Wematch has been making big strides since its formation in 2017 by co-founder and CEO Joseph Seroussi, David Raccat, and CTO Elie Slama, with the goal of connecting market participants and driving the digitisation of the securities finance sector.

Subsequently, it has set about building a cross-asset platform, growing from its early roots in the financial incubator programme of its key investors — and a primary focus on the total return swap (TRS) market — to also offering optimised workflow and lifecycle management for interest rate derivatives, equity derivatives and delta one products, collateralised finance, and securities lending.

While the Wematch platform spent its early life predominantly supporting dealer-to-dealer (D2D) activity, it is also broadening its focus to deliver wider efficiency to the dealer-to-client (D2C) segment. It indicates that it has now onboarded close to 1000 traders and sales staff at 90 financial institutions onto the platform and is playing a prominent role in bridging traditional and digital finance.

Synthetics ecosystem

For Wematch, the primary objective is to be the global one-stop-shop for synthetic trading, and traditional lending, explains Raccat. Total return swaps occupy an important place in the securities financing ecosystem, with an expanding community of users recognising the flexibility, risk management and balance sheet advantages of synthetic lending. Dealers and investment bank clients remain Wematch’s largest constituency of users, but a handful of agent lenders are currently looking to extend their coverage to synthetic lending. Wematch also supports buy-side institutions that are already involved in the TRS space and are interested in broadening their TRS franchise to a wider range of trading partners. “We aim to be the number one TRS platform on a global scale,” explains Raccat.

To do so, it has been developing innovative workflow solutions that extend well beyond the trade matching element profiled in the company name. It offers an automated platform that helps dealers to issue indications of interest (IoIs) and conduct trade negotiation, to navigate collateral eligibility schedules, and ensure that trade details align with counterparties, thereby providing a sound foundation for high STP rates across the trade lifecycle.

Beyond this, Wematch offers a broad suite of workflow and optimisation tools which includes lifecycle management, market data and analytics, sales-to-trader workflow, an ETF optimiser and collateral optimisation.

To complete this vision of a full TRS lifecycle coverage, Raccat indicates that the company is soon to add two missing components which will be delivered during Q2. The first is cashflow reconciliation, enabling clients to reconcile funding and equity performances for each TRS contract at reset and at expiry. This is a significant pain point currently.

Second, Wematch will release a new module supporting TRS market data and pre- and post-trade analytics, thereby providing predictive insights that will help users to draw maximum value from their trading strategies. “Data in the TRS space has typically been a constraint,” explains Raccat, “with few data vendors able to provide comprehensive and accurate data for this asset class. Given that a major share of TRS volumes are concentrated on Wematch’s platform, particularly in EMEA, this sets us as an ideal candidate
to work out the data and to redistribute on a smart basis to our community of users.”

Indeed, Wematch now supports approximately US$150 billion of notional outstanding on its platform globally, a sharp increase from the US$20 billion it supported globally in July 2020. EMEA continues to account for a large share of this global activity, representing US$116 billion in ongoing notional at the time of writing.

Since launching in the US two years ago, Wematch has seen ongoing notional grow in this location to US$25 billion. The company also relaunched its services in the Asia-Pacific region in January, following a hiatus during Covid, and is on its way to hitting the US$10 billion mark in ongoing notional from the APAC region.

Wematch offers integrated workflow across the trade lifecycle, but indicates that it is agnostic to where the trade is negotiated, whether on Wematch’s platform or elsewhere. “This is an important component of Wematch’s offer,” says Raccat. The focus has been on developing an open architecture workflow, enabling the user to import trade data into the system wherever the trade has been printed.

“As a solutions vendor, we do not feel we should be telling traders how they should access liquidity, when that is their job and their core expertise,” adds Raccat. “Regardless of how the client negotiates and executes the trade, when the trade details are uploaded to Wematch’s platform we can then support the downstream workflow and offer a full set of solutions to deliver efficiency across the trade lifecycle. This is changing our relationship with the user.”

Download the full article: SFT Issue 325 – Wematch

To learn more about our Platform, reach out.