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Abstract
On the face of it, Neo is a single-dealer platform much like any other. Its unique selling point, and the reason it appears in this category, is its aggregation of prices from 10 swap execution facilities (Sef). There may be 24 Sefs in total, but the lion's share of the volume is going to just a handful; 94% of dealer-to-client trading is happening on Bloomberg and Tradeweb, while Sefs belonging to four interdealer brokers are seeing almost all of the trading between banks. More importantly, perhaps, clients are near-universally using request-for-quote (RFQ) trading rather than Clobs. So UBS's bet has so far only paid out in part. It has put the bank on the right side of many arguments about US regulation -- striving to bring about change, rather than holding it back -- and aligns it with the hopes many clients have for the market's evolution. Some of them describe membership of Neo as like holding an option on change.