MTS launches D2C repo trading, LCH is first client

  • New service streamlines dealer and client trade flows via RFQ trading protocol
  • Full client audit trail for proof of best execution
  • Integrated with current trading software for STP connectivity
  • LCH Ltd signs as first buy-side trading client

MTS, one of Europe’s premier fixed income trading venues, has launched its new dealer-to-client (D2C) Global Collateral Management (GCM) segment for the repo market on MTS BondVision UK, and is pleased to announce the signing of LCH Ltd, a leading global clearing house as its first buy-side client.

MTS has a presence on the dealing desks of over 100 sell-side institutions and at over 400 buy-side institutions. This makes it ideally placed to help buy-side clients seeking access to balance sheet in an environment of reduced collateral availability and increased regulatory burden through MTS BondVision UK. The unique dealer axe pages will help highlight dealer inventory, linking to interdealer quotes to ensure axe integrity.

Having identified a clear demand for a flexible collateral management system, MTS will offer an RFCQ trading mechanism alongside a trade registration facility.

Dealers and clients will benefit from a variety of new features, including:

  • RFCQ efficiencies through automation: clients can send single line or “list” RFCQs to their dealers, with an import function to allow easy upload of bond portfolios
  • Straight through processing: dealers benefit from existing STP efficiencies, with trades co-mingled in their current blotter, whilst clients benefit from a full audit trail for proof of best execution
  • Flexible tri-party baskets:  MTS will list participants’ bespoke tri-party baskets, with visibility restricted to approved dealer-client combinations
  • Full control of streaming of indicative quotes for dealers: dealers can stream axes, linked to their interdealer market quotes, to their configured clients on a proposal by proposal basis, directing them to relevant pools of liquidity and leading to improved access to funding and pricing
  • Highly granular credit line matrix – full control over trading counterparties with credit lines configurable by counterparty and instrument class with max tenor limits for each line and haircut capabilities

Oliver Clark, Head of Product at MTS, comments: “We are pleased to welcome LCH Ltd to our new Global Collateral Management system. LCH executes significant repo volume as part of its treasury function, and its decision to start to move this business onto our platform is a major vote of confidence in our technology and network. Its involvement, along with MTS’s track record as a leading electronic venue for repo markets, will help to establish GCM as the premier platform for clients seeking the efficiency and security of electronic trading for their repo and collateral management needs.”

Bruce Kellaway, Global Head of Repoclear, EquityClear and Collateral at LCH Group: “MTS’s new Global Collateral Management system will allow us to deliver greater efficiencies in our treasury and collateral operations at LCH. Alongside our members, we are active users of the repo market and the increased flexibility offered through the new segment will deliver additional opportunities for execution for our investment activity. LCH continues to work on the development of a new model to allow high quality buy-side firms to use RepoClear, subject to regulatory approval, which will also improve liquidity for market participants and offer them greater access to risk management tools. The new dealer to client functionality offered by this GCM tool will be of value in this regard.”

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