Ten Reasons to Choose MTS Repo

1 Participant network

Connecting cash with collateral and inventories with short positions
 

The MTS Repo market on the MMF Platform is the professional’s e-trading venue for real-time eurozone repo pricing, liquidity and trading, uniting over 150 unique participants across Europe, including international and domestic banks and institutional buy- side clients.

Over half of all trades in the European repo market are executed directly, while 28% are traded electronically and 20% are traded by voice. The participant network and trading volumes on MTS Repo are growing steadily as increasingly electronic trading is used for its ability to improve on the efficiencies of voice trading with the added transparency required in the current regulatory environment. 

Offering bespoke functionality for the electronic transaction of repo agreements and buy/sellbacks through an efficient order driven market place, the MTS Repo market has grown to become a de facto choice for repo and money market traders across Europe.

The depth of counterparties and range of instruments combined with the transparency of MTS pricing has made it a benchmark electronic trading venue for the European repo market.


The MTS Repo market on the MMF platform:

2 Markets/bonds

Comprehensive market and product coverage
 

MTS Repo offers the widest range of eurozone government bonds, in addition to Pfandbriefe, covered, corporate, sovereign, agency and supranational bonds, as well as a continually updated reference portfolio of specific bonds and GC contracts.

New markets are launched regularly alongside the expanding MTS Cash markets, including Czech Republic, Slovenia and Israel.

Markets include:

3 Leading-edge technology

Flexibility, scalability, capacity and uptime
 

MTS invests significantly in technology development to support the diverse needs of repo market participants, along with proven system stability and local expert customer service.

  • Flexibility – one single platform combines different market models, products and functionalities 
  • Open architecture – MTS supports and encourages trading and gateway software development by independent software vendors
  • Scalability – modularity of components allows for both horizontal and vertical scalability
  • Capacity – the MTS Repo market remains stable even in the most volatile of market conditions
  • Uptime – for over 15 years MTS has facilitated an orderly repo market of natural interest for cash lenders and collateral providers
The MTS Repo platform can be accessed either via leased line connectivity or public internet. MTS provides market participants with a standard GUI allowing traders to connect to markets, and members can implement more sophisticated solutions or integrate MTS trading functionality within their existing applications.

Effective and rapid communication is available with MTS through the SDP native protocol. Official network service providers for leased line connectivity include BTRadianz, SIA and BItNet (LSE/Borsa Italiana Group).

MTS Repo offers complete open architecture, enabling seamless integration with ISV solutions and existing internal systems.

4 Liquidity

Transparent, orderly and liquid market
 

Trusted by cash lenders and collateral providers across Europe and beyond for over 15 years, MTS facilitates an orderly, efficient repo market that delivers deep liquidity and natural interest in both specific bonds and general collateral.

MTS promotes transparency and delivers one of the primary sources of liquidity for the European repo markets, bringing together major cash lenders with the largest pool of collateral providers and also matching short positions with participant inventories.

 

 

5 Tri-party repo and Agency Cash Management (ACM)

Bringing automation and efficiency to basket trading
 

At the centre of the MTS Repo market sits the tri-party model where a Tri-party Agent, usually a highly rated custodian bank, helps to administer a repo agreement between two parties by managing the daily margining, management and segregation of assets.

In the interdealer repo space MTS is increasingly listing standardised tri-party baskets for a number of tri-party agents including Euroclear Tri-Party Services, Clearstream Tri-Party Services and Monte Titoli, in addition to the standard bilateral general collateral baskets.

ACM is an electronic auction-trading platform that enables cash-rich investors to enter into secured money market investments via the tri-party repo mechanism. By providing an alternative to the traditional suite of unsecured money market products, the platform offers access to low-risk cash management investment opportunities.

By bringing a new pool of cash providers to the market, the platform will also benefit banks facing continued pressure to diversify their sources of funding in the face of Basel III.

The platform is built on the same robust technology that facilitates the MTS fixed income market, combining secure investment opportunities with the high levels of transparency offered by electronic trading.

