UBS Investment Bank acting as an introducing broker, completed the first trade today involving an end customer entering an order via the UBS Neo Execution Services platform, which was automatically routed to trueEx and executed against the anonymous central limit order book (CLOB).
UBS routed the first trade using true agency style execution; the client communicated their order via UBS Neo, the Investment Bank's unique global distribution and execution services platform, which was routed to the Swap Execution Facility (SEF), with the pre-trade credit check against UBS as “Standby Clearer” at the SEF prior to the trade's execution and clearing at CME.
"trueEX is thrilled to have partnered with UBS and their client to have validated the Introducing Broker model which provides much needed scale and ease of access for the buy-side in accessing SEF's and DCM's," said Sunil Hirani, CEO of trueEX.
"Our goal is to help our clients navigate this rapidly changing market landscape and we believe the introducing broker model is most efficient and effective way for clients to access the regulated SEF markets," said Paul Hamill, Global Head of Fixed Income Agency Execution. "This model provides our clients access to liquidity across all the SEFs, without the complex technological, legal and operational requirements associated with direct membership or sponsored access models. We are very excited to have executed the first client CLOB trade using this model for our client.”
UBS operates its Client Execution Services business from its CFTC regulated Futures Commission Merchant (FCM,) offering clients a futures-style introducing broker model, with segregation of order flow from the principal side of the business and the ability to both interact with order books and send request-for-quotes (RFQs). As the SEF member intermediating client orders, UBS is responsible for the associated regulatory requirements applicable to SEF members, such as 1.35 recordkeeping. This model provides clients broad access to SEFs, without clients needing to become a direct participant of the SEF and provides clients with access to new pools of liquidity that were formerly only available to dealers.