Euronext has made a $10 million investment in London-based bond trading technology vendor Algomi. In November, the exchange operator licensed Algomi's product for $2.3 million.
Euronext’s minority stake in Algomi is aimed at increasing both the exchange operator’s presence in the fixed-income market and furthering the joint venture between the two organizations designed to increase the availability of pre-trade information through a collaborative approach between banking users through the establishment of a new pan-European multilateral trading facility (MTF).
The development of the new MTF will be undertaken by Algomi, which will supply an internally developed exchange-grade bond-matching solution to provide the functionality required for algorithmic smart matching to create an auction between dealers. Banks that have already deployed Algomi’s information-matching platform Synchronicity will automatically have access to the MTF after it launches.
Euronext will also seek to build out its global operations through the launch of a number of worldwide fixed-income venues; the firm is already undertaking the launch of an automated trading system in North America, in conjunction with partners in the Asia-Pacific region.
“This partnership with Algomi is central to our fixed-income ambitions and our wider FICC diversification plans as part of our ‘Agility for Growth’ plan,” says Stéphane Boujnah, CEO of Euronext. “As a strategic investor taking a board seat, we will be in a strong position to oversee the successful growth of the business, and consolidate future trading activity globally.”
Algomi was established in 2012 with the goal of enhancing bond liquidity information availability for both the buy side and sell side. Its flagship Honeycomb network, winner of the Best Buy-Side Product category at the Buy-Side Technology Awards 2015, provides buy-side traders with information from sell-side participants on illiquid bonds and facilitates over-the-counter (OTC) trading, while reducing information leakage through anonymous indications of interest. The Honeycomb network currently hosts 240 buy-side firms and 18 banks.
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