trueEX Launches First Platform for Trading and Novation of Non-Cleared Derivatives


trueEX – New York – trueEX has launched the first execution venue for real-time execution, processing and novation of non-cleared interest rate swaps. By streamlining the workflow, trueEX is defraying much of the significant complexity and operational burdens arising from mandatory margining of non-cleared swaps, which has already been implemented in the U.S., Canada and Japan and due to go live in Europe in Q1 2017.

The trueEX innovation allows dealers and their buy-side clients to immediately benefit from full transparency of economic details, certainty of execution, and a central venue for novation, the process of transferring or “stepping out of” swaps. By providing a standardized electronic protocol to communicate the trade information, pricing, credit support annex (CSA) details and margin payments, the trueEX platform enables streamlined and accurate negotiation and assignment of unlimited numbers of swaps. This vastly improves the current costly, time-consuming and error-prone manual process for transacting non-cleared swaps, which represent as much as 30% of the entire swaps marketplace.

“We are very pleased that innovative firms like trueEX are responding to pressing needs in the fixed income markets,” said Ken Lester, Managing Director at NISA Investment Advisors, a leading fixed income and derivatives asset manager. “Introducing much needed efficiencies, automation and scale for non-cleared derivatives helps all market participants adjust to margin, capital and regulatory changes that are taking place. The development also lays the foundation for additional improvements that will be needed in the swaptions, total return swaps and repo markets. We are excited to work with trueEX to help in this endeavor as they have proven to be very capable of creating platforms that greatly enhance the user experience.”

“In an environment where staying at the forefront of trends in ecommerce remains key to success, Societe Generale is proud to partner with a market leader like trueEX,” said Barry Cohen, Managing Director at Societe Generale. “This new platform helps drive our leadership position in non-cleared currencies, where we were the first dealer to transact dealer-to-client IRS in PLN, MXN and BRL via trueEX. Moreover, trueEX helps us manage a significantly more efficient and cost-effective workflow.”

“This is a watershed moment for the non-cleared swaps market,” said Christina Landry, Head of Product Development at trueEX Group LLC. “By opening up the marketplace to more efficient execution and processing, we can vastly improve the experience of trading and managing these systemically important instruments for both the front and back office.”

Non-cleared (or bilateral) derivatives are customized to clients’ needs and because they are tailored to suit the liability profiles of institutional investors, they play an important risk management role.

trueEX has been a leader in the execution and process of interest rate swaps since the introduction of mandatory SEF trading in 2013. Its pioneering approach to developing new products and services has resulted in more than 20 dealers and 80 buy-side institutions taking advantage of functionality that includes flexible RFQ, full STP and execution via its trueFIX API, and direct clearing.

As a result of its ongoing innovation, trueEX commanded more than 20% of all dealer-to-client execution of interest rate swaps on SEFs in October 2016, more than 5 times the level of 6 months ago.


About trueEX

trueEX LLC operates the first exchange approved by the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) for swaps. As an exchange and registered swap execution facility (SEF), trueEX has executed over $2.8 trillion in trading volumes and $14.4 trillion in post-trade services. Its SEF provides request-for-quote (RFQ) trading protocols and a proprietary portfolio terminations and compactions (PTC) system for the efficient trade management of existing positions through direct connectivity to multiple clearing houses. trueEX has been recognized as one of the industry’s leading and most innovative companies, winning SEF of the Year at the 2016 Risk Awards and SEF of the Year at the GlobalCapital Americas Derivatives Awards in 2015 and 2016. trueEX was also named to the 2015 Institutional Investor Tech 50 and Forbes Fintech 50 rankings. The Company is based in New York and enables the trading of interest rate swaps by all market participants. It will add other liquid derivatives to its portfolio in the near future.

Related articles

  1. The first phase of the rewrite was originally due to be implemented in May 2022.

  2. The first amendments to the CFTC's swap data reporting rules come into effect on December 5.

  3. CEDX is planning to expand its range of products in 2023, subject to regulatory approvals.

  4. The paper proposes a path forward for standard SLD documentation.

  5. Exchange group’s crypto suite has had consistent volume and open interest growth.