Initially tpSWAPDEAL, which forms part of Tullett Prebon's rapidly expanding electronic broking services, will support trading in Euro denominated IRS, gap and butterfly strategies, matched maturity futures spreads, and tenor basis swaps.
tpSWAPDEAL utilises the most up-to-date and market leading technology from MillenniumIT, a premier technology solutions provider, wholly owned by the London Stock Exchange and serving the global capital markets industry as a specialist in exchange grade, low latency technology.
The new platform has been created with the flexibility to give Tullett Prebon's clients the ability to transact either entirely electronically or via our comprehensive voice execution broker network, within both the current trading landscape and under all anticipated regional regulatory environments.
In addition to standard electronic platform functionality, tpSWAPDEAL has a number of features designed to replicate and enhance the advantages of the current voice market: Ultra low latency implied order generation engine creating deep liquidity in the maximum number of products.
“Pegging” capability enabling clients to place specific orders into the market tracking futures contracts. This allows counterparties who do not wish to provide continuous streaming liquidity to actively participate in the platform and submit prices inside streaming contributions, thus adding value to the liquidity pool.
A unique counterparty trading preference model which enables banks to select counterparties to whom they are prepared to offer liquidity and to a specific maximum maturity. This therefore provides full market transparency by including institutions currently not members of a clearing house but which represent a proportion of the wholesale market.
Importantly, tpSWAPDEAL operates using a non preferential open governance and fee structure for Tullett Prebon's existing client base and is designed to attract participation from customers operating on both a cleared and bilateral trading model.
Clients who have committed to supporting tpSWAPDEAL with market liquidity and are currently in the process of establishing connectivity include:
Pierre Renom, Global Head of Rates Trading at BNP Paribas, commented: "In the changing regulatory environment for OTC markets there has been much innovation in the industry with regard to how dealers and brokers manage liquidity. Tullett Prebon‘s tpSWAPDEAL is the latest instance and may prove to be one of the market leading innovations. Tullett Prebon’s electronic initiative faces much competition, but in an environment
where technology is the game changer, they bring a new dynamic to the market and have been very impressive so far."
Andy Morton, Head of G10 Rates, Risk Treasury and Fixed Income Finance at Citigroup, said: “Citi looks forward to market making on the tpSWAPDEAL platform, which we see as an important new part of the IDB market, especially in light of the evolving regulatory environment.”
Thomas Roesner, Head of Rates Trading at Commerzbank, commented: “tpSWAPDEAL is entering a fast changing marketplace which we believe represents the future of Swaps trading. Its hybrid nature and several clever innovations make it an intriguing proposition. Commerzbank looks forward to building on its existing market making activities by providing liquidity to the platform.”
Franck Darlay, Deputy Head of Euro Rates Trading at HSBC, said: “HSBC is fully committed in supporting electronic initiatives to increase efficiency, transparency and liquidity in the OTC derivatives market. We feel Tullett Prebon's tpSWAPDEAL offering will very much have a place in this process.”
Steve Ashley, Global Head of the Macro Products Group at Nomura, welcomes the introduction of tpSWAPDEAL's hybrid model to the electronic swap dealing landscape: “The combination of highly performant technology and innovative platform features represent differentiators for the platform.”
Simon Wilson, Deputy Head of EMEA DeltaTrading, RBS Global Banking and Markets, commented: “As a leading market maker in the Fixed Income markets, RBS welcomes Tullett Prebon's new tpSWAPDEAL platform. The use of exchange grade technology and the adoption of a hybrid trading system to combine their top tier voice broking business should allow them to compete effectively with the other platforms offering electronic trading of FI products.”
Christophe Coutte, Co-Global Head of Fixed Income and Currencies at Societe Generale Corporate & Investment Banking, commented: “tpSWAPDEAL is an innovative proposal to address the current changing and challenging environment. Tullett Prebon's approach is original in the sense that it promotes openness within the wholesale swap community.”
Due to the uniqueness of tpSWAPDEAL functionality, tpSWAPDEAL has also been asked to provide trading capability, via the GUI by a further 35 clients in 9 countries.
Steph Duckworth, Global Chief Operating Officer at Tullett Prebon, said: “tpSWAPDEAL has been developed with the most up-to-date technology, providing our clients with the best-in-market hybrid broking product, combining the benefit of our extensive voice platform with the ability to trade electronically. Our secure, stable and robust platform enables clients to trade and process transactions more quickly and with less risk than ever before.”
Paul Humphrey, CEO Electronic Broking & Information at Tullett Prebon, said: “We believe tpSWAPDEAL will best preserve the current liquidity pool that our customers currently enjoy, encouraged by Tullett Prebon‘s strategy of open inclusion to all existing and potential clients, and functionality designed to most easily translate voice liquidity onto an electronic screen. tpSWAPDEAL demonstrates Tullett Prebon’s ability to deliver sophisticated, efficient and innovative electronic platforms.”