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Compagnie Financiere Tradition (CFT.EB) Tuesday voiced confidence in its fledgling derivatives trading platform Trad-X, saying it wants to exceed the EUR112 billion in euro interest rate swaps it has traded since the platform's launch two months ago.
The London-based venue for trading over-the-counter derivatives electronically is one of the first competitors to ICAP PLC's (IAPLY) iSwap platform, which was relaunched with dealer backing last September.
Trad-X said its EUR112 billion represents a "significant milestone" in attracting liquidity and, in turn, winning market share.
"It proves to me that if we can succeed at the start of this venture in a non-risk appetite-type market, it gives me confidnce for the future of our venture," Tradition's Daniel Marcus told Dow Jones Newswires.
Marcus is head of strategy and business development for Tradition, the interdealer broking arm of Swiss-based Compagnie Financiere Tradition.
Trad-X's strong growth in its first two months already poses a considerable threat to ICAP, a London-based exchanges analyst said. Trad-X competes with brokers such as ICAP, BGC Partners, GFI Group and Tullett Prebon (TLPR.LN), connecting buyers and sellers of swaps, bonds and currencies.
Second-quarter earnings from Europe's largest investment banks such as Deutsche Bank AG (DB) next week are expected to show that trading in euro swaps has been light as the euro zone grapples with its debt problems and investors clamp down on risk.
Last week, ICAP reported a volume of EUR510 billion in the trading of euro interest rate swaps since September.
Regulators are set to shine a spotlight on trading in over-the-counter securities following the financial crisis, with U.S. and European overseers drafting rules to force more trading onto platforms. Besides ICAP and Tradition, GFI Group (GFIG) is among the interdealer brokers jockeying for position with trading platforms before the new rules come into effect.
-By Katharina Bart, Dow Jones Newswires; +41 43 443 8043; [email protected]