UBS had launched a trading platform for US equity swaps to enable rapid automating of both basket and single-stock orders.
The new algorithmic trading service, SwapsDirect, will enable UBS’s institutional clients to execute US equity swap trades directly from their preferred order management system or execution management system. Use of FIX protocol means it can also be accessed using proprietary technology.
Automated processing of electronic orders will enable rapid execution and confirmation across both baskets and single-stocks, including exchange-traded funds, real estate investment trusts and master limited partnerships. UBS said it will also eliminate many of the operation challenges normally associated with OTC derivatives trading.
“Trading swaps has not traditionally linked higher speed/lower touch execution with operational efficiencies. Clients accepted the more gradual speed of swaps trading for such efficiencies as ease of settlement and reporting,” explained Ryan Nelson, head of Americas synthetic equity distribution.
“UBS SwapsDirect solves this problem by giving clients the speed of execution that they have come to expect from executing a cash trade, while also maintaining the full operational efficiencies that they have come to demand in swaps.”
UBS said new services like SwapsDirect are being developed in response to client feedback to help them prepare for evolutions in the market environment over the next few years as regulatory rules stemming from the Dodd-Frank Act increase regulatory oversight of derivatives trades.