Tradeweb Executes First Fully Electronic SOFR Swap Spread Trade

Tradeweb Markets Inc., the leading fixed income, derivatives and ETF electronic trading platform, announced the completion of the first fully electronic institutional Secured Overnight Financing Rate (SOFR) swap spread trade. BlackRock and J.P. Morgan were counterparties to the trade on the Tradeweb Swap Execution Facility (TW SEF).

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As markets globally transition from using IBOR rates toward a new reference rate, market participants have been accessing growing liquidity in alternative risk-free rates (RFRs) and have begun to trade increasingly in SOFR. In the U.S., the Alternative Reference Rates Committee (ARCC) has identified SOFR, which is administered by the Federal Reserve Bank of New York, as the rate that represents best practice for certain new USD derivatives and other financial contracts. In time, the increased adoption of RFRs including SOFR will help the market migrate away from IBOR.

The Tradeweb team is working with clients around the world to help increase liquidity and encourage robust RFR markets across currencies, including those for USD SOFR, GBP SONIA, CHF SARON, and JPY TONA. To help smooth the transition to new RFR rates, and in addition to offering trading, Tradeweb enables its clients to upload existing IBOR portfolios directly into the platform's list trading tool and convert them to the new rates in a process that also helps achieve best execution.

Lee Olesky, CEO at Tradeweb said: "The global transition away from IBOR usage is a significant undertaking and is important to our market participants across various asset classes. Providing the tools and platforms that help foster electronic trading and coalesce liquidity around rates like SOFR is an area where we can be immediately helpful to our clients. We are proud to bring the full power of the Tradeweb platforms and network to bear as the industry moves toward critical deadlines."

Fazzaco earlier reported that Tradeweb has completed the first-ever fully electronic standardized total return swap trade​ based on IHS Markit's iBoxx USD Liquid High Grade Index. J.P. Morgan was a counterparty to the trade, which was executed on the Tradeweb Swap Execution Facility.