Goldman Sachs and large asset manager use Bloomberg’s SEF to execute first fully standardized swap contract, signaling a new phase in the global derivatives market.
New York, November 21, 2013 – In its ongoing effort to prepare market participants for trading in a more regulated environment, Bloomberg announced today that the first electronically traded Market Agreed Coupon (MAC) swap contract was executed on Bloomberg SEF LLC, the company’s multi-asset class swap execution facility (SEF). The electronic trading of this newly created standardized interest rate swap further advances Dodd-Frank’s goal of increasing standardization and transparency in the global derivatives market. Goldman Sachs completed the trade with one of the leading global asset managers.
“Today there is a critical need for fungible, standardized contracts as the derivatives market migrates to electronic platforms,” said Ben Macdonald, Bloomberg’s Global Head of Product and President of Bloomberg SEF LLC. “By providing the ability to trade these contracts electronically, Bloomberg will continue to help our clients transition to a more centralized marketplace.”
The MAC swap contract features a range of pre-set terms including start and end dates, coupons and maturities. Because the terms are standardized, the addition of MAC swaps will help improve liquidity and efficiency for those who are constrained by line items, as well as enhance the ability of buy-side market participants to engage in portfolio compression.
“We are pleased to work with Bloomberg and to play a role in the ongoing evolution of the market structure for interest rate products,” said Kostas Pantazopoulos, Global Head of Interest Rate Products, Goldman Sachs. “Goldman Sachs values its role as a market maker in MAC swaps, as well as other interest rate swaps that fit the specific needs of our customers.”
Bloomberg’s SEF, the first SEF to receive Commodity Futures Trading Commission approval, provides market participants with access to interest rate, credit default, foreign exchange and commodity swap liquidity. Since launching in October, more than $400 billion in cross-asset volume has been executed and 270 global firms have signed on to use Bloomberg’s SEF. Clients and prospects can learn more by typing SEF on the Bloomberg Professional service or visiting www.bloombergsef.com.
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