Deja Vu for Bond Exchanges

摘要

With Archipelago announcing in October that it's going to trade listed corporate bonds on its electronic trading system, electronic bond trading systems providers might be a little nervous. After all, Archipelago is merging with the New York Stock Exchange, and the Big Board already has an automated bond system (ABS) that CEO Jerry Putnam says needs an upgrade. If any market has the clout, technology, connectivity and customer base to revamp the bond trading system, Arca/NYSE is it. But, in the fragmented world of bond trading — where each sector (e.g., Treasuries, corporate bonds, high yield, mortgage back securities, European government bonds, etc.) has access to its own sources of dealer liquidity — it's going to be difficult for an exchange model to win critical mass without some incentives.