Bloomberg Fixed Income Trading has launched ALLQ Derivatives as the first commingled trading platform for over-the-counter (OTC) swap trading.
The new platform lets buy-side investors review indicative prices and execute directly with dealers.
The move signals Bloomberg's development of a swaps execution facility (SEF) ahead of a new regulatory framework for derivatives trading in the form of the Dodd-Frank Act, which will require companies to trade standardised derivatives products through SEFs.
Bloomberg said its ALLQ platform will be the first to provide a “full view of dealer liquidity available in the market and to provide multi-currency details on interest rate swaps (IRS) and CDS”.
Under Dodd-Frank, the Securities and Exchange Commission will
be responsible for regulating swaps based on single-name products, while the Commodity Futures Trading Commission will have oversight for index products, including credit default swap indices.
A wide range of dealers are set to trade on ALLQ IRS, including Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, Citigroup, Commerzbank, Credit Suisse, Société Générale and UBS.
“Bloomberg is the largest independent trading platform for OTC derivatives and we have been actively working with regulators to develop the mandatory clearing and post-trading reporting requirements,” said Ben Macdonald, global head of Bloomberg's fixed-income business. “The challenge now is to get the market ready when we don't know exactly what the regulations will entail. The development of the ALLQ Derivatives platform is a crucial step toward SEF-style trading and the support we are getting in the marketplace is strong.”