The new TradeCycle platform announced by Commerzbank and Clearstream is intended to offer an integrated service for over-the-counter (OTC) derivative trading from start to finish. Due to launch in Q4 2013, it is designed for the altered OTC trading landscape, which is already undergoing transformative regulatory change under the impact of Dodd Frank and the European Market Infrastructure Regulation (EMIR) among much else.
The new TradeCycle OTC platform will provide clients with access to an integrated management solution for the entire OTC derivative trade lifecycle, assert Clearstream and Commerzbank. The platform covers everything from trading through to clearing, settlement and custody, including key services such as advisory, valuation, and collateral management – important considerations under the post-crash regulatory environment mandated by the Pittsburgh G20 meeting back in 2009.
According to the partners market participants in the new regulatory environment that is now coming into effect will benefit from an end-to-end solution for the handling of OTC derivatives, allowing them to minimise operational inefficiencies, funding costs, enhance yield and improve their risk management. Investment banks, hedging corporate treasuries and other end users are the intended target audience for the new platform, which is also intended to company with the EU’s revised Market in Financial Instruments Directive (MiFID II) stipulations, which is now properly called MiFIR after being upgraded to a Regulation.
“Derivatives trading and market infrastructures have been brought to the forefront of regulatory attention and regulators have set in motion mandatory requirements which financial institutions and corporates have to meet,” said the partners in a statement. “As the market becomes more fragmented, it is not uncommon for clients to engage with a large number of banks and vendors to complete one single transaction, leading to increased costs and inefficiencies. TradeCycle will simplify this process for clients by managing all their OTC derivatives trades across the entire value chain from one single point of access.”