As banks are increasingly unwilling to act as market-makers due to financial and regulatory pressures on their balance sheets start-ups like TruMid and Electronifie (both in NYC) have appeared on the scene.
Many bank traders are sceptical however of the new platforms. “They’re coming up with science projects and seeing what works,” said one corporate bond trader to the FT
Almost $24bn of corporate bonds trade daily so far in 2015, the highest on record according to Sifma data. But relative to the size of the swelling market — which has almost doubled since 2008 to nearly $8tn — the ability to wheel and deal has deteriorated. Traders say bigger chunks of corporate bonds worth $5m or more are particularly difficult to shift, as banks are increasingly unwilling to act as market-makers due to financial and regulatory pressures. Two start-ups launched last week in an effort to fix this problem, with TruMid and Electronifie each offering very different approaches and solutions to the corporate bond trading conundrum.