Euronext has formed a joint venture with Algomi in a bid to become a centralised market for pan-European corporate bond trading, the exchange said on Thursday. Euronext will form a new multilateral trading facility (MTF) utilising Algomi's trading protocols in an exclusive 10-year enterprise and link dealers with Euronext's investor client base.
Corporate bond trading has suffered from a dearth of liquidity for several years with banks beset by higher capital costs and greater regulation. There has been a host of start-ups attempting to fix the demise of the traditional principal-at-risk trading model, but this is the first big exchange to attempt to do so since Deutsche Boerse's brief tie-up with Bondcube failed after just a few months in 2015. Euronext's head of fixed income, rates and FX, Paul Humphrey, said in a press release that the platform will create huge network effects and will help banks' sales and trading to identify the most profitable trades from the "market noise".
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