Online fixed income network Thomson TradeWeb is teaming with JPMorgan, Goldman Sachs and Morgan Stanley to launch an electronic auction-based trading platform for credit default swap (CDS) indices.
TradeWeb says it is working with the three liquidity providers to develop the new online market, which is due to launch in Europe and the US in the second half of the year. The company says more liquidity providers are set to join the platform soon.
The new online market for CDS Indices will enable institutional investors to simultaneously request quotes from multiple dealers electronically and move from trade execution seamlessly to electronic processing via the vendor's TradeXpress service,
Lee Olesky, president, Thomson TradeWeb, says: "For the CDS index product we will provide the tools for substantial operational risk reduction in the post-trade environment. This is a significant benefit and targets issues that are a real concern to our buy and sell side clients."
TradeWeb CDS will be the firm's 12th online market for fixed income and the second in the derivatives markets.
Rival platform MarketAxess is understood to be gearing up to launch its own CDS trading capability later this year.