Tradeweb and FTSE Russell Extend Benchmark Closing Prices to U.S. Treasury Markets

Rhea-AI Summary

Tradeweb and FTSE Russell have launched Tradeweb FTSE U.S. Treasury Closing Prices, extending their fixed income pricing offering to the U.S. Treasury markets. This new benchmark utilizes an enhanced methodology for calculating bid and offer prices, including transaction costs based on executable pricing quotes from Tradeweb's platform. The pricing data covers various U.S. Treasury securities with snap times at 3:00 and 4:00 p.m. (New York). The expansion aims to increase transparency and reliability in benchmark pricing, supporting investment portfolios, compliance, and accounting standards. Tradeweb and FTSE Russell plan to integrate this methodology into their UK Gilt and European Government Bonds pricing soon.

Positive

• Expansion to U.S. Treasury markets increases the scope and utility of Tradeweb and FTSE Russell's benchmark pricing.
• Enhanced methodology provides greater transparency and reliability in bid and offer price calculations.
• Comprehensive coverage of U.S. Treasury securities, including notes, bonds, bills, strips, and TIPS.
• Snap times at 3:00 and 4:00 p.m. (New York) offer timely and relevant benchmark pricing data.
• Adheres to EU and UK Benchmark Regulation and IOSCO Principles, ensuring regulatory compliance.
• Enhanced benchmark pricing supports investment portfolios, compliance, and accounting standards.
• Future integration with UK Gilt and Euro Government closing prices promises broader applicability.

Negative

• Increased competition in the benchmark pricing market may pressure Tradeweb and FTSE Russell to continuously innovate.
• Implementation challenges in integrating the enhanced methodology into existing pricing models for UK Gilts and European Government Bonds.
• Potential market resistance to adopting new benchmark methodologies, impacting initial uptake.

Insights

Fixed Income Analyst

The extension of benchmark closing prices to the U.S. Treasury markets by Tradeweb and FTSE Russell introduces greater transparency and efficiency in the valuation of these securities. This is especially relevant given the U.S. Treasury market's importance as a global benchmark for fixed income securities. By incorporating executable pricing quotes and supporting both mid and bid/offer prices, the new methodology enhances the overall accuracy of these benchmarks.

This development may benefit investors by refining their ability to evaluate the fair value of U.S. Treasury securities, aiding in portfolio management and compliance. Additionally, the creation of a more reliable and transparent closing price may improve liquidity and price discovery, key factors in the efficiency of financial markets.

Compared to previous methods, this new approach could help mitigate risks associated with valuation inaccuracies, which can be significant in a market as vast as U.S. Treasuries. Enhanced pricing mechanisms can lead to more accurate index tracking and may attract increased investor interest in index-linked products.

Market Research Analyst

Expanding benchmark pricing coverage to include U.S. Treasury markets represents a substantial step in broadening the scope of fixed income indices. This move can potentially impact a wide array of investment products and strategies that rely on accurate and reliable benchmark data. The U.S. Treasury market is a cornerstone of global finance and having enhanced benchmark prices is likely to drive better investment decision-making.

For retail investors, this development could mean more accurate pricing of index funds and ETFs that track U.S. Treasuries. The additional transparency in bid and offer prices provides a clearer picture of market demand and supply, which is essential for informed trading. Moreover, this improved pricing data can aid in compliance and reporting, ensuring regulatory standards are met efficiently.

Overall, this strategic partnership between Tradeweb and FTSE Russell exemplifies a commitment to advancing market transparency and reliability, which could foster greater investor confidence in fixed income markets.

• Expansion of strategic partnership between Tradeweb and FTSE Russell to produce benchmark closing prices for the U.S. Treasury markets
• Tradeweb FTSE U.S. Treasury Closing Prices utilize an enhanced methodology that provides additional transparency into bid and offer price information

NEW YORK & LONDON--(BUSINESS WIRE)-- Tradeweb and FTSE Russell today announced that they have launched Tradeweb FTSE U.S. Treasury Closing Prices, extending their combined offering of next generation fixed income pricing, which can be used in index trading products.

Similar to the existing Tradeweb FTSE closing prices for UK Gilts and European Government Bonds, these U.S. Treasury closing prices incorporate trading activity from Tradeweb’s electronic platform, which results in more robust benchmark pricing.

Tradeweb FTSE U.S. Treasury Closing Prices utilize an enhanced methodology, which facilitates the calculation of bid and offer prices, capturing transaction costs based on executable pricing quotes collected through the Tradeweb platform. This is in addition to mid prices, which are produced for all asset classes. The pricing data set features comprehensive coverage for a range of security types including U.S. Treasury notes and bonds, bills, strips and Treasury Inflation-Protected Securities (TIPS), with both a 3:00 and 4:00 p.m. (New York) snap time.

