Several major execution firms for interest rate swaps have sought to become approved platforms for Eurex Clearing’s profit sharing partnership programme.
Bloomberg, Tradeweb, TP ICAP’s i-Swap, BGC Partners and Tradition’s Trad-X are all awaiting approval to join the Eurex’s clearing incentive scheme, which has gained ground in recent weeks with more than 20 major institutions signed up to participate.
Once approved, the platforms will support various execution strategies for derivatives, including central limit order book, request-for-quote and disclosed streaming.
Eurex Clearing said the addition of these execution platforms will improve price transparency, price discovery and liquidity for all participants.
“Cooperation with major execution venues is a key milestone in successfully rolling out our new partnership programme to establish a liquid alternative for clearing interest rate swaps in Europe,” said Matthias Graulich, chief strategy officer at Eurex Clearing.
Eurex Clearing’s programme awards its 10 most active participants with a ‘significant’ profit share of the multi-currency interest rate swaps business.
The firm has described the scheme as a performance-based programme, which “aims to build a balanced ecosystem where responsibilities and benefits are fully aligned between all participants in terms of economics and governance”.
The scheme was established in a bid to win euro-denominated derivatives activity from LCH in London, which currently holds the majority of clearing business.
LCH won business from its US counterparts for the majority of swaps clearing globally through operating a similar profit sharing model.