Next up in this Editors’ Choice award nominees series are introductions to the five shortlisted firms for the Outstanding Electronic Trading Initiative – a new category added this year to give a nod to the players pushing forward progress in the electronic trading space. Up for the 2022 award are BMO’s Clearpool, KopenTech, Liquidnet Primary Markets, Octaura and Tradeweb’s AI-price. Take a look below to see what they’ve been up to.
Clearpool – BMO – North American and European electronic trading service
Canada’s BMO Financial Group finalised its acquisition of cloud-based algorithmic management system (AMS) Clearpool in April 2020 and since then the electronic trading service has continued to grow. Following popular demand, BMO chose to expand Clearpool’s remit outside of North America for the first time to EMEA earlier this year.
“The European markets have many of the same trading technology needs as North American markets that we have been able to successfully address,” said Joe Wald, managing director and co-head of electronic trading at BMO Capital Markets.
The service offers a full suite of algorithmic trading strategies – which are both benchmark driven – and liquidity sourcing and access to all major markets in EMEA and North America across equities, options and over the counter (OTC) in the US.
Its special sauce is its custom configuration process across both passive and active strategies and across a variety of venues and order types. It also boasts built in transaction cost analysis (TCA) for venue analysis and real time monitoring.
KopenTech – web-based platform for electronic trading, the refinancing of CLO liabilities and primary market surveillance and analytics
Part of KopenTech Capital Markets, the FINRA and SEC registered broker dealer and alternative trading system, disruptor FinTech KopenTech offers a web-based platform for electronic trading, the refinancing of CLO liabilities, primary market surveillance and analytics.
The FinTech has taken the market by a storm in the last year, mainly with its attempts to electronify the over the counter (OTC) collateralised loan obligation trading. Last year the firm achieved two record breaking milestones, completing the largest secondary trade and largest online securitisation – a portfolio of $466.5 million in debt – without an arranging bank.
It has demonstrated continued commitment to expanding its offering, also launching the first ever client to client direct trading service in CLOs in June. The firm has over 150 buy-side clients and 15 banks streaming live prices.
Liquidnet Primary Markets – end-to-end electronification of the new issuance process and bond lifecycle
Liquidnet, now part of TP ICAP, is set to transform the way the bond new issuance process works, freeing up buy-side execution traders time and minimising risk for both the buy- and sell-side.
The newly launched initiative is dedicated to creating an electronified and streamlined debt capital markets (DCM) workflow for new issuance announcements and trading. It is integrated into Liquidnet’s existing fixed income application giving trading and non-trading desk users a dashboard of new issue announcements in European investment grade, high-yield and global emerging market bonds. This new issue data can be sent to a client’s order management system (OMS), or consumed by the trading desk, Portfolio Managers or data teams via Liquidnet’s desktop application or web portal.
It has continued to evolve in recent months, with new functionality added to allow investors to communicate with syndicate banks directly from their OMS as part of the bookbuild process. In September 2022, the team performed a live deal with orders transmitted from investor’s E/OMS. Liquidnet also partnered with Bloomberg to leverage its Financial Instrument Global Identifier (FIGI) – allowing the new issue to be set up in the OMS earlier and to be traded electronically. Liquidnet enables buy- and sell-side to trade the new deal on an order book both pre and post pricing.
Less than a year since launch, over 30 banks partner with Liquidnet’s platform in Europe and it claims to be capturing over 70% of new issues on any given day. The firm has said there is scope for the solution to be expanded out of Europe.
Octaura – sell-side backed electronic trading platform
Backed by seven of the world’s biggest banks and Moody’s Analytics, it would be difficult to not give Octaura a nod in this year’s Editors’ Choice awards shortlists.
Akin to the KopenTech initiative also nominated, Octaura is an electronic trading platform for syndicated loans and collateralised loan obligations (CLOs). The platform will initially launch focused on the former with plans to add CLOs and credit products later down the line. It will offer straight through processing (STP) for trade booking and data and analytics provided by Moody’s.
Originally cooked up by Bank of America and Citi – inspired by the pair’s eBidding platform and Instinct Loan Match Platform – Octaura has also received backing from Credit Suisse, Goldman Sachs, JP Morgan, Morgan Stanley and Wells Fargo. The initiative was given the nod at this year’s Fixed Income Leaders Summit (FILS) conference as one of the industry’s most influential sell-side innovations to come to market.
“With the launch of Octaura, we are proud to be moving our industry in a direction that will bring greater liquidity, efficiency and ultimately attract a broader investor base to the syndicated loan and structured credit markets,” said Brian Carosielli, co-head of global credit trading at Bank of America.
Tradeweb AI-price – bond pricing engine for US cash credit securities
Tradeweb’s real-time bond pricing engine for US cash credit securities, Automated Intelligent Pricing (Ai-Price), has demonstrated significant growth in the last year, alongside a commitment to expanding its offering through partnerships.
The model delivers reference process for over 24,000 bonds to give clients a ‘live view’ of the market. Using the system, Tradeweb claims that clients are able to evaluate illiquid or rare securities while also modelling and pricing portfolio trades.
It uses data and the relationships between bonds to derive a price estimate, taking into account actual trade data, proprietary trade data and TRACE prints of adjacent bonds.
SIX Swiss Exchange partnered with Tradeweb in October to offer its clients access to the pricing engine to help participants interact with the municipal bond markets amid current market conditions.