ICE relaunches sweeps protocol for corporate bonds to meet market demands

The exchange and clearing house operator invested both human capital and technology to relaunch the ICE Risk Matching Auction (RMA) product part of the ICE Bonds’ suite of trading protocols.

Intercontinental Exchange (ICE) has relaunched ICE RMA, its sweeps protocol for corporate bonds, effectively expanding its fixed income liquidity offering, in response to market demand.

ICE RMA – part of the ICE Bonds’ suite of trading protocols – is used in dealer-to-dealer fixed income trading. Initially launched in 2015, the service now conducts multiple auctions each week, with 50 registered firms and more than 400 connected users.

Peter Borstelmann, president of ICE Bonds, highlighted that there was a notable demand for improvement in the space and the development of a product superior to that already in the market.

Speaking to The TRADE, he explained: “We heard from our partners that they wanted a strong competitor in this space and nobody had yet been able to step [into] that capacity.  We saw this as an opportunity to invest in something that we were the initial creators of and would be a nice complement to our existing ATS liquidity network. 

“We invested in both human capital and technology to bring an intuitive and easy product to market and the initial adoption and activity validates this investment.”

In practice, through ICE RMA, a proprietary algorithm matches the buyers and sellers of the same bond – or list of bonds – following traders’ upload of their inventories.

The protocol proposes pricing levels for bonds by leveraging ICE’s Continuous Evaluated Pricing (CEP). Subsequently, traders confirm or reject, wither on a line-item basis or in bulk.

“The sweeps protocol continues to be an important tool for dealers for additional liquidity and risk management […] With our relaunch, we’ve delivered a highly intuitive and easy to use platform that incorporates direct user feedback,” said Borstelmann in a statement.

ICE Bonds’ offering includes: click-to-trade, request-for-quote, sweeps and portfolio auctions. Through its CEP it provides streaming intraday fixed income evaluations for front-, middle- and back-office processes, leading to increased pre-trade transparency.

Amanda Hindlian, president of fixed income and data services at ICE, explained: “Our broad offering across fixed income provides a range of services that our customers can use to gain more transparency into volatile markets. The RMA relaunch builds on our strengths in both execution and data to deliver a robust sweeps solution that helps manage risk exposure across fixed income portfolios.”