Multi-asset market operator, Tradeweb has reported that institutional clients executing Japanese Yen swaps on its multilateral trading facilities (MTFs) and swap execution facilities (SEFs) can now clear their transactions via the Japan Securities Clearing Corporation (JSCC).
The enhancement follows JSCC’s decision to support MTF and SEF trading, replacing a previously time-consuming confirmation/take-up process between the clearing house and clearing brokers subsequent to the execution of their clients’ Yen swap transactions.
Instead, clients should be able to benefit from fully automated workflows on Tradeweb’s MTFs and SEFs – from pre-trade credit checks to execution and clearing – and support straight-through processing (STP) improvements.
“This is the latest example of Tradeweb and JSCC being responsive to the needs of our clients, both global hedge funds and real-money accounts, around more connectivity, flexibility and choice in Yen swap trading,” said Enrico Bruni, head of Europe and Asia business at Tradeweb. “Yen swaps form an important part of many institutional strategies, and harmonising these transactions with the real-time, STP nature of the other instruments in their portfolios will create significant efficiencies to the institutions that trade them.”
“We are very pleased to be working together with Tradeweb to address institutional investor demand for fully electronic trading workflows in Yen swaps,” said Yasuyuki Konuma, JSCC president & CEO. “As a primary central counterparty (CCP) for Yen derivatives products, we are always focused on ensuring our services are competitive, and offer global investors convenient and enhanced access to Japanese markets.”
Tradeweb facilitates both direct and indirect connectivity to clearing houses and links to middleware providers. JSCC provides clearing services for listed cash and derivatives, over-the-counter (OTC) derivatives and OTC Japanese government bond cash and repo transactions for both domestic and foreign financial institutions. The CCP is currently exempted from registration with the Commodity Futures Trading Commission (CFTC) as a derivatives clearing organisation (DCO). Clearing volume of Yen swaps on JSCC reached ¥1,181 trillion (US$8 billion) as of August 2023, exceeding the previous record of 2022 yearly total of ¥1,111 trillion.
“I am confident that JSCC’s support of MTF and SEF trading will help our clients express their views in Japanese interest rate products much more efficiently,” said Taichi Shibuya, head of Japan at Tradeweb. “Enabling investors to hedge their JPY risk, while simultaneously enjoying the benefits of trading electronically, can only add tailwinds to their strongly growing interest in Yen assets.”
Tradeweb launched derivatives trading in 2005 and has since engaged in EUR, GBP and USD interest rates swaps (IRS). More than US$78 trillion has been executed across Tradeweb’s IRS platforms in 2023 since January 2023, according to the company. The firm introduced its first Japanese products – including Yen interest rate swaps – in 2008, and electronically-traded a JSCC-cleared Yen swap transaction by a Japanese bank in 2014. A year later, Tradeweb executed its first regulated Yen swap transaction on its electronic trading platform (ETP) under Japan’s mandatory trading rules.
©Markets Media Europe 2023
