Less than six months after LiquidityHub launched its Euro interest-rate swaps (IRS) service, the consortium of 16 investment banks behind the multidealer aggregation platform has moved swiftly to close down the service. Rumours had been circulating in the market that take-up of the service in a rapidly deteriorating market had been disappointing and that bank support for the platform was lukewarm at best.

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Euronext has signed an agreement to acquire 51% of SecFinex, in a deal due to close this quarter. The other main shareholders of the European electronic platform for securities lending are Société Générale Corporate & Investment Banking and Fortis Merchant Bank. SecFinex hopes to be able to extend its client base to members of Euronext and Euronext.liffe. Benefits for Euronext clients will include the provision of more efficient, cost effect-ive and automated access to the securi-ties lending market, the partners say.

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Following its acquisition of Hotspot FXI earlier this year (Transaction Networks & Technologies, February 2006), Knight Capital Group is continuing its expansion into new asset classes with the purchase of the ValuBond fixedincome trading platform for $18.2 million in cash. Knight aims to offer the platform’s bond trading capabilities to its existing broker/dealer client base, allowing firms to offer electronic bond trading to their own customers.

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Bloomberg’s move to establish with six major banks a new company to offer multi-bank electronic in interest-rate swaps builds on the company’s existing offerings in this market segment and pitches it head-to-head with Thomson Financial’s TradeWeb subsidiary. By offering participating dealers equity ownership in the new platform operator, Bloomberg is seeking the replicate the approach used by others, including TradeWeb and ICAP’s Brokertec, to attract liquidity to the system.

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Reuters this month filled the final asset class gap in its Reuters Trading line of transaction services, launching Reuters Trading for Exchanges to offer buy-side users electronic access to brokers’ trade execution and clearing services.

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Two of the leading exponents of dealer-to-client electronic trading launched new capabilities in the derivatives area last month. Thomson TradeWeb and MarketAxess both appear to be seeking to exploit the huge growth in interest in swaps, and further incursions into the space are in the cards.

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Cantor Fitzgerald’s eSpeed electronic bond trading subsidiary is leading the pack in bids for MTS, the Eurozone government debt trading platform. Industry reports have cited anonymous sources stating that eSpeed’s bid has come closest to the EUR 250 million MTS’s owners are seeking for the business. The company is 46%-owned by Italian banks.

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The interest-rate swaps marketplace saw a flurry of activity last month as both Thomson TradeWeb and Bloomberg launched multi-dealer IRS trading facilities on their respective platforms.

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As reported last month, the Bond Market Association’s survey of electronic transaction systems for fixed-income markets, published in December, found that platforms for derivatives trading are proliferating and that existing bond systems are adding value-added services in a bid to differentiate their offerings and cement client relationships.

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The new Trading for Fixed Income platform announced by Reuters last month may present traders with a compelling argument for reassessing their access to multi-dealer liquidity pools. The Reuters initiative – launched in tandem with a new strategy for the equities markets – offers as its unique selling point simultaneous access to both bilateral and multilateral trading models across what promises to be a wide range of fixed-income securities.

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Spending some of its new-found capital following its recent IPO, multi-dealer platform MarketAxess has selected Cameron Systems to provide a FIX engine in support of its electronic trading capabilities. CameronFIX will give MarketAxess’s institutional investor clients access to its bond-trading platform, for trading in U.S. and European high-grade corporate and emerging markets fixed-income securities.

As exclusively revealed by Transaction Networks & Technologies, Thomson Financial has agreed to acquire the TradeWeb electronic bond trading platform from its dealer owners. Thomson will pay $385 million in cash for the trading system, and a further $150 million after three years if the platform achieves earnings objectives.

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Thomson Financial’s emergence as the lead bidder for TradeWeb, a leading multidealer transaction system for fixed-income securities, would add substantially to Thomson’s arsenal of trading capabilities and data services as it moves to take on market leaders Reuters and, more specifically, Bloomberg. The bid – details of which were published exclusively by Transaction Networks & Technologies in a news alert released on February 17 – is now being considered by TradeWeb’s owners, who are expected to make a decision within a month.

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TradeWeb is a multi-dealer portal for trading in bonds. The system was established in 1998 by a group of bond dealers, including Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, J.P. Morgan, Lehman Brothers, Merrill Lynch, Morgan Stanley and Salomon Brothers (now Citigroup). The dealers were seeking to address issues of fragmentation, lack of transparency and narrowing margins within the area of ‘commodity’ executions in government bonds for their institutional clients.

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Moneyline Telerate’s long awaited Momentum trade connectivity network is set to begin operation this month, starting with access to Deutsche Bank’s Autobahn bond trade execution platform. The release will bring Moneyline Telerate into line with rivals Bloomberg and Reuters, which already offer access to their clients’ single-dealer transaction systems.

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