mc2fool wrote:dealtn wrote:BUT from a (retail) broker perspective he has the following choices. Ask electronically via the LSE ORB platform for a price, with relatively quick execution and no cost, but get a minimum of 1 price back, and a wide price (typical is to ask 4 quotes and receive 1 or 2 within 15 seconds) OR phone the sales desk of a GEMM and get an indicative price, then do it again 2 or 3 times to satisfy "best execution" then go back to the best price, and close the trade on behalf of the client. You will get a better price but have to make 3/4 phone calls, and it takes longer.
Well then we possibly have a mixture of the two. With Interactive Investor one can trade conventional gilts totally electronically and do so "live" (15 seconds to accept the quote, etc). However, trading index linked gilts takes a 17-19 minute phone call, most of it on hold while the II agent "contacts the dealer". Whether they contact just one favoured GEMM or several or none at all I don't know, but I'll ask next time.
Well, today was next time and I did ask but the II call centre agent I talked to clearly wasn't the best person to answer the questions, as not only couldn't she say why index linked gilts couldn't be traded live online, as conventional gilts can be on II, but she'd never heard of GEMMs, or indeed of ORB!
However, she did say that my order had been executed by "Winterflood", and when I asked if that was the only oufit they used for IL gilts she said they also use "Peel", depending on which is giving the better prices.
Winterflood I'd heard of before in respect to investment trust research, but on a google I quickly found "
Winterflood Securities is a specialist in execution services. Ranked at number 1 in the UK equity market, we are dedicated to providing liquidity in all market conditions to a diverse client network including institutional investors, retail brokers and asset managers..."
https://www.winterflood.comTheir
Coverage page, under the Fixed Income tab, says "
Recognised retail gilt-edged market maker (GEMM) offering a service in UK gilts" (a
retail GEMM?) and "
Registered market maker on the London Stock Exchange (LSE) Order book for Retail Bonds (ORB)". It's unknown which of those facilities II went through. However....
On their
What we do page there's a graphic that show WINS at number 1 and PEEL at number 2, and I assume that's the other one II use and assume it refers to Peel Hunt, although their site doesn't mention being a GEMM at all but just says, under Fixed Income, "
We specialise in retail bonds, UK Government Bonds (Gilts), permanent interest bearing securities, Fixed Income ETFs, and preference shares. We are the largest market maker on the LSE market segment ORB".
https://www.peelhunt.com/what-we-do/execution-services/So, make of that what you will.
I suspect II are using those two as ORB market makers. At least, as you've seen, we've discovered that Interactive Brokers uses a GEMM (UBS) for their gilt trades ...
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