The proposals by US Treasury secretary Timothy Geithner to move the standardized part of derivatives trading on to exchanges or transparent electronic trade execution systems spell good news for those two businesses. JPMorgan analysts upgraded the CME Group to neutral from underweight in response to the Treasury secretary’s plans for greater transparency. But while the focus has been on how the exchanges will benefit, the advantages for the electronic trading platforms have been largely ignored. Firms such as Tradeweb stand to see a lot more business flowing their way if the proposals take shape.
"Electronic trading platforms are more flexible in the types of derivative structures that can be bought and sold than exchanges, so will benefit," says Lee Olesky, chief executive of Tradeweb. "We are certainly seeing this as a positive development for us, as well as for the industry."
| "Electronic trading platforms Lee Olesky, Tradeweb |
Lack of transparency in the derivatives market has been blamed for adding to the financial crisis.
