TT partners with CurveGlobal to help market transition from LIBOR to SONIA

Rick Steves

STIR products available through CurveGlobal are 3M Euribor, 3M Sterling, 3M SONIA, and 1M SONIA.

CurveGlobal has partnered with Trading Technologies International that will mutually benefit the firms as they exchange services for their client bases.

CurveGlobal is an interest rate derivatives trading platform, a Listed Future Exchange subsidiary of London Stock Exchange Plc. The platform has gained more attention with Brexit as it helps the market transitioning from LIBOR to SONIA.

STIR products available through CurveGlobal are 3M Euribor, 3M Sterling, 3M SONIA, and 1M SONIA.

TT’s customers who are not currently connected to Curve will be able to trade short term interest rate futures with no Market Access Provider (MAP) fees, enabling them to benefit from growing volumes and open interest on CurveGlobal, particularly in SONIA-linked instruments.

CurveGlobal futures also clear at LCH enabling customers to further benefit from portfolio margining opportunities.

Andy Ross, Chief Executive Officer at CurveGlobal, said: “Our partnership with Trading Technologies will enable their customers to benefit from lower costs and significant margin efficiencies when trading STIRs through CurveGlobal.

“The easy electronic access available through Trading Technologies will also give traders the opportunity to benefit from free market access and clearing as well as portfolio margining against OTC products cleared through LCH Ltd.”

Steve Stewart, Managing Director Sales EMEA, Trading Technologies: “CurveGlobal has been leading the charge to increase competition in the interest rate futures space. We are happy to be working with them to provide our mutual customers with access to their platform as they continue to grow.”

A research study conducted by Duff & Phelps found that 77% of financial institutions do not have a comprehensive plan in place for LIBOR transition, which is due to take place on 31 December 2021.

Over half of the firms (54%) identified LIBOR exposures, but haven’t resolved their liability nor have they taken any action towards it, as most had not cataloged transition provision, and nearly half were unsure of what to do next.

The data was gathered from a sample of 27 respondents, comprised of private equity firms (43%), professional service providers (25%), hedge funds (11%), banks (4%), and others (18%).

Quite astonishing is the finding that almost a quarter (23%) of the firms surveyed have not begun any formal processes to identify exposure.

Failure to adequately prepare for the LIBOR transition could lead to significant risks for firms as contracts transition to alternative reference rates. As such, there is potential for the underlying value to shift from one party to another.

A third of respondents (34%) revealed a belief that they are on track for the transition, despite the stunted progress across the majority of the industry. Firms are potentially underestimating the extent and complexity of work required for a successful transition.

Nearly a third of respondents have begun thinking about their transition and are unsure whether they are on track, while 14% have not begun planning, with a further 14% concerned they will not be ready before at least Q1 2022, which is too late.

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