MTS and Wematch.live launch risk netting service for IRS market
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MTS and Wematch.live launch risk netting service for IRS market 27 June 2023UK Reporter: Carmella Haswell
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European electronic fixed income platform MTS and fintech Wematch.live have run the first session of the Risk Netting Service for Interest Rate Swaps (IRS), Euronext confirms.
The MTS Swaps Risk Netting Service is a session-based trading functionality that builds upon the web-based interdealer trading venue for the IRS market, MTS Swaps by Wematch.live, launched in February 2023.
The web-based interdealer trading venue was designed to digitise voice trading in rates swaps, combining benefits of traditional voice trading and fully electronic execution platforms in providing additional flexibility to traders to do voice negotiation supported by digital workflow.
According to MTS, its Swaps Risk Netting Service is the only platform for automated risk netting of IRS inclusive of trading constraints, profit and loss (PnL) controls and contingencies.
Participants of this service can manage their risk across their IRS portfolios during regularly scheduled risk netting sessions on a three month versus six month, 鈧琒TR/EURIBOR, and Eurex/LCH basis.
The three month versus six month EURIBOR basis session executed trades across a number of participants and tenors on 20 June 2023.
In the pipeline, MTS plans to launch a dealer-to-client request for quote (RFQ) trading functionality for IRS, BondVision Swaps, in early 2024.
Commenting on the milestone, Oliver Clark, head of product development at MTS, says: 鈥淭he MTS Swaps Risk Netting Service delivers an electronic trading solution and source of unique liquidity for traders in the interest rate swaps market. We look forward to working with our clients to continue innovating across the rates market.鈥�
Steve Schiff, head of Risk Netting Services at Wematch.live, adds: "We are thrilled to have run the first session of the Risk Netting Service by Wematch.live for interest rate swaps with our partners, MTS.
鈥淭his milestone represents a significant advancement in our mission to provide cutting-edge solutions and enhance liquidity in the interest rate swaps market.
鈥淭he session-based functionality of the service enables participants to effectively manage risk in bulk across their portfolios, fostering efficiency and mitigating PnL volatility: we are proud to be at the forefront of innovation and look forward to further collaboration with MTS as we build out new liquidity pools for the rates market."
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