European derivatives exchange Eurex has partnered with Wematch.live to improve access in the synthetic securities finance industry through basket total return futures (BTRFs).
Randolf Roth
The tie-up will enable interoperability between Wematch’s total return swaps (TRS) module, which automates trade matching and collateral optimisation, with Eurex’s BTRF products. The ‘futurisation’ of synthetic equity financing is designed to provide portfolio margining efficiencies and streamlined operations.
“Collaboration with leading industry innovators like Wematch is essential for Eurex to continue evolving our pioneering BTRF product suite to meet increasing global demand,” said Randolf Roth, member of the executive board at Eurex. “By harmonising our respective strengths in synthetic product innovation and TRS lifecycle management expertise, we can radically enhance and optimise the entire value chain for BTRF users worldwide.”
The two firms hope to improve the end-to-end workflow for BTRF market participants – from basket construction and pricing to trade execution, lifecycle events like amendments and substitutions, and ultimately streamlined clearing and settlement.
“Partnering with Eurex creates immense opportunities to optimise an increasingly critical area of the securities finance ecosystem,” added David Raccat, chief revenue officer and co-founder of Wematch. “Synthetic products are vital for efficient capital deployment and portfolio utilisation, and BTRFs represent a paradigm-shifting innovation layering exchange benefits onto this model. Our transformative partnership will empower market participants to seamlessly access and capitalise on these pioneering instruments and leverage our cutting-edge workflow tools on Total Return Swaps.”
The roll-out will be staggered in strategic phases over the coming months, with the full integration across pricing, execution and lifecycle management targeted for a Q3 2024 launch.
The partnership follows a recent expansion of Eurex’s partnership with Euroclear Bank, with clients of both organisations now able to post collateral directly to Eurex Clearing, with the ability to further optimise the pool of collateral held in Euroclear’s international central securities depository (ICSD).