BLOOMBERG SEF & MADE- AVAILABLE- TO-TRADE

Transcription

1 BLOOMBERG SEF & MADE- AVAILABLE- TO-TRADE JANUARY // 28 // 2014

2 BLOOMBERG SPEAKERS 2» NATHAN JENNER Global COO Fixed Income Electronic Trading» DEREK KLEINBAUER CDS Business Manager» JEFFREY MISSIMER US Head of Buyside Sales

3 TABLE OF CONTENTS 3» TIMELINES FOR MAT» SCOPE OF PRODUCTS» TRADING PROTOCOL CHANGES» OPTIONS FOR TRADING ABOVE BLOCK SIZE» SOLUTIONS FOR 1.35» NEXT STEPS

4 2013 WAS BUSY

5 A SHORT REVIEW OF HIGHLIGHTS Phase 1, 2, 3 of the Clearing Mandates Business Conduct Rules SEFs went live Mandatory Pre Trade Credit Checking Void Ab Initio STRONG CUSTOMER DEMAND FOR SEF TRADING Over 400 customers participating on Bloomberg SEF ( BSEF ) $900 Billion in notional Over 16,000 trades executed CUSTOMER FEEDBACK Multi Asset class Rates, Credit, FX & Commodities Integration with LCH, CME, ICE & SDRs Integration with Pre and Post trade analytics

6 TIMELINES & SCOPE OF PRODUCTS 6 CFTC ANNOUNCED APPROVAL OF A MAT APPLICATION ON JANUARY 16TH. THEREFORE EFFECTIVE DATE IS FEBRUARY 15, 2014 PRODUCTS SPECIFIED ARE USD and Euro Spot starting or next two IMM Start dates Fixed Notional 2,3,5,7,10,12,15,20,30 Year MAC swaps from Feb 21st CREDIT DERIVATIVES DUE TODAY (MAT APPLICATIONS 30TH OCT) CDX NA IG & HY ITRAXX Europe & Xover On-the-run & Most recent off-the-run WHAT ABOUT PACKAGES?

7 HOW WILL YOUR TRADING CHANGE? 7 MANDATORY SEF TRADING BELOW THE BLOCK THRESHOLD (UNLESS COUNTERPARTIES CLAIM AN EXEMPTION) TRADING ON SINGLE DEALER PAGES PREVENTED BELOW THE BLOCK SIZE THRESHOLD WHAT ABOUT TRADES ABOVE THE BLOCK THRESHOLD? They still need to be reported to a SEF SEF will then report to an SDR WHAT OPTIONS DOES BLOOMBERG SEF HAVE FOR BLOCK TRADE REPORTING 1. VCON Submission 2. Single Dealer Page Execution 3. RFQ to one on BSEF

8 WHAT ARE YOUR OPTIONS ON BLOOMBERG SEF? 8 BELOW BLOCK SIZE THRESHOLD REQUEST FOR STREAM (ALLQ) Minimum of 2 REQUEST FOR QUOTE (BBTI OR ALLQ) Minimum of 2 ORDER BOOK ABOVE BLOCK SIZE THRESHOLD REQUEST FOR STREAM (ALLQ) No minimum REQUEST FOR QUOTE (BBTI OR ALLQ) No minimum ORDER BOOK VCON SUBMISSION SINGLE DEALER PAGE EXECUTION RFQ TO ONE

9 RECORD KEEPING REQUIREMENT DIRECT MARKET ACCESS FCM OFFERS YOU SPONSORED ACCESS VOICE CALL & TRADE RECORDS STORAGE (BVAULT) USE BLOOMBERG TO INITIATE THE CALL CALL RECORDED & ASSOCIATED WITH THE SUBSEQUENT TRADE TRADE RECAPS ASSOCIATED WITH THE PHONE CALL & THE TRADE

