European Swaps Demand Prompts Javelin Expansion

By Nicola Tavendale


US Swaps platform Javelin Capital Markets has established a London office, in response to a spike in demand from European end-users ahead of the next phase of OTC derivatives reforms writes Nicola Tavendale.

The interest-rate swap and credit derivatives trading venue plans to register as a swap execution facility once this controversial part of the Dodd-Frank mandated reforms are finalised.

Javelin’s EMEA operations will be headed-up by Dan Moon who brings over 15 years in derivatives sales experience gained from HSBC London and Bank of America, among others.

Buy-side interest

Speaking to FOWi, Moon said the firm had built up considerable momentum in the US and was now seeing strong interest from Europe.

“London was also a natural target given the number of international institutions and active interest rate derivatives market, particularly in USD, so there was a natural overlap,” he added.

“The focus on clearing and SEFs has increased in Europe as Dodd-Frank became a reality, particularly from the buy-side institutions.”

Swaps and choices

Final trading rules governing the new SEF platforms, which were introduced in a bid to increase transparency in the swaps market, are expected to be finalised in the coming weeks and come into effect by late summer.

Javelin added it will be launching its anonymous swaps trading venue in the coming weeks.

“A number of institutions in Europe have realized that the swaps markets are evolving and will offer customers more choice,” said Moon.

“No-one knows the regulatory timetable yet but we have customers in Europe already on-boarding to our platform and expect this to build over time, particularly once US SEF rules are finalised.”

Aims of Dodd-Frank

On expanding into other currencies and products, he added the firm will continue to monitor developments in both the US and European markets for a lead on its future direction.

Formed in 2009 and led by CEO James Cawley, the firm caught the market’s attention when it claimed to have cleared swaps transactions through CME’s clearing house in an average time of less than two seconds.

This aligns with one of the central aims of Dodd-Frank to introduce real-time, or as soon as technically practical, execution and clearing of OTC derivative trades to the US markets.