Friday, August 1, 2008

T-Zero Says Clients Already Exceed Fed's Targets

(Bloomberg) T-Zero, which operates an electronic platform for affirming credit-default swap trades, said its clients already are in compliance with targets that banks and regulators announced yesterday to speed up processing in the $62 trillion market.

JPMorgan Chase & Co., Goldman Sachs Group Inc., Deutsche Bank AG and 14 other banks that handle about 90 percent of trading in credit-default swaps agreed to targets that included faster confirmations of trades, which are negotiated privately between banks, hedge funds and other investors. The banks said by year-end they would have 92 percent of contracts submitted for confirmation within a day after the trade. They also agreed to match 95 percent of contracts within five days of the trade.

More than 98 percent of trades through T-Zero are ``fully affirmed'' by the fifth day after the trade, T-Zero President Mark Beeston said today in an interview. T-Zero clients exceed the target for submitting trades, according to a statement.

More than 90 clients are using a service that reassigns trades using an electronic platform, another Fed target, T-Zero said.

New York Federal Reserve President Timothy Geithner in 2005 began pushing banks to improve processing of credit-default swaps as a backlog of unsigned trades ballooned to the equivalent of more than 17 days of trading volume. The banks yesterday agreed to limit the backlog of unsigned trades older than 30 days to one day's worth of trading volume.

T-Zero, created by New York-based broker Creditex Group Inc., said more than 200 asset managers and 17 dealers are signed up to use the platform.

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