Liquidnet Embraces Sell-Side as All-to-All Model Strengthens in Fixed Income

The fixed income market is undergoing dramatic changes as the applicability of electronic trading remains limited.

Liquidnet, the global institutional trading network, today marked another milestone for its fixed income platform as the company is set to shift from a buyside to buyside model to the all-to-all concept, the latest in a series of initiatives targeting the liquidity crunch in fixed income markets.

By expanding support all-to-all trading venues, where multiple parties from the buy side and sell side could come together and communicate, Liquidnet uncovers more growth opportunities. It will also enhance liquidity by enabling greater market connectivity and centralization, improving the likelihood of quality execution, as well as pivoting its offering towards that of rivals like MarketAxess and MTS BondsPro.

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Liquidnet is expected to provide fixed income sell-side firms the capabilities to efficiently manage inventory, risk and compliance through a suite of solutions that includes electronic trading tools and market connectivity.

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The fixed income market is undergoing dramatic changes as the applicability of electronic trading across the sector has been much slower relative to the equity and forex markets, and in best cases is still largely limited to the most liquid parts of the market.

Since launching in September 2015, Liquidnet’s community of fixed income asset managers has grown to 200 active firms, around 70 of which are in Europe, who have traded some 17,000 different ISINs to date. This growth has been fueled by members’ ability to trade in institutional size, with an average execution of $2.4 million.

Mark Pumfrey, head of EMEA at Liquidnet, commented: “It was always our intention to create an all-to-all platform to create a critical mass of liquidity. Most of the sellside interest is coming from regional banks that perhaps don’t have the global client networks, but if the big dealers want best execution they have to engage with electronic platforms.”

“Two years ago if we had told banks we were building a buyside to buyside fixed income platform, they would have basically said good luck,” added Jonathan Gray, head of fixed income, EMEA, at Liquidnet.

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