SwapsWire expands equity derivatives service

The service, which provides banks with a clearing tool for processing trades, will be rolled out in Asia on November 20. The confirmation service will also be launched in the US in the first quarter of 2007. In a separate initiative, support for share and index variance swaps will be added in Japan.

SwapsWire already supports share and index options, and share and index variance swaps in Europe, where the service has been live since May 2005. The SwapsWire platform has obtained backing from 12 major dealers, including Barclays, BNP Paribas, Calyon, Citigroup, Credit Suisse, Deutsche Bank, Dresdner Kleinwort, Goldman Sachs, JP Morgan, Merrill Lynch, Société Générale and UBS.

Timothy Geithner, president of the Federal Reserve Bank of New York, has spearheaded a drive among global regulators to speed up the processing of derivatives trades, notably in the area of credit derivatives. The New York Fed said dealers have reported that confirmations outstanding more than 30 days have been reduced by 85% in the synthetic credit market.

Attention is now focusing on the level of outstanding documentation for over-the-counter equity derivatives trades. SwapsWire is working with global dealers to ensure that the rollout of products and services is aligned with the focus on standardised documentation.

“The benefit of the service will be to reduce dealers’ operational risk. The chances of a (processing) error being caught early will be much higher,” said a SwapsWire spokesman in London.