Capitaliaâs derivative strategy has been focused on using innovative technology to help achieve its goals. Capitalia trades OTC interest rate swaps on-screen using Bloomberg and TradeWebâs electronic trading systems. Both systems are connected to SwapsWire meaning trades are instantly routed to SwapsWire for real-time legal confirmation within seconds. These trades and others executed over the telephone are all electronically routed to Capitalia in a standard format on SwapsWire making confirmation quick and easy.
Seventeen dealers recently committed to improve their level of outstanding equity derivative confirmations in a letter to regulators. Many of these dealers trade with Capitalia as a client. One of the initiatives identified in the letter was the need for industry-agreed standard documentation and master confirmation agreements, which make individual transactions simpler to document.
Giampaolo Argenio, COO at Capitalia in Rome said âWe are pleased to be leading the way in Italy by using SwapsWire to have all trades fully confirmed by the end of the trading day. After seeing the massive improvement in confirmation speed for swaps, we are excited to be able now to confirm equity options this way. We will continue to use the best available technology to reduce our operational risk and to increase efficiency for these and any other eligible products. We have written to all our brokers and asked them to sign master confirmation agreements and have received a positive response.â
SwapsWire has been steadily increasing the array of OTC products supported, most recently extending support for various equity OTC products including variance swaps in Japan, and options in Asia ex-Japan. By early 2007 all regions will be covered for single name and index options, swaps and variance swaps. Also in early 2007 SwapsWire will support inflation swaps and non-deliverable currency interest rate swaps.
Chip Carver, SwapsWireâs CEO, said âWe are pleased our system has once again proven itself at Capitalia by helping it to achieve its objectives quickly and cost effectively. It is very clear that the marketplace recognizes the value of efficiently confirming OTC trades as close to the time of execution as possible. SwapsWire is enjoying strong growth in both trade volumes and the number of clients and we expect this to continue through 2007 as we continue to add products and features.â