SIX Swiss Exchange is to launch an electronic platform for trading corporate bonds intended to lead to more efficient dealing of larger blocks and less liquid issues.
The launch is planned for the first half of 2015 and will help eliminate the disadvantages of inefficient off-exchange trading, the exchange – a part of SIX Group – says.
As well as low liquidity and small trade sizes, these disadvantages also include time-consuming price negotiations and the worry that prices could be negatively impacted by premature disclosure.
Therefore, SIX says, the platform offers an alternative to the highly fragmented bond trading arena, most of which is conducted outside an exchange infrastructure and is therefore inefficient.
SIX defines larges trades as above 2 million euros, pounds or dollars.
The platform will be domiciled in Switzerland and is subject to regulatory supervision by the Swiss Financial Market Supervisory Authority, known as FINMA.
Christian Katz, division chief executive of Swiss Exchange, says: "This not only lowers transaction costs but also improves risk management."
Algomi was selected as the technology partner.
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