Icap's fixed income platform BrokerTec is teaming with Chicago-based Trading Technologies to launch an alternative marketplace that will provide futures-style execution for US treasury benchmark issues.
The alternative marketplace will provide futures-style execution on the BrokerTec platform, which will be accessed via Trading Technologies' front-end application, X_Trader.
Clients will be able to use the marketplace to transact cash instruments outright, as well as cash instruments against futures.
Hal Hinkle, CEO of Icap electronic broking, says the new market will allow dealers to trade both US treasury futures and cash instruments using the same trading protocols: "By introducing the same trading rules for cash as already exist in futures, traders who choose to use the alternative execution method will enjoy greater reliability and efficiency when hedging between cash and futures."
Trading Technologies says the new market signals an extension of its business revenue as it is the first time the firm has directly connected to the cash market.
Harris Brumfield, CEO of Trading Technologies, adds: "While vastly increasing our user base, this will create incredible efficiencies and trading opportunities by making the cash and futures markets tradable through one ISV."
The alternative marketplace is scheduled to launch by the end of 1st quarter 2004.
It will provide direct competition to rival platform eSpeed which offers government bond cash as well as futures and basis trading. The tie-up with TT is important to Icap in this respect, since it will provide access to Eurex US' treasury futures contracts alongside Cbot contracts, following TT's direct access deal signed with Eurex late last year. ESpeed currently offers only Cbot contracts.