Bloomberg has expanded its exchange-for-physical (EFP) trading workflow for Australian markets, as part of an effort to build out its electronic trading solution in the region.
Nicholas Bean
The new offering, delivered by Bloomberg Electronic Markets, supports contingent package trading, enabling the negotiation of Australian bonds electronically against a benchmark Australian bond future on an EFP basis.
The first expanded EFP transaction has already been completed between HESTA and ANZ, with the latter participant acting as the market maker.
“Australia is playing an increasingly important role in global capital markets, underpinned by a highly sophisticated and engaged participant base. The expansion of our EFP trading solution marks a significant step forward in our ongoing investment in our offering for our clients in the region,” said Nicholas Bean, global head of electronic markets at Bloomberg.
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The expansion aims to provide a new path to manage risk, making use of an electronic workflow that leverages straight-through-processing (STP), as well as integrating order management systems (OMS) for requests-for-quote (RFQ) and requests-for-market (RFM).
Specifically, EFP trading connects a bond and corresponding futures leg, allowing both to trade together as a single package.
“Exchange-for-physical trades are important to the functioning of the Australian debt capital markets and a core part of our portfolio management,” said Sonya Sawtell-Rickson, chief investment officer at HESTA.
“This represents a significant step forward for Australia’s fixed income market construction, and we’re pleased to see support for a protocol that helps reduce transaction costs and execution risk for market participants.”