According to ICE, the TRF contracts serve as an exchange listed alternative to over-the-counter total return swaps that seek to replicate the performance of MSCI’s indices in a more “capital-efficient and transparent” way.

The underlying US funding rate Secured Overnight Financing Rate (SOFR) will be used by the contracts, which measures the cost of overnight cash borrowing.

The contracts are available to trade out the curve to 2033, with both quarterly and yearly expiries.

“We have worked directly with the market to design the TRF contracts, which allow clients to benefit from trading in a US time zone, against the closing MSCI index level and report the trade on the same day, utilising the truly global nature of ICE’s equity derivatives offering,” said Caterina Caramaschi, vice president, financial derivatives at ICE.

ICE’s futures on MSCI EAFE, MSCI Emerging Markets, MSCI ESG and MSCI Climate indices, provide participants globally with a set of tools to manage equity risk.

Last year, the average daily volume for ICE’s MSCI complex was roughly 214,000 contracts, equivalent to an estimated $14 billion of notional value. ICE MSCI futures traded over 53 million contracts in the same period.

“Goldman Sachs is excited about the launch of ICE MSCI Index TRFs. We expect it to be an excellent product for clients seeking a cost-effective solution to access a range of flagship MSCI indices,” said Daria Sentuc, managing director, emerging markets global synthetics at Goldman Sachs.

“As a long-established provider of liquidity across the MSCI complex, we look forward to supporting growth in this new product.”

MSCI’s global head of fixed income and derivatives, George Harrington, added: “We’re pleased to license ICE as they expand their TRF segment to include MSCI indices. This reflects the increasing demand for new products linked to MSCI’s global benchmarks.”

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ICE Voice will be offered with ICE Chat, bringing together the latter’s network of over 120,000 active users and IPC’s Connexus Unigy private cloud platform to offer always on, open communications between individuals or groups of traders across internal trading desks, alongside any other registered ICE Chat users.

The new functionality will allow users to switch from chat to voice instantly, as well as being able to open calls from chat tabs and group chat rooms.

ICE Voice will also support full audio recording with configurable retention, playback of archived chats, and integrated chat and voice logs providing a record of communications which can aid compliance programmes.

“ICE Voice builds on our instant messaging service, which has become one of the largest networks in the financial industry, and utilises IPC’s voice network for providing cloud-based audio connectivity with a single click,” said Maurisa Baumann, head of desktops and feeds at ICE.

According to the firm, ICE Voice will bridge together voice connectivity with functionality, which was designed to match the needs of traders, including ICE Chat’s AI-powered smart text recognition functionality, which turns texts into actionable data.

“This solution reinforces both IPC and ICE’s focus on continuous innovation in trading communications and connectivity and enhancing the experience of the global trading community through greater integration and interoperability between chat, voice and electronic platforms, applications and workflows,” said Tim Carmody, chief technology officer at IPC Systems.

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ICE Global Network will be leveraged by ADX to expand its global investor base by facilitating real-time access to market data and order entry.

With hubs located worldwide, the ICE Global Network offers content, delivery and execution services through fibre and wireless networks.

The addition of ADX to ICE Global Network follows previous initiatives by ICE in the region, having previously partnered with the Abu Dhabi National Oil Company (ADNOC) to create ICE Futures Abu Dhabi, alongside bringing improved accessibility to local markets.

“ADX’s collaboration with ICE Global Network, widely used by financial institutions and trading firms around the world, aligns with our strategic goal to enhance connectivity in the market and demonstrates our commitment to facilitating access for global investors in Europe, Asia and the US to one of the world’s fastest growing markets,” said Abdulla Salem Alnuaimi, chief executive of ADX.

“The strengthening of Abu Dhabi’s dynamic capital market will serve to support the long-term sustainable growth of the UAE economy and the exchange will continue to explore partnerships that support both regional and global connectivity as well as a deeper and more liquid market.”

The ICE Global Network offers banks, asset managers, hedge funds and other market participants direct market access to data and execution services from more than 150 exchanges and marketplaces around the world.

The network’s managed services provide customers with end-to-end hosting, hardware procurement, connectivity and support through a single ICE Global Network solution.