10 LETS REVIEW THE BLOCK TRADE SUBMISSIONS IN MORE DETAIL

11 OVERVIEW OF BLOCK TRADING 11

12 RFQ TO ONE IN MORE DETAIL 12 SEF PARTICIPANTS WILL HAVE THE OPTION OF EXECUTING A BLOCK NOTIONAL TRANSACTION ON BSEF BSEF PERFORMS THE NOTIONAL CHECK ON THE INSTRUMENT IF THE NOTIONAL IS OVER THE BLOCK NOTIONAL THRESHOLD, THE TRADE IS ALLOWED TO PROCEED AS AN RFQ TO 1 POST EXECUTION, THE TRADE FOLLOWS THE STANDARD REPORTING FLOWS PRE-TRADE CREDIT CHECKS WILL BE PERFORMED BY BSEF TO THE FCMS DESIGNATED ON THE TICKET BLOOMBERG SEF WILL SUBMIT BOTH SIDES OF THE TRADE TO THE DCO FOR CLEARING AS IS DONE FOR ON SEF EXECUTION PARTICIPANTS CAN USE THIS FLOW TO SUBMIT VOICE NEGOTIATED TRANSACTIONS TO BSEF AND BENEFIT FROM STP

13 SINGLE DEALER PAGES IN MORE DETAIL 13 AUTHORIZED TRADERS ON BSEF CAN EXECUTE A BLOCK NOTIONAL TRADE VIA A SINGLE DEALER PAGE BSEF PERFORMS THE BLOCK NOTIONAL CHECK ON THE MAT INSTRUMENT IF THE NOTIONAL IS OVER THE BLOCK NOTIONAL THRESHOLD, THE TRADE IS ALLOWED TO PROCEED (IF THE NOTIONAL IS UNDER, PARTICIPANT IS NOTIFIED THAT THE TRADE MUST BE EXECUTED ON A SEF) A PRE-TRADE CREDIT CHECK WILL BE PERFORMED BY BLOOMBERG TO THE FCMS DESIGNATED ON THE TICKET AFTER THE BLOCK TRADE IS EXECUTED THE TRADE IS AUTOMATICALLY REPORTED TO BLOOMBERG SEF AND THE SDR BLOOMBERG SEF WILL SUBMIT BOTH SIDES OF THE TRADE TO THE DCO FOR CLEARING AS IS DONE FOR ON SEF EXECUTION THIS FLOW MAY BE USEFUL FOR A PUT THROUGH FLOW TO BENEFIT FROM STP

14 VOICE RECAP VIA VCON<GO> 14 REPORTING COUNTERPARTIES WILL HAVE THE ABILITY TO SEND A RECAP TO THEIR SEF COUNTERPARTY USING A TEMPLATE BASED OFF OF THE EXISTING CDXT/SWXT TICKETING FUNCTIONALITY SEF RECEIVES THE REPORT AND PASSES THE TRADE ON TO THE SDR OF THE SEF S DESIGNATION IN PARALLEL, THE RECAP IS SENT TO THE RECIPIENT WHO WILL THEN ALLOCATE TO THE APPROPRIATE ACCOUNT/ACCOUNTS AND DESIGNATED FCM BSEF SUBMITS THE TRADE TO THE DCO ON BEHALF OF BOTH COUNTERPARTIES SUBMISSION VIA FIX AVAILABLE NO CREDIT CHECK

15 WHAT ARE MY NEXT STEPS?

16 NEXT STEPS 16 ONBOARDING STEPS: Participation Agreement Admin Form FCM Accounts & Set Ups CONTACT YOUR BLOOMBERG FIXED INCOME TRADING REP RUN SEF<GO> ON THE TERMINAL RETURN YOUR DOCS

17 CONTACT BLOOMBERG SEF 17 US: Jeff Missimer - jmissimer@bloomberg.net Joe Guarino - jguarino@bloomberg.net EUROPE: Andy Moreton - amoreton6@bloomberg.net Howard Hoskin - hhoskin@bloomberg.net ASIA: Rich Warrick - rwarrick@bloomberg.net