Elixium, a new EU-regulated Multilateral Trading Facility (MTF) for collateral and secured deposits, has announced it will launch in May 2016.
Elixium has been developed to address the growing need for a transparent, open to all, peer-to-peer, regulated marketplace. It seeks to address the growing liquidity concerns that have emerged as a result of changes in regulation and the subsequent composition and availability of balance sheets.
Elixium uses a standardised legal structure, uniform collateral schedules and an underlying credit matrix which allows for rapid counterparty diversification and helps spread counterparty risk to provide a solution that brings all market participants together on a fully transparent and equitable basis. It is open to corporates, central banks, sovereign wealth funds, asset managers, pension funds, insurance companies, government institutions, hedge funds, brokers, dealers and banks.
Elixium, via intelligent trading tools and analytics, will allow institutions to qualify credit slippage, view depth and liquidity across tenures and baskets and offer varied execution methodology. Over the coming months, Elixium will expand to over 40 collateral baskets covering fixed income and equities in GBP, EUR, USD, CAD, JPY and a range of emerging market currencies.
Elixium also announced a series of new appointments to its management team. Roberto Verrillo has been appointed Chief Strategy Officer, with overall responsibility for Elixium’s strategy and markets. Gabriele Frediani joins as Chief Business Development Officer and will oversee international expansion, while Nick Van Overstraeten joins as Director of Product Development. In addition, Iona J Levine, Barrister and co-founder of Minerva Chambers, will act as special adviser to the team. They will all report to Nick McCall, Chief Executive Officer at Elixium.
Nick McCall, Chief Executive Officer at Elixium, comments: “The repo and collateral market is a critical source of funding for many institutions but is balance sheet intensive. As institutions come under pressure as a result of regulatory changes such as the Liquidity Coverage Ratio and Net Stable Funding Ratio, a reduction in balance sheets has impacted the depth of liquidity available.
“By establishing a peer-to-peer network and offering full counterparty control, we are enabling greater access and price discovery for many non-bank institutions such as asset managers, CCPs, corporates and insurance firms, which are increasingly being seen as key sources of liquidity in the repo market.”
Roberto Verrillo, Chief Strategy Officer at Elixium, comments: "Legacy trading models are no longer as relevant in today’s market as they once were. Financial institutions are re-structuring their product offerings and businesses in light of regulatory and structural shifts in the dynamics of how markets operate. Elixium is designed as a direct result of these changes and we hope to be at the forefront of this evolving market over the coming years."
Gabriele Frediani, Chief Business Development Officer at Elixium, comments: “I’m delighted to join Elixium at a time when the market is ripe for ambitious change. Regulators and central banks are demanding a move towards transparent markets, while market participants want standardised access to collateralised liquidity on a short-term and long-term basis. Elixium addresses these complex issues and offers a choice of execution protocols that is urgently required by the market.”
Dan Marcus, Global Head of Strategy and Business Development at Tradition, adds: “We are delighted to bring together some of the brightest and most respected industry professionals to launch Elixium. Together, they bring extensive knowledge, expertise and experience of financial markets, treasury and balance sheet management, trading technology and market structure from a diverse range of financial institutions.”