Barclays and UBS adopt new platform to reduce costs

Barclays and UBS have joined Traiana's platform, providing the banks with automated central clearing of equity derivatives trades resulting in cost savings for all active market participants. The move of banks towards the platform, including Credit Suisse, Instinet, JP Morgan and Deutsche Bank, which have already joined, is expected to save $30m a year across the equity market.

Barclays and UBS have joined Traiana’s Harmony CCP Connect Equity platform that provides automated matching and central clearing of over-the-counter equity derivatives trades. The addition of two new members is expected to bring further cost savings for connected firms.

The two European banks join some of the largest equity broker-dealers on the platform, including Credit Suisse, Deutsche Bank, Instinet and JP Morgan. Four additional brokers are believed to be in the process of signing up.

“The addition of Barclays and UBS to the platform will bring a tremendous boost to the volume of trades we are able to net and a corresponding saving for all active market participants, not just the two new brokers,” said Laura Craft, director of product strategy for equity & fixed income at Traiana.

“By netting trading activity, executing brokers and prime brokers benefit from reduced ticket volumes and a corresponding reduction in settlement costs and risks.”

Overall savings could total US$30m each year across the equity market, according to the platform provider.

Bespoke and labour intensive processing has led to high error rates in the OTC market. According to Traiana, Harmony CCP Connect achieves cost savings by reducing the volume of trades requiring bilateral settlement, reducing failed trades and lowering borrowing, funding and margin costs.

Traiana said that over 90% of OTC equity trades are eligible for clearing and the platform has a success rate exceeding 95% for netting and clearing those trades when both brokers are connected.

Harmony CCP Connect is an interoperable platform that enables users to clear their trades through connections to all three pan-European central counterparty clearing firms; EuroCCP, LCH and SIX x-clear.