UBS to Use Outside Fixed-Income Trading Platforms to Save Costs

UBS AG, Switzerland’s biggest bank, plans to use outside firms’ systems for its rates and credit trading to reduce costs at businesses it decided to scale back in 2012, a person with knowledge of the matter said.

UBS will replace its own multiple trading platforms with standardized products from technology companies Murex SAS and Ion Trading Ltd. to benefit from the vendors’ economies of scale, said the person, who asked not to be identified because the plans haven’t been announced. A representative for Zurich-based UBS declined to comment.

UBS in 2012 decided to exit most of its debt trading businesses to boost profitability at the investment bank amid regulatory and cost pressures in the industry. The bank kept smaller client-driven businesses in rates and credit and in November said it would merge the unit, run by Chris Murphy, with foreign exchange trading.

The decision to use Murex and Ion will allow the bank to focus on developing products its clients require in the rates and credit businesses rather than maintaining and updating its trading platforms, the person said. Foreign exchange, where UBS has a 10 percent market share, according to a survey from Euromoney Institutional Investor Plc, is not affected by the plans, the person said.

The Financial Times reported UBS’s plans yesterday. An e-mail to Paris-based Murex and a call to Dublin-based Ion Trading weren’t immediately returned.

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