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Tradition to launch new collateral platform

1 May 2016 Securities Lending Times

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Swiss broker-dealer Tradition is launching a new peer-to-peer collateral trading platform. The platform, known as Elixium, aims to tackle the impact on balance sheets caused by Basel III for those in the repo and collateral financing markets.

Elixium’s tools and analytics will allow institutions to qualify credit slippage, view depth and liquidity across all tenors and baskets and offer varied execution methodology, according to Tradition.

The platform will be rolled out in stages over the next few months and will be run by Nick McCall.

McCall said: “The repo and collateral market is a critical source of funding for many institutions but is balance sheet intensive. As institutions come under pressure as a result of regulatory changes such as the liquidity coverage ratio and net stable funding ratio, a reduction in balance sheets has impacted the depth of liquidity available.”

“By establishing a peer-to-peer network and offering full counterparty control, we are enabling greater access and price discovery for many non-bank institutions such as asset managers, central counterparties, corporates and insurance firms, which are increasingly being seen as key sources of liquidity in the repo market.”

The new platform will also be managed by Roberto Verrillo, as head of strategy and markets, Gabrielli Frediani as chief business development officer, Nick Van Overstraeten as director of product development, and Iona Levine as special adviser.

Verillo was previously head of Nomura’s GBP rates desk, while Overstraeten brings more than 13 years of experience as a senior interest rates trader at Citibank.

Levine previously served as general counsel for LCH.

The new platform will hold 40 collateral baskets covering fixed income and equities in GBP, EUR, USD, CAD and JPY, along with emerging market currencies.

Elixium is available to corporates, central banks, sovereign wealth funds, asset managers, pension funds, insurance companies, government institutions, hedge funds, broker-dealers and banks.

Verrillo added: "Legacy trading models are no longer as relevant in today’s market as they once were. Financial institutions are restructuring their product offerings and businesses in light of regulatory and structural shifts in the dynamics of how markets operate. Elixium is designed as a direct result of these changes and we hope to be at the forefront of this evolving market over the coming years."

Frediani said: “I’m delighted to join Elixium at a time when the market is ripe for ambitious change. Regulators and central banks are demanding a move towards transparent markets, while market participants want standardised access to collateralised liquidity on a short-term and long-term basis. Elixium addresses these complex issues and offers a choice of execution protocols that is urgently required by the market.” Drew Nicol, Securities Lending Times.

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