Bloomberg and Central Bank launch trading system for Government bonds

Thursday, 22 September 2016 00:00 - - {{hitsCtrl.values.hits}}

Bloomberg and the Central Bank of Sri Lanka (CBSL) announced the launch of the Bloomberg E-Bond trading and market surveillance system, a new electronic trading and reporting system for Sri Lankan government securities. Over 20 commercial banks and primary dealers are required to trade and report inter-dealer trades on Bloomberg’s E-Bond platform, which serves as the primary execution platform for fixed income secondary trading in Sri Lanka.

“Bloomberg shared a common vision with us in developing a more transparent and efficient market and ecosystem for all Sri Lankan government securities,” said P. Samarasiri, Deputy Governor of the Central Bank of Sri Lanka, which supervises public debt management and financial sector regulation.

“The introduction of the Bloomberg E-Bond system is a significant milestone towards establishing a more credible and competitive government securities market, and part of a series of strategic actions taken,” he continued. “With real-time trade and reporting data of secondary market activity, along with the competitive auction-based issuance system currently in operation, the financial market will benefit in the medium to long-term in terms of market transparency, price discovery and liquidity. In fact, early signs of such benefits are already seen in the market.”

As of 1 August, the Central Bank of Sri Lanka required all primary dealers to undertake inter-dealer trades and reporting on outright deals with investors via Bloomberg’s E-Bond trading system. In the second phase, all licensed banks were required to do the same as of 15 September 2016. A summary of trading information consisting of yield rates and volume of securities traded is published on the Central Bank’s website daily.

“Moving towards an electronic bond system will ultimately enhance Sri Lanka’s market transparency, which leads to greater liquidity and trading volumes,” said Prins Perera, Global Markets Head, Commercial Bank.

“For the first time, primary dealers in Sri Lanka are moving from voice to an electronic trading platform,” said Gihan Hemachandra, CEO at CAL, a primary dealer appointed by CBSL. “Over time, this will increase transparency and liquidity as onshore and offshore investor confidence grows, while also reducing transaction costs, allowing us to trade more efficiently.”

The Bloomberg E-Bond system provides a complete, consolidated marketplace for Sri Lankan government bonds, offering market participants a robust and flexible set of tools supporting the full trade workflow. This includes pre-trade price discovery and analytical tools, the ability to handle both multi-dealer request-for-quote (RFQ) and order trading, straight-through processing (STP) functionality and integrated trade capture and reporting tools.

“We are delighted to work together with the Central Bank of Sri Lanka to improve the functioning of its capital markets by building a more transparent, liquid and efficient bond market,” said Sunny Chhabria, Head of South Asia, Bloomberg L.P. “This is a great example of how we are providing technical expertise and partnering with a market maker community to adopt international best practices, enabling global investors looking at emerging markets to make more informed investment decisions.”