That’s why it’s bad news that three US banks are now working on a new platform to ease bond issuance pain points — sending out deal updates, pricing info, and collecting investor interest and orders.
Such a system already exists, and has been adopted by at least 32 banks, though it is used predominantly for EMEA bond issues. Ipreo trialed its Investor Access system throughout 2016, going live early in 2017.
Not every investor uses it — but plenty do, from small accounts that struggle for attention, to large accounts whose dedicated execution traders prefer it to a flurry of Bloomberg messages. New regulation from MAR to Mifid has increased the bureaucracy of bond underwriting, and given an extra push to any system that makes it smoother.
But US firms have been reluctant to adopt it. It’s partly owned by Goldman Sachs, a competitor. But this is just an excuse. It’s partly owned by Blackstone too, shortly to own GlobalCapital’s major competitor, and we have no problem praising it. Banks already share orders through the pot system — originally a US innovation.
One of the US houses argued Ipreo must do better at integrating with investor order management systems — but this, too, smacks of post-hoc justification. BAML, Citi and JPM have had years to raise these concerns with Ipreo.
Ultimately, it’s not a good thing to have competing standards duking it out for attention and market share. Investors don’t want more complexity in their workflow. Quite the opposite.
Whatever flaws Ipreo’s system might have, it’s a de facto market standard. Better to improve it than fight it.