J.P. Morgan Executes and Clears CDS and IRS Trades Via Bloomberg Professional

Bloomberg executives disclosed that J.P. Morgan electronically executed and cleared credit default swap (CDS) and interest-rate swap (IRS) trades on Bloomberg’s Fixed Income Electronic Trading platform (FIT), according to the company’s news release.

 

The trades demonstrate that Bloomberg is preparing for launching a swap execution facility or SEF, a new type of trading platform that meets the broadly defined requirements of the Dodd-Frank Act for transparency and market efficiency in over-the counter derivatives. Bloomberg intends to register with the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) as an SEF and security based SEF (SBSEF), respectively.

The CDS trade was executed by leveraging J.P. Morgan’s function (JPTE ) on the Bloomberg Professional service, the first CDS single-dealer trading page on the service. The credit indices were executed and submitted to ICE Trust for clearing while the IRS trade was executed and submitted to LCH.Clearnet Ltd’s SwapClear service through the J.P. Morgan (JPSX ) page on the Bloomberg IRS single-dealer page (IFIT). Also, trades intermediated through J.P. Morgan’s prime brokerage were also executed on JPTE.

In a prepared statement, Ben Macdonald, global head of Bloomberg's Fixed Income business, commented, “These trades represent the next generation of electronic trading and clearing. Today's execution, our ability to handle large volumes, and our VCON voice affirmation platform, demonstrate Bloomberg’s ability to provide clients with any option they need." Macdonald further added, "Having all of your fixed income tools in one single, integrated system is convenient and helps eliminate opportunities for risk."

 

In the same release, Rob Milam, co-head of North American Credit Trading at J.P. Morgan, stated: "We found that Bloomberg’s FIT platform is an excellent way for us to execute and clear credit index trades. We've been at the forefront of electronic trading since we first offered CDS single dealer trading via JPTE in 2009.” Among the clients participating in the trades were: Alphadyne Asset Management, BlueMountain Capital Management, Claren Road Asset Management, Diamond Notch Asset Management, Gracie Credit Opportunities Fund and PAMLI Capital Management LLC.