Swap execution facility (SEF) operator trueEX has completed its first portfolio termination and compaction (PTC) trade, providing efficiency, automation and scale in swaps trading.
The PTC platform, part of trueEX, is designed to help clients who need to terminate, compact, back-load and allocate cleared swaps, providing operation benefits as well as connectivity to clearing houses CME and LCH.Clearnet.
Buy-side firm AllianceBernstein, along with JP Morgan, MKP Capital and Societe Generale, are the first to use the PTC platform.
Matthew Scott, trader at AllianceBernstein, said: "Asset managers such as AllianceBernstein need automated platforms like trueEX with direct connectivity to clearing firms, swap data repositories and clearing houses to help execute cleared terminations.”
The current process for dealing with PTC trades is highly manual, making it prone to operational risk and trades can often take hours. By moving to an automated system with direct central counterparty (CCP) connectivity, this can be reduced to minutes.
The system was designed with input from asset managers, hedge funds, banks and clearing firms to enable interest rate swap traders to cope with some of the operational burdens stemming from executing cleared terminations and compactions required by regulators.
It also utilizes trueEX’s identification protocols to ensure that clearing firms and CCPs can clear and margin portfolios appropriately.