Interdealer broker GFI Group reports that it has launched a dealer-to-dealer electronic trading platform for so-called odd lot corporate bonds in the U.S., officials say.
An “odd lot,” whether of a stock or a bond, is generally defined as a smaller trade such as those that are fewer than 100 shares of a stock. “Odd lot transactions represent almost 90 percent of the number of trades in the interdealer corporate bond market and almost 20 percent of the notional amount traded,” says GFI, citing a 2014 FINRA report.
The new service “consists of an end-of-day odd lot matching session that provides instant executions via CreditMatch, GFI’s electronic trading system for corporate bonds and derivatives,” GFI says, adding that it “anticipates extending this into a fully executable Central Limit Order Book (CLOB) during the third quarter of 2015. Trades will be electronically posted to FINRA’s Trade Reporting and Compliance Engine (TRACE) and cleared by Pershing.”
GFI also provides trading technologies and support services to both the over-the-counter (OTC) and listed derivatives markets.
GFI’s “fully integrated workflow” CreditMatch offering provides price discovery, pre-trade credit checks, trade execution, trade capture and straight-through processing (STP) support, officials say. GFI also has electronic connections to a number of major clearinghouses and swap data repositories (SDRs) to provide a fully electronic workflow, allowing participants to be “confident of liquidity and superior execution with the assurance that they are fully compliant with SEC and FINRA requirements,” officials add.
“We are providing a much-needed source of Odd Lot liquidity to the dealer community,” says Colin Heffron, GFI Group CEO, in a prepared statement. “We are delighted to offer clients an opportunity to trade in this growing sector of the corporate bond market,” Heffron adds.
GFI notes that it is majority-owned by, and will operate as a division of, BGC Partners, Inc., a brokerage company servicing the financial and real estate markets.
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