Bond Platforms Look To Adopt Better Trade Processing

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Bond Platforms Look To Adopt Better Trade Processing

Providers of electronic bond trading platforms are increasingly beginning to integrate straight-through processing to their platforms as buyside and sellside participants request the need for seamless execution in order to make markets, according to BW sister publication Financial NetNews. Back-office straight-through processing is the next major step on which many of the platforms are currently working, according to Tim Sangston, v.p. of Greenwich Associates, a research and consulting firm that focuses on institutional financial services.

The straight-through processing mechanism allows participants to execute a trade through the Web frontend where settlement is then made instantly through the back office. Trades are then allocated automatically across the different funds the portfolio manager handles.

BondBook is in the process of enhancing its straight-through processing function. The firm has added an application program interface (API), which provides a direct link from buyside and sellside participants' computers to the BondBook system. Participants can access their Web frontend to seamlessly feed into BondBook's system to retrieve trade information.

Steven Sadoff, chief technology officer for BondBook, said the firm continues to enhance its straight-through processing as buyers and sellers see a need to maintain a firm bid or offer price for any fixed-income security by standing ready to buy or sell quickly. "The application program interface allows people to automatically feed into the system and make a market electronically," Sadoff said. Tom Evankovich, ceo of BondHub (www.bondhub.com), said that many bond platforms still manually fill out a ticket once a trade order is made and then send it to the clearing house. BondHub offers a straight-through processing platform where a broker/dealer can make a trade and at the same time the fund manager can select any portfolio online and view the information of the trade that was just executed.

TradeWeb (www.tradeweb.com) is currently in the process of offering a platform that offers straight-through processing as well. "We have taken a major initiative this year with offering a straight-through processing solution. We are working on ways for the trades to seamlessly go right into the accounting and portfolio management systems," said a spokesman for the firm. "We are building an API that will allow fund managers to allocate assets for any block trade and break it down. If they have 100 accounts, a fund manager can upload that through the trade order option and automatically place the trades in the right funds," he added.

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