Fixed income trading platform provider MarketAxess has facilitated the first automated repo trade confirmation in the US between Citadel and JP Morgan.
MarketAxess said both firms used its trade confirmation engine, which provides the buy- and sell-side with means to electronically confirm repo trades on T+0 and throughout the transaction lifecycle. By automating the confirmation process, the engine aims to deliver benefits to the industry such as reduced risk and greater post-execution control.
“Automation of the repo trade confirmation process reduces risk and improves efficiency in this critical part of the fixed income market,” said Jamie Clayton, head of European operations at Citadel. “Partnering with MarketAxess has delivered a proven solution to help modernise the post-trade process in Europe, and we look forward to it expanding across all repo markets.”
JP Morgan operations manager, Dan Phillips, also commented that services like the MarketAxess trade confirmation engine are useful in managing pre-settlement risk, with streamlined technology backed by the community of counterparties.
Traditionally, repo transactions are confirmed manually which can be costly and can increase risk of trade failures. MarketAxess said more than 50 firms are using its repo trade confirmation engine in the US, and it has seen a 94% increase in the number of repo transactions confirmed in October, compared with year-end 2018.
“The repo market has historically experienced a long-standing lack of automation,” added Camille McKelvey, head of business development for post-trade solutions at MarketAxess. “As Securities Financing Transaction Regulation (SFTR) and Central Securities Depository Regulation (CSDR) are raising the profile of risks associated with not having an efficient trade confirmation solution, more firms are now migrating to electronic solutions like ours.”
Earlier this month, MarketAxess closed its $150 million acquisition of US treasuries trading marketplace LiquidityEdge, as the firm expands its fixed income trading services. LiquidityEdge brings rates trading capabilities to MarketAxess as it looks to strengthen its position in global credit markets.