Bloomberg launches trading platform for derivatives compliance

Date: Monday, September 26, 2011
Author: Institutional Asset Manager

Institutional investors facing upcoming Dodd-Frank Act regulations on over-the-counter (OTC) derivatives, can get another step closer to compliance with new technology from Bloomberg's Fixed Income Trading

Bloomberg FIT has launched the first commingled trading platform for OTC swap trading, ALLQ Derivatives, which allows buy-side investors to review indicative prices and execute directly with dealers on the Bloomberg Professional Service. The new technology is the foundation for Bloomberg's development of a swaps execution facility (SEF) offering. The platform will be adapted upon finalisation of the SEF rules by regulators. The Dodd-Frank Wall Street Reform & Consumer Protection Act requires companies to trade credit-default swaps (CDS) and other derivatives products through SEFs.

The Bloomberg AllQ platform is the first to provide a full view of dealer liquidity available in the market and to provide multi-currency details on interest rate swaps (IRS) and CDS. In the IRS market, investors can review executable prices in four currencies in maturities ranging from one year to 30 years. A wide range of dealers are participating on AllQ IRS including: Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, Citigroup, COMMERZBANK, Credit Suisse, Danske Bank, The Royal Bank of Scotland plc, Société Générale and UBS. For CDS Indices, customers can execute on prices in both the CDX© and ITRAXX index suites. Participating dealers in the CDS Index markets are: Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, Citigroup, Credit Suisse, Goldman Sachs, Nomura, The Royal Bank of Scotland plc and UBS.

“Bloomberg is the largest independent trading platform for OTC derivatives and we have been actively working with regulators to develop the mandatory clearing and post-trading reporting requirements," says Ben Macdonald (pictured), Global head of Bloomberg's Fixed-Income business. "The challenge now is to get the market ready, when we don't know exactly what the regulations will entail. The development of the ALLQ Derivatives platform is a crucial step toward SEF-style trading and the support we are getting in the marketplace is strong."