Fixed Income: Electronic Evolution

The historic liquidity issues plaguing the fixed-income market have been recognized for some time and a number of trading platforms have been launched to facilitate trading, particularly within the secondary bond market.

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Electronic platforms have swamped the corporate bond space but consolidation will thin the herd.

The fixed-income market has become more challenging for buy-side firms to trade in as the bulk of liquidity has shifted away from dealers and into buy-side portfolios. Regulations surrounding capital adequacy and risk for traditional market-making banks have also meant that those institutions have focused on a tighter range of highly traded bonds.

While the fixed-income market lags behind the equities and foreign-exchange markets in terms of electronification, the historic manual request-for

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