New OTC derivatives trading venture TeraExchange is preparing to launch one of the world's first central limit order books for OTC cleared derivatives in Q4 2011.
The initiative positions TeraExchange to seize "first mover" advantage as sweeping regulatory reform reshapes the world of trading and clearing OTC derivatives.
Featuring integrated cross-asset trading, analytics and voice broker assistance services, TeraExchange's core technology and platform will provide market participants with unrivaled transparency, standardization, connectivity and liquidity. Strong risk controls combined with centralized clearing further align with the objectives of the Dodd-Frank Act to boost transparency and reduce systemic risk.
TeraExchange expects all eligible contract participants such as corporations, hedge funds, asset management firms and energy firms to experience immediate benefits including:
- Enhanced liquidity
- Improved pricing
- Full anonymity
- Pre-trade credit checks on all bids/asks
- Mitigated counterparty risk through central clearing with CME, ICE & LCH
- Voice broker / block trade assistance
- Streamlined reporting requirements.
TeraExchange will offer seamless cross-asset, multi-leg trading through integration with a wide variety of other global liquidity destinations, all accessible through its proprietary front end. Sophisticated analytics, including interactive charting indicators for both product and underlying instruments, as well as a customizable, unlimited-leg, cross-asset spread trading tool, will allow users to more easily find trading, hedging and arbitrage opportunities.
All cleared OTC derivatives will be available including:
- Interest Rate Swaps (IRS)
- Credit Default Swaps (CDS)
- Energy Swaps
- Non-Deliverable Forwards (NDF)
- Equity Swaps
Additional features and benefits will include: FCM pre-trade credit checks; clearing across multiple clearing houses based on contract; full source C++ algo engine; FIX API for direct access to exchange; pre-trade transparency and STP+ for SDR reporting.
"Legacy platforms won't work in this transforming market landscape and new world being created," states Christian Martin, CEO of TeraExchange. "Our agile, transparent multi-asset trading solution can be shaped to accommodate a near limitless number of objectives and strategies," Martin adds.
"Market participants will benefit from our fluid pricing analytics tools, highest-quality execution and unmatched reaction to evolving market dynamics for a truly differentiating competitive advantage."
Registered as an Exempt Board of Trade (EBOT) for swaps and other OTC cleared derivatives, TeraExchange intends to apply to become a Swaps Execution Facility (SEF) once SEC and CFTC rules are finalized in early 2012.
TeraExchange is a service of Spring Trading, Inc. which has offices in Summit, NJ and Washington, DC, a subsidiary in Germany and plans to expand to Europe, Asia and other locations shortly.