Waters Rankings 2015: Best Broker Dealer ─ UBS

Call it foresight or call it luck—but there is no way around the timeliness of this trading platform, with particular respect to OTC instruments, in explaining its rapid ascent. Throughout 2014, almost every major investment manager Waters spoke with mentioned the possibility of a swap execution facility (SEF) aggregator as one way to solve the liquidity and connectivity challenges associated with Dodd-Frank Title VII. And in most of those conversations, the word on the tip of the tongue was “Neo.”

UBS has managed to broadly deliver on that promise, and as more pressure builds to create faster-moving, central limit order book-style trading in the space—the first market-agreed coupon (MAC) swaps were traded on Neo last October—the platform will only become more influential.

That being said, the impressive work UBS has done in other asset classes deserves attention, as well: 550 cross-currency pairs, 12 FX non-deliverable forwards (NDFs) pairs, and streaming dealable prices for four precious metals are included on the platform, challenging the better established Autobahn (Deutsche Bank) and Barx (Barclays) in these areas. Tools like a dual-mode pricer, strip wizard (for replicating strategies around expiration) and a volatility grid for comparing maturities differentiate Neo’s FX options offering, while equity derivatives are now a new area of focus in addition to the original fixed-income trading.

But what the platform gets right above all else—and what surely has attracted many of Waters’ readers to it—is the way Neo’s softer functions like research provision and messaging float so seamlessly right next to the harder, more action-oriented ones. In an era of cross-asset trading, single-dealer portals can be notoriously clumsy in their interface, and UBS made sure that wouldn’t be an issue early on by thoughtfully combining HTML5 and Apache Cassandra with a range of other underlying technologies.

Sure, UBS will need to continue innovating to keep Neo fresh—and that isn’t easy. But the foundation here is just too good to doubt, and for now, the votes say Neo is still well ahead of the game.

Call it foresight or call it luck—but there is no way around the timeliness of this trading platform, with particular respect to OTC instruments, in explaining its rapid ascent. Throughout 2014, almost every major investment manager Waters spoke with mentioned the possibility of a swap execution facility (SEF) aggregator as one way to solve the liquidity and connectivity challenges associated with Dodd-Frank Title VII. And in most of those conversations, the word on the tip of the tongue was “Neo.”

—TBM