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  3. Sara Carter, CME Group’s BrokerTec
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CME Group’s BrokerTec


Sara Carter


01 October 2024

Sara Carter, global head of repo at CME Group’s BrokerTec, discusses the growth and robustness of its central limit order book and BrokerTec Quote, highlighting the success of both platforms, alongside their expanded product offerings and enhanced functionalities

Image: Sara Carter
Over the past few years, BrokerTec has rolled out several developments to set it up for its next stage of growth. What have been the most transformative developments in the business over the last few years?

Since CME Group’s acquisition of NEX Group in 2018, the focus for BrokerTec has been to heavily modernise and expand the underlying technology infrastructure while also extending further efficiencies to clients across products traded at CME Group. The migration of BrokerTec’s dealer-to-dealer (D2D), anonymous central limit order book (CLOB) to the Globex matching engine gave us the scalability, enhanced security and global connectivity necessary to support a broader range of products and features. The result of this technology upgrade has been enhanced performance and efficiency, particularly in cash bonds and repo trading, allowing us to innovate faster and respond to market demands with greater agility.

By operating BrokerTec on Globex, clients can access CME Group’s network of international and regional banks, and extensive product suite. This has been particularly beneficial as we look to complement our collateral offerings and integrate products, such as an ability to view euro short-term rate (ESTR) and secured overnight financing rate (SOFR) futures together with our BrokerTec repo and cash bond services on a single platform. Globex’s global reach and robust infrastructure have been instrumental in our ability to offer a more comprehensive service to our clients.

Working in partnership with the CME Benchmark Administration and Data Services division, we continue to expand securities financing benchmarks via publishing the Repo Funds Rate (RFR) in Europe, the UK and Japan, with our partners.

BrokerTec’s CLOB is a key player in the repo market. Can you talk about how the repo side of the business has evolved?

The repo market has been the beating heart of the BrokerTec business for nearly 25 years. The platforms have continued to grow, producing record volumes globally over the last few years.

BrokerTec remains one of the largest liquidity pools for D2D electronic repo execution in the cleared markets, handling over 30,000 trades daily and transacting more than US$750 billion in average daily volume (ADV) per day.

As we look to expand our CLOB platform, we continue to invest in enhancements that provide premium electronic trading opportunities and functionality, currently not available in the global repo markets, to create greater execution efficiencies for our clients and deeper electronification of voice executed transactions.

BrokerTec has been instrumental in bringing ESTR floating repo trading to the electronic market in Europe. While in the US, over the last three years we have focused on dramatically improving the bulk order manager to build efficiencies around the liquidity pools and reduce operational costs. The impact of this is that the decision making process is simplified for clients and the speed of execution accelerated.

BrokerTec Quote has been a relatively recent addition to the platform. How has it developed and what role does it play in your broader repo strategy?

BrokerTec Quote has been a game-changer for us and has complemented our position in the D2D market. There was a clear need for a platform which offered comprehensive repo execution and collateral management solutions. In 2019, we launched BrokerTec Quote, a dealer-to-client (D2C) RFQ platform for the global repo markets, which provides clients with an intuitive and efficient way to trade, while allowing for straight-through processing (STP). The platform was designed to increase liquidity and enhance automation in the repo market globally, and we have been really pleased with its success to date.

Over the last 12 months, we have seen accelerated growth in both nominal volumes and client adoption, with many buy and sell side firms coming on board and the pipeline exploding with fast momentum. We have consistently achieved ADV records month-over-month, including multiple daily ADV records week-over-week. Year-on-year, BrokerTec’s Quote ADV has increased 200 per cent, demonstrating strong client demand for the product.

This can be attributed to multiple factors: the aggressive price points for sell side and free for the buy side; connecting the buy side and sell side to execute with their trusted counterparties while enriching negotiation; RFQ workflow for a wide product suite (including corporates and securities lending in Europe); and connectivity via a wide independent software vendor (ISV) integration. BrokerTec Quote incorporates first-rate monitoring and protection systems to safeguard data, therefore offering a comprehensive alternative platform.

As we continue to add new functionalities and asset classes in 2024 and into 2025, and with a strong customer pipeline, I am excited about the momentum of this business and its growth trajectory.

You mentioned new functionalities — can you share more about what has been added and what is coming next for BrokerTec Quote?

We have introduced several key features — the most exciting has been the ability to trade repo on corporate bonds. It is a huge addition for the platform, rounding out our securities finance offering and complementing our existing G10 and emerging market (EM) government bond products. Alongside the securities lending option, it allows centralised execution of all repo requirements. The addition of repo on corporates has also contributed to the growth in ADV on the platform.

In 2024, we introduced new order types such as evergreens, one-cancels-other on ‘all or nothings’ and the axe dealer board which allows the sell side to show positions to selected counterparts, enabling buy side clients to quickly convert those positions into RFQs. We also introduced repo on ESTR floating rates, pre-trade assignments, a position management tool and risk management functionalities for clients. These are just some examples of features introduced that significantly reduce negotiation time and reduce the number of booking errors for clients. We also continue to focus on offering connectivity across multiple vendors to support our clients.

Given the agile development sprints that we can conduct and the production timelines that we are working to, we can work with clients to ascertain their priorities and develop features while pivoting development where required to consider changes in market structure.

CME Group’s partnership with Google Cloud will support BrokerTec in continuing to expand our product offerings, the ability to provide clients with comprehensive analytics and ensure we can quickly adapt to market structure changes and client needs.

With the global repo market continuously evolving, where do you see BrokerTec’s growth in the next few years?

The repo market is increasingly automated and we are committed to staying at the forefront of this trend. We are also focused on increasing our Asian market offerings and exploring new asset classes and product types. As we roll out additional features like pre-trade analytics and expand our collateral availability, I anticipate BrokerTec Quote will continue to see outsized growth and client adoption as we expand our white-glove service and introduce new functionalities. We have several exciting developments planned for the D2D CLOB in 2025 which will further strengthen BrokerTec’s position as a leading platform for both D2D and D2C repo trading.
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