Intercontinental Exchange’s ICE Bonds has unveiled a new request-for-quote (RFQ) protocol for mortgage-backed securities (MBS).
The offering will allow clients to execute anonymously, due to ICE Bonds sitting in the middle of the transaction. Requests will be transmitted electronically to a wide community of MBS dealers, market makers and investors on the multi-asset class alternative trading system ICE TMC.
The functionality is also designed to work alongside ICE Bonds’ existing ‘click-to-trade’ functionality, with the aim of delivering increased liquidity and execution efficiency to the MBS market.
The platform is aimed at wealth management and retail brokerage clients, and by enhancing MBS trading capabilities, ICE Bonds claims this is a step forward in achieving an electronic mortgage market and will create a “more flexible and efficient trading environment”.
Read more: ICE Bonds and MarketAxess connect liquidity networks to bolster bond market efficiency
Pete Borstelmann, president of ICE Bonds said: “The launch of our RFQ protocol represents a key step forward in electronification of a traditionally voice and message driven market, supporting more efficient price discovery while giving customers greater flexibility to execute trades aligned with their evolving strategies.”
According to ICE Bonds, the functionality will address challenges facing mortgage clients, namely to move towards electronification in a market which still relies heavily on transactions over voice and chat messaging.
The firm has also announced plans to integrate pricing and analytics from ICE Mortgage Technology (IMT) later this year, with a combined MBS execution on ICE TMC with IMT’s real estate solutions expected to deliver a unified platform for trading the MBS asset classes.
Enhancing liquidity offerings in fixed income markets is a key focus for ICE Bonds. In August 2024, the firm connected ICE TMC with MarketAxess’ Open Trading network to bolster price transparency, best execution and overall market liquidity for all users.