Thu, 09/02/2017 - 08:47
Neptune Networks, an open-standard network for bond real-time AXE indications, has added Nomura and Jefferies to its network.
The Neptune network provides a venue for institutional investors to access sell-side pricing on the key bonds they are looking to buy and sell.
This makes it easier to execute orders, prove best execution, minimise information leakage and comply with regulation such as SEC Rule 22e-4, and its equivalent in EMEA, which expands on the existing framework for the oversight and management of liquidity risks.
Seventeen bond dealers are already live on the real-time network (the remaining four are expected to go live in Q1) with over 13,500 individual securities, across 20 different denominations.
This has resulted in over 19,500 real-time AXE indications in the system, updating around seven million times per day. Neptune says the 15 per cent growth in bond IOIs since the end of 2016 has been driven by dealers increasing belief in the platform, whilst using it as their preferred channel to distribute this data to their clients.
“The addition of Nomura and Jefferies to the Neptune network is an important step forward in the development of our open-access, non-discriminatory network which links bond market participants and makes markets more efficient whilst continuing the theme of aggregating global liquidity onto one platform,” says Grant Wilson, CEO of Neptune Networks.
Neptune is a not-for-profit, technology utility incorporated in July 2016. The aim of Neptune is to increase and improve the quality of information available to bond market participants by providing higher quality data which should transfer into a positive impact on liquidity and transparency.
The data is provided to the network using an open standard which means it is cheap for banks to connect to the network, as well as being uncomplicated for the buy-side to integrate with OMS/EMS systems.
Once live with Jefferies and Nomura (alongside Citi and Deutsche Bank, who were announced in late 2016), the 21 banks will cover approximately 90 per cent of the European credit market for buy-side customers.
Wilson says: “Identifying the client pain points, for Neptune to solve, was critical. It wasn’t simply a matter of considering the issues surrounding pre-trade data in the corporate bond market – it was focusing on aspects that were common amongst market participants and that could be addressed by technology: structure, distribution and quality. Another key aspect, which remains an issue going forward for all new initiatives, is the dominance of a few incumbent vendors in providing the ‘last mile’ connectivity to end-user desktops. This dominance of the desktop has slowed the pace of innovation in many cases, at a time when market participants continue to struggle to source real time liquidity."
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