SwapsWire eyes October launch

SwapsWire, the inter-dealer interest rate derivatives trading system backed by a consortium of 23 banks, is to launch in October after extensive delays and an entire systems overhaul, according to its chief executive Chip Carver. The system has also opened its doors to broker participation earlier than planned, with London-based inter-dealer broker Icap set to be live on the system at launch.

SwapsWire will support trading of euro, sterling, yen, US dollar, Swiss franc, Norwegian krone, Swedish krona and Danish krone interest rate swaps throughout Europe. A US launch will follow before year-end prior to the system being rolled out globally.

David Casterton, managing director of Intercapital Europe - part of Icap - and head of the firm’s interest rate derivatives business in Europe, said Icap will use SwapsWire as a "confirmation conduit" to provide straight-through-processing (STP) to its bank clients. It will use the system to deliver messages for every voice-brokered deal done with SwapsWire members.

"This should prove the chosen STP utility for swaps," said Casterton.Contrary to its previous plan, SwapsWire will not offer electronic execution capabilities - at least not at launch. It will initially focus on providing a system for electronic booking and confirmation of trades negotiated externally between dealers to enable more efficient confirmation and processing of trades negotiated by phone, e-mail or proprietary systems. Carver said adding execution is still part of SwapsWire’s business plan, but that the main focus is delivering a product to build on, and attracting more users.

The decision to change focus was taken at board level around the time Carver became chief executive in April, replacing Andrew Brown, who left following delays and software problems. Prior to this Carver was head of e-commerce for interest rate business at Goldman Sachs in New York, and represented the bank on the SwapsWire board.

SwapsWire has since ended its association with former software provider, AVT, and software integrator Syntegra, Carver said.

Carver admitted that the original platform planned for Q1 this year was not of "sufficient quality", although he declined to specify in which areas it fell short, or which party was responsible for the problems.

SwapsWire was founded by a consortium of leading banks in the derivatives business. Casterton said Icap would not become a member of the constorium's board. "This is purely a commercial deal," he said.