The Financial Times has published an article looking at the technology that is being developed for swap trading, following the recent financial reforms.
Regulators have welcomed electronic trading as a way of reducing systemic risks associated with “over-the-counter” derivatives deals, and increase transparency. As a result, swap execution facilities (SEFs) have started operating within financial markets, threatening traditional investment banking business models.
Although the major players in the market have embraced the change, GreySpark believes that some companies are more likely to focus on SEF aggregation, as their fixed-income businesses shrink. Some banks will move to this more slowly than others, as they try to focus on their original business models until the last minute.