In Association with FTSE Group, Kepler Capital Markets Unveils Trading Solution for the $349 Trillion* Interest Rate Swap Market Via FTSE MTIRS Index

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Via an OTC license from FTSE Group, Kepler Capital Markets announces a central market in the USD Interest Rate Swap index series, FTSE MTIRS.

This is an extraordinary Index which reflects the full Fixed for floating interest rate swap market and is a ground-breaking concept. We believe that it marks the beginning of the indexation of the interest derivative market.

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Via an OTC license from FTSE Group, Kepler Capital Markets announces a central market in the USD Interest Rate Swap index series, FTSE MTIRS. Kepler’s clients will be able to access bid-offer pricing on the FTSE MTIRS index via a unique arrangement whereby clients are licensed by FTSE Group when trading this product with Kepler. We are very pleased to obtain a MTIRS license from the award-winning global index provider, FTSE Group – says Kepler.

(Please note that ‘MTIRS’ is an acronym for Medium Term Interest Rate Swaps).

The product launch comes at a time when government regulators are demanding credit efficient alternatives for the trading of Interest Rate Swaps. Trading the FTSE MTIRS Index over the counter gives traders the ability to open positions for a few hours, days, weeks or years in place of a binding long-term commitment anywhere from two to 40 years. Under Basel II, swap contracts may have a negative effect on balance sheets. However, by utilising the FTSE MTIRS Index, these potential strains on the balance sheet can be alleviated. Moreover, long-term credit risk is reduced whilst maintaining similar returns.

The FTSE MTIRS Index is already of significant interest to asset managers, macro and fixed income hedge funds, bank trading desks, quant funds and corporate treasury departments.

Clear and public methodology, rules based design and real-time calculation across key data providers such as Bloomberg and Reuters, all ensure that investors are able to trade Interest Swaps with confidence.

Trades on the FTSE MTIRS Index replicate full fixed for floating Interest Rate Swap exposure with 45 indices covering single period’s spreads and butterflies trading strategies.

Michael Creedon, Managing Director at Kepler Capital Markets comments ‘This is an extraordinary Index which reflects the full Fixed for floating interest rate swap market and is a ground-breaking concept. We believe that it marks the beginning of the indexation of the interest derivative market.’

Mike Bruno, Director of Fixed Income Research at FTSE Group, says “We are pleased to be working with Kepler Capital Markets on the licensing of the FTSE MTIRS Index, which comes at an important time for the Fixed Income market. Factors such as counterparty risk and pricing transparency in the interest rate swap market, have become major concerns to market participants and regulators globally. Using a rules-based design, the FTSE MTIRS index effectively addresses long term risk and is operated in real time, offering clients a transparent and tradable solution.”

Notes to editors

*Source Bank for International Settlements - Amounts outstanding of over-the-counter interest rate swaps December 2009 $349 trillion.

About Kepler Capital Markets

Kepler Capital Markets is an independent, dynamic European financial services company. The two core business lines are Fixed Income & Emerging Markets and Equity Brokerage. Founded in 1997, the company is 100% owned by management and staff following an MBO in December, 2008. Kepler is present in all major financial centres in Europe plus New York.

About FTSE Group

FTSE Group (“FTSE”) is a world-leader in the creation and management of indexes. With offices in Boston, Beijing, London, Frankfurt, Hong Kong, Madrid, Milan, New York, Paris, San Francisco, Sydney, Shanghai and Tokyo, FTSE works with investors in 77 countries globally. It calculates and manages a comprehensive range of equity, fixed income, real estate and investment strategy indices, on both a standard and custom basis. The company has collaborative arrangements with a number of stock exchanges, trade bodies and asset class specialists around the world.

FTSE indices are used extensively by investors worldwide for investment analysis, performance measurement, asset allocation, portfolio hedging and for creating a wide range of index tracking funds. http://www.ftse.com

Vendor screens: Bloomberg KIRS1 and Thomson Reuters KEPLERMTIRS

Press Enquiries:
Clive Connors, Head MTIRS Index, Kepler Capital Markets:
Clive(dot)connors(at)keplercm(dot)com

Tel:
Direct 00 41 22 994 1540
Mobile 00 41 79 255 1450

FTSE Group

Mittal Shah, Public Relations Officer EMEA – FTSE Group

Tel 00 44 20 7866 1821
media(at)ftse(dot)com

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Clive Connors
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