T-Zero® To Provide Significant Operational and Cost Benefits To The Credit Derivatives Market;
New Platform Will Strengthen the Market Infrastructure, Creating Automation and 'T+0' Electronic Processing
London & New York, July 28, 2005 – T-Zero®, a platform dedicated to achieving operational
efficiencies in the credit derivatives markets, is launched. T-Zero®, which has been incubated by Creditex, Inc. and is being
spun off into a separate, independent entity, will provide a cost-effective solution to post-trade processing issues in the
rapidly growing credit derivatives industry. Creditex and T-Zero® will be owned by a separate holding company.
T-Zero®’s mission is to address three of the central challenges in the processing of credit derivatives: 1) lack
of robust standardized electronic messaging between market participants, 2) deficiency of system-to-system connectivity between
counterparties, and 3) need for a standardized workflow.
T-Zero® electronically captures and re-directs all trade details, assignments, allocations and other relevant trade details.
This is a particularly critical for tri-party transactions like “assignments” or “novations” – transactions
where trades are assigned by the buyside to the sellside -- and “give-ups” – transactions where a prime
broker acts as an intermediary between a sellside and buyside institution.
In addition, the T-Zero® platform will provide agnostic connectivity among market participants, vendor risk systems, fund
administrators, prime brokerage systems, dealer risk systems and The Depository Trust Clearing Corporation (DTCC). The system
will automatically allow counterparties to send affirmed trades to DTCC for same-day or “T+0” legal execution.
“Achieving greater automated operational efficiencies is critical to the continued development and maturity of the
global credit derivatives market,” said Sunil Hirani, CEO of the holding company that will own Creditex and T-Zero®. “T-Zero®
is designed to dramatically accelerate the industry’s movement toward automation and will allow market participants
to achieve trade-date messaging and connectivity at a fraction of the current time and cost.”
“Periodically, an innovation occurs that will be a critical factor in the development of that market,” said Simon
Morris, head of European credit trading at Goldman Sachs. “T-Zero® is one such innovation. It will provide much needed
automation and operational control in a time when the rapid growth of the credit derivatives market is not just continuing,
but accelerating. We are pleased to be involved with this important industry initiative.”
Guy America, head of European credit trading at JP Morgan, noted, “The launch of T-Zero® comes at an opportune time
when dealers, hedge funds, regulators and other market participants are seeking technology solutions to address the delays
in unsigned confirmations and assignments.”
Robert McGrail, Executive Managing Director of DTCC, said, “We are pleased to be linking our service with T-Zero®.
DTCC is continually collaborating with complementary service providers such as T-Zero® to connect their front-office capabilities
to Deriv/SERV’s real-time automated confirmation process efficiently.”
“T-Zero® complements our technology strategy perfectly,” says Hans Hufschmid, Chairman and CEO of GlobeOp
Financial Services. “By providing T-Zero® messaging and connectivity services to our hedge fund clients, there will
be substantial benefits to credit derivatives trade processing.”
The launch of T-Zero® comes on the heels of industry and regulatory calls for improving transaction processing as the industry
has grown exponentially over the past few years. The FSA, Bank of England, Federal Reserve and ISDA have recently identified
operational risks of derivatives and have called for automated solutions to address the problems.
Initially, T-Zero® will handle single-name CDS trades and credit index trades. Additional products and further connectivity
will be introduced over the course of the next year
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