ICAP and the Buy-side – The Desk
September 16, 2016 \
5 Comments
Full Article: The Desk
The ICAP Sponsored Access Model (ISAM) is poised to go live, allowing asset managers to trade fixed income on the inter-dealer market for the first time, via their sell side partners.
Comments
This path is the natural culmination of changed to the bank and IDB relationship since the crisis. At the height of the credit crisis credit traders would happily hit agency brokers’ bids a formerly taboo interaction. When that relationship normalized the IDBs saw the growing threat of agency brokers as banks started seeing IDBs as competition as balance sheet costs went up and research ever more marginalized. Of all the IDBs ‘new’ ICAP is the most forward looking so it’s not a surprise they come out of the gate first. It’s hard to see the banks actioning a negative reaction… Read more »
I agree with Cougar. Regulatory pressures to reduce proprietary trading to minuscule levels have emasculated the dealers and forced them to find new ways to service their clients without using their capital as the centerpiece of their offerings. IDBs have always looked to expand their customer base but continually ran aground when the dealer community pushed back, rightfully, and kept the interdealer market, interdealer. I say rightfully because the central issue was that the dealers didn’t want their customers to become their competitors. The dealers understood that the liquidity they competed for in the IDB space was used to provide… Read more »
Bravo on the innovative step forward by ICAP. This looks like a much better idea than their previous buy-side focused CrossTrade venture (sponsored by Bad Idea Jeans). Perhaps some of the recent departures from their eCom leadership team is becoming addition by subtraction. I have one issue with this article…..actually, this article just articulates (see what I did there?) a major issue with innovation. This entire piece fails to mention the person who actually designed, invented and deployed the ISAM system. In fact, it treats the initiative as if it is totally brand new. Those in the know (like your… Read more »
Ay ay ay, Where to begin. Bravo to ICAP for taking a step in the right direction. I want to reiterate a term that Wolfman mentioned: “emasculated the dealers “. You see, while ICAP is getting the rightful recognition for innovating and trying to provide value, on the other hand, dealers are continuing to get emasculated more. While this article talks about electronic, it is also analogous to voice and potentially portends some very bad things for dealers. Here’s my historical-based rationale filled with over-generalizations and bad humor: 1. Dealers historically provided balance sheet and information flow to the buyside.… Read more »
Jester, what got into you this week? Not sure why everyone is acting as if this is new news. Well known since the beginning of the year. Actually surprised it has taken them so long to move forward. Plus, what is really the big deal here? Sponsored access to the IDB market; a big yawn. As already mentioned many of the IDB’s have been playing footsie with buy side accounts for years, if not decades. And outside of EM, it is not as if there are any electronic screens where end users are putting in live executable levels. At best,the… Read more »
Related Posts
Blackrock’s Richard Prager: The Liquidity Is Out There – Institutional Investor
March 18, 2016Everyone is Worried About the Thing Markets Need Most, But They’re Not Asking the Right Questions – Business Insider
March 25, 2016US Companies Overpaying for Bonds; Banks May Be to Blame – Reuters
March 31, 2016