Swapstream look to be working very hard on adding a “cleared” module to their sPro B2C IRS platform. Essentially leveraging off their parent’s (CME) futures prowess to essentially deliver a Swaps Exchange, in very vanilla products (EUR & USD standard date outrights) to start. This is on top of the existing standard e-OTC model, which also has futures cross, spreads, flies etc.

Basically the lack of an ISDA Master Agreement, Credit Lines etc, etc would be a non-issue. It would be interesting to see what the Market Makers think and, indeed, ISDA.

Personally I think it is a great idea but one that is three, maybe five, years ahead of it’s time. FX MarketSpace (the joint Reuters/CME exchange in FX) is having a slow start and the FX market is miles ahead of IRS in terms of e-Trading. Plus the markets may move quickly in terms of price, valuations and sentiment, but in terms of structural change, it is very much a case of evolution over revolution.