“Our network was designed to connect investors with marketplaces and opportunities globally and our work with ADX is a perfect match for that purpose,” said Margaret Niche, head of ICE Global Network.

“The ICE Global Network offers a portfolio of solutions for low latency data delivery that connects firms around the world and is part of our global data business which provides multi-asset market data and analytics, desktop solutions, hosting and connectivity that provide greater market transparency and helps our customers manage risk in evolving markets.”

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The trans-Atlantic data service offers a new route that removes significant latency and optimises costs for investors utilising the development.

The ICE Global Network will also be expanded by the service, providing connectivity and managed services to the most active US, European and Asian marketplaces.

“We are excited to expand our ultra-low latency offering by enabling an end-to-end market data solution between US and European markets, which is designed to improve the speed and access to international financial markets,” said Margaret Niche, head of ICE Global Network.

“This new service will complement our existing offering. It will connect to the key data centres in Europe and will leverage our existing data delivery platform to ease integration for customers and provide a consistent service, including our comprehensive fibre back-up.”

A system of wireless networks on each continent will be combined by the solution, with high-speed transatlantic fibre to connect US and European markets.

The offering allows market participants to work with a single vendor enabling operational challenges linked to building and supporting a global end-to-end market data solution to be simplified.

The initial route available will transport market data Eastbound from Illinois to various locations across the London Metro Area and Europe, including Frankfurt and Bergama. ICE stated that it plans to launch more hybrid routes – both Eastbound and Westbound – between Europe and the US at a later stage.

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The LBX suite is now connected to ICE ETF Hub’s FIX application programming interface (API), providing third-party platforms and ETF market participants with improved access to the ICE ETF Hub platform, alongside the ability to systematically manage their creation and redemption orders.

Users of LBX will also be able to receive ETF creations and redemptions in real time, allowing their portfolios to be managed within the OEMS for portfolio and trade management.

“By modernising and bringing new efficiencies to the creation and redemption process, the ICE ETF Hub offers a powerful platform for accessing the ETF primary market,” said Peter Borstelmann, president of ICE Bonds.

“Connecting with LiquidityBook’s LBX OEMS gives institutional investors seamless access to our workflow over a highly scalable trade management platform, and it builds on our goal of providing an open architecture framework to create a unique network for ETF market participants.”

Currently, ICE ETF Hub supports US-listed equity, fixed income, derivative, commodity and multi-asset ETFs. Primary market participants in the ETF space also have access to functionality within the platform that helps facilitate the assembly and negation of custom basket proposals.

“Our OEMS platform helps asset managers, hedge funds and other institutional investors manage positions and transact efficiently across markets,” said Kevin Samuel, chief executive of LiquidityBook.

“Our cloud-based offering provides our clients an alternative to the inefficient file-to-file and spreadsheet-based processes that portfolio managers have used in the past and gives them more capacity to handle increasing order volumes, which promotes growth. We are excited to work with ICE to expand this functionality within the ETF creation and redemption process.”

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Lord joins the firm from ICE, where he spent the last three years, responsible for the business development and commercialisation of fixed income analytics and indices.

Before that, Lord spent nearly a decade at Bloomberg in a variety of senior positions, responsible for the development and management of Bloomberg Valuation, its pricing business for global corporate, agencies and municipals.

As head of data product, Lord will oversee MarketAxess’ global data business and products as it continues to develop and service its global client base. He will be based in New York.

“We are delighted to welcome Pierce to MarketAxess. Pierce has deep experience within the fixed-income market, delivering comprehensive data services and product development for clients. He will be an invaluable leader as we continue to expand our market-leading data offering,” said Kathryn Sweeney, global head of index and ETF solutions at MarketAxess.

Lord appointments follows the selection of Chris Concannon, current president and chief operating officer, to become MarketAxess’ new chief executive officer, effective from 3 April.

Concannon is set to replace Richard McVey in April as he steps away from his role as chief executive officer to become executive chairman.

Read more: MarketAxess selects president Concannon to replace departing chief executive

“Building and delivering actionable data services to clients has been the focus of my career and I am delighted to join a company that shares the same aspirations,” said Lord.

