Tag Archives: UBS


One More Corporate Bond Electronic Trading Platform; Still None Include Bond ETFs

Well Matilda, as if the universe of corporate bond electronic trading platforms isn’t crowded enough, despite clear signs of consolidation taking place for this still nascent stage industry (e.g. upstart Trumid’s recent acquisition of infant-stage Electronifie) , one more corporate bond e-trading platform has its cr0ss-hairs on the US market. The latest entrant is UK-based Neptune Networks, Ltd., a consortium controlled by sell-side investment banks that has inserted electronic trading veteran Grant Wilson as interim CEO. Neptune’s lead-in value proposition’ is perfecting the IOI approach to capturing liquidity, and also offers a tool kit of connectivity schemes that bridge buyside and sell-side players.

Grant Wilson, Interim CEO Neptune Networks

Promoting indication-of-interest orders ( pre-trade real-time AXE indications) as opposed to actionable bid-offer constructs that are ubiquitous to equity trading platforms, is a technique that other US-based corporate bond trading platforms are already advancing. Neptune is also not alone in their positioning an ‘all-to-all’ model as a means to inspire buy-side corporate credit PMs and traders to embrace electronic trading, a seemingly counter-culture technique that enables them to swim in the same pool as sell-side dealers aka market-makers. The distinction that Neptune brings to the table is girth and size, thanks to its sponsors Goldman Sachs, JP Morgan, Credit Suisse, Morgan Stanley, UBS, Citi and Deutsche Bank, each of which maintain board seats.  Unlike the other players in the space that are focused on building a “round lot marketplace” (as opposed to retail size orders that MarketAxxess (NASDAQ: MKTX) specializes in, Neptune carries over 14,000 individual ISINs daily, claims that its average order size is 5mm,  total daily gross notional in excess of $115bn, and according to Neptune’s marketing material, over 22,000 individual ISINs have been submitted to the platform since January 1st.

Lots of e-bond trading platforms, but none are incorporating bond ETFs, at least not yet.

As compelling as Neptune’s value proposition is, some corporate bond e-trading veterans are quietly wondering whether these initiatives are somehow missing the memos being circulated throughout the institutional investor community profiling the rapid adoption of corporate bond ETF products in lieu of their long-held focus on individual corporate credits.

According to one e-bond trading veteran, “Anyone who follows the trends [and follows the money] can’t help but appreciate that a broad assortment of Tier 1 investment managers, RIA’s and even public pensions’ use of bond ETFs is increasing in magnitude by the week, not the quarter.  If you’re operating an electronic exchange platform for corporate bonds, and your users are rapidly increasing their use of fixed income exchange-traded funds, having a module for ETFs would seem to be a natural next step.”

Others in the industry have suggested to MarketsMuse reporters that enabling users to trade the underlying constituents against the respective corporate bond cash index along with a module for create/redeem schemes, or even a means by Issuers can distribute new debt directly seems to make “too much sense.”  But then again, these same industry experts acknowledge the political landmines that would most assuredly be encountered by those trying to disrupt and innovate within corporate bond land are perhaps too much for those who need to prove their business models before aiming at new frontiers. Continue reading


Convicted Libor Trader Launches Crowdfund Campaign

(FinanceMagnates.com) Supporters of Tom Hayes, the former UBS rates trader and the first person to be convicted for the manipulation of the London Interbank Offered Rate (LIBOR), have launched a crowdfunding appeal via UK platform Fundrazr to raise £150,000 ($217,403) to underwrite a further appeal against his conviction. The former trader, currently serving an 11-year prison sentence, was also ordered to pay a confiscation order of £878,806 ($1,240,267) in February by a UK criminal court.

The crowdfund campaign hopes to to raise 150,000 pounds to pay for a fresh attempt to appeal against his conviction.

Hayes, a former UBS and Citigroup derivatives trader, last August became the first person to be convicted of fraud offences linked to the setting of benchmark Libor rates. In sentencing him for dishonesty, the judge said a message must be sent to the world of banking, “where probity and honesty are essential”.

He was initially handed a 14-year jail sentence – one of the toughest in the UK for white collar crime – before it was reduced to 11 years on appeal four months later. However, his simultaneous appeal against the conviction failed and in March the Court of Appeal also refused leave for his case to be brought before the UK’s Supreme Court.

Hayes on Tuesday formally announced plans to bring his case to the Criminal Cases Review Commission (CCRC), which looks at miscarriages of justice and can refer a case back to the appeal courts – usually on the basis of compelling new evidence.


Hayes was initially given a 14-year sentence before it was reduced to 11 years on appeal four months later. However, his concurrent appeal against the conviction failed and in March the Court of Appeal also refused leave for his case to be brought before the UK’s Supreme Court.

This week, Hayes formally announced plans to bring his case to the Criminal Cases Review Commission (CCRC), which examines miscarriages of justice and can refer a case back to the appeal courts, usually on the basis of compelling new evidence.

Hayes’ family is now said to be in possession of fresh evidence, some of which he had requested in his trial but which the prosecution did not supply. His latest attempt to appeal comes three months after six former brokers he is alleged to have conspired with were acquitted in a separate London trial.

Hayes’ attempt to appeal is supported by David James, a member of the House of Lords, who is reported to have said that Hayes had been victimised and called for a more precise legal clarification of Libor and how it should be supervised.

Last year, European Union lawmakers gave their backing to a draft law introducing direct supervision of important benchmarks like Libor. The UK has also introduced a law requiring Libor to be compiled by a third-party administrator which fulfills certain requirements.

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UBS breaks ETF launch record


UBS is aiming to break into Europe’s exchange-traded fund big league following the listing of 64 of its funds on the London Stock Exchange, the largest number ever admitted to the LSE on a single day.

According to the LSE, the launch, which follows the listing of a suite of products by Vanguard Asset Management, has taken the total number of ETFs listed in London to 1,000.

The total value of ETF trading on the LSE has exceeded £500bn since the launch of the first fund in 2000, the exchange said.

UBS is carrying out the launch through its UBS Global Asset Management business. Its ETFs offer ‘A’ shares to retail investors and ‘I’ shares to institutional investors. Global head of ETFs Clemens Reuter said the unit size of ‘I” shares is a thousand times larger than ‘A’ shares: “Because they are dealt in bulk, the total cost of ownership becomes smaller.”

Of its London offerings, 17 will replicate the movement of indices through swap arrangements and a further 49 will operate in physical markets through the purchase and sale of underlying stocks. They will cover a range of equity sectors, plus investments in more esoteric areas such as infrastructure, rare earths and hedge funds.

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