Tradeweb Develops Enhanced Online Marketplaces for CDS Index Trading in US and Europe
JERSEY CITY, NJ; LONDON (November 7, 2008) - Tradeweb, a leading provider of online markets for institutional investors and dealers, announced today that it has developed enhanced marketplaces in the U.S. and Europe for Credit Default Swap Indices. As a result, clients will be able to view real-time composite prices, and efficiently execute and process trades for the major CDS indices. The U.S. market is live, with Europe expected to launch in January 2009.
This initiative supports the goals voiced by financial regulators in recent weeks by providing increased price transparency, a marketplace for electronic trading and connectivity to relevant third parties for electronic processing and legal confirmation of CDS index trades.
The new marketplaces will benefit institutional clients by:
Providing access to the liquidity of leading CDS dealers;
Displaying real-time, indicative composite two-way pricing for the major U.S. and European CDS indices;
Providing connectivity to key third parties, including DTCC Deriv/SERV (and the Trade Information Warehouse), and order management systems where relevant;
Maintaining a full audit trail on all trades;
Electronically capturing trade details in real-time, using the Tradeweb API messaging service;
Providing access to AccountNet, Tradeweb's leading derivatives account database to maintain accurate settlement instructions and deliver electronic allocations to dealers.
These CDS Index marketplaces offer a broad level of commitment from the major dealers, sophisticated new trading protocols for institutional clients and real-time pricing to provide a high degree of market transparency. They demonstrate Tradeweb's ability to evolve the electronic trading environment to meet changing market needs.
The markets will provide a new trading protocol, "Request-for-Market", in addition to enhanced "Request-for-Quote" functionality, pioneered by Tradeweb in the late-1990s. RFM allows a client to request a two-sided market and negotiate interactively with a single dealer, while RFQ allows clients to request a price from up to four dealers simultaneously.
"We have been working with the buy-side and supporting dealers for months to bring an enhanced electronic marketplace for trading CDS indices. Especially given the current market turmoil, we are confident that Tradeweb's inherent transparency and efficiency for OTC markets will provide a compelling trading mechanism for the market," said Lee Olesky, CEO of Tradeweb.
"As one of the leading CDS dealers, we are keen to provide solutions that allow our clients to trade more effectively. We support the growth of electronic trading as it provides for a more efficient marketplace and look forward to using Tradeweb as a distribution channel for better servicing our clients in the CDS market," said Eraj Shirvani, Head of European Credit at Credit Suisse and Chairman of the International Swaps and Derivatives Association.
"We are proud to support CDS index trading on the Tradeweb platform," said Rob Milam, Managing Director, Head of North American High Grade Credit Trading at J.P. Morgan. "It will allow us to expand our client service and provide another efficient trading and settlement process."
"We believe the liquidity that clients will find on Tradeweb will prove to be very compelling, and the capabilities for automated trade booking will benefit all market participants," said Brian Walter, Managing Director, Head of U.S. Credit Index Trading at UBS.
"Tradeweb has successfully introduced greater transparency and efficiency to the fixed income and derivatives markets over the past decade," said Vic Simone, Managing Director of Goldman Sachs and Chairman of Tradeweb. "It makes sense that they are leading the way in providing the same kind of benefits to the CDS market."
Tradeweb is a leading provider of online markets for institutional investors and dealers, and a pioneer in the development of electronic trading and trade processing. The company provides services in the fixed income, derivative, and equity markets to clients in more than 50 countries. Since 1998, Tradeweb has operated a global trading network, which harnesses the distribution of the major investment banks with over 2,000 institutional clients. With its expansion into the equity markets, Tradeweb is leveraging AutEx, the industry leader for 40 years in providing indications of interests, and Tradeweb Routing Network, a global FIX network with more than 7,000 connections to over 750 firms. Tradeweb is owned by Thomson Reuters and nine leading global dealers: Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch, Morgan Stanley, The Royal Bank of Scotland, and UBS. Tradeweb LLC is registered as an ATS with the Securities and Exchange Commission in the US and Tradeweb Europe Limited is authorized and regulated by the Financial Services Authority in the UK, as well as by other regulatory authorities in key financial markets in Asia.