Eurex streamlines off-book EFP-financial trade approvals in Fixed Income Futures

Eurex extends its auto-approval functionality for off-book trading to EFP-financials trades for Fixed Income Futures in its latest joint efforts with Tradeweb to improve efficiency of fixed income derivatives business. 

Exchange for physicals (EFPs) trades may involve the simultaneous purchase and sale of futures and a cash market security. Eurex allows EFPs for its Fixed Income Futures versus securities that show a price correlation such that the futures are an appropriate hedge instrument for these transactions. 

Eurex streamlines EFP-financial trades with auto-approval rules 

To date, each EFP-financial trade had to be entered manually as an off-book trade in our T7 trading system. Details of the reference instruments transaction as well as fields required to enrich the futures leg of the trade itself had to be entered manually by our members. Now, Eurex is pleased to extend its auto-approval functionality to EFP-financials off-book trades. With the use of TES auto-approval rules, trade details can be pre-configured for various products, clients and in-house trading teams. This includes the used account, client info fields, open and close flags – just to name a few. Auto-approved off-book trades are hence booked directly and instantly, allowing participants to benefit from greater efficiency throughout the trade life-cycle.  

Collaboration with Tradeweb to offer automated solution 

As electronic workflows progress across different platforms, Eurex has collaborated with Tradeweb to offer an automated solution to streamline the reporting of Bond-Futures basis trades negotiated on their RFQ platform. By mapping TES auto-approval rules across both platforms, the futures leg of combined EFP-Fin trades agreed on Tradeweb are then sent to Eurex, including the required details of the cash transaction that would otherwise have to be entered manually on Eurex.  
 

“We are pleased to announce Nomura is the first client to go live with the auto-approval service for exchange for physical (EFP) offered by Eurex and Tradeweb.”  

Lee Bartholomew, Global Head of Fixed Income and Currencies ETD Product Design, Eurex 
 

“As we continue to provide investors with full access to fixed income markets in one place, we are pleased to have executed the first Eurex bond basis trade on a European government bond, with Nomura providing liquidity to Nykredit Bank. We look forward to continuing to bring new functionalities that digitise workflows and drive innovation in the market.”  

Roderick Joniaux, Head of European Governments & Supranational products, Tradeweb 
 

“The launch of Bond Basis is part of a series of investments in technology and trading talent that Nomura has made in its European business over the past year. These steps have materially improved liquidity provision to our clients and, as a result, Nomura is now a leading liquidity provider in European Government Bonds.”  

Hemish Shah, Head of EMEA Flow Rates Trading, Nomura
 

“We are pleased to be the first dealer to support European government bond basis on Tradeweb. This functionality allows Nomura to provide clients with a streamlined electronic solution and reduces the operational burden of trading the product. We look forward to seeing the wider adoption of this trading protocol.”  

Robbie Anderson, Head of EMEA Flow Rates Sales, Nomura