Baymarkets has a superior product addressing a large and fast growing market, an experienced team and very satisfied customers
Jakob Svärdström, Managing Director KTH Chalmers Capital
Norwegian Stock Exchange
OTC Equity Derivatives Market Capture
Despite the pressure for more transparency and centralized clearing, OTC volumes are still very substantial. By using EDGE to capture part of the OTC market an Exchange or Clearing House can grow its business substantially.
The EDGE platform can be used as a gateway or funnel for OTC transactions into exchanges and clearing houses.
* Source: www.bis.org (click image to enlarge)
Exchanges and Clearing Houses have a large opportunity to capture the OTC side of their regulated markets by offering a tool for negotiating and trading of OTC derivatives with Straight Through Processing (STP) of deals into their clearing systems.
By first analyzing and later mimicking the current business flows, Baymarkets configures the EDGE platform to conform in a similar way that the OTC market is trading and negotiating. The platform configuration can be gradually changed as the market adapts to electronic OTC trading.
For a successful launch of an electronic OTC trading platform it is essential that all participants in the market keep their status and are positive towards the platform.
The Oslo Bors Case Study
In November 2009 Oslo Bors (the national stock exchange of Norway) launched Oslo Connect based on Baymarkets EDGE, as the first exchange in the world to offer an OTC trading platform for their derivatives markets with Straight Through Processing (STP) to clearing.
Oslo Connect is approved as a Multilateral Trading Facility (MTF) by the Norwegian Financial Supervisory Authority “Kredittillsynet”.
Users of Oslo Connect can negotiate and trade derivatives such as futures and options with a choice of sending trades STP into Oslo Clearing or using the bilateral deal capture also offered in the system.
Oslo connect has a number of unique features which are the result of a very successful and interactive relationship between Oslo Bors/Clearing and Baymarkets.
Previously to Oslo Connect the market was very manual and voice based, and with the introduction of Oslo Connect the participants in the market enjoy a much more efficient OTC market, yet keeping the integrity so necessary for OTC trading.
Market structure for Oslo Connect
*(click image to enlarge)
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