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BNY Mellon, HSBC join Algomi to boost bond market liquidity

BNY Mellon, HSBC join Algomi to boost bond market liquidity

BNY Mellon and HSBC are each partnering with Algomi to expand corporate bond trading opportunities for their custody clients and the wider market.

Algomi is a bond market infrastructure provider, and the collaboration between the banks and Algomi is expected to bolster fixed income market liquidity.

The initiative will increase trading in the illiquid corporate bond market, which has seen turnover shrink while outstanding debt rise by 75% in the last decade.

To address this growing liquidity challenge, custody clients of BNY Mellon and HSBC will have the opportunity to make their bond holdings in custody available on a non-disclosed basis through a system powered by Algomi’s Honeycomb network, and delivered through Algomi Automated Liquidity Filetering and Analytics (ALFA).

Algomi ALFA provides cross-market information on liquidity and trade intent in order to give the buy-side a real-time view of the entire bond market, including government bonds, investment grade and high yield.

Counterparties on the network will be able to query those bond holdings, which will alert the custody holder, and give them the ability to instruct their dealer to trade on their behalf while protecting the client’s identity. This can be done directly through BNY Mellon or HSBC affiliated broker dealer’s trading desk.

Mark Ledwards, head of sell side division at Algomi said, ‘Custodian data is often perceived to be the ‘holy grail’ of inventory in bond markets, yet the need for data privacy has rightly prevented this resource from being used to its full potential.

‘A permission led approach that gives custody members the power to only reveal their data if they wish to interact with trade enquiries from the market, provides a mutually beneficial model that enhances liquidity across the ecosystem.’

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