Trad-X has reported a surge in the electronic trading of USD interest rate swaps (IRS) during June, with volumes showing the increasing uptake of swap execution facilities (SEFs) in the US.
Tradition’s electronic trading platform reached the US$50 billion mark in notional volume throughout the month, from 750 trades.
According to Trad-X, the venue’s record figures were driven by a continuing move from voice to electronic trading.
"Central limit order book electronic execution of IRS was non-existent just 18 months ago and has had to start from zero,” said Dan Marcus, CEO of Trad-X.
“For it to account for a third of all trades at Tradition in such a short period of time is significant.”
The results follow a similar trend at Icap’s SEF, where USD IRS activity hit a monthly high with 588 trades executed, worth a notional US$26 billion.
The CEO of ICAP's SEF said the record showed the ongoing electronification trend.
An increasing number of interest rate swaps are now being conducted electronically on SEFs, as mandated by US regulators in line with the Dodd-Frank Act.
During June, the package trade relief for made available to trade (MAT) swaps dealt with US Treasury securities also expired, another factor in the volumes rise.
As a result of the 16 June expiry, 99% of MAT swaps are now taking place on SEFs, according to data from Clarus Financial Technology.
"There is clearly a demand for change and we believe that if the whole market moves to our model, the trading environment would change beyond recognition for the better," said Mike Leibowitz, chief operating officer at Tradition.