ICAP’s FRA-Cross system will use SwapsWire Network to confirm electronically matched trades

FRA-Cross, ICAP’s internet based matching facility for crossing forward rate agreements (FRAs), has agreed to use the SwapsWire network to confirm electronically matched trades. The use of the SwapsWire network will significantly improve the efficiency of trading FRAs by reducing errors and by allowing the banks to gain efficiencies in their front, middle and back office functions.

Charlie Sabel, FRA-Cross Project Manager, commented: "SwapsWire has become the leading Straight Through Processing (STP) infrastructure for the OTC derivatives community. We are using the system to transfer trade information immediately after a trade has been completed on FRA-Cross. It will reduce errors and allow the banks to gain efficiencies in their front, middle and back office functions."

"We are constantly seeking ways to provide our clients with easier and quicker ways to conduct their trading business. FRA-Cross can create a large number of trades which a dealer needs to be able to handle quickly and efficiently. We expect that the use of FRA-Cross will increase for the banks which use the SwapsWire network. We also offer banks a number of other STP solutions in the different markets in which we operate."

Chip Carver, Chief Executive Officer of SwapsWire, said "the addition of FRA-Cross transactions will increase the flow across the SwapsWire network. The current labour intensive, and manual confirmation processes will be replaced. By bringing ICAP’s transactions onto the system there is an immediate benefit to the user banks. By replacing paper documentation with electronic messages the banks and brokers using the system are expected to realise substantial cost savings and will reduce their operational risk."

The FRA-Cross system enables traders of interest rate swaps to input all their unhedged positions - their FRA exposures or mismatches - onto the FRA-Cross website which then automatically matches one exposed FRA with another. The system covers Sterling, Euro, Swiss Francs, US Dollars and emerging markets trades. More than 200 traders at 80 banks are currently using FRA-Cross which has matched transactions worth $1trillion since its launch in January 2002.

SwapsWire, a consortium of 23 banks, went live with its straight-through-processing (STP) system in November 2002 and has booked close to $2trn of transactions since then. ICAP, the world’s largest interdealer broker, was the first broker to join the SwapsWire network. SwapsWire and ICAP are co-operating to improve the efficiency of trading in the interest rate derivatives market.

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