adamant that the buy-side will play a significant role in the platform’s success.
“We cannot be successful if Curve is a
bank-centric platform; we have to be
focused in working with the buy-side. For
hedge fund and asset managers, it is a case
of first going live, become real and credible and then start walking the path of
building open interest,” he explains.
“Once that happens, you will get market makers coming to you to provide
“We will not pay for
order flow and we will
not pay for people to
trade. We will pay for
people to put prices
on the screen.”
on-screen liquidity and we are going to
ask banks to put positions in because it
is in their economic self-interest. We are
going to do some block-transfer business
to allow people to put blocks in and
build up their risk.”
What are the expectations of Curve in
the short-term once it goes live? Ross does
not expect any fireworks or a surge in
activity, but rather a gradual build-up as
market participants come round to the
idea of Curve.
“Our model is to be funded for a long
time and to slowly and surely build market
share over time by individually bringing
on positions that are economically sensible,” Ross says.
“I think for OTC clients of LCH that
already trade futures, Curve should be a
really interesting place to get them to come
and express interest because there is such
little liquidity risk. Because we are not
building our own vertical model, we can
present really exciting opportunities and
innovative ideas to our buy-side clients.” n
