Former Morgan Stanley, Deutsche Bank fixed income head goes live with startup platform

OpenDoor Securities aims to bring traders to the less-liquid segments of the US Treasury market.

A new fixed income platform led by Susan Estes, the former global head of Treasury trading at both Morgan Stanley and Deutsche Bank, has gone live in a bid to bring traders to the less liquid segments of the US Treasury market.

OpenDoor Securities launched on Tuesday with the backing of nearly three dozen firms representing more than $5 trillion of assets under management, with six sponsor dealers including Societe Generale and Bank of Nova Scotia, which have onboarded to the platform.

Its users include central banks, hedge funds, pension funds, asset managers, trading firms and primary dealers, among others.

“The Treasury market remains bifurcated between the six benchmark issues and the remaining three-hundred plus off-the-runs,” stated Estes.

“As a result, real-money accounts continue to experience increased transaction costs in their core bond holdings through ever widening bid-offer spreads. This is felt to a much larger degree by accounts trading less volume than the top ten. OpenDoor’s solution works for all participants, targeting an often-overlooked but vital pillar of national debt.”

It provides an all-to-all marketplace for traders struggling to source liquidity in off-the-run Treasuries (OFTRs) and Treasury Inflation Protected Securities (TIPS), which combined represent 98% of the $13.8 trillion of total outstanding issuance in the US Treasury market.

With banks’ having less capacity to house securities on their balance sheets, off-the-run Treasuries have become more difficult to trade.

“Liquidity conditions remain challenging across many asset classes, even in the off-the-run segments of liquid markets such as U.S. Treasuries,” said Barry Cohen, managing director and head of rates sales, Americas, Societe Generale.

“We absolutely believe that the OpenDoor platform represents an innovative way to utilise technology to achieve added liquidity in the off-the-run and less liquid corners of the Treasuries market. Being involved on day 1 shows our commitment to the US markets, our customers, and our partnership with the team at OpenDoor.”