Javelin SEF, LLC (“Javelin”) announced today that it has launched an electronic, fully automated functionality for pre-trade credit checking and straight through processing of block trades in the US$350 trillion Interest Rate Swap market. Javelin’s electronic block trade processing capability provides market participants with the ability to submit proposed block trades for pre-trade credit checks and, once the credit checks have been approved, the block trades can be submitted to the designated clearinghouse and swap data repository for clearing and swap data reporting in a manner that is fully compliant with all CFTC regulations regarding straight through processing of block trades that are intended to be cleared. While the CFTC provided No Action Relief from many of the current “Block Trade” requirements on Sept 19, 2014, the CFTC reminded the marketplace of the required steps for the proper processing of a block trade and the sequence in which those steps must occur. The CFTC No Action Relief expires on December 15, 2015, after which the existing rules concerning proper processing and the order of steps must be followed in the conclusion of a block trade.
Javelin has introduced the capability for salespeople at dealing firms to conclude block trades with their customers and then process those trades on Javelin using the proper protocols. Salespeople may enter proposed trades as agent for customers into a staging area on Javelin’s electronic platform to perform pre-trade credit checks, and then on the conclusion of the negotiation, may send the executed block trade for clearing and swap data reporting. The staging process allows the salesperson to complete all steps and provides feedback on how long the salesperson has to complete the transaction. Further, the staging area permits FCMs to provide credit approval for the proposed transaction before its completion and submission for clearing and reporting.
Javelin’s innovative agency model has cleared the path for dealer firms to easily onboard customers onto Javelin without the need for customers to sign additional documentation or fill out paperwork. Javelin’s agency model allowsdealers and buy-side firms to operate in a largely business-as-usual fashion when booking large block trades in Interest Rate Swaps.
About Javelin Capital Markets
Javelin SEF, LLC (www.thejavelin.com) is a derivatives execution platform for Interest Rate Swaps. Javelin offers both anonymous electronic and voice-hybrid methodologies for trade execution.