Aiming to help fixed income traders find liquidity for large and illiquid orders, Bondcube is launching their fixed income trading platform today to live US and European markets. The platform works by connects with buy-side and sell-side participants. Both buy and sell-side participants are able to broadcast on the platform their trade needs, with each side being able to fill orders. For buy-side to buy-side trades, Bondcube partnered with UBS, with the bank acting as the intermediary for anonymously matched trades.
Focusing on providing anonymity for proposed orders, the platform works by only showing the underlying asset, direction of trade and minimum and maximum trading size. Not shown is the specific price or spread of the Indication of Interest (IOI). The IOI then stays in the system until it is matched, with the two sides of the trade then being notified and eligible to directly begin negotiation of the trade.
Along with partnering with UBS, Bondcube also collaborates with the FX, Rates and Credit (FRC) Execution Services unit for settlement of trades between the platform’s participants. In the UK, the platform is licensed as a ‘crossing network’ by the FCA, and registered as a Broker/Dealer and Automated Trading System (ATS) in the US.
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We started two years ago with the unique and innovative concept that the buy-side has vast amounts of liquidity that RFQ has failed to execute and no one can see that liquidity – Paul Reynolds, Bondcube CEO
Paul Reynolds, Bondcube CEO commented about the launch that “We started two years ago with the unique and innovative concept that the buy-side has vast amounts of liquidity that RFQ has failed to execute and no one can see that liquidity. Our very supportive first adopters have already proven our concept works at a level that exceeds our expectations. We have taken that concept further now by enabling website visitors to load their lists of securities and receive email alerts when the platform has an indication of interest in one of them.”
Martin Reck, Managing Director of Deutsche Börse Cash Market added “We congratulate Bondcube for this milestone and wish the market every success. The 30% stake Deutsche Börse AG holds in Bondcube Ltd reinforces our strategy of supporting companies with new solutions for firms seeking alternative sources of liquidity,” adding “it also ensures that we are well positioned in the ever-changing corporate bonds market.”