By Tim Clark, Wall Street & Technology
T-Zero, a credit derivative affirmation and connectivity provider recently announced that more than 100 buy side firms have signed on to use its services. Launched just over a year ago, T-Zero was expected to hit the 100 client goal by year end, but strong interest by the buy side is resulting in a substantially faster sign-up rate.Mark Beeston, president of T-Zero, said in the September issue of Wall Street & Technology that the cost of operational risk on the buy side has become "acutely transparent," thus driving up demand for automation. "Financial services firms are in the business of managing market risk -- not managing operational risk," he says. "They want to make the elimination of that risk as easy as possible," adds Beeston, the former COO for credit trading at Deutsche Bank.
T-Zero expects to increase its buy side user base over the next several months as more dealers, prime brokers, fund administrators and other service providers connect to the service, especially in light of recent announcements made by the Financial Services Authority (FSA).
The FSA warned investment banks and hedge funds that they face possible penalties unless they tighten controls on derivatives trading. A supervisory group led by the New York Federal Reserve will meet with the top 14 dealers later this month to review progress.
Available as either a stand-alone system or through the Bloomberg Professional service, T-Zero enables financial professionals to affirm, allocate, novate and terminate trades with their counterparts in real time thus reducing the primary source of operational risk. Through the Bloomberg distribution channel, more than 250,000 financial markets participants have access to the platform and eleven leading dealers have signed on.