Survey Reports 74 E-Bond Trading Platforms With Move Into Derivatives
There are 74 electronic trading systems for fixed-income securities currently operating in the U.S. and Europe, which is down from 77 in 2003, according to The Bond Market Association's 2004 survey of "eCommerce in the Fixed-Income Markets," which was released on Wednesday.
The Association cited a maturing industry and heightened competition that spurred several high-profile mergers, such as Thomson Financial's acquisition of TradeWeb, as forcing smaller players to close their doors as liquidity dried up on their platforms.
Despite the trend of consolidation, the report found that 25 platforms now execute online transactions in derivatives including interest-rate swaps, credit default swaps, options and futures, an increase from 13 systems available for derivatives in 2003.
"Derivatives are simply the next step in the evolution of online trading and build on the success that treasuries and other cash-based products have had in the electronic markets," states Matt Frymier, a member of the Association's Technology Committee and a principal at Bank of America, who is quoted in the release.
Looking ahead to 2005, the survey says vendors offering trading platforms plan to enhance their offerings with value-added services -- including historical pricing data, analytics, research, matching services and order management.