Bloomberg has expanded its electronic trading infrastructure in Australia with support for Exchange-for-Physical (EFP) trading in the local fixed income market.
The first transaction using the workflow was completed last week, according to a Bloomberg press release. HESTA participated in the trade, while ANZ acted as market maker.
The setup allows market participants to negotiate Australian government bonds electronically against benchmark bond futures as a contingent package trade. Under the model, the bond and futures legs are linked and executed together.
Electronic workflow for EFP trades
EFP transactions are widely used in the Australian rates market for hedging and risk management. Bloomberg says the new functionality supports straight-through processing and integration with order management systems for request-for-quote and request-for-market workflows.
“Exchange-for-Physical trades are important to the functioning of the Australian Debt Capital Markets,” said HESTA CIO Sonya Sawtell-Rickson in the statement.
ANZ’s Glenn Blackley described EFP trades as “a key feature of Australian fixed income markets and an important tool for managing risk”.
The announcement expands Bloomberg’s electronic fixed income trading offering in Australia, where market participants continue to shift more rates and bond workflows into electronic execution environments.
