Bloomberg planning MTF with new London trading platform

Bloomberg wants to create its first fully-regulated European trading venue with the establishment of a new London-based trading platform, ahead of regulations that will force certain over-the-counter derivatives to be traded on so-called multilateral trading facilities (MTFs). Bloomberg finance touchscreen

A Wall Street Journal report indicated that the firm is asking the UK’s Financial Conduct Authority to approve an MTF.

MiFID II regulations will make it mandatory for certain derivative products, such as interest rate swaps, to be traded on venues like MTFs.

Records at Swift, the bank network, show Bloomberg has applied for a “market identifier code” (MIC) for the venue.

The WSJ notes that while few details of the platform are yet known, it will be eligible to trade interest-rate swaps and credit derivatives and will come under the purview of Nicholas Bean, head of fixed income product at the firm.

At present, Bloomberg dominates European corporate bond trading through its ALLQ platform, but this does not exist as a regulated trading venue as it doesn’t match buyers and sellers, only publishes bids and offers. It is regulated as a service company by the FCA.

Figures from the European Securities and Market Authority database show there are 74 MTFs in the UK, half of the total 152 MTFs in Europe.

Investment firms or market operators operating an MTF may not execute client orders against proprietary capital, or engage in matched principal trading.

Recently, Bloomberg’s sell-side trading solution - Trade Order Management System - was granted approval by the FCA to report securities with an International Securities Identification Number (ISIN) and OTC derivatives as part of the UK’s Approved Reporting Mechanisms (ARM) regime.