SwapsWire, the industry utility established in 2002 to automate the confirmation process in the OTC derivative markets, announced record 2006 volumes last week.
In 2006, the service confirmed more than one million trade events for the first time, more than double the number in 2005.
In order to handle increased volumes and a broadening product scope, the company says it intends to increase its headcount by 50% this year.
In addition to newly executed trades, a “trade event” includes unwinds, option exercises and other changes which occur to trades after they were originally put on the books. These “trade life cycle” changes require agreement between the parties to the original trade and are often the source of processing problems in manual operations.
SwapsWire says that an analysis of volumes shows 74% of trade events in 2006 were new deals, compared to 86% in 2005, highlighting the growing importance of life-cycle events to post-trade automation. “It is very clear that clients are utilising the additional support provided by SwapsWire for these life-cycle events,” the firm says.
Chip Carver, SwapsWire’s CEO, says, “We are delighted with the take-up of our services across the market. Volumes on the buy-side increased by a factor of eight in 2006 and the momentum is continuing in 2007. Overall, our volume growth is being driven by both an increase in client numbers, and by existing clients using new products and features.”