OK, so we all know that LiquidityHub is to be distributed via Bloomberg and Reuters (regardless of the sale to Thomson in the later’s case). But what exactly will be offered to clients via these portals?

The following are a few items I’ve picked up around the traps recently. Nothing earth shattering (in fact much is repetition for which I apologise) and all seems quite logical, with a bit of my opinion thrown in for good measure:

* Essentially LiquidityHub is a swaps platform, plain and simple. Sure US Treasuries will be offered in phase 2 and probably Euro Govies in Phase 3 (phase 1 being EUR and USD Swaps) but the crux of the matter is the consortium being in control of the swaps market going “e”. Likewise the bond component is starting with Benchmark issues only….with a plan to add off-the-runs later.

* Price Discovery is via a composite LiquidityHub price (no idea how that will be calculated at this stage). There will be no market depth as both Bloomberg and Reuters will receive feeds solely from LiquidityHub and not directly from the 15 Banks.

* Request For Stream (RFS) is the selected method, over Request For Quote (RFQ). The reason being that the banks feel this is the fairest method for both sides of the market. It provides true real-time pricing rather than the time-to-live (usually a few seconds) seen with the RFQ model.

* In terms of Competitive RFS, there will be the ability to select up to three dealers only, unlike the current market standard with Competitive RFQ of up to five dealers. Given the Off-Balance Sheet nature of swaps, this seems fair enough.

* But is it fair enough that the trades are not centrally matched? Essentially the dealer always has last look, or at least his/her pricing engine does. The good news on this front is that at least if a bank rejects an “accepted” price (is that ever acceptable????) the RFS is meant to automatically start again.

* STP is to be provided, initially via Swapswire but with a view to expanding the options.

Overall I think it seems a solid offering to start and most importantly it has liquidity (as the name suggests 😉 ) via the backing of these 15 Banks. Can you say the same about other swaps platforms in or around the B2C space?