BATS Global Markets to Enhance NDFs Offering Through SEF Acquisition
- The transaction will enable BATS to broaden the instruments available to trade on Hotspot.
With the U.S. ecosystem for swap Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co facilities continuing to evolve, Bats Global Markets, Inc. (Bats: BATS), the Lenexa-based operator of the U.S second-largest stock exchange, today announced its plans to acquire Javelin SEF, LLC (Javelin), a Swap Execution Facility (SEF).
The transaction is pending regulatory approval and the deal terms will not be disclosed.
Javelin SEF, LLC is a swap execution facility that offers Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent and execution choices in a wide range of interest rate swaps. Bats said the deal is intended to accelerate its plans to offer trading of non-deliverable forwards (NDFs) for the foreign exchange market.
Commenting on the news, Chris Concannon, CEO of Bats Global Markets said: “Our acquisition of Javelin underlines our commitment to the FX market and is an acceleration of our FX product rollout plans. The transaction will enable us to broaden the instruments available to trade on Bats Hotspot, adding to the platform’s existing product line-up.”
SEFs and NDFs
NDFs are cash-settled, short-term forward contracts in a thinly traded or nonconvertible foreign currency like the Brazilian real, Chinese renminbi, or Indian rupee, against freely traded currencies, like the U.S. dollar. The profit or loss at the settlement date is calculated by taking the difference between the agreed upon exchange rate and the spot rate at the time of settlement. The gain or loss is then settled in the freely traded currency.
Non-deliverable forwards (NDFs) have experienced impressive growth in recent years. According to the latest Bank for International Settlements (BIS) triennial survey, total NDF daily turnover was $127 billion, as of 2014, around 19% of all forward trading globally and 2.4% of all currency turnover.
In terms of SEFs, they are trading entities that clear OTC products, such as OTC interest rate and credit swaps under the CFTC’s regulatory oversight. The new facility emerged out from the Dodd- Frank Act and Consumer Protection Act of 2010 which deemed NDFs as a financial instrument requiring mandatory clearing, providing greater pre-trade and post-trade transparency to the swaps market.
The US watchdog has issued recently a series of orders granting registration to a large number of platforms to operate as Swap Execution Facilities, better known as SEFs. However, much of the trading volume in this realm is still concentrated among a few big players. The list includes ICAP, BGC Partners, Tullett Prebon, CME Group, ICE and Bloomberg, with the latter capturing nearly 50 per cent of plain vanilla swap trades last year.
With the U.S. ecosystem for swap Execution Execution Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a co facilities continuing to evolve, Bats Global Markets, Inc. (Bats: BATS), the Lenexa-based operator of the U.S second-largest stock exchange, today announced its plans to acquire Javelin SEF, LLC (Javelin), a Swap Execution Facility (SEF).
The transaction is pending regulatory approval and the deal terms will not be disclosed.
Javelin SEF, LLC is a swap execution facility that offers Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent and execution choices in a wide range of interest rate swaps. Bats said the deal is intended to accelerate its plans to offer trading of non-deliverable forwards (NDFs) for the foreign exchange market.
Commenting on the news, Chris Concannon, CEO of Bats Global Markets said: “Our acquisition of Javelin underlines our commitment to the FX market and is an acceleration of our FX product rollout plans. The transaction will enable us to broaden the instruments available to trade on Bats Hotspot, adding to the platform’s existing product line-up.”
SEFs and NDFs
NDFs are cash-settled, short-term forward contracts in a thinly traded or nonconvertible foreign currency like the Brazilian real, Chinese renminbi, or Indian rupee, against freely traded currencies, like the U.S. dollar. The profit or loss at the settlement date is calculated by taking the difference between the agreed upon exchange rate and the spot rate at the time of settlement. The gain or loss is then settled in the freely traded currency.
Non-deliverable forwards (NDFs) have experienced impressive growth in recent years. According to the latest Bank for International Settlements (BIS) triennial survey, total NDF daily turnover was $127 billion, as of 2014, around 19% of all forward trading globally and 2.4% of all currency turnover.
In terms of SEFs, they are trading entities that clear OTC products, such as OTC interest rate and credit swaps under the CFTC’s regulatory oversight. The new facility emerged out from the Dodd- Frank Act and Consumer Protection Act of 2010 which deemed NDFs as a financial instrument requiring mandatory clearing, providing greater pre-trade and post-trade transparency to the swaps market.
The US watchdog has issued recently a series of orders granting registration to a large number of platforms to operate as Swap Execution Facilities, better known as SEFs. However, much of the trading volume in this realm is still concentrated among a few big players. The list includes ICAP, BGC Partners, Tullett Prebon, CME Group, ICE and Bloomberg, with the latter capturing nearly 50 per cent of plain vanilla swap trades last year.