On the first day of trading, euro interest rate swap trades
with a nominal value of €1.3bn were matched through the
electronic order book.
With the support of large market makers, including Barclays
Capital, Deutsche Bank and JP Morgan, the platform provides
streaming prices to members, functioning as a multilateral
The MTF takes Icap’s existing voice broking
liquidity and combines it with an electronic platform, to
create a single pool in a wide range of euro IRS instruments
with up to 30 years’ maturity.
The platform is open to market making banks that have access
to a clearing house for interest rate derivatives. Other banks
will continue to have access via Icap’s voice
Michael Spencer, chief executive of Icap, said in a
statement: "OTC dealers have been waiting for an effective
electronic interdealer trading system for swaps for some time.
This is a major turning point for the largest and most
important interest rate market in Europe; bringing greater
automation, increased transparency and lower transaction
"All transactions will be captured and recorded
electronically, although we expect the most liquid and
standardised products to move progressively electronic while
the less liquid products remain mostly voice."
The firm said in July that it was hoping to benefit from the
newly signed Dodd-Frank Act, which requires OTC swaps to be
traded through swap execution facilities. It hopes to meet the
Act’s requirements as an SEF. For now, the new
platform is regulated in the UK as an MTF.
In a July statement to investors, Spencer concluded the firm
was "well positioned to take advantage of the potential changes
in the structure and regulation of the financial services
industry, which are now becoming clearer."
Harry Harrison, head of rates trading at Barclays Capital,
called the new platform "a key development". Chris Willcox,
global head of rates at JP Morgan, commented: "As market
participants, we are always interested in finding ways to
improve trading efficiency. Interest rate swaps trading is a
large, diverse and complex activity.
"The use of Icap’s technology by wholesale
interbank participants trading euro interest swaps, combined
with existing industry infrastructure, will help to mitigate
ongoing risks and improve efficiency."