Firms partner to enable more over-the-counter (OTC) equity trades to be brought on-exchange and fully cleared
BATS Chi-X Europe (BATS), Europe’s largest stock exchange, and Traiana, a leading provider of pre-trade risk and post-trade processing solutions, today announced a joint service that will extend OTC equity trade CCP clearing to a greater number of market participants.
Due to the evolving regulatory landscape, market participants in all asset classes are leveraging central clearing of bilateral OTC trades to reduce counterparty risk, and lower capital requirements and direct processing costs. As a result, BATS and Traiana have developed services that, taken together, provide market participants with the ability to match OTC equity trades, bring them on-exchange and push the transactions to CCP clearing.
Clients that utilize Traiana’s CCP Connect service to enable matching and novation of trades to the pan-European CCP’s will now have the option to extend the service to include on-exchange benefits under BATS’ rulebook and surveillance framework, helping to smooth risk workflows for participants.
In order to provide this solution, BATS has enhanced BXTR, its market-leading trade reporting facility, by expanding its Exchange Trade Reporting (ETR) services to integrate with Traiana’s Harmony CCP Connect service. Traiana will be the first external matching provider to provide access to the new service, which is available to all Harmony CCP Connect participants, the firm’s global network that processes FX, equities, equity derivatives, fixed income and exchange traded derivatives.
Mark Hemsley, CEO of BATS Chi-X Europe said: “The versatility of BXTR – and our willingness to work with providers across the trading spectrum to improve market efficiency – has been further demonstrated with this new service. By settling more trades with CCPs and netting settlements, counterparty risk and costs across the European market will be reduced.”
Roy Saadon, Head of Product Strategy and Innovation, Traiana said: “Traiana constantly strives to provide clients with services to increase efficiency and reduce cost. The link to BATS ETR with CCP Connect further enhances the service to our clients by offering the opportunity to clear trades directly with CCP’s and bring OTC equity trades on-exchange.”
In 2015, notional value either traded on BATS or reported to BXTR totalled €8.6trn – an average of €33.3bn every trading day.
