Tradeweb Markets has announced a collaboration with two margin optimisation providers, Cassini Systems and OpenGamma, to offer clients a choice of vendor access to life-cycle cost analytics, including initial margin, collateral, clearing fees, brokerage and trading costs.
The firm says its integration of margin optimisation analytics with its interest rate derivatives platform will provide institutional investors with pre-trade initial margin calculations, as well as real-time insight into trade execution options, such as optimal clearing venue and clearing broker selections. As a result, Tradeweb clients will be better able to minimise trade life-time costs and prove best execution, it adds.
“Tradeweb continues to connect markets, this time by bringing together our rates derivatives marketplace and pre-trade analytics and margin calculation specialists,” says Enrico Bruni, head of Europe and Asia business at Tradeweb. “Our strategic alliance with Cassini and OpenGamma will equip investors with flexibility and choice, when selecting the best way to satisfy their margin and best execution requirements.”
Following the 2008 financial crisis, global regulators introduced the phased implementation of margin requirements for non-centrally cleared derivatives, most widely known as Uncleared Margin Rules (UMR). The final two phases of UMR in September 2020 and 2021 will bring into scope a significant number of new counterparties, creating increased demand for tools that help evaluate the true life-time cost of trading.
Tradeweb says the integration of margin analytics within the execution workflow will significantly enhance the trading experience for buy-side firms, ultimately helping them make smarter investment decisions. Once clients have onboarded with the vendor of their choice, they will be able to check the margin impact of interest rate swap trades on their portfolios pre-trade.
“The ability to connect to margin optimisation solutions on Tradeweb will allow us to further improve managing costs efficiently across the trade life-cycle, a key component of our investment process,” says Christoph Hock, head of multi-asset trading at Union Investment. “We look forward to using this innovative solution, which will help us ensure a well-informed, cost-efficient, and regulatory compliant trading workflow ahead of key industry reforms.”