The three other firms to have signed on to the new project are BNP Paribas, Deutsche Bank, and Wells Fargo.
Since first announced in March, more details of the system have emerged. The aim is to make it a consortium of global banks improving communications around primary issuance, boosting efficiency in the market, and using an inclusive utility model that will be open to other players in the industry.
The initial focus of the service will be on investment grade bonds, first in the US, then in EMEA and finally in the Asia Pacific region.
It will essentially comprise a messaging service, which will serve as a hub for new issue information. Investors will be able to connect their order management interface through a direct fixed feed.
The consortium of banks has completed its blueprint phase and is moving to the build. The plan is to have the programme up and running by the end of 2018 or beginning of 2019.
A source familiar with the matter said he did not know if each of the banks had an equity stake in the business but gathered that, as the tech needed to be built and that there was a cost to that, each of the eight banks might be “putting in a wedge”.
The banks involved declined to comment.
The firms signed up to the platform have accounted for 48.14% of volume on Dealogic’s dollar investment grade corporate league table (which also includes Reg S issues) so far this year. The other top 10 banks yet to sign up are Barclays, HSBC, RBC Capital Markets, Mizuho and Morgan Stanley.
Last week, data firm IHS Markit announced that it was buying Ipreo, a firm making software for the primary markets, for $1.855bn.
Ipreo owns the IssueNet software used to reconcile syndicate order books, but since 2014 it has been developing Investor Access, a tool that allows buy-side firms to place indications of interest and orders directly, rather than through investment bank sales teams, as well as receiving deal information and updates.
Ipreo was owned by Goldman Sachs Merchant Banking and Blackstone, which bought it from KKR.
Though Goldman’s merchant banking division is an arms-length operation, the firm’s involvement meant that Goldman was the only US bank to sign up to Investor Access, with the other institutions sceptical about it for several reasons.
Part of the scepticism stemmed from Goldman’s ownership, but banks were also reluctant to create an effective monopoly able to charge what it liked and take profitability out of the primary bond business. Some also worried about levelling the playing field between banks with strong distribution capabilities and others.
Ipreo’s Investor Access product has more than 30 banks signed up, but it has by far the strongest presence in European capital markets, and with firms that have predominantly European franchises.
A major part of IHS Markit’s strategy for the firm, however, is to expand the reach of Investor Access and push it into other geographies.