Tradeweb Markets and LSEG’s FTSE Russel have entered a strategic partnership to develop enhanced fixed income index pricing and index trading products.
The pair aim to offer improved pricing across a wider range of fixed income securities, which FTSE Russell will administer as benchmarks.
This will build upon their existing collaboration on benchmark pricing for UK gilt and European government bonds, with the goal of delivering robust, algorithmic and reliable pricing.
Tradeweb’s trading activity from its electronic platform will be amalgamated by the closing prices, enabling closer alignment with actual trading levels and intraday pricing.
These prices are administered in accordance with the EU and UK Benchmark Regulation and the IOSCO Principles for Financial Benchmarks. They can be used as reference rates for a wide range of use cases including trade-at-close transactions and derivatives contracts.
“Tradeweb’s collaboration with FTSE Russell will provide clients with verified benchmarks they can use as reliable closing prices for their end-of-day trading strategies and other purposes,” said Lisa Schirf, global head of data and analytics at Tradeweb.
“The Tradeweb FTSE closing prices will create a foundation across global fixed income markets for consistent end-of-day and intraday prices and is another way we are investing in the electronification of the markets.”
Elsewhere, Tradeweb and FTSE Russell will work collaboratively on fixed income pricing sets to extend coverage across various regions and fixed income asset classes.
FTSE Russell will explore incorporating Tradeweb pricing into FTSE fixed income indices over time, initially with FTSE World Government Bond Index (WGBI), an index consisting of sovereign debt from more than 20 countries and denominated in a selection of currencies.
Tradeweb also plans to expand and strengthen electronic trading functionality for FTSE Russell fixed income indices and customised baskets through tools and protocols including request-for-quote (RFS), Automated Intelligent Execution tool (AiEX) and portfolio trading, providing trade-at-market close, trade-at-month-end and other features linked to index rebalancing trades.
Providing enhanced trading functionality will be able to help clients seeking to express a view on FTSE Russell indices and baskets manage what are typically their largest and most critical trades.
“With our comprehensive suite of sophisticated fixed income indices and a growing need for innovative pricing solutions from our clients, our deeper collaboration with Tradeweb will enable us to bring to market greater tractability and tradability of our indices,” said Scott Harman, head of fixed income indices at FTSE Russell.