Neptune continues liquidity expansion in first few weeks of 2017

  • Trading Systems , Foreign Exchange
  • 09.02.2017 08:30 am

Neptune Networks Ltd. "Neptune", the open-standard network for bond real-time AXE indications, today announced the addition of Nomura and Jefferies to its network.

The Neptune network provides a venue for institutional investors to access sell-side pricing on the key bonds they are looking to buy and sell, making it easier for these investors to execute orders, prove best execution, minimize information leakage and comply with regulation such as SEC Rule 22e-4, and it’s equivalent in EMEA, which expands on the existing framework for the oversight and management of liquidity risks.

Seventeen bond dealers are already live on the real-time network (the remaining four are expected to go live in Q1) with over 13,500 individual securities, across 20 different denominations. This has resulted in over 19,500 real-time AXE indications in the system, updating around 7 million times per day. The 15% growth in bond IOIs, since the end of 2016, has been driven by dealers increasing belief in the platform, whilst using it as their preferred channel to distribute this data to their clients.

“The addition of Nomura and Jefferies to the Neptune network is an important step forward in the development of our open-access, non-discriminatory network which links bond market participants and makes markets more efficient whilst continuing the theme of aggregating global liquidity onto one platform,” said Grant Wilson, CEO of Neptune Networks Ltd.

Neptune is a not-for-profit, technology utility incorporated in July 2016. The aim of Neptune is to increase and improve the quality of information available to bond market participants by providing higher quality data which should transfer into a positive impact on liquidity and transparency.

The data is provided to the network using an open standard which means it is cheap for Banks to connect to the network, as well as being uncomplicated for the buy-side to integrate with OMS/EMS systems.

As a utility, Neptune is placing itself at the heart of the Bond market as the ‘trusted go to’ venue for the buy-side to access the highest quality sell-side bond data in order to meet their existing and future needs – a network by the market, for the market. Expanding from zero to almost 20,000 real-time line items has happened in just 18 months. Once live with Jefferies and Nomura (alongside Citi and Deutsche Bank - who were announced in late 2016), we believe those 21 Banks will cover approximately 90% of the European credit market for buy-side customers. Beyond that we continue to expand our USD product coverage and connectivity to the US-based desks of these Banks.

Grant Wilson, CEO Neptune Networks Ltd commented further, “Identifying the client pain points, for Neptune to solve, was critical. It wasn’t simply a matter of considering the issues surrounding pre-trade data in the corporate bond market – it was focusing on aspects that were common amongst market participants and that could be addressed by technology: structure, distribution and quality. Another key aspect, which remains an issue going forward for all new initiatives, is the dominance of a few incumbent vendors in providing the “last mile” connectivity to end-user desktops. This dominance of the desktop has slowed the pace of innovation in many cases, at a time when market participants continue to struggle to source real time liquidity."

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