Moneyline Telerate Enters Liquidity Markets with Momentum

Moneyline Telerate’s long awaited, Momentum trade-connectivity network is set to begin operation this month, starting with access to Deutsche Bank’s Autobahn bond trade execution platform.  The beta trial will bring Moneyline Telerate into line with rivals Bloomberg and Reuters, which already offer access to their clients’ single-dealer transactionsystems.

Eventually, Momentum will allow institutional dealers access to several areas of liquidity through a single Moneyline Telerate iinterface.  The system will be accessible from the market data vendor’s core desktop display services.  Buy-side traders use the service by clicking on prices from sell-side firms displayed on
Moneyline Telerate’s Active8 and WebStation market data systems.

The Momentum trading platform includes streaming real-time prices, instant execution and trade confirmation.  The core trading engine is provided by French software house Smart Trade, through a llicensing agreement with Moneyline Telerate.
 
Deutsche Bank signed the agreement to distribute the fixed income trading capabilities of Autobahn via Momentum last summer.  Autobahn is Deutsche Bank’s dealer-to-institution electronic trading service and supports the bank’s treasury, foreign exchange, fixed income and derivatives businesses.  The self-execution platform will allow buy-side clients of Deutsche Bank and Moneyline Telerate to trade
online with the bank.
 
Autobahn is one of Moneyline Telerate’s Dealer Direct suite of services, which offer analytics, portfolio and risk management tools and end-of-day feeds as well as other services.  Other services include Salomon Smith Barney’s Yield Book Calculator, Credit Suisse First Boston’s Global Fixed Income Indices and Bear Stearns’ PricingDirect. Phil Cenatiempo, who recently left Moneyline Telerate to join Moody’s Investors Service, played a substantial role in pulling together the components of the Dealer Direct offering.
 
The web version of Autobahn’s fixed-income trading platform has been available on Reuters 3000 Xtrasince early 2003.  Bloomberg has been carrying the full service Autobahn, similar to the service now available via Moneyline Telerate’s Momentum, for some time, according to Alsun Keogh, senior vice president and head of global business development (and former Bloomberg employee), at Moneyline Telerate.
 
The Momentum service will support U.S. and European government bonds, agencies and other fixed income securities.  Momentum was designed to handle a wide range of instrument types, says Keogh.
 
However, Moneyline Telerate has decided to focus on its traditional market, over-the-counter fixed income instruments, for the moment, she said.  The vendor plans to move into foreign exchange spot and interest rate derivatives in the near future, she adds.  Although the deal with Deutsche Bank is not exclusive, the bank played an active role in developing the Momentum service, says Keogh.  “Market conditions as they were,” she says, “we [Moneyline Telerate] waited for customer demand to drive the development of Momentum.”
 
For Deutsche Bank, the Moneyline Telerate deal is part of its strategy of securing multiple distribution channels for Autobahn.  The bank was looking for a service that offered more flexibility than was available
via the Bloomberg network, according to Keogh.  Specifically, the bank wanted to support spread-based trading and allow sales managers to capture trades, among other capabilities, both of which were limited
via Deutsche Bank’s agreement with Bloomberg, says Keogh.
 
Momentum clients can choose between a white-label version of the service, which will allow larger firms to outsource liquidity to smaller firms with a Moneyline Telerate-branded version.  The service does not consolidate prices, allowing users to construct their own montage of liquidity sources.
 
Momentum will be aimed at larger banks looking for a distribution channel for their e-commerce services or smaller banks and institutions that have yet determined their online business plans.
 “It is all about, ‘How do we get our footprint on our clients’ doorstep?’” says Keogh.  Moneyline Telerate has targeted Europe as “especially looking for electronic solutions,” she adds.
 
In addition to the licensing deal with Smart Trade, which lends its trade-matching engine to Momentum, Moneyline Telerate will also work with clients who wish to develop internal ecommerce services using
Smart Trade technology. Paris- and NY-based Smart Trade has developed its matching engine to work with large banks that want to operate internal private exchanges as well as single-dealer, multi-bank and exchange communities, says Harry Gozlan, CEO, Smart Trade.

Although Smart Trade does not have an exclusive relationship with Moneyline Telerate, maintaining a single vendor relationship is “beneficial” to Smart Trade, at this time, he says.

Smart Trade was developed in 1999 by Gozlan and David Vincent, then CTO.  The idea was to provide an online service that was better than the telephone services used by brokers at that time.

Prior to that, Gozlan had spent 12 years working in the trading and capital markets areas of Citibank and Credit Agricole.  Vincent spent 10 years in derivatives including a stint as head of development and research at Société Générale.

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