The London Stock Exchange is to launch a new order-driven trading service for private investors in the bond markets.
The new electronic order book will be available for a select number of gilts and UK corporate bonds and will offer private investors with an on-screen secondary market in London-listed debt securities for the first time.
The system, which is modelled on the successful MOT market operated by LSE subsidiary Borsa Italiana, is expected to go live in February next year.
Pietro Poletto, the LSE's head of fixed income, says the retail appetite for bonds has increased substantially in the current climate of low interest rates and equity market volatility. "This new initiative aims to meet that demand by offering private investors exposure to this market for the first time through transparent, efficient access to fixed income securities listed in the UK.
Over 10,000 debt securities are already admitted to the London Stock Exchange but the vast majority are currently available for trade reporting only.
Poletto says the new trading service is not expected to impact existing wholesale bond or gilt trading and trade reporting arrangements and does not aim to change established practices in the institutional fixed income markets.