Live repo matching commences between the buy and sell side for the first time with TRAX2.
The International Capital Market Association (ICMA) Ltd is pleased to announce that European Credit Management Ltd (ECM), a buyside firm, has commenced live matching of repurchase agreements (repo) with UBS for the first time via TRAX2.
Robert Galione, Head of Operations, European Credit Management Ltd. commented: “ECM is very proud to be the first buyside company to go live with TRAX2 Repo. This is a major step forward for the risk management of our exponentially increasing repo book. We look forward to all our counterparties coming on board soon”.
TRAX2 is the post- trade, pre-settlement, trade matching & regulatory confirmation system for the OTC market. It processes all financial instruments/asset classes and is now available to both the sell side and buy side.
“UBS regards TRAX2 as a key component within the securities market to drive the automation of repo trade confirmations with both sell-side and buy-side clients and across the life of the repo transaction. UBS is pleased to have partnered with ECM on TRAX2 and looks forward to welcoming more buy-side clients on to the platform”, said David Daniell, Fixed Income Operations Manager, UBS
This innovative market offering was made possible by ICMA’s development, in co-operation with market participants, of a unique fund ID database which allows buyside firms to match individual trades for specific funds and so successfully automate the confirmation process integrating TRAX2 with their own systems.
Kevin Milne, Managing Director, ICMA Ltd, commented: “ICMA are delighted that the buy and sell side are now actively matching in real time via TRAX2. UBS and ECM were among the firms who spearheaded this new development by realizing the potential to reduce operational risk through TRAX2 matching of repo. We look forward to announcing more market participants as they go live with this new repo functionality in the near future”.
The repo market is the fastest growing sector of the European capital market, now valued at over EUR 6.4 trillion (December 13, 2006). ICMA worked closely with the operations committee of the Association of Foreign Banks (AFB), the European Repo Council (ERC) and ICMA members to design TRAX2 to include the needs of repo market participants.
Ian Holden, Operations Manager, European Credit Management Ltd., commented: “By using TRAX2 we will reduce significantly both our costs and operational risk. It will minimize our manual intervention and make our rapidly expanding repo business much more scaleable”.
Repo is still traded in large volumes over the counter (OTC) which can lead to increased levels of operational risk through human error causing delayed settlement and verification. TRAX2 allows firms to manage their operational risk effectively by matching trades that have been transacted ‘over the counter’ i.e. not on an automated trading system, in all asset classes in real time with their counterparties, so virtually eliminating failed trades at settlement. An additional benefit of TRAX2 is that users can fulfil their transaction reporting requirements in a range of financial instruments to a number of specified regulatory authorities throughout the EU.