David E. Rutter has gathered an expert team of financial market and technology professionals in a new company, LedgerEdge, to build an ecosystem for the exchange of data and assets in the corporate bond market.
Corporate bond market participants face serious challenges in discovering liquidity and executing trades without harmful data leakage. The corporate bond market lags behind other asset classes in adoption of digital solutions: $59bn is traded daily, but only 30% of this is traded electronically.
The last ten years have seen innovative new solutions and protocols make strides to improve market efficiency, but they have been limited by the technology available. All have required trade-offs including imprecise order tools, centralized data stores, and data leakage.
LedgerEdge is building on technology only now ready for institutional-grade solutions. The team is using blockchain technology, artificial intelligence, and secure enclave computing to empower users to locate and promote liquidity in markets.
It will deliver a fundamentally better ecosystem and experience for finding data, sharing data, and executing trades. LedgerEdge will be licensed as an MTF in the UK with suitable licenses in the U.S.
David E. Rutter is a pioneer in electronic fixed income trading with over 35 years of experience in building successful platforms, including BrokerTec and LiquidityEdge, which was sold last year to MarketAxess for USD $150 million.
Rutter has assembled an expert team to work with the industry to resolve the issues in the corporate bond market. The team compromises David Nicol (IBM/R3) as CEO, Ian Chicken (ICAP/BrokerTec) COO and Bob Bose (Santander/NYSE Euronext) as CTO.
Rutter is the founder and CEO of enterprise blockchain firm R3. LedgerEdge will use the same industry collaborative approach as R3, working with market participants to test and validate cutting edge technologies. Rutter remains CEO of R3.
David E. Rutter comments: “The secondary market for corporate bonds is growing and is ripe for an evolution, but existing platforms are not fit for purpose. Data is monetised by platforms and it is leaked across fragmented, opaque markets, decreasing execution quality. Working with the industry, we will build a platform that solves the challenges of locating and promoting liquidity and data ownership once and for all.”
David Nicol, CEO of LedgerEdge, comments: “The fundamental desire that all traders share is to execute efficiently and effectively, with minimal data leakage. Difficult and persistent challenges such as these require a holistic approach and cross-industry collaboration. We look forward to working with the market on product validation to ensure LedgerEdge is built by the industry, for the industry.”
Kevin McPartland, Head of Market Structure and Technology Research at Greenwich Associates, comments: “Illiquid areas of the corporate bond market have challenged participants for years. While increased electronic trading and new data sources have moved markets forward in this regard, challenges still remain. Innovative solutions that further expand data access while limiting information leakage will prove a key piece of the market’s next evolutionary stage.”