Markets get lucky break during outage on Treasuries electronic platform

New York

BROKERTEC, the biggest electronic trading platform for Treasury securities, shut down for more than an hour on Friday because of a technical malfunction, an outage that several traders said caused a market-wide slowdown in one of the world's biggest assets.

In an email message to traders at around 2.11 pm New York time, BrokerTec said it was "experiencing technical difficulties and trading has been temporarily suspended."

Laurie Bischel, a spokesman for BrokerTec owner CME Group, said it reopened around 3.35 p.m.

BrokerTec is the largest interdealer broker in the US$15.6 trillion US government bond market, according to Greenwich Associates. CME acquired the business when it bought NEX Group in November, complementing its existing market for Treasury futures.

While trading of Treasuries across other cash and futures platforms slowed with the loss of BrokerTec pricing, the timing of the outage was fortuitous as other financial markets were calm and there was little else going on, said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York.

"Liquidity went away, but the market was fine," said Mr Comiskey, whose employer is one of 23 primary dealers, the counterparties that trade with the Federal Reserve Bank of New York."

Nasdaq Fixed Income, a competitor to BrokerTec in the interdealer market that was formerly known as eSpeed, was not affected, according to an email from spokesman Joe Christinat.

Other market competitors in electronic bond trading include Tradeweb Markets and Bloomberg, the parent company of Bloomberg News. BLOOMBERG