Eurex Taps Bloomberg’s Regulated Venues for Swaps Clearing

As part of the arrangement, Eurex Clearing has added Bloomberg’s facilities to its approved trade sources (ATS).

Bloomberg’s Swap Execution Facility (SEF) and Multilateral Trading Facility (MTF) have established a direct connection to Eurex Clearing for the clearing of over-the-counter (OTC) interest rate products to improve workflow efficiencies.

For Eurex Clearing, the connection with Bloomberg’s SEF or UK MTF is another building block in its efforts to offer an attractive venue for clearing OTC interest rate swap products.

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As part of the arrangement, Eurex Clearing has added Bloomberg’s facilities to its approved trade sources (ATS) for trade registration of OTC interest rate products, meaning Bloomberg’s clients and liquidity providers can submit trades directly to Eurex’s OTC central clearing counterparty (CCP).

Bloomberg Trading Facility Limited (BTF), an affiliate of Bloomberg LP, has recently secured approval from the Dutch Authority for the Financial Markets (AFM) to operate a multilateral trading facility (MTF).

Bloomberg’s Dutch MTF, or BTFE, mirrors its current regulatory permissions in the United Kingdom and allows the company to provide its services throughout the EU from Amsterdam, operating under a MiFID II passport. The new MTF also draws on Bloomberg’s trading venue capabilities to enable market participants to execute interest rate swaps and credit default swaps, using both request for quote and order book functionalities.

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Bloomberg and other companies running trading venues such multilateral-trading facilities are establishing European bases ahead of the UK’s departure from the European Union, to continue offering services to their clients.

Dutch Effort to Win Business

Tradeweb, MarketAxess and NEX Group have already chosen Amsterdam as their post-Brexit base, while Thomson Reuters is seeking authorization to relocate its foreign exchange MTF from London to Dublin.

The Dutch regulator set a deadline until July 1 for firms to seek approval if they want a guarantee of being regulated in time for Brexit. It is important to note that under the new regulations, for any and all institutions that fall under the MiFID II regime, financial instruments can only be traded on the new MTFs.

Commenting on the news, Nicholas Bean, Head of Electronic Trading Solutions at Bloomberg, said: “Our expanded connectivity to Eurex Clearing delivers a more streamlined workflow to the entire swaps trading process on Bloomberg. We will continue to provide a venue for clients globally to access broad liquidity while leveraging the efficiencies of electronic execution.”

Danny Chart, Head of Fixed Income Business Development at Eurex Clearing, added: “Having received CFTC approval to clear interest rate derivatives for U.S. persons under a DCO (Derivatives Clearing Organization) license, direct connectivity to Bloomberg is another important step in expanding our OTC clearing services to sell and buy-side clients in the U.S. and Europe.”

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