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Tradeweb and FTSE Russell announce strategic partnership

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Electronic marketplace operator, Tradeweb Markets Inc has announced a strategic partnership to develop the next generation of fixed income index pricing and index trading products.

Expanded Benchmark Pricing. The firms aim to provide next-generation pricing across a broader range of fixed income securities, which will be administered by FTSE Russell as benchmarks. Expanding their existing collaboration on benchmark pricing for UK Gilt and European Government bonds, the objective is to deliver robust, algorithmic, and reliable pricing. The closing prices amalgamate trading activity from Tradeweb’s electronic platform, 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 and can be used as reference rates for a broad range of use cases including trade-at-close transactions and derivatives contracts.

Broad Index Inclusion. In the coming months, Tradeweb and FTSE Russell write that they will continue to collaborate on fixed income pricing sets to extend coverage across multiple regions and fixed income asset classes. Over time, FTSE Russell will explore incorporating Tradeweb pricing into FTSE Fixed Income indices, starting with FTSE World Government Bond Index (WGBI), a flagship index comprised of sovereign debt from over 20 countries and denominated in a variety of currencies.

Enhanced Trading Functionality. Tradeweb seeks to expand and enhance electronic trading functionality for FTSE Russell Fixed Income indices and customised baskets through tools and protocols such as RFQ (request-for-quote), AiEX (Automated Intelligent Execution tool) and Portfolio Trading, offering trade-at-market close, trade-at-month-end and other features conducive to index rebalancing trades. For clients seeking to efficiently express a view on FTSE Russell indices and baskets, providing enhanced trading functionality can help efficiently manage what are often their largest and most critical trades.

Lisa Schirf, Global Head of Data & Analytics at Tradeweb, says: “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. 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.”

Scott Harman, Head of Fixed Income Indices at FTSE Russell, says: “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. We are very excited by the opportunity this relationship will bring and how it has the potential to fundamentally change the Fixed Income ecosystem.”

Trusted reference price data is critical for financial firms to manage investment portfolios, evaluate the fair value of securities, perform compliance, and satisfy general accounting standards, the firms say. Tradeweb and FTSE recently launched benchmark closing prices for European Government Bonds in May 2023, expanding on Tradeweb’s well-established UK Gilt Closing Prices. Administered in accordance with the EU and UK Benchmark Regulation and the IOSCO Principles for Financial Benchmarks, Tradeweb FTSE Euro Government Bond Closing Prices are available from Tradeweb and provide end-of-day reference prices for Euro-denominated nominal bonds issued by Austria, Belgium, Finland, European Union, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal and Spain.

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