Mostly… fixed income and cross product eTrading

December 4, 2006

EPDA attacks government bond market restrictions

Filed under: etrading — holky @ 9:57 am

Following on from Icap hits out at eurozone bond restrictions, now efinancialnews  says that European Primary Dealer Association wrote to the competition directorate of the European Commission in August and effectively condemned the practices of some of its most important clients, those offices who were prescribing where secondary market trading activity in their bond issues should take place .. complaining this was uncompetitive and was keeping the cost of capital artificially high.

The letter only recently became public and the directorate has not officially responded. But a study published last week added weight to the dealers’ arguments and is likely to spur a reaction.



  1. Holky, the most ridiculous aspect to Debt Agencies only looking at MTS isn’t that they should also look at BrokerTec or eSpeed etc, rather it is the fact they ignore the B2C platforms such as TradeWeb, Bloomberg, Reuters & MTS’s own BondVision.

    Or are they saying they only care about inter-bank biz? My view is they’ve simply not thought too much about it!

    Comment by waratah — December 5, 2006 @ 2:58 pm

  2. If an issuer is seeking a demonstration of commitment to providing and ensuring liquidity in the issue going forward, surely the best picture that can be given of a dealers history and intent is to consider their activity in the (finite number of) venues in which they can transact a material amount of that type of issue? ..including if they have no activity in a particular channel too. Sure, some of the venues have quoting obligations and some don’t, some are b2b and some b2c, but isnt that part of the overall picture?? I’d be amazed if every dealer’s pitch book didn’t already include their b2c profile for comparable issues if they have something to brag about with that view, so this whole situation is clearly not because the ‘other’ venues are unknown, or because it isn’t possible to demonstrate real liquidity outside of what is done on MTS.

    Comment by holky — December 5, 2006 @ 9:16 pm

  3. Holky, I’m sure their reviews will have their client business included…..if it is impressive enough of course!

    My understanding is that these Issuers see the MTS market as a proxy for the entire market. That is, if you are doing plenty of client business this will necessarily flow through to your MTS business.

    Sound enough at first glance, but not when you are obliged to quote. I’d prefer to see them include stats from at least one B2C system as a start….TW being the obvious choice at the moment. Although this will exclude local banks who may not participate in TW of course.

    The logical move is to use all electronic systems – afterall that is one of the points of e-trading, the ease of collating information.

    Comment by waratah — December 6, 2006 @ 8:45 am

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