Bondcube, a fixed income trading platform, has appointed execution broker ITG as a U.S. trading intermediary for Bondcube’s buy-side to buy-side trades, officials say.
For the new role, ITG will facilitate the settlement of trades between buy-side participants. In addition, the partnership will increase the probability of a match for clients of ITG and Bondcube by allowing for more interaction, officials say.
Frank DiMarco, head of fixed income electronic trading at ITG, said the partnership “means our clients can now access an additional pool of liquidity to improve their fixed income execution efficiency.” ITG serves global portfolio managers and traders from investment decision to settlement, officials say.
Bondcube, which offers free connections for all buy-side and sell-side firms, provides access to liquidity for large and illiquid bond trades and applies smart technology for the discovery process, officials say. Bondcube takes indications of interest (IOIs) from participants and matches them with other buyers and sellers. These IOIs remain active or historic until a match is found. Only the participants that have the offsetting interest in that security are notified and eligible to begin a negotiation for a trade, officials add.
Posting an IOI includes side and size range, but no price or spread, officials say. The IOI can be exposed to specific groups of users. Bondcube’s dark-matching means only the buyer and the seller are aware of the match. Buy-side firm to buy-side firm negotiations are anonymous and crossed through intermediaries such as UBS or ITG for a small mark up/down, officials say. Buy-side firm to sell-side firm negotiations are fully disclosed while existing buy-side to sell-side relationships are maintained in all trades.
Bondcube has major offices in London and Boston. In the U.K., Bondcube Ltd. is a crossing network regulated by the Financial Conduct Authority (FCA), officials say. Bondcube Inc. is a broker/dealer and an automated trading system (ATS) in the U.S. The company is privately owned by a consortium of owners including Deutsche Börse AG and Bondcube management.
“With a complimentary client base, we see this partnership as an exciting phase of our growth in building out the new global pool of buy-side fixed income liquidity,” said Paul Reynolds, Bondcube CEO in a prepared statement. “We will be making further announcements about high quality partners such as ITG.”
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