Liquidnet to Launch Corporate Bond Dark Pool

The trading network's corporate bond dark pool is expected to launch in Q3.

Constantinos Antoniades, head of fixed income at Liquidnet.

Global institutional trading network Liquidnet has announced it is to launch the first corporate bond dark pool and offer connectivity through integration with seven existing order management systems (OMS).

Through the establishment of the corporate bond dark pool, Liquidnet aims to provide opportunities for corporate bond trading that are "not currently available in the marketplace" and build a critical mass of liquidity. The dark pool is expected to launch in Q3 this year.

"Our clients have asked us for a dark pool that enables them to match based on passive blotter-level dark liquidity. By connecting to their existing order management systems, asset managers will have direct access to a protected venue that allows them to exchange natural liquidity with minimum effort and minimum information leakage," says Constantinos Antoniades, head of fixed income at Liquidnet. "The functionality, protocols and connectivity of our dark pool will create significant new liquidity in the broader corporate bond universe-not just in the most liquid segment of the market."

Liquidnet has stated it is working with Charles River Development, Eze Software Group, Fidessa, LineData and Thinkfolio, as well as two other undisclosed vendors, to provide connectivity with their OMS to the protected trading environment.

"Against the backdrop of greater regulatory scrutiny and tighter capital adequacy requirements, our buy-side customers are finding it increasingly hard to access liquidity in the fixed income markets," says Paul Noakes, CEO, Buy Side at Fidessa. "Providing them with direct access to Liquidnet's dark pool for corporate bond liquidity is one of a number of key steps we've taken to ensure they can trade these instruments efficiently."

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