Key Insights
- Bloomberg launches automated trading and reporting system for euro interest rate swap spreads
- New workflow aims to ease operational burdens for futures brokers amid strict regulations
- Initial focus on euro swaps vs Eurex bond futures before expanding to more currencies
NEW YORK (MarketsXplora) – Data giant Bloomberg has debuted a fully automated process for trading and reporting euro interest rate swap (IRS) spreads against bond futures in a new system aimed reducing paperwork burdens.
The end-to-end electronic workflow allows brokers to conduct such swap spread trades and meet strict reporting timelines in one interface, Bloomberg said on Thursday.
The new portal is initially available for euro swap contracts benchmarked against highly liquid government bond contracts on German exchange Eurex’s trading venue.
Bloomberg plans to later expand it to cover corporate bonds and additional currencies after starting with the benchmark euro swaps market, one of the world’s largest derivatives asset classes.
“Increased electronification enables workflow optimization and benefits our clients across the buy and sell-side,” said Derek Kleinbauer, Bloomberg’s head of e-trading for fixed income and equities.
Large global banks have already been investing heavily in streamlining historically manual trading processes, but the project could also assist smaller brokers struggling with compliance obligations around swaps reform.
Rules like those from the European Market Infrastructure Regulation (EMIR) require reporting new swap trades within minutes amid global regulatory efforts to increase transparency in the vast interest rate derivatives sector following risks seen during the 2007-09 financial crisis.