“As the fixed income market continues to evolve, increased use of data products and automated execution strategies will propel the market to a new level of transparency and efficiency, ultimately benefiting the fixed income investor. I am excited to work towards growing the MarketAxess data business and continue to deliver our clients a true competitive advantage.”

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The New York Stock Exchange (NYSE) saw a volatile opening to the market on Tuesday as what appeared to be a floor

The issue was first acknowledged by the NYSE (which is owned by ICE) at 10.21 ET, at which time the exchange confirmed that it was “investigating reported issues with the opening auction”.  

By 10.57 ET the problem was acknowledged, with the exchange stating that: “In a subset of symbols, opening auctions did not occur” and that impacted member firms would be able to file for “Clearly Erroneous” or Rule 18 claims for any busted trades. 

In a follow-up statement, the NYSE confirmed that a “system issue” meant that it did not conduct opening auctions in a subset of its listed securities, resulting in continuous trading from 9.30 ET without an opening auction print.  

The halted trades, and those that were impacted by the price swings, were to be declared as either null and void or aberrant (depending on the time they took place) and eliminated from the calculation of the day’s price, with the consolidated tape adjusted accordingly after the close.  

Although the issue was attributed by the exchange to a technical glitch, there was some discussion amongst market participants as to whether there could have been other factors at play, such as a program trade gone wrong. However, these rumours are unconfirmed; and the exchange has been unequivocal in its explanation.  

“Such events are extremely rare, and we are thoroughly examining the day’s activity to assure the highest level of resilience in our systems,” said NYSE’s chief operating officer, Michael Blaugrund, in a statement. 

Impacted stocks included Verizon, McDonald’s, Wells Fargo and Walmart.  

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The Bank of England’s annual supervision of financial market infrastructures (FMI) report this week laid out plans for the future supervision of systematically important FMIs.

“As a global financial centre, the smooth and safe operation of UK FMIs is vital for international markets,” said deputy governor for financial stability, Sir Jon Cunliffe. “The Bank’s supervision of FMIs is essential for financial stability by ensuring that their risk management and resilience frameworks enable them to carry out their vital functions in normal times and during periods of stress.” 

The bank regulates three broad categories of FMI: payment systems, central securities depositories (CSDs) and central counterparties (CCPs). Currently, it supervises one CSD (Euroclear UK & International) and three CCPs (ICE Clear Europe, London Clearing House (LCH) and the London Metals Exchange); along with payment platforms including Bacs, CHAPS, LINK, Visa Europe and Mastercad Europe, among others.  

The role of FMIs is to simplify complex networks of counterparty exposures, making financial transactions more efficient and secure. Their central role in the financial system means that maintaining their operational and financial resilience is of crucial importance to financial stability. 

However, FMIs can be exposed to multiple sources of disruption, including from other market participants and service providers, as well as their own operations, which can give rise to both financial and operational risks. “FMIs must be financially and operationally resilient in order to be able to absorb, rather than amplify, shocks,” stressed the Bank of England.  

Market volatility over the past year has demonstrated the importance of the resilience of FMIs for financial stability in the UK and abroad, and the latest report outlines how the central bank has stepped up its supervision of these entities in response to the challenging times.  

This includes a new agenda on CCP resilience and recovery, an updated policy on the recognition and supervision of overseas CCPs and CSDs that want to provide services in the UK, and targeted enhancements to supervisory frameworks – with new requirements on FMI operational resilience including consultations to reflect an increased reliance on outsourcing. Also this year, the Bank published its first public supervisory stress rest of UK CCPs, which (reassuringly) confirmed their resilience to market stress scenarios calibrated to be of equal or greater severity than the worst historical market stresses. 

“The BofE’s annual report reinforces the increasing importance of interconnection between FMIs across Europe.”

“The BofE’s annual report reinforces the increasing importance of interconnection between FMIs across Europe,” said Javier Hernani, head of securities services at SIX Group, speaking exclusively to The TRADE.  

“What market participants crave is a far greater array of choice when it comes to clearing services. For instance, if an international trading firm is opening a new euro clearing account, they need to have direct access to the domestic CSDs. Providing connectivity like this is paramount to ensuring the financial stability that the BofE has outlined.” 

