AllianceBernstein has become the first buy-side firm to execute a corporate bond block transaction with aggregated liquidity sourced from four buyers via the Broadridge AI trading platform, LTX.
The first-of-its-kind fixed income trade leveraged the LTX platform’s dealer network, allowing AllianceBernstein to sell a large block of bonds and access the aggregated liquidity from the buyers simultaneously and in real-time.
Broadridge said the platform’s RFX trading protocol allowed clients to bid for their preferred amount of bonds and improve prices to fulfil the order, while its AI technology identified the dealers and natural buyers of the bond, rather than placing dealers in competition.
“A challenge facing many asset managers is how to trade blocks of bonds more efficiently,” said Tim Kurpis, head of investment grade trading at AllianceBernstein.
“Most electronic solutions focus on smaller sizes and liquid bonds, but 70-75% of the corporate bond market still trades over the phone. LTX brings a different approach for accessing liquidity that offers new protocols to better match potential counterparties and allow multiple bids or offers for a bond.”
Launched in June, the LTX platform processes over $10 trillion in notional volume each day across over 10 dealers and 40 asset manager clients, using AI and protocols to provide the buy-side and sell-side with a more detailed view of pre-and post-trade liquidity.
Last month, Broadridge successfully secured a patent for the RFX proprietary trading protocol which was designed to improve liquidity, efficiency, and execution offered by broker-dealers to their buy-side clients while also minimising information leakage.
“This is a major milestone for the fixed income market,” said Jim Toffey, chief executive of LTX. “This is the latest example of how our next-gen RFX protocol benefits market participants and goes beyond electronifying the phone call to create a digital liquidity pool of natural counterparties that will move the bond market forward.”