By Flora McFarlane.
New York-based Broadridge Financial Solutions has launched its Repo Order Quote (ROQ) system. The multi-market aggregation and execution tool for repo markets is designed to allow repo traders to view liquidity and pricing across a variety of electronic marketplaces. Demand and availability for each term, security, or basket of general securities is visible to traders through the tool, which also allows them to quote and execute on an aggregate basis.
Broadridge’s ROQ offers real-time inventory optimisation and revenue analysis tools for to support effective trading strategies. The firm reports is already in use with a major European bank.
The new offering from Broadridge, which reportedly processes more than US$5 trillion in fixed income and equity trades daily, can potentially be integrated with its existing financial solutions, as well as other major securities finance trading and inventory systems.
Jerry Friedhoff, head of Broadridge’s securities finance and collateral management business said, “ROQ also enables repo desks to automate their trading activities via a unique combination of algorithmic execution and global inventory.”
Latest figures from International Capital Markets Association (ICMA) showed the baseline figure for the size of the repo market in Europe at €6,455 billion.
While 2016 proved a tough year in repo, a recent ICMA report showed 2017 having stabilised as a result of, “market positioning (fewer open shorts in sovereign bonds), improved public sector purchase program lending facilities, a break-down in the correlation between repo rates and the cross-currency basis, as well as greater awareness and better preparedness.”
However, the report highlighted that repo, and in particular the year-end element of the market, is dependent on banks’ balance sheets and remains highly sensitive to regulation. Market participants should increase their awareness of market vulnerabilities and the possible ramifications of any unexpected shocks.