Benefits include:

  • Low-risk investment opportunities – improved cash management for buy-side

  • New investor base – additional source of funding for sell-side

  • Access to wholesale pricing - cash placed via daily cash auctions 

  • Tri-party agent offering robust settlement engine – segregation of assets and daily margining

  • Bespoke auction methodology to ensure best execution

  • Best-in-class innovative technology – reliable and proven system

  • Improved liquidity in market overall - enhanced oppoortunities for


 

The ACM is scheduled to go live in the fourth quarter of 2011 and will operate as a Multilateral Trading Facility (as defined under MiFID regulation) by EuroMTS Limited. Launch being also subject to applicable regulatory approvals. 

6 OTC Registration

Enhanced negotiations and automatic booking
 

In addition to the traditional click-to-trade model, MTS Repo supports RFQ negotiations and OTC registrations, making it easier than ever to trade repos on the platform and leverage its extensive STP capabilities.

The RFQ feature also contains a messaging facility, opening a new communication channel between dealers.

In response to changing customer needs, MTS Repo’s dedicated OTC booking mechanism is now available for use both by dealers and also by voice brokers looking for an efficient method of booking clients’ trades. 


Trade management:



OTC management:

7 Post trade services

Seamless connectivity and integration
 

MTS dedicates significant resources to ensuring its market is compatible with the relevant domestic and international settlement systems, central clearing houses and tri-party agents.

Automatic registration of trades and seamless STP integration guarantees a reduction in errors, cancellations and other issues that have an effect on customers’ efficiency and profitability, whilst reducing the costs typically associated with integration. 

Highlights include:

  • Completely automated settlement network
  • Settlement instructions automatically created and sent in real time by MTS on behalf of the buyer and the seller
  • Messaging copies can be sent to custodian banks for reconciliation purposes
  • Instructions for each trade are automatically matched, eliminating potential post trade discrepancies
  • Central counterparty clearing provided by LCH.Clearnet LTD, LCH.Clearnet SA and Cassa di Compensazione e Garanzia
  • Links to all the major European CSDs and ICSDs

8 Expert support

Sales support, client services and monitoring
 

The MTS sales team is available during market hours to offer expert support and to animate the market, as well as being responsible for the on-boarding of new repo market participants.

The multi-lingual client services team is the first point of contact for professional technical support, including all queries covering:

  • User problems
  • Technical queries
  • Testing activity
  • Connections to new markets
The MTS monitoring team offers support to participants for any issue related to the post-trade process and maintains relationships with central securities depositories, clearing houses and settlement agents for all MTS markets and products.

The monitoring team is responsible for market supervision and providing members with data and reports on their own activity. In addition the team manages the listing of securities and configuration of members.

As a value-added service for its repo community, MTS offers sector-specific information and user documentation to ensure users get the most from its market-leading services. All information is available on-demand through the MTS website.

Click here  for the relevant support team contact details. 

9 Compliance

Regulated and transparent market
 

MTS prides itself on meeting demands from global regulatory authorities for improvements in risk management and compliance with new and pending regulations.

In addition, participants can have peace of mind in the knowledge that MTS undergoes regular internal and external audits by its board and the Bank of Italy respectively. 

The MTS Repo market is regulated by CONSOB and domestic authorities and offers a range of tools combined with robust technology and expert customer support to empower customers to set best practice and comply with global regulatory authorities (ECB, FSA, CONSOB, etc.) and reporting (MiFID).

Click here  for details on the regulatory authorities with jurisdiction over each of the various markets within MTS. 

In addition, MTS provides a range of post-trade analytical services that enable customers to measure the benefits generated from electronic trading for compliance purposes.

10 Market data

Executable prices direct from the source
 

MTS delivers comprehensive and trusted market data service empowering fixed income dealers to set best practice for price discovery, verification and validation.

MTS Data delivers:

  • Executable – not indicative – market prices direct from the interdealer platform offering market-leading liquidity
  • Continuous pricing throughout the trading day with market depth and all associated volumes
  • Extensive coverage
  • Reference data from the source, providing complete coverage and accuracy
  • Historical data direct from source

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