This Week: Tradeweb, LSEG, TMX Group, SimCorp

Tradeweb, LSEG launch integrated FX swaps workflow for EM bonds

Tradeweb has launched an FX swap workflow in partnership with the London Stock Exchange Group’s FXall. The workflow allows institutional investors to trade emerging market (EM) bonds using request-for-quote (RFQ) or request-for-market (RFM) protocols and hedge the risk using an FX swap trade in a single user interface.

Electronic trading still makes up less than 10% of the cleared EM interest rate swaps market at present, according to Tradeweb. EM trading has traditionally been done over the phone, but allowing users to trade via a straight-through-processing (STP) system could help reduce the legging risk, or the time between the initial EM bond’s purchase and the point that the currency risk is bought back, says Kerim Acanal, Tradeweb’s global head of emerging markets.

Tradeweb makes up about 95% of the electronic markets on EM swap execution facilities, says Acanal, who was brought in last July as part of the trading platform operator’s bid to expand into emerging markets.

As far as asset classes go, Tradeweb has invested most heavily into emerging markets recently, says William Tarr, the company’s director of product management and implementation. “There’s a lot of opportunity to move EM swaps to an electronic trading marketplace.”

The workflow, which allows users to trade using RFQ and RFM, is also a part of a bigger push on the part of Tradeweb to position itself as a leader in these protocols. With geopolitical changes making emerging markets increasingly volatile, the ability to conduct both legs of the trade on a single platform could increase efficiency and reduce risk.

In this asset class, currency fluctuations can prove catastrophic. “You can have 3%, or 4% moves, which can wipe out the entire profit targets the investor might have on the local cash bonds,” Acanal says.

But Acanal is optimistic, and he hopes that the possibility that central banks may begin tapering their recent rate hikes draws more risk-averse funds back into the EM fold.

After all, “the definition of emerging market is political risk,” Acanal says.

Aquis Exchange takes minority stake in OptimX Markets

Aquis Exchange has taken a minority stake in OptimX Markets, a startup for the block trading market, founded by a group of former equity capital markets professionals. It offers investment banks, brokers and institutions the opportunity to find additional matches for order flow. Aquis will work closely with OptimX in the UK and EU to combine its technology platform with the OptimX technology suite.

The Investment was made as part of a consortium that includes DB1 Ventures, the venture capital arm of Deutsche Boerse Group. Jonathan Clelland, COO of Aquis, is expected to join the board of OptimX as a non-executive director.

SimCorp opens new office in Mexico City

SimCorp, a provider of software-as-a-service (SaaS) investment management solutions, has opened an office in Mexico City in a drive to grow its presence in the Americas.

Oscar Nasta will join the vendor as head of the delivery center alongside 15 new staff members. SimCorp says it plans to expand the office to more than 40 employees by the end of the year.

In 2019, SimCorp announced its strategy to transition from a software company to a SaaS company. Since then, the company has opened several delivery centers to expand service to clients in different timezones.

Venn by Two Sigma launches presentation module

Venn by Two Sigma, a portfolio analytics platform for professional investors, has launched Report Lab, an analytics and presentation solution that generates client-facing reports and proposals.

The Report Lab module complements a broad array of tools offered by Venn to provide asset allocators an end-to-end workspace to run risk analyses and then communicate those outputs to their clients and other decision-makers. Report Lab, which has the ability to combine analytics from multiple sources, is available to Venn clients via its cloud-based platform. Additional fees may apply.

Investment Office Resources partners with Aapryl to expand analytics offerings

Investment Office Resources (IOR) has partnered with Aapryl, a platform which ranks and evaluates investment managers, to integrate its analytics platforms. IOR is a provider of institutional investment services and specializes in chief information officer (CIO) services.

Aapryl uses AI to predict the future performance of accounts by aggregating information on around 20,000 separately managed accounts, mutual funds, and ETFs in public equities and fixed income.