Institutional investors, custodians and new entities are rapidly expanding into the fixed income arena, as market participants ramp up their debt issuance, says an expert at outsourcing provider Broadridge.
“There are two strands to this, says Robin Kneale, Head of Strategy and Product Management, Securities Processing Solutions, International at Broadridge. We have many existing fixed income clients, however, there are now new participants who werent previously in the market and who are now expanding into fixed income, while established firms are looking to extend their fixed income businesses more globally.”
“The problems of the financial crisis created space for top Tier II players to try and challenge the big global banks, adds Kneale. There has also clearly been a lot of debt issuance recently and therefore this has opened up niches to operate in, new business for our brokers, and for us a way to service new clients.”
Meanwhile, investment banks have evidently expanded their fixed income efforts. Most recently (April 21) Nomura appointed Mark Leahy in a newly created role as head of debt origination and fixed income syndicate, Asia ex-Japan.
Recently, Broadridge added three new fixed income clients through the launch of its multi-asset trade processing and settlement offering, Gloss, which allows for enhanced fixed income and financing functionality, says the company.
The platform allows users additional processing support for tri-party repurchase agreements, auto-borrows and mortgage-backed securities as well as new P&L methodology and a Bloomberg interface.
Kneale says tha t a big focus for the next year will be on exchange traded derivatives.
A big driver for this is our Asia Pacific clients who are looking for a multi asset platform, says Kneale. Broadridge sees three trends in Asia at the moment. The first is that the traditional big global players would like single vendor platform for fixed income as traditionally costs per transaction are substantially higher than equities and historically on fragmented in infrastructures. The other is the expansion, again, of the top Tier II brokers into the region to provide global execution and settlement services for the mainly equities clients. While the third – local players in rapidly growing economies such as India are looking to put a regional or global infrastructure in place.”
(LB)