Deutsche Börse has acquired a stake in Bondcube, the new fixed income trading system, for a low sum in the single digit millions (GBP).
Bondcube is a London and Boston based electronic bond platform which links dealers and customers in a single marketplace in order to boost the liquidity of the global bond markets.
The firm uses tried and tested trading protocols from other markets, such as equities, to optimise liquidity discovery.
Bondcube is ideal for large, market sensitive bond orders that have now reverted to execution via telephone.
“The perception of a lack of liquidity in the bond market arises because the existing trading infrastructure protocol means the buy-side can only request liquidity from the sell-side. To solve this problem Bondcube enables all users, whether buy-side or sell-side, to discover liquidity amongst each other, known as ‘all to all’,” says Paul Reynolds, CEO of Bondcube. “We are immensely pleased with this investment from such a strategically important global exchange partner and view this as a clear endorsement of our vision and business model, whilst maintaining our innovative capacity.”
Bondcube has now commenced signing up customers and forecasts that clients will be trading with each other in the third quarter of 2014.
“This investment in Bondcube highlights our focus on using innovation to drive growth and buoyancy in financial markets whilst ensuring integrity and safety for all. Through this exciting move Deutsche Börse enlarges its client reach with direct access to the buy side whilst offering unique benefits to the sell side with no disintermediary effect,” says Johannes Weßling, responsible for bonds trading at Deutsche Börse.