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LSE's new retail bond market goes live for private investors

Monday 1st February 2010
By Mike Jones

The London Stock Exchange today launched its new electronic Order book for Retail Bonds.

Introduced in response to strong private investor demand for greater access to fixed income, it offers continuous two-way pricing for trading in UK gilts and retail-size corporate bonds on-exchange for the first time.

Initially, 49 gilts and ten corporate bonds are available for trading including securities issued by Tesco, BT, National Grid, GlaxoSmithKline, Morgan Stanley, GE Capital, Enterprise Inns and a bond issued specifically for this new service by Royal Bank of Scotland. Investors can see prices on-screen, and trade in increments as low as £1 for gilts and £1000 for corporate bonds, in a process similar to share dealing.

The new market is supported by dedicated market makers. Evolution Securities has committed to a leading role and will make markets across all of the gilts and corporate securities on the service. In addition, Shore Capital Stockbrokers will make markets in corporate bonds and ABN Amro is committed to quoting in the new RBS bond.

The new initiative is modelled on Borsa Italiana’s highly successful MOT market which, with euros 230 billion worth of trading in 2009, is Europe’s largest retail fixed-income market.

Xavier Rolet, Chief Executive of London Stock Exchange Group, said: "We are very excited to be launching this new market today. We are determined to continue expanding and diversifying our product offering while responding to the needs and demands of our customers. There has already been considerable interest in this new platform from issuers, member firms and private investors, and we look forward to further facilitating that growing interest as the market establishes itself over the coming months."

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