Swiss Dots, the over-the-counter (OTC) platform launched in 2012 by Swissquote Bank, UBS and Goldman Sachs, which now also includes Deutsche Bank and Commerzbank as issuers, is expanding its range on the Swiss Dots trading platform with the addition of Vontobel, supplementing the existing range with approximately 10,000 additional leveraged products.
The new leverage products will comprise warrants, knockout warrants and minifutures, as well as various underlying assets such as international and Swiss equities, currency pairs, indices and precious metals, according to Vontobel. The new suite of products can be traded on an exclusive basis directly with the issuer via Swiss Dots, from Monday to Friday, 8am to 10pm. "As the largest issuer of leverage products in Switzerland, this will mean that we have tapped into virtually every distribution channel," said Roger Studer (pictured), head of Vontobel investment banking. "We rank among the market leaders in Europe, with more than 330,000 issued products, seven million trades and one billion quotes per day."
Vontobel's market shares and claim to leadership underscore the fact that the bank understands the dynamics of the challenges involved with leverage products, and that it has the essential expertise to master them, according to Studer. "In this competitive international environment, we want to play a key role in shaping the ongoing developments in the market, further enhancing the quality of decision-making information, transparency and efficiency," said Studer.
With this move, Vontobel expands its long-standing partnership and cooperation with Swissquote, while at the same time integrating its presence on Swiss Dots in its own platform strategy.
"We currently have four of the largest issuers on the platform," said Marc Bürki, chief executive officer, Swissquote Group Holding and Swissquote Bank. "In 2016, approximately 190,000 transactions were settled via the derivatives platform (+3%). This is the equivalent of an average 34% of comparable leveraged products traded on the Six Structured Products Exchange (SSPE). The increasing growth in both market share and the number of transactions bears testimony to the success of the Swiss Dots business model."
Swiss Dots already offers Swissquote clients and PostFinance e-trading clients to trade more than 60,000 leveraged products OTC. According to Burki, Swiss Dots' attractive conditions, transparent trading and tight spreads, represents an ideal complement to the existing offering from SSPE. "For Swissquote, this partnership is an outstanding opportunity to continue to pursue its growth strategy in the derivatives sector," said Burki. "As a result, clients will benefit from an even more complete range."
The move follows Vontobel's launch of a range of certificates at Euronext in France, one of the main markets for leveraged products in Europe, and a strategic agreement with Bank of Singapore through which clients of the Singaporean private banks will be able to book their assets in Switzerland and use Vontobel as custodian.
The onboarding of Vontobel to Swiss Dots' OTC platform adds pressure to the Swiss Six Exchange, which launched XBTR in 2016, an on-exchange OTC venue to capture some of the OTC transactions in Switzerland. "It is difficult to launch a new platform in the context of a well-developed market with a number of existing alternatives but we are working to develop this segment, and we are happy with our progress," said Andre Buck, head of sales at Swiss Six Exchange. "This is a complement to our core offering and it can be a bridge also for the buyside to access the structured products market. We have already received feedback from 15 buyside firms in Switzerland that have shown interest in transacting products on XBTR, once issuers make their offerings available."
According to Eric Blattmann, head of public distribution financial products at Vontobel in Switzerland, with this move, Vontobel expands its “long-standing partnership and cooperation with Swissquote, while at the same time expanding our platform strategy”.
This allows us to diversify our distribution channels and further extend our market leadership,” said Blattmann. “We can further scale our efficient platform, open up an additional distribution channel for our product offering and reach new clients.”
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