Broker Tradition to launch collateral trading platform

Compagnie Financiere Tradition SA

27/04/2016 10:00

LONDON, April 27 (Reuters) - Interdealer broker Tradition 
will next month launch the first stages of a platform for the 
trading of collateral such as government bonds in an effort to 
improve liquidity and transparency in the market, it said on 
Wednesday. 
    Tradition, owned by Swiss-listed Compagnie Financière 
Tradition  CFT.S , will initially launch the platform, Elixium, 
with a limited range of products to build up liquidity, the 
company said in a statement. 
    Repos, in which short-term loans are offered in return for 
collateral such as government or corporate bonds, are used by 
banks and companies to manage their cash balances. 
    Increased regulation has pushed down profits, forcing some 
banks and dealer-brokers that offered repo services to 
restructure their businesses or even withdraw from the market. 
   "The driver for this is the disconnect we have currently in 
the marketplace, brought about by regulation," said Dan Marcus, 
global head of strategy and business development at Tradition. 
    Elixium will offer peer-to-peer trading of collateral for 
banks, institutional investors, brokers and hedge funds, 
Tradition said in the statement. 
    Marcus said that about 25 institutions, the bulk of which 
are banks and fund managers, had already completed the first 
part of the legal process to operate on the platform. 
    Institutional investors such as insurers often have large 
amounts of low-yielding cash on their balance sheets, which they 
could put to work by lending it out as repos, Marcus said.    
    Nick McCall, who previously managed Tradition's UK 
fixed-income business, will be Elixium's chief executive, 
Tradition said.  
 
 (Reporting by Carolyn Cohn and John Geddie; Editing by David 
Goodman) 
 ((carolyn.cohn@thomsonreuters.com; 44 207 542 6320; Reuters 
Messaging: carolyn.cohn.thomsonreuters.com@reuters.net)) 
 
Keywords: MONEYMARKETS PLATFORM/LAUNCH