A dozen firms have signed commitments to use SwapsWire for automated confirmation of OTC Equity Option transactions. The dealers represent a critical mass of backing for the service which is expected to launch early in the second quarter of 2005. The backers are Barclays, BNP Paribas, Calyon, Citigroup, Credit Suisse First Boston, Deutsche Bank, Dresdner Kleinwort Wasserstein, Goldman Sachs, JPMorgan, Merrill Lynch, Societe Generale and UBS.
SwapsWire allows deals to be captured, verified and confirmed on-screen within minutes of execution, removing the need for manual processing of paper contracts. As well as the reduction in processing cost, confirmation on trade date (T+0) means a significant reduction in operational risk. SwapsWire is already used by 45 dealers, inter-dealer brokers and buy-side clients in Europe, the U.S.A. and Asia for Interest Rate and Credit Derivatives. The volume of transactions booked has been doubling approximately every six months.
"Weâre pleased to be among the large group of dealers backing this initiative. SwapsWire will be a big step forward in reducing the marginal cost of each transaction we execute, allowing us to remain competitive as volumes continue to grow" said Paul Leech, Vice President, Co-Head of Flow Derivatives Trading at JPMorgan in London.
Peter Noha, Managing Director Global Equity Derivatives at Deutsche Bank in London added "Weâre committed to making this business as efficient as possible, and straight through processing is a big part of that. SwapsWire will allow us to receive our trades direct from our inter-dealer brokers in real time. With our counterparts linked to the same system, this means trades coming into our front-end are already fully confirmed, eliminating a huge chunk of downstream work."
Eric Litvack, Head of Flow Trading at Societe Generale, designated by IFR as the Equity Derivatives House of the Year in 2004, commented "Weâre encouraged by the broad backing for SwapsWire. Societe Generale is one of the top dealers in equity derivatives, and with the vast majority of the other large dealers on board we expect to be able to automate the booking and confirmation of a large percentage of our trades".
The system supports new trade and trade-life cycle events including amendments, increases and decreases, terminations, exercises, assignments and corporate actions.
Chip Carver, CEO of SwapsWire commented "With over $200bn per day in transactions being handled by SwapsWire, the derivatives community clearly recognizes the value we are bringing to the fixed income area, and extending this to equity derivatives is a natural step. Firms will be able to use the existing infrastructure they have in place. SwapsWire can scale its successful platform to offer these new services at very competitive levels. With a proven model, we expect this new initiative to be immediately successful."