The world of Fixed Income trading is one that this blog has covered many times, at the end of this post is a list of links to previous articles.
The core idea is set out in "Fixed Income: New market for Corporate Bonds"
There are numerous new Fixed Income platforms - my count is 90
The post "The next crisis in the Bond market..." has links to the themes raised in "Buy-side desktop real-estate in a new Fixed Income world??" where venue proliferation without FIX connectivity is discussed. Also the impact on TCA calculations for this multiple venue world in "TCA for Fixed Income in a new trading venue world" and a proposal for how the buy-side can operate in Fixed Income Trading: Buy-side desk of the near future?
As you can see, there are common themes here around the buy-side, sell-side, operational risk, liquidity capture and inefficiencies of the current market structure.
In summary, a new Bond trading venue, properly constructed, controlled and with these four key features:
- No one is disintermediated.
- Retail and institutional can trade against each other if they choose.
- Near matches are possible based on configurable parameters.
- Anonymity is controlled closely
Should be able to bring about the true change needed in the Fixed Income market. The firm that works to this model will also be able to generate a substantial enterprise value. Very hard to estimate but based on the valuations for some firms in this space I would suggest more than £1billion.