Middleware key to clearing success

Central clearing looks like a wonderful opportunity for middleware providers, which will play a key role in matching trades and routing data to a growing array of entities. But it’s not an easy trick to pull off – and the service may even become redundant. Duncan Wood reports


In the old days, it was possible to represent the flow of information in a derivatives trade as a simple dumbbell: one blob for each counterparty, with a connecting line to represent the phone calls and faxes used to agree and confirm the trade. Today, a similar diagram would look more like an explosion in a dumbbell factory – many more blobs and a bewildering profusion of connections.

As well as the two counterparties, a single over-the-counter trade today could also involve an execution

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