Atlanta, Ga. 11/18/2009 11:07 PM GMT (WooEB)
The London Stock Exchange today announces that it will introduce a new order-driven trading service for bonds. This new electronic order book will be available for a select number of gilts and UK corporate bonds and will offer private investors with an on-screen secondary market in London-listed debt securities for the first time. This new service is expected to go live in February next year.
Pietro Poletto, Head of Fixed Income for London Stock Exchange Group, said:
"London is a global centre for the listing and trading of debt, and in the current climate of low interest rates and equity market volatility, the retail appetite for bonds has increased substantially. This new initiative aims to meet that demand by offering private investors exposure to this market for the first time through transparent, efficient access to fixed income securities listed in the UK.
"London Stock Exchange Group's ‘MOT' market operated by Borsa Italiana is the most liquid and most heavily traded retail fixed income platform in Europe. We are delighted to offer the established benefits of this model to retail investors in the UK."
Over 10,000 debt securities are already admitted to the London Stock Exchange but the vast majority are currently available for trade reporting only.
The main characteristics of the new trading service are:
- An electronic order-driven model, with retail-friendly order sizes, and continuous two-way trading provided by market makers.
- Two new segments for electronically tradable gilt-edged securities (UK Gilts) and electronically tradable UK fixed interest securities (UK Corporates) will be introduced on London Stock Exchange Group's TradElect trading system.
- The trading day will be made up of an initial opening auction phase followed by continuous trading until market close. There will be no closing auction.
- All order book trades in securities admitted to the new segments will settle in CREST. Routing of trade information to Euroclear UK & Ireland will be carried out by London Stock Exchange Group's post-trade router, X-TRM.
The new trading service is not expected to impact existing wholesale bond or gilt trading and trade reporting arrangements and does not aim to change established practices in the institutional fixed income markets.
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For further information, please contact:
Jonny Blostone Press Office +44 (0)20 7797 1222
Notes to editors:
About London Stock Exchange Group:
London Stock Exchange Group is Europe's leading diversified exchange business, incorporating Borsa Italiana and London Stock Exchange. With over 500 member firms and more than 3,000 companies quoted across its markets, the Group operates the largest and most liquid equity marketplace in Europe.
London Stock Exchange itself is the world's most international exchange with over 600 overseas companies from more than 70 countries quoted on its markets. These figures include international companies on AIM, the London Stock Exchange's growth market, which has grown to become the world's most successful market for small and medium sized enterprises with 1,385 companies at the end of July 2009.
The Group offers trading in a wide range of instruments, holding the number one position in the trading of exchange-traded products (ETFs and ETCs) and through its interest in MTS, is Europe's leading platform for the trading of fixed income products. Through Borsa Italiana's MOT market it offers a comprehensive range of European corporate and government bond trading services. Its Italian Derivatives Exchange Market (IDEM) sees over €2.5 billion worth of trading every day and through EDX London the Group provides a facility for the trading of Scandinavian and Russian equity derivatives.
London Stock Exchange Group also offers post-trade services such as netting, clearing and settlement on an efficient and competitive basis. These include services from Monte Titoli, the Central Securities Depository for all Italian financial instruments, and Cassa di Compensazione & Garanzia (CC&G), which in July 2009 was granted Recognised Overseas Clearing House (ROCH) status by the FSA to operate in the UK.
Now with the recent acquisition of MillenniumIT, the Group also encompasses a leading developer of low cost high performance trading platforms and financial markets software serving both the industry and the Group's own businesses.