SIFMA Issues Report on Electronic Bond Trading Platforms

SIFMA issued a Report providing the results of a survey on electronic bond trading platforms for U.S. corporate and municipal securities. SIFMA found that the "platforms have primarily focused on the corporate bond market, which has approximately $8 trillion outstanding and over $1.4 trillion issued in each of the last three years." The SIFMA Report summarizes key information on "target markets, trading protocols, technology interfaces, planned enhancements and related capabilities."

According to the Press Release, the Report's major highlights include:

• Several new entrants are offering or plan to offer electronic trading related services to challenge established players, seven of the 19 platforms interviewed have entered the market in the last two years, and four more platforms plan to launch in 2016.
• Enhancements are being made to established trading protocols and several new protocols are emerging to promote price discovery, including live order books, session based trading and independently determined midpoint pricing.
• The survey found that 14 platforms offer "all-to-all" trading which highlights efforts to increase market participation among a diverse universe of investors.
• The 19 electronic trading platforms surveyed offer 42 electronic trading protocols that have been structured in a variety of ways to address the differing demands of market participants.
• Electronic trading platforms are increasingly targeting larger sized trades and providing various methods to protect anonymity and to better protect investors. Platform innovation is also primarily occurring within the corporate bond market, while the municipal market is likely to shift more gradually due to its significant number of issues and CUSIPs and high direct retail participation.