BGC Group’s Fenics Market Data launches mispricing-free AUD Interest Rate Swaps service

Rick Steves

“The Fenics Market Data team have worked collaboratively with the industry to produce the aggregated AUD IRS page, made solely of executable prices. This page is a leap forward on current practice for compliant and independent price validation.”

Fenics Market Data, a division of BGC Group, Inc. has unveiled a cutting-edge data service designed specifically for Australian Dollar (AUD) Interest Rate Swaps.

This pioneering service, powered by executable data, introduces a new era of transparency to the market, offering robust safeguards against the potential of mispricing.

“Leap forward on current practice for compliant and independent price validation”

Rich Winter, Global Head, Fenics Market Data and kACE Information Analytics, said: “This is a transformative new service. By working together with market participants, we are helping our clients meet their regulatory needs. The power of harnessing extensive market contributions offers traders, risk and compliance officers, and managers alike, reassurance that the referencing source used by them for client trades is the broadest and most accurate reflection of real, observed prices in the market.”

Nicholas Allen, Executive Director, Head of AUD Rates Trading at Westpac, stated: “The Fenics Market Data team have worked collaboratively with the industry to produce the aggregated AUD IRS page, made solely of executable prices. This page is a leap forward on current practice for compliant and independent price validation.”

Keith Nicolle, product strategist at Fenics Market Data, added: “Transactions such as Interest Rate Swaps, that are priced using a narrow, single venue price reference source, are under scrutiny from regulators concerned at mispricing for end user clients. The onus is on industry players to ensure that their price referencing sources are reflective of the whole market and not a singular view.”

Fenics Market Data AUS IRS mitigates risk of mispricing

This novel service, founded on executable data, is positioned to enhance market transparency, thus mitigating the potential for mispricing.

Through collaborative efforts with market participants, Fenics Market Data has conceived an exceptional solution that stands alone as the sole composite screen exclusively designed for AUD IRS.

This comprehensive platform derives from real-time, executable inputs provided by numerous market players. With a launch already underway and over 50% of the market actively engaged, the participation rate is projected to surge beyond 80% in the coming weeks. Market professionals can access this service conveniently via Bloomberg (FMDS<GO>FABD).

Traditionally, markets have leaned on single Interdealer Broker (IDB) reference pages, which offer merely a fraction of the overall market perspective and fail to capture the holistic view.

Several IDBs generate data pages or screens for the AUD IRS market. Nonetheless, these indicative data prices remain non-tradeable due to calculations based on models for less liquid tenors. Given that these pages solely mirror the viewpoint of individual IDBs, the risk of mispricing is amplified, a concern that regulatory bodies strive to mitigate.

The recently unveiled Fenics Market Data AUS IRS service is poised to rectify this situation by providing an all-encompassing market perspective, sourced directly from market participants, and featuring tradeable prices.

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