First Fully-Electronic CDS Trades Executed and Cleared in U.S.
February 10, 2011 (New York); Tradeweb, a leading global provider of fixed income and derivatives markets, today announced the completion of the first credit default swap trades to be executed and cleared electronically in the U.S.
The U.S. dollar-denominated swap transactions were executed on the Tradeweb institutional multi-dealer-to-client platform between BlueMountain Capital Management, a U.S.-based hedge fund, and Deutsche Bank. The trades were then cleared by the two major clearing houses in the U.S., CME Clearing and ICE Trust, with Deutsche Bank acting as respective clearing members. These trades are the first fully-electronic CDS transactions which could be considered swap execution facility (SEF)-ready under the regulatory framework set forth under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
"The financial markets are now preparing for the new regulatory environment under Dodd-Frank," said Scott Beardsley, Principal and Head of Operations at BlueMountain Capital Management. "Today's trade represents the first-ever transaction to fit within what many market participants expect to be the new model for central clearing and electronic execution of derivatives. We are supportive of this evolution and expect to see a healthy and competitive landscape among the various market offerings."
"We are delighted to participate in these significant trades on behalf of an important client," said Colin Fan, Managing Director and Head of Global Credit at Deutsche Bank. "They reflect not only the new reality of the derivatives markets, but Deutsche Bank's legacy as a leader in the movement towards e-trading."
"These trades represent a key milestone in the road to derivative reform," said Lee Olesky, CEO of Tradeweb. "After implementation of Dodd-Frank, clearing and trading on regulated electronic platforms will be required and the market is now accelerating its preparation for the new environment."
Tradeweb is a leading multi-dealer-to-client trading platform for Credit products, including European Credit, Covered Bonds/Pfandbriefe, Supranationals, Credit Default Swap Indices and U.S. Corporates. Institutional investors rely on Tradeweb's automation of these fast-moving markets for real-time pricing, and the ability to put leading dealers in competition with each other. Clients may then identify the best price or rate, and execute their trade within seconds.
Tradeweb is a leading provider of online markets and a pioneer in the development of electronic trading and trade processing. The company provides services in the fixed income and derivatives markets to clients in more than 50 countries. Since 1998, Tradeweb has operated a global fixed income and derivatives trading network, which harnesses the distribution of the major investment banks with over 2,000 institutional clients. In 2008, Tradeweb introduced inter-dealing broking capability with the acquisition of voice broker Hilliard Farber and subsequently launched Dealerweb, an electronic IDB platform. Tradeweb Retail provides a trading and sales application to fixed income brokers and traders. Please find more information at http://www.tradeweb.com/.