Electronic bond trading accelerating

Electronic bond trading accelerating

The take-up of electronic trading in global fixed income markets accelerated sharply in 2006, according to the annual Securities Industry & Financial Markets Association (Sifma) survey.

The data, which was compiled from more than sixty operators of electronic trading systems for fixed-income securities in the US, Europe, Asia, Australia and Canada, revealed that more than 74% witnessed an increase in trading volume during the first three quarters of 2006 when compared to last year.

Sixty-eight percent of respondents have seen transaction volumes grow more than five percent so far this year, while 47 percent reported increases of at least 10 percent. Twenty-eight percent of those surveyed said volumes shot up by at least a fifth over the same period last year.

The Review also demonstrates the growing importance of straight-through processing links from execution through to clearing and settlement, as a majority of platforms provide users with direct access to global clearing organisations such as DTCC, NSCC, GSCC, Euroclear, Clearstream and Bloomberg, among others. In addition to clearing and settlement, respondents also reported offering greater access to a variety of value added products such as compliance and analytical services.

Michael Decker, head of research and policy analysis at Sifma, comments: “Market participants are increasingly turning to electronic execution as trading platforms grow even more sophisticated.”

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