Inter-dealer broker Icap is to launch an electronic market for trading Euro interest rate swaps, with support from market makers Barclays Capital, Deutsche Bank and JPMorgan.
Set to go live on 6 September, the platform will take Icap's established voice liquidity and combine it with "a proven electronic platform" to create a single liquidity pool in a wide range of Euro IRS instruments out to 30 years maturity.
Michael Spencer, chief executive of Icap, describes the initiative as a "major turning point" for European swaps trading, bringing greater automation, increased transparency and lower transaction costs.
"All transactions will be captured and recorded electronically although we expect the most liquid and standardised products to move progressively electronic while the less liquid products remain mostly voice," he says.
The platform will be open to market making banks that have access to a clearing house for interest rate derivatives.
Barclays Capital, Deutsche Bank and JPMorgan have each agreed to support the venture by providing streaming prices, alongside a number of other banks, says Spencer.
Harry Harrison, head of rates trading at Barclays Capital, comments: "As the industry adopts central clearing for OTC derivatives and electronic trading expands, it becomes increasingly important for the interdealer market to adapt to these trends too. This initiative is therefore a key development."