Going forward, the UK’s Future Regulatory Framework (currently before Parliament) is likely to step up supervisory attention, as it grants the Bank of England sole rulemaking power over CCPs and CSDs operating in the UK.  

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Panellists gave insights into how trading desks can leverage innovations in electronic trading and big data as key differentiators to drive growth and achieve agility.

Kem Husain, managing director APAC at AxeTrading, broke down future proofing a trading desk into three key areas. “Number one is really investing in your trading technology – that’s of utmost importance to keep up to date,” he said. “When you’re looking for efficiencies, whether that’s data, workflow, automation or execution – it’s all about efficiency and helping to drive that.”

“The second main point is really around skills. Fixed income traders are unique, highly skilled individuals. They need to be able to have that type of skill set to know which tool to use in the appropriate manner on a particular channel. It’s really about utilising that tool at the right time – that’s really key. The last point is around having an interoperable execution system that is easily accessible to traders,” concluded Husain.

 Meanwhile, Martin Viseux, head of fixed income trading Asia, HSBC Global Asset Management (Hong Kong), noted that electronification is an initiative that the asset manager takes seriously. “I think electronification is a word that we hear a lot in fixed income trading, where we need to signal workflows and we need to increase electronic trading. This is something that we’re trying to achieve by using the best trading platforms available for every asset classes. Automation is also a big topic for us because as we said, with low liquidity and lack of market transparency, we need to gain time as a trading desk and automation is the key,” said Visuex.

Automation has been a key topic over the last several years, with many acknowledging the benefits it can present. “Automation is a way to execute faster, but I’m not saying that we will give up quality for quantity. I think that there are few asset classes where we will be able to have time as the biggest component of quality and for such liquid asset classes,” added Visuex.

“When you’re looking at future proofing of the trading desk, workflow is a key conversation we have with sell- and buy-side,” said Larry Rorrison, head of fixed income APAC at ICE.

“Automation is key, these workflows are continuously evolving. Efficiency is extremely important. The immediacy of information continues to shorten, as well as information that is actionable and how that can be used. The two key areas that we focus on with clients at the moment is around workflow efficiencies as well as understanding the information that they’re consuming and how they can make use that of information in different market conditions to make better decisions,” added Rorrison.

 Another major talking point during the panel was the importance of the people who work on the actual trading desk. “When we talk about future proofing the sell-side trading desk, the first thing that comes to mind is our people,” said Alexandre Manakyan, co-head international eMacro trading at Credit Suisse.

“If you’ve been around a trading desk for a while, you will have noticed that what traders do today is a little different than what they used to do in the past. I think the thing that stands out is that traders are asked to do more. They have to do more business and more products, and so the idea here is that we’re breaking down silos of specialisation in trading,” said Manakyan.

 “Today we’re seeing desks merge and we’re seeing traders become capable across multiple seats. The next generation that’s going to replace us won’t only be capable, but they’ll be proficient at everything. That new generation of traders that is growing up in that environment of a merged desk, multi product and multi asset coverage, will be much more versatile than we are today,” added Manakyan.

 Other areas noted as being beneficial for the future proofing of trading desks included the investments in new technologies and in particular, artificial intelligence. One panelist stated that the democratisation of deep learning techniques and how the sell-side uses that, will be essential in creating differentiated offerings as well as adding value to customers.

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Following the UK Financial Conduct Authority’s (FCA) announcement on 5 March last year, on future cessation and loss of representativeness of the Libor benchmarks, IBA stated that it does not expect sufficient input data required to calculate USD Libor ICE swap rate settings – data based on eligible interest rate swaps referencing USD Libor settings – to be available after 30 June 2023.

In response to this, IBA published a consultation in August to gain feedback related to its plans to halt the publication of all USD Libor ICE swap rate benchmark “runs” for all tenors immediately after publication on 30 June next year.

Following the end of the consultation, IBA has announced that it will cease the publication of USD Libor Rates 110, USD Libor Spreads 1100 and USD Libor 1500 immediately after publication for all tenors on 30 June 2023.

“Users of the USD Libor ICE Swap Rate benchmark should take account of its upcoming cessation and ensure their contractual and other arrangements linked to the benchmark contain appropriate fallback or other arrangements to address the cessation,” said ICE in a statement.

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