November 30, 2016 / 3:01 PM / 3 years ago

CORRECTED-Sellside to join Liquidnet as they warm to fixed income fintech

(Corrects to say orders have been placed for 17,000 different ISINs in paragraph 10)

By Tom Porter

LONDON, Nov 30 (IFR) - Electronic trading venue Liquidnet will sign sellside firms to its fixed income platform in the next few weeks, a significant shift from a buyside only model as banks become more receptive to the all-to-all concept.

“It was always our intention to create an all-to-all platform to create a critical mass of liquidity,” said Mark Pumfrey, head of EMEA at Liquidnet.

“Most of the sellside interest is coming from regional banks that perhaps don’t have the global client networks, but if the big dealers want best execution they have to engage with electronic platforms.”

The move, which could see banks and brokers join the platform before the end of the year, pivots Liquidnet’s fixed income offering towards that of rivals like MarketAxess and MTS BondsPro.

The fixed income market has been much slower to embrace the sort of automation technology that now drives the equity and currency markets, which most participants put down to its more idiosyncratic and illiquid nature.

But Liquidnet’s expansion is another sign that banks, which pre-crisis kept vast warehouses of bonds for trading, are warming to e-trading venues having a greater role in helping investors find liquidity.

“Two years ago if we had told banks we were building a buyside to buyside fixed income platform, they would have basically said good luck,” said Jonathan Gray, head of fixed income, EMEA, at Liquidnet.

“Now they are much more receptive.”

Liquidnet launched its fixed income platform in September 2015 and operates what it believes is the only buyside to buyside fixed income dark pool.

The platform has more than 200 active firms, around 70 of which are in Europe, and orders have been placed for 17,000 different ISINs to date. (Reporting by Tom Porter)

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