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Bloomberg Launches VICON Interface into CDS Clearing Facilities

Provides first neutral interface that connects buy-and sell-side to two central clearing counterparties for OTC credit derivatives.

Bloomberg has launched the first interface in the U.S. credit derivatives (CDS) market that connects both buy- and sell-side firms to the two central clearing counterparties (CCPs).

The Bloomberg VCON solution, a confirmation utility for cash and derivative instruments, now allows dealers and their clients to send executed trades to the two US-based providers of central clearing for OTC credit derivatives — the Chicago Mercantile Exchange (CME) and the InterContinental Exchange's ICE Trust. This connectivity leverages the Bloomberg VCON infrastructure for linking to MarkitServ for credit default swap and interest-rate swap trades.

"Bloomberg is uniquely positioned to act as an integrated hub for OTC derivative processing, utilizing the network of Bloomberg Professional service to connect trading customers with downstream processing and clearing services like ICE and CME," stated Ben MacDonald, Bloomberg's global head of fixed income trading. "With the data, news and analytics on the all-inclusive Bloomberg Professional services, we can play a key role in assisting our customers with operational efficiency and risk mitigation, and add value for our users," stated MacDonald in the release.

Buy-side firms that are clearing credit derivatives through the CCPs could benefit from a neutral platform that links into the CCPs. "Bloomberg has played an integral role building a robust platform with integrated connectivity that will serve as a bridge for PIMCO, the dealer community and the clearing platforms," stated Rick Okun, EVP at PIMCO. "We are excited about the launch of clearing connectivity and are also looking forward to expanding our CCP capabilities during the course of 2010 with additional products," stated Okun.

According to Laurent Paulhac, managing director, OTC Products and Services, CME Group, " CME and Bloomberg have worked closely to together to integrate affirmation and matching capabilities for clearing credit default swaps. "The VCON —CME ClearPort link allows our buy side and sell side customers to seamlessly monitor their clearing status in real time," stated Paulhac.

According to Dirk Pruis, president and COO of ICE Trust, in the release, "ICE's role is to bring advanced risk management and clearing solutions to the CDS market, and we welcome both dealer and buy-side customer participation via Bloomberg's VCON solution." Also, Clieve de Ruig, global head of ICE Processing, in the release. "ICELink is happy to be connected to Bloomberg's VCON offering to provide connectivity to ICE Trust and ICE Clear Europe for our common customers."

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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