Bloomberg has unveiled an electronic trading system for repurchase agreements (repos) in the Philippines.
The system, which is available through partnership with the Bankers’ Association of the Philippines (BAP), the Money Market Association of the Philippines (MART) and the Philippine Depository & Trust Corp (PDTC), will allow trading of repurchase agreements to be fully electronically executed with straight-through processing.
The vendor says that the new platform is linked directly to PDTC, which allows customers and dealers to send requests for quotes electronically and enter them directly on their Bloomberg screens.
This all-new trading facility is the first of its kind for the country’s repo market, which may have lacked innovation in other areas of fixed income, with the majority of activity still passing through traditional manual channels.
The newly developed electronic trading platform offers new functions as it allows repo counterparties to view live dealer repo rates, electronically execute trades, and electronically process and allocate trades, all on one platform in a seamless workflow. This is combined with a dedicated design to meet different trading and regulatory requirements while the PDTC’s gateway automatically picks up and displays the trades for final verification and settlement authorization.
MART, a self-regulatory organization, will have visibility on all trades to strengthen regulatory oversight and ensure the repo market grows in an orderly manner.
BSP Governor Nestor A. Espenilla Jr. commented: “While our local currency bond market has grown over the last decade, it still remains as one of the smallest in the regions. Understanding the importance of a deeper, a more active capital market to compliment bank lending to serve as an alternative source of industry financing, we made a bold commitment and unveiled the road map for developing the local debt market. This includes organising the repo market for government securities.”
Andrea Mosconi, Bloomberg’s Head of Sales at ASEAN, added: “The Philippines is setting a benchmark by being the first country in Asia to adopt straight-through-processing and achieving full transparency in a repo market. We are pleased to support the establishment of an active repo market in the Philippines by 2019 and will continue to bring scalable and best-in-class technology to ensure optimal efficiency of the market in the long-term.”