HFM Asian Services Awards 2023 Winners Interview - Tradeweb

This article originally appeared on HFM Global here.

How do you feel having won the award for Most Disruptive Technology Solution? 

This award is a wonderful testament to the work we have done in Asia, helping our hedge fund clients use technology to access and manage liquidity; express investment views; hedge their positions and manage their portfolios across the region and around the world.

I am very proud of our team, who have been really focused on ensuring our hedge fund clients are able to enjoy the most seamless access to the liquidity and instruments they need. There is still lots of potential to further digitise the hedge fund space, and we believe we can continue to play a significant role in improving market infrastructure to future proof our clients ahead of extreme volatile periods.

What have been your highlights as a business over the past year? 

Over the past year, as hedge funds around the world have grappled with soaring energy prices and interest rates along with volatility in currencies, commodities and equities, our flexible electronic workflows across protocols, currencies, regions, and asset classes have consistently delivered the gold standard in resilience in varying market conditions.

We continue to build out our emerging markets (EM) offering and as of today offer trading of cleared IRS in 16 currencies. The Asian currencies are the Hong Kong dollar, Chinese yuan, Indian rupee, South Korean won, Singapore dollar, Taiwan dollar, and Thai baht.

On the back of the data we have gathered through this offering, we introduced a new data service to our clients. Tradeweb now produces fully transparent data on all cleared EM interest rate swaps volume traded on our platform. This includes composite prices, yield curves and historical data for 16 EM currencies. This data can be used by our clients to track yield curves over time, providing vital intelligence that can help clients to better understand responses to changes in the market.

What is your outlook for the hedge fund space over the next year in terms of challenges and opportunities for managers?

Markets are often unpredictable, but we’ve equipped our clients with the tools they need to manage ranging markets conditions as they change and fluctuate. Our deep network and multi-asset expertise enable us to constantly improve trading workflows and outcomes for hedge fund users, particularly via the use of data. For instance, through smart dealer selection tools such as SNAP, we help them identify the best counterparty and execution method for each transaction, and also analyse their trading strategies and be more cost-effective.

Another tool that has been very popular among our hedge fund clients is the request-for-market (RFM) protocol, which Tradeweb was the first to introduce in the fixed income space. Available for both NPV List and compression trades, as well as also for outright duration, curve, and butterfly risk trades, the key benefit of RFM is that it gives clients complete control over the information they share with the market, as they don’t have to disclose the direction of their enquiry, particularly for larger size trades. They are also better able to discern in which direction dealers are ‘axed’ in a live RFM quote. In volatile markets we a spike in the number of RFM transactions.

The hedge fund industry in Asia has proved its resilience and we look forward to continuing to work with the community in 2024 and beyond, and to grow the breadth of tools and services we can provide.

What will be your key areas of focus for the remainder of 2023 and into the new year? 

Hedge fund clients have been huge supporters of our rules-based automated intelligent execution tool, AiEX, another Tradeweb first. Thanks to their feedback, we have been able to evolve AiEX into a solution that not only speeds up execution, but also helps traders react to changing market conditions and implement their trading strategies much faster.

Last year, we brought AiEX to the Asian ETF market, and since have significantly grown the number of dealers supporting ETFs and introduced our hedge fund clients to the benefits of automation in this area. We continue to focus on working with customers to expand the features of AiEX so that it adds even more value to their businesses.

We are also excited to have launched Swap Connect in May 2023, helping hedge funds to manage their China trading strategies. We are currently working with Swap Connect stakeholders to enhance the access channel with new functionalities and consequently drive more global investor participation in the CNY swaps market.

Finally, we look forward to growing our EM offering. The EM space is in its early stages of electronification and we are focused on continuing to provide seamless, real-time tools for trading EM bonds and derivatives; asset swap functionality; program trading and recouponing.

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