AllianceBernstein has reportedly become the first buy-side firm to receive aggregated liquidity from multiple buyers on the same block trade. The trade was enabled by LTX, a Broadridge Company using LTX’s patented RFX protocol. AllianceBernstein tapped into its dealer’s customer network to sell a large block of bonds and access aggregated liquidity from four buyers at once and in real time. The buyers were a mix of buy- and sell-side firms. Participants entered orders via the LTX user interface or via FIX connectivity.
“A challenge facing many asset managers is how to trade blocks of bonds more efficiently,” said Tim Kurpis, head of investment grade trading at AllianceBernstein. “Most electronic solutions focus on smaller sizes and liquid bonds, but 70-75% of the corporate bond market still trades over the phone. LTX brings a different approach for accessing liquidity that offers new protocols to better match potential counterparties and allow multiple bids or offers for a bond.”
Instead of putting dealers in competition, LTX enables dealers to distribute bonds across their customer network, with the intention of amplifying the buy-side firm’s opportunity to find liquidity and achieve best execution. Using LTX’s artificial intelligence, AllianceBernstein’s dealer identified the potential natural buyers of the bond within their customer network, leading to the RFX trading invitation. Customers invited to participate in the RFX were able to bid for their preferred amount of bonds and improve their price as needed to fulfill their order.
“This is a major milestone for the fixed income market,” said Jim Toffey, CEO of LTX. “This is the latest example of how our next-gen RFX protocol benefits market participants and goes beyond electronifying the phone call to create a digital liquidity pool of natural counterparties that will move the bond market forward.”
To date, over 10 dealers and 40 asset managers representing a significant liquidity pool have joined the LTX platform, with an additional 50 firms in the pipeline to join at midyear. The number of RFX sessions on the platform has steadily increased since January 2021, and the platform recently surpassed the half-billion mark in total amount of bonds offered.
©Markets Media Europe, 2021
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