Securities Hub-a consortium of six financial institutions and Communicator Inc.-plans to go live with its latest product, Syndicate Hub, by this September.
Syndicate Hub provides a centralized location where dealers can go to view information on new issues in the bond market. Securities Hub previously launched Bond Hub, which culls information for members on existing bond deals. Syndicate Hub will leverage the technology used in Bond Hub to connect member sites.
Syndicate Hub will have links to individual dealers' Web sites, with listed offerings from that dealer, red herrings and prospectuses, electronic road shows and facilities to submit indications of interest. Features offered on Syndicate Hub will include a master commingled calendar with issuer, size, rating, coupon, maturity date, price talk, underwriters and expected timing of the transaction.
Bond Hub, which was released last December, functions as a forum for bond-trade rumors, current research reports and updated news. The Bond Hub consortium was initially comprised of Goldman Sachs, Morgan Stanley Dean Witter and Salomon Smith Barney, along with Communicator Inc., a business-to-business e-commerce company that looks to develop "Hub" marketplaces for different industries. The new venture, Syndicate Hub, brings J.P. Morgan, Lehman Brothers and Merrill Lynch together with the original three Bond Hub institutions in the hopes of forming a "sticky" Web site where investors will spend some time and, perhaps, some money on one of the proprietary member sites,.
"We're in a funny time. You'd never have guessed that such fierce competitors would be together on one platform," says Victor R. Simone Jr, managing director of eCommerce, fixed income, currency and commodities at Goldman Sachs, "We have brought the buy-side to one site to commingle, and we hope the stickiness will keep you there."
While some see the potential for powerful consortiums such as Securities Hub to stifle competition for their own benefit, Staunton Peck of Communicator Inc., says the reality is quite the opposite. "They can't see each other's sites, and that uncertainty is spurring, not decreasing, competition."
Simone says, "We provided the ability to seamlessly navigate between Web sites, because we've come to realize that if you're talking to one of us, you are probably talking to others." Benjamin Wolkowitz, managing director of Morgan Stanley Dean Witter, says services like Syndicate and Bond Hub seek to address a number of consumer desires, such as having one log-on for multiple vendor sites and obtaining streamlined information, rather than overwhelming amounts of data.
The Syndicate and Bond Hub sites can be accessed through any of the proprietary member sites, and customers can do business with any Hub company with which they have a relationship. While the number of institutions involved in the venture may go slightly higher than six, Wolkowitz says, Syndicate Hub should not have too many participating firms or risk winding up with what he called an "exhibition hall environment."
John R. Casaudoumecq, managing director and head of eCommerce for fixed income with Salomon Smith Barney, says that the Hub model of business is due to a fundamental change in knowledge possession brought about by technology and the Internet. "We are trying to be proactive, and dismantle the old way we did things and organize in a new way." Simone adds, "We used to be the holders of the information. Now you're the holders."