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Tradeweb Markets Inc. (Nasdaq: TW), a leading global operator of electronic marketplaces for rates, credit, equities and money markets, announced the launch of multi-asset package (MAP) trading on its global Interest Rate Swaps (IRS) platform. The first fully-electronic multi-asset package transaction using in-competition request-for-quote (RFQ) took place between Legal & General Investment Management (LGIM) and Bank of America Merrill Lynch.
“Our MAP functionality is a clear demonstration of Tradeweb’s unique ability to enhance the trading experience for our clients, and connect the buy-side with deep liquidity pools across asset classes on a single electronic venue, and in this case a single trade,” said Lee Olesky, CEO of Tradeweb Markets. “Tradeweb’s strategic approach continues to be focused on building robust and efficient trading solutions that advance our markets globally.”
The Tradeweb MAP functionality builds on the firm’s award-winning NPV (net present value) list trading tool to streamline the simultaneous execution of interest rate swaps, inflation swaps and government bonds in a single package. Traditionally, multi-asset packages have been traded via phone or chat, a laborious and time-consuming process involving multiple trading desks. By leveraging its ability to provide institutional investors with access to multi-asset liquidity, Tradeweb enables clients to achieve more competitive pricing, reduce manual booking errors, and increase execution speed for multi-asset packages.
In addition, Tradeweb uses its extensive live market data to present buy-side trading desks with analytics and pricing for each instrument in the package, thus increasing transparency and helping them fulfil their best execution requirements. Clients also benefit from a streamlined post-trade workflow, as Tradeweb automatically sends swaps transactions for clearing and bond transactions for booking.
“The Global Trading team at LGIM is constantly looking for ways to innovate, and ultimately improve client outcomes,” said Phil Hunter, head of rates trading at Legal & General Investment Management. “The Tradeweb MAP functionality helps LGIM reduce trading costs and achieve straight-through processing, while also ensuring that enhanced best execution requirements under MiFID II are being met.”
Tradeweb launched NPV list trading in November 2013, initially to address demand for a solution that would help firms execute offsetting trades to eliminate line items at the clearing house, a process more widely known as compression. Since then, the tool has been developed to not only compress existing cleared trades, but also to trade custom swap strategies and packages, to facilitate the migration of their portfolios from LIBOR to new risk free rates, and to trade across multiple CCPs and manage CCP basis risk.
Institutional investors have been trading swaps electronically on Tradeweb since 2005. Tradeweb operates the largest swap execution facility (SEF) by volume for institutional rates derivatives trading, representing 68% of total notional traded year-to-date, according to Clarus data. Global IRS activity on Tradeweb Markets has already surpassed USD 36 trillion in 2019, with an average USD 214 billion traded daily, up 75% year-over-year. Tradeweb has been moving the industry forward with innovations such as the first fully electronic, centrally-cleared IRS transaction, and the first cleared inflation swap transaction using in-competition RFQ.
