Platform Automates Collateral Confirmation & Settlement Process
NEW YORK -- Investors in the U.S. tri-party securities repurchase (repo) market can now use Bloomberg technology to match and confirm repo trades with both clearing banks, Bank of New York Mellon (BNY) and JP Morgan. Bloomberg’s fixed income group announces the first agency-neutral platform that allows investors to process and confirm repo trades with either clearing bank as mandated by the Federal Reserve Bank of New York (The Fed).
The Fed, following the financial crisis, asked for improvements to the settlement structure of tri-party repos, which represent an estimated $1.8 trillion a day in deal turn over. Bloomberg’s Fixed Income Trading platform tracks and matches repo trades using a voice confirmation system (VCON) and automatically informs BNY Mellon and JP Morgan that a trade has occurred. The FIT platform and process meets the guidelines issued by the Tri-Party Repo Infrastructure Reform Task Force (the “Task Force”).
“The enhancements to our tri-party repo platform bring greater transparency to the market,” said Ben Macdonald, Global Head of Fixed Income Trading at Bloomberg LP. “More than 500 trading firms are affected by the guidelines and can now replace ad-hoc methods of matching trades with an automated system that takes the guess work out of meeting the compliance guidelines.”
“Market participants using Bloomberg’s system will benefit from the automation of key aspects of the trading process for tri-party repos,” said John Vinci, managing director of BNY Mellon Broker Dealer Services. “We are fully supportive of the changes recommended by the Task Force, which will lead to greater confidence and transparency in the tri-party marketplace.”
Bloomberg executes more than 85,000 block repo agreements per month across specials repo, general collateral (GC) delivery vs. payment (DVP) and tri-party classifications. There are already 27 dealers exchanging tri-party trade confirmations over Bloomberg’s FIT platform.
“Partnering with Bloomberg for tri-party repo matching has allowed Federated to seamlessly match deals against our dealer community, and it has provided flexibility and integration with the clearing banks while meeting regulatory timelines,” said Albert Morabito, Director of Global Trading Operations at Federated Investors.
Bloomberg LP is the world’s most trusted source of data, news and technology for businesses and financial professionals. Headquartered in New York, the company employs more than 13,000 people in 185 locations around the world. Bloomberg Fixed Income Trading (FIT) is the world’s largest and most widely used fixed income trading platform. FIT provides liquidity, trading functionality, and straight-through-processing across all fixed income asset classes including cash bonds, repo, money markets, interest-rate and credit derivatives, mortgages, money markets, and municipal bonds. FIT is the only fixed income platform which is fully integrated with the Bloomberg Professional service.
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