The extension of closing pricing to the U.S. Treasury markets is an important step in further expanding benchmark pricing capabilities across a comprehensive range of fixed income securities, importantly including USD-denominated credit securities, for which prices are largely underpinned by U.S. Treasury valuations.

The enhanced methodology used for Tradeweb FTSE U.S. Treasury Closing Prices has been thoroughly tested to arrive at an optimal approach to delivering robust, algorithmic and reliable pricing. In the near term we plan to incorporate this methodology into our UK Gilt and Euro Government closing prices, including the addition of bid and offer prices.

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. Tradeweb and FTSE Russell are committed to the continued expansion of their benchmark pricing coverage, and the incorporation of these prices throughout the investment process.

Lisa Schirf, Global Head of Data & Analytics at Tradeweb, said: “As we continue to expand Tradeweb’s collaboration with FTSE Russell, our clients gain access to a broader set of benchmarks for use as reliable closing prices in their investment process and end-of-day trading strategies and other purposes. We believe the Tradeweb FTSE U.S. Treasury Closing Prices will serve as a unique foundation for the global fixed income markets and their launch further demonstrates our commitment to the electronification of the markets.”

Scott Harman, Head of Fixed Income, Currencies and Commodities Indices at FTSE Russell, said: “The launch of Tradeweb FTSE benchmark pricing for the U.S. Treasury markets, represents significant progress in realizing our ambition to offer the financial markets a better, more representative solution for valuing fixed income securities. We recognize the criticality of the U.S. Treasury markets to the investment ecosystem, and the need to continue to offer innovative benchmark solutions to our clients for this important asset class.”

These benchmark prices are administered in accordance with the EU and UK Benchmark Regulation and the IOSCO Principles for Financial Benchmarks and can be used in index construction, as well as reference rates for a broad range of use cases, including trade-at-close transactions and derivatives contracts.

About Tradeweb Markets:

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 50 products to clients in the institutional, wholesale and retail markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves more than 2,500 clients in more than 70 countries. On average, Tradeweb facilitated more than $1.5 trillion in notional value traded per day over the past four fiscal quarters. For more information, please go to www.tradeweb.com.

Forward-Looking Statements:

This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, our outlook and future performance, the industry and markets in which we operate, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions and future events are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the heading “Risk Factors” in documents of Tradeweb Markets Inc. on file with or furnished to the SEC, may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. In particular, preliminary average variable fees per million dollars of volume traded are subject to the completion of management’s final review and our other financial closing procedures and therefore are subject to change. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future performance and our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this release. In addition, even if our results of operations, financial condition or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this release, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.

About FTSE Russell, an LSEG business:

FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $15.9 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.

FTSE Russell is wholly owned by London Stock Exchange Group.

For more information, visit FTSE Russell.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240609717691/en/

Media:

Daniel Noonan, Tradeweb

+1 646 767 4677

Daniel.Noonan@Tradeweb.com

Simon Henrick, LSEG

+44 (0) 20 7797 1222

newsroom@lseg.com

Gexler Diaz, LSEG

+506 8513-3280

gexler.diaz@lseg.com

Investors:

Ashley Serrao, Tradeweb

+1 646 430 6027

Ashley.Serrao@Tradeweb.com

Sameer Murukutla, Tradeweb

+1 646 767 4864

Sameer.Murukutla@Tradeweb.com

Source: Tradeweb Markets Inc.

FAQ

What is the Tradeweb FTSE U.S. Treasury Closing Prices?

Tradeweb FTSE U.S. Treasury Closing Prices is a new benchmark pricing for U.S. Treasury markets, utilizing an enhanced methodology for bid and offer prices.

How do the Tradeweb FTSE U.S. Treasury Closing Prices enhance transparency?

The enhanced methodology includes bid and offer price calculations and transaction costs based on executable pricing quotes from Tradeweb's platform, increasing transparency.

What types of U.S. Treasury securities are covered by the new benchmark prices?

The benchmark covers U.S. Treasury notes, bonds, bills, strips, and Treasury Inflation-Protected Securities (TIPS).

When are the snap times for the Tradeweb FTSE U.S. Treasury Closing Prices?

The snap times are at 3:00 and 4:00 p.m. (New York).

How does this new launch affect investment portfolios?

The enhanced benchmark pricing supports investment portfolios by providing reliable and transparent price data, aiding in compliance and accounting standards.

What regulatory standards do the new benchmark prices comply with?

The benchmark prices comply with EU and UK Benchmark Regulation and IOSCO Principles for Financial Benchmarks.

What future plans are there for the enhanced methodology?

Tradeweb and FTSE Russell plan to incorporate the enhanced methodology into their UK Gilt and Euro Government closing prices.