Fixed income trading platform Bonds.com has created a bespoke front end for electronic bonds trading that will connect several top US asset managers to its central limit order book (CLOB).
The execution system, which will operate in a similar way to execution management systems (EMSs) common to buy-side firms’ equity trading operations, was built to connect to other platforms too, such as industry leaders MarketAxess and Bloomberg.
Speaking to theTRADEnews.com, George O’Krepkie, chairman and president of Bonds.com, said the system was created to meet industry demand as buy-side firms continue to migrate traditional phone-based trading to electronic, especially for smaller orders.
“A real challenge for the industry is creating an efficient secondary market for corporate bonds, because banks often concentrate resources on the larger bonds trades,” he said.
“We’ve built this system for several top US asset managers that are looking for ways to further automate their search for fixed income liquidity,” he said.
Bonds.com developed the platform with input from two software vendors, and confirmed that one asset manager will go live on the system next week.
O’Krepkie said activity on Bonds.com was around 80% dominated by the sell-side, although he predicts the buy-side will increasingly grow its participation on the market in the future as it adapts to CLOB-based fixed income trading.
“In five years the entire fixed income market will be electronic, but that will encompass not only click trading with no human activity but also straight-through-processing combined with phone-based trading,” he said.
The trading platform is technically an alternative trading system and registered broker-dealer with the Financial Industry Regulatory Authority, and provides access to live liquidity and execution through its web-based electronic platform, BondsPRO.