Bond market specialists are tiptoeing into web-based services already well-populated by equity services.
Starting in the third quarter, Boston-based Visible Markets Inc. will offer what it calls the world's first Internet-based open auction site for buyers and sellers of mortgage- and asset-backed securities.
Brian Robertson, chief executive officer and co-founder of Visible Markets, said the service will "fundamentally alter the bond market by making secondary bond trading more efficient through direct matching of a community of buyers and sellers in a competitive, highly liquid marketplace."
The service offers anonymity and price transparency, helping ensure equitable pricing for both buyers and sellers, he said. "This is especially good news for small and mid-sized institutions, which will be able to be more price competitive," Mr. Robertson said.
Users can be online and trading in five minutes, he said, in an auction environment. Bond sellers establish a reserve price for their bonds and set timing limits. Buyers can evaluate the bonds and join in the bidding. With only a few keystrokes, buyers and sellers can interact directly with access to real-time pricing, Mr. Robertson said.
The system is being tested with live trades, said Mr. Robertson, who invested $3 million in the business. Visible Markets also received $9 million in venture funding from Greylock Management Co., an early stage venture capital firm in Palo Alto, Calif.
The firm recently announced that James G. Ednie, formerly managing director and head of North American sales at ABN AMRO Inc., New York, joined the company as vice president of sales.