Fixed Income trading in Asia on Single Dealer Platforms on the rise

Asian Investor has an interesting article regarding the rise of fixed income trading on SDPs.

Although Bloomberg is still the dominant FI platform in the region (trading up to 70% of volumes), Asian Investors are starting to migrate flows to Single-Dealer Platforms for US Treasuries and Sovereign bonds.

According to Gavin Ottery, head of fixed income e-commerce sales at UBS in Hong Kong.

Hundreds of clients in Asia-Pacific have migrated from voice to electronic for both regional and global cash products, and electronic fixed income trading volumes in the region continue to increase year-on-year, with 2012 being a record year.

These clients are trading on UBS Pin-FI, where clients can trade with each other, with UBS acting as the neutral matched principal (like inter dealer brokers do), preserving the anonymity of the client.

The trend in buy-side to buy-side trading in what are likened to equity style dark pools, is driven by regulation, with Basel III capital charges making it more expensive for banks to hold the inventory required to quote clients and warehouse the risk, and the US Volcker rule on prop trading (even though market making is not considered prop trading).

Among leading dealer, a number have recently launched similar offerings, including Goldman’s GSessions, Deutsche’s new bond platform, as well as investor BlackRock’s Aladdin Trading Network, and StateStreet’s existing FICross.

Asian Investor story here

One Response

  1. […] When SDP’s proved to be popular globally. They aren’t just used in the Americas and the EMEA region. According to Paul Blank’s post in March, Asian investors are starting to migrate flows to Single-Dealer Platforms for US Treasuries and Sovereign b…. […]

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