Automated terminations in a cleared world (coming soon)

Abstract

There is an unmet need to streamline the process of terminating trades in over-the-counter (OTC) derivative financial products, such as interest rate swaps (IRSs), through standardisation and automation. Investors who now wish to wrap up a particular investment and its attendant risk must use methods that are non-uniform, cumbersome, expensive, based on spreadsheets and dependent on manual processing and execution. To implement a more reliable, cost-effective and faster process, a standardised automated system should be put in place to terminate existing swap positions and completely eliminate the manual processing now used to handle these critical transactions. trueEX has created a platform that will facilitate the termination of pre-existing cleared swaps. On the trueEX platform, traders and firms can upload packages of executed existing swap trades from their internal databases and trade books. Eventually, the trade will be direct via links with the major clearinghouses. From the executed trades entered, traders can select those that they wish to terminate and put those trades together into a termination package, which can contain one or more pre-existing swaps.