Exchange-based products emerging on SDPs


Caplin’s Xaqua platform has been used as a framework for building a variety of SDPs in recent years but the majority of these have been for OTC products in FX, Interest Rates and Bonds.

Equity and exchange based electronic trading has a well established infrastructure, built up over many years, which has not really needed to use the Internet or web technologies for product distribution in the institutional space. However, this looks set to change as banks seek to combine various combinations of asset class into their SDPs along with pre-trade, analytics and post-trade services either side of trade execution.

We have noticed a few other factors that appear to be helping drive this change, including banks providing some liquidity, offering their own inventory of exchange products on the SDP and to help increase the volume of internally crossed trades from the OMSs. However the main driver seems to be the banks’ customer wanting a single place to interact and deal, irrespective of product or stage of the trade life cycle.

Of course it is very early days and many people still do not see the need for combining the main OTC and exchange traded products in the SDP yet or in the near future. We’ll be on the look out to see if what we’re seeing a bit of now turns into more of a trend and would be interested in hearing comments on possible other drivers.

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