The Total Return Swaps (TRS) market has always been highly bespoke, with each trade being unique, based on the seller’s constraints and the buyer’s inventory. However, at Wematch we see that demand for a standardized TRS market continues to grow, driven by compliance with regulations, reducing the risk of operating in a bespoke market, and the significant cost consideration of standardizing the TRS market. 

Digital technologies are critical in enabling an end-to-end platform that automates and optimizes workflows, replacing manual trading workflows and inefficient communications protocols. The entire TRS market could be underpinned by a single, end-to-end platform that creates a TRS ecosystem that unlocks significant efficiencies while making dealers much more productive. This digitized approach would benefit dealers in many areas: interest matching, lifecycle management, collateral optimization, sales to trader, synthetic ETFs, cash flow reconciliations, and enhanced regulatory reporting. 

In order to meet the industry’s required standards of standardization, a departure from the conventional vendor approach is necessary. This approach should aim to establish the technical foundations of TRS ecosystems, whether for an external marketplace or an internal collaboration zone. Regular input from users, such as those provided by Wematch through our TRS Forums, provides ongoing feedback that informs feature roadmaps, ensuring constant improvement that closely aligns with the needs of market participants.

The Wematch platform enables both buy-side and sell-side firms to connect to nearly 1,000 dealers across the globe to better exchange pre-execution, negotiation, and post-trade transaction data. We drive profitability for financial institutions through next-level efficiencies including cost and time savings and significantly enhanced productivity. 

To learn more about our Platform, reach out.