US-based OpenDoor Securities has launched an all-to-all anonymous order book for on-the-run (OTR) US treasuries in response to concerns around liquidity and information leakage during times of stress on traditional venues.
The US treasuries trading firm claimed the anonymous order book will be the first US treasury venue to offer non-discriminatory pricing in benchmarks regardless of an account’s designation.
The roll-out of the anonymous order book is in direct response to concerns about information leakage at the height of the volatility amid the coronavirus pandemic. Traders can now source large blocks of OTRs directly and anonymously on the OpenDoor platform for improved execution, and the ability to clear risk with low market impact.
“We found out in March that the largest debt market in the world does not function well when it is growing and the ability to intermediate its risk is not,” said Susan Estes, CEO of OpenDoor. “OpenDoor is a private sector solution to a public sector problem. Innovation does not come without disruption and we believe that the expanded OpenDoor platform is a necessary step forward in tackling the structural issues that plague the US Treasury market.”
OpenDoor saw a surge in volumes in its off-the-run issues and anticipates the same in OTRs, with combined order volume on the platform in May and June doubling from January and February. Buy-side to buy-side matching also increased a significant 70% since the launch of its continuous order book in January.
The firm launched the all-to-all continuous order book for illiquid US treasuries earlier this year, with State Street acting as a riskless principal intermediary to market participants and clearing dealers.