Indiana Grain Company, LLC

Posted: 12/16/11

By: tomgrisafi

Javelin Capital Markets, a swaps trading platform, and the CME, a swaps clearing house, today announced that they had executed and cleared over $4.1 Billion of interest rates swap trades in an average time of under 2 seconds--a market first.

Working with several dealers and the buyside, Javelin executed 21 trades across multiple points of the swap curve using Javelin's anonymous execution platform late last week.

The average trade size was $195 Million in notional.

From the point of trade execution to the point the counterparties were notified of trade acceptance into clearing at the CME, the average round trip time was 1.932 seconds. CME accepted 90% of the trades in under 2 seconds, with the fastest being 1.32 seconds.

Recently proposed CFTC rules require that swap trades be accepted into clearing as quickly as "technologically practicable" where the standard is within "milliseconds or seconds or, at most, a few minutes."

"Dealers, buyside firms, clearing firms, and Javelin wanted to put a time stamp on what 'technologically practicable' meant. This now means in under 2 seconds -- A new industry standard has now been set," said Javelin CEO, James Cawley.

CME's market leading clearing engine processed the swaps in real-time by utilizing preset credit limits that were allocated to the customers by their clearing members.

"CME is excited that our investment in a robust clearing infrastructure has helped make real-time clearing a reality for the IRS marketplace," said Kim Taylor, President of CME Clearing. "Our customers value the ability to immediately clear their trades post execution, as this allows them to focus on managing their portfolios instead of worrying about operational and credit risk."

Source: Javelin

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