Euroclear, a provider of settlement services, announced this Wednesday that it is investing in Algomi. The firm’s data and information business, Euroclear Information Solutions (EIS), will make the investment in order to “improve liquidity in the global fixed income market.”
How, this author wondered, will the investment in Algomi, a FinTech firm founded in 2012, achieve this goal? Well, according to the firm’s statement today, EIS clients will be able to use Algomi’s bond liquidity matching system.
This system enables users to make specific bond holdings information available anonymously. The firm’s data aggregation tool, Algomi ALFA, also allows users to access the Euronext Synapse Multilateral Trading Facility, a multilateral trading facility, and query those bonds and, if they so choose, to trade in them.
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Fixed income liquidity increases
As a result of this, EIS’ clients can increase their trading opportunities and, one would imagine, transaction volumes. A corollary of this is that trading in illiquid fixed income securities, such as corporate and government bonds, will increase. This won’t just be the case for Euroclear markets but in the fixed income market as a whole.
EIS is not the first major player in the financial services industry to invest in Algomi. Earlier investors include Euronext, a stock exchange operator, AllianceBernstein, an asset manager, and S&P Global, an index provider.
Peter Golder, CEO of Euroclear Information Solutions commented: “Our investment in Algomi is driven by client demand to access untapped liquidity pools. This venture represents an opportunity to transform our data into an asset to increase transparency and provide a substantial boost for global fixed income markets.”