BlackRock to bypass banks with bond-trading platform

BlackRock is planning to bypass dealers to trade bonds directly with other investors, the Wall Street Journal has reported.

The world’s largest money manager is planning to set up an electronic bond-trading system that would allow it to trade bonds without the aid of Wall Street, depriving dealers of commission on its $3.5tr worth of assets.

According to the Wall Street Journal: “The trading platform would be run by the New York-based company’s BlackRock Solutions arm and offer 46 clients – including sovereign-wealth funds, insurance companies and other money managers – the ability to trade in corporate bonds, mortgage securities and other assets, company executives say.”

The platform is being developed to reduce costs and provide liquidity, not to compete with investment banks, the newspaper reported.

“It’s not going to cannibalize Wall Street […] If there’s a savings available to clients, we want to give it to them,” Richard Prager, a BlackRock managing director, was quoted as saying.

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