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OpenDoor re-boots US treasury market with dedicated all-to-all trading platform

First Published 25th April 2017

OpenDoor Securities is launching the first trading platform dedicated to improving liquidity in the less liquid segments of the US Treasury bond market.

Susan Estes, OpenDoor

Susan Estes, OpenDoor

Nearly three dozen firms representing more than $5 trillion of AUM and six sponsor-dealers are already onboarded to participate. The diversified client base includes central banks, hedge funds, pension funds, sovereign wealth funds, mutual funds, insurance companies, primary dealers, asset managers and trading firms.

The platform provides an all-to-all marketplace for market participants who wish to source liquidity in off-the-run Treasuries (OFTRs) and Treasury Inflation Protected Securities (TIPS), the largest pain points in Treasuries for many investors. These securities represent 98% of the $13.8 trillion of total outstanding issuance in the U.S. Treasury market, yet account for less than 32% of average daily trading volume.

OpenDoor's market-based solution is an all-to-all, session-based trading platform for OFTRs and TIPS. In addition to the current participants and the six sponsor-dealers, firms representing another $16 trillion of AUM, as well as five additional sponsor-dealers, are preparing to join the platform by the end of Q2 2017.

"This is a watershed moment for the U.S. Treasury market," said Susan Estes, CEO of OpenDoor. "The Treasury market remains bifurcated between the six benchmark issues and the remaining three-hundred plus off-the-runs. As a result, real-money accounts continue to experience increased transaction costs in their core bond holdings through ever widening bid-offer spreads. This is felt to a much larger degree by accounts trading less volume than the top ten. OpenDoor's solution works for all participants, targeting an often-overlooked but vital pillar of national debt."