Yieldbroker

Overview

Yieldbroker was the first fixed income trading platform to be awarded an Australian Market Licence, which authorises Yieldbroker to operate two markets, a Dealer & Client market and an Interdealer (dealer-to-dealer) market.

Trading in both markets is governed by a set of Operating Rules. These are varied occasionally following consultation with and subject to the approval of the participating banks and ASIC. A PDF version of the current operating rules is accessible here.

The Dealer & Client market is an easy to use service that provides institutional investors with enhanced price discovery and superior deal execution in a secure online trading environment.

Investors are provided with unrivalled dealing flexibility, with the ability to view live indicative prices and simultaneously request competitive two-way markets from all the leading pricemakers in over 700 debt securities.

The Dealer & Client market is a service provided to Yieldbroker’s participant banks and their institutional clients in the Australian and New Zealand debt markets. Asian-based investors are also able to access the Yieldbroker dealer panel via the Reuters RTFI trading platform.

The Dealer-to-dealer market provides dealers with an efficient, low-cost alternative and has already captured a substantial share of interbank turnover.

Dealers are able to post and execute live prices, anonymously negotiate online and conduct call-outs to other market participants. Coverage includes Australian government and semi-government securities, AUD denominated corporate, supra-national, agency and sovereign fixed rate securities and FRNs.

The co-operatively owned platform is accessible at minimal cost to all banks that are active in the Australian and New Zealand debt markets with 17 banks currently utilising the service.

Client access

The Dealer & Client market is a service provided to Yieldbroker’s participant banks and their institutional clients in the Australian and New Zealand debt markets. Access can be arranged through the relevant debt markets contact at a participating bank or by contacting Yieldbroker directly on 1800 220 550.

Clients are required to sign a System Use Deed prior to the commencement of trading. Trading in the Dealer & Client market is subject to the Operating Rules contained in the systems use deed and a PDF copy of these rules is available here.

Asian-based clients are able to access the Yieldbroker dealer panel via the Thomson Reuters RTFI trading platform and should contact Thomson Reuters directly for more information.

Coverage

Yieldbroker provides comprehensive market coverage giving investors the ability to view live indicative prices and request competitive two-way markets in over 700 debt securities. Security classes currently traded on Yieldbroker include:

• Australian and New Zealand government securities
• Australian Semi Government securities
• AUD denominated fixed rate corporate securities
• AUD denominated Floating Rate Notes
• AUD denominated Supranational, Sovereign, Agency fixed rate securities

Yiledbroker is currently developing client trading platforms for inflation-linked securities, and swaps with further debt security and derivative classes to be added over time.

Transaction flexibility

Yieldbroker gives investors unrivalled dealing flexibility, with our adaptable technology enabling the trading platform to be customised to meet the evolving requirements of market participants.

Clients are able to request for quote (RFQ) and simultaneously receive competitive two-way markets from all of the leading participants in the Australian and New Zealand debt markets. Requests can be made in individual securities or in multiple securities using the portfolio trade functionality.

Transactions options include:

• Outright - Outright Yield
• EFP - Exchange-for-Physical where physical securities are dealt at a margin for exchange with an equivalent quantity of futures.
• Switch - traded as a basis point margin between two securities
• MOC - Market-on-Close transactions are outright trades that are quoted at a basis point margin to the closing price of a nominated futures contract. Transaction yields are determined by the official closing price of the futures contract.
• Margin - FRN transactions are dealt as a basis point margin to the BBSW rate.

Dealer and client response times vary depending upon the complexity of the transaction and the security type and may also vary over time dependent on market conditions. A matrix outlining the various response times is included in the Operating Rules and is accessible here.

Trading clients can familiarise themselves with the various options in the test environment which is accessible from the login screen and a detailed explanation of the various dealing options in the help guide.

Market axes

Yieldbroker also offers a Market Axes functionality which gives clients the ability to identify participant banks indicative interest in individual issues.

The functionality is only available in less liquid security classes with “axes” currently listed in AUD denominated fixed rate corporate securities, AUD Supranational, Sovereign, Agency debt securities and FRNs. Axes are identified by an icon next to the relevant security and trading clients can view axe details by clicking the icon or the security.

Recent system upgrades

Yieldbroker continually seeks to improve its service and regularly implements functionality improvements. The bulk of these changes result from client requests, so if you have any suggested improvements please contact Yieldbroker here or call 1800 220 550.