Bank-backed inter-dealer broker Dealerweb plans to take on Icap and BGC partners with the launch of electronic trading of US Treasury bills, according to a report in BusinessWeek.
Dealerweb, a TradeWeb subsidiary whose stakeholders include ten of the world's leading bond dealers, is moving into a booming market as the US Government borrows trillions of dollars to kick-start an economic recovery.
Icap, the world's largest inter-dealer broker, controls about 60% of electronic treasury trading through its Brokertec platform, while BGC Partners' eSpeed system claims about 40% of trading.
"We view our move into Treasury bills as an extension of what we're doing with mortgages and agencies," Billy Hult, president of Tradeweb, told BusinessWeek in an interview.
Dealerweb has already successfully snatched business away from Icap in the TBA morgage marketplace and anticipates a similar successful run in US T-bill trading.
Speaking at an anlyst presentation Thursday, Shaun Lynn, president of BGC Partners said Dealerweb would need to invest billions of dollars in computer processing, back office technology and screen real estate to play catch up with eSpeed and BrokerTec.