Recently both the Financial Times and the Wall Street Journal reported a move by senior traders at investment managers and Wall Street banks to address the pressing need for improved liquidity and a new marketplace for bonds. These discussions included an identification of a centralized, electronic venue that will connect all parties for the execution of Corporate Bonds. The move, long delayed, is made more urgent now as the industry faces the first in a series of regulatory mandates coming off Dodd-Frank, most immediately the upcoming Volcker Rule. The Volcker Rule will limit proprietary trading and will fundamentally alter market structure. In addition, the need for an exchange-like facility is driven by the concern that large money managers have regarding the ability to transact positions as trading moves more towards an agency model.
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