K&KGC
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K E Y F I N D I N G S F R O M 2 0 1 8 H 1 AT F
2018 is the year of
all-to-all fixed income
bond trading
When the private, exclusive, invitation-only Alpha Trader
Forum (ATF) fixed income meeting was launched in
London back on 20 th June 2013, the buy side addressed
their lack of efficient electronic means to trade bonds.
K&KGC volunteered to map out the different trading
technology providers and summarise the buy side’s
desired specifications which we subsequently helped to
communicate to different technology providers in the
market. Five years later, we are pleased to see that the
buy side now have the efficient choices of brands and
protocols for electronic bond trading. It is now up to the
users to ‘start the dancing’, trusting and placing liquidity in
the technologies that are made available.
The key take-aways from our recent ATF buy-side
roadshow in May and June this year in Paris, Frankfurt
and London are that the buy side are at large supportive
of starting to place more liquidity in all-to-all trading
technologies in 2018, especially but not limited to credit
and illiquid bonds to unlock liquidity in these areas.
More onus is placed on the buy side trader than ever
before adapting to the new market and they need more
transparency, data and analytic tools to make better
informed decisions linked to best execution. The fixed
income industry is energetic with development, both
by technology vendors and the buy side themselves,
workflow automation and better pre-trade decision
making tools.
One of the major challenges is that all this technology and
informed decision making is dependent on data. Holistic,
timely and structured data is now desperately needed
to take the industry to the next level. Most buy side
expect that ESMA will calibrate the liquidity definitions in
response to MEP Markus Ferber’s explicit disappointment
over the lack of real-time reporting of bonds in MiFID II.
Another major challenge is the juniorisation of the sell
side and the lack of useful market colour and liquidity
they can deliver to the trading desk. Evidently, K&KGC’s
buy-side research clearly indicates the benefits for sell-side
firms improving their service levels toward the buy side
and investing in auto-quoting tools for better electronic
interaction through multilateral trading platforms. K&KGC
has, with the help of our buy-side trading community’s
research participation, developed guidance for better due
diligence of the counterparties.
K&KGC welcome more
trading portfolio managers
to join our private exclusive
roundtable debates and
research initiatives, together
with our fixed income trading
community, as the trading
role is evolving rapidly and
we would advise everyone to
keep up with the changes.
SAVE THE DATE - FIXED INCOME ATF'S:
- 12 th ATF London (25 th September)
- 14 th ATF France (16 th October)
- 10 th ATF Dach (18 th October)
- 7 th ATF Global Summit (7 th February 2019)
Summer 2018
www.buysideintel.com
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