Swaps trading platform trueEX this week announced it had processed over US$100 billion in bunched order allocations, which its chief has said will drive buy-side activity on the platform.
Sunil Hirani, CEO of trueEX told theTRADEnews.com the buy-side would continue to look to trade bunched orders through dealers to minimise overall OTC derivatives trading costs when executing on swap execution facilities (SEFs).
“It's beneficial to the buy-side and to dealers to trade bunched orders, as clients can use a top level account to execute large positions and divide them after execution into a number of sub-accounts,” he said. “This helps the buy-side meet all their regulatory obligations and keeps total transaction costs down.”
The move to include packaged transactions, which include combinations of products, for instance multiple swaps, or a swap and a bond, would further spur buy-side activity on SEFs.
“With packaged transactions being required to execute on SEFs I expect a growth in overall market volumes in the coming months,” Hirani said.
Through its Post-Trade Services (PTS) platform that sits alongside the swaps execution platform, trueEX reduced the complexity for the buy-side and their futures commission merchants to allocate bunched orders after execution.
Bunched orders are orders executed by an account manager on behalf of a customer where orders are allocated on a post-trade basis to individual customers, before being cleared by an initial clearing firm. Then, the account manager submits allocation information and the trade is sent to the ultimate clearing firm which has an account for the end-customer.
The platform offers an anonymous central limit order book and request for quote models to facilitate swaps trading and has executed modest volumes in rates products, which Hirani said would increase once a greater number of dealers supported the venue which is expected in the next few months.
The platform was the second SEF to submit a ‘made available to trade’ plan to the regulator, focused on the most liquid swaps, and Hirani said it would continue to focus on buy-side issues to build volumes.
“As a new entrant we have to offer a different set of products to address the key issues the buy-side is facing to build market share,” Hirani said.