ICMA creates centralised source for comparison of fixed income trading platforms in Europe 

ICMA has launched a comparative mapping study of electronic fixed income platforms in Europe. The ICMA Electronic Platform Mapping Study compares the key features and capabilities of 22 electronic trading platforms (ETPs) and information networks that are currently available for trading fixed income in Europe.

The landscape of bond trading is changing. Driven by regulatory developments and the search for liquidity, trading is increasingly moving to a variety of different electronic trading platforms. ICMA has undertaken a mapping initiative of trading platforms for European fixed income markets, listing their features and capabilities in a standard format allowing market participants to compare and contrast ETP providers and to determine which platforms best suit their investment and/or trading strategies.

European bond market trading is increasingly becoming more electronic. This is due to the natural evolution of trading in bonds and, more recently, also a by-product of regulation. Market participants have a regulatory obligation to evidence best execution and meet transparency obligations, but more importantly need to source and optimise liquidity. The fixed income landscape is currently very fragmented.

The reduction in balance sheet due to Basel III combined with investors’ reluctance to trade has led to a diffusion of liquidity across platforms. This is particularly the case in corporate bonds where it is often heard that liquidity is “a mile wide and an inch deep”. Sourcing and aggregating liquidity is paramount for sell-side and buy-side traders. Technology is the only way to enable these participants to uncover the liquidity available. Understanding the contrasts and capabilities of new and more traditional ETPs is the first step to choosing the best execution venue or information network available in the market.

Therefore, ICMA has undertaken a capabilities mapping initiative for participants in European fixed income markets to better understand the unique selling points of various electronic trading platforms (ETPs) and information networks. By offering a centralised one-stop shop to research the e-trading skills available in the market, ICMA members will be able to compare and contrast the various ETP providers in order to determine which platforms best suit their investment and/or trading strategies.

The full ICMA ETP Mapping Study is available on the website of ICMA.

Source: ICMA – ICMA creates centralised source for comparison of fixed income trading platforms in Europe

 

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