Beacon Capital Markets, which operates an electronic-trading MBS marketplace, plans to add in non-agency MBS, ABS and CMBS starting July 10.
Beacon will act as executing broker, and Broadcort, a division of Merrill Lynch that provides clearing and settlement services, will clear and settle the trades.
Securitization players will be able to trade the full range of non-agency MBS, as well as the entire array of ABS, including auto loans, credit card and home equity.
According to CEO Rob Barsky, market participants have asked for the addition of less liquid securities, and given the current market challenges, this was the next logical step in the expansion and development of the firms Trade Discovery Platform.
Our platform is focused on providing price discovery and efficient executions, said Barsky. Particularly at a time when market participants face challenges trading in these markets, our platform represents a tool providing more efficient access to pools of liquidity.
Trade Discovery is a marketplace dedicated to trading the full range of both MBS and ABS on both the buy and sell sides. Participants can locate and trade using search methods designed specifically for these securities, and trades are negotiated anonymously while being automatically captured, creating an electronic audit trail.
Our customers are receptive to our trading model and, in this environment, have found it an excellent way to conduct price discovery, Barsky said. We think this is an important time to release trading in these securities as the administration advances its [Public Private Investment Program ] using a funding mechanism like the successful [Term ABS Loan Facility]. Holders of so-called legacy bonds will want to make those available to the new sources of investment coming to market, explicitly to own those bonds.