Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241131 
Year of Publication: 
2020
Series/Report no.: 
Staff Report No. 938
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We investigate the trading of corporate bonds on alternative trading system (ATS) platforms. We draw a key distinction between request-for-quote (RFQ) and electronic communication network (ECN) trading protocols, which balance investors' preference for immediacy and anonymity. Trades on ATS platforms are smaller and more likely to involve investment-grade bonds. Trades on ATS platforms are more probable for older, less actively traded bonds from smaller issues and for bonds traded by more dealers where inventory is high. Moreover, dealer participation on ATS platforms is associated with lower customer transaction costs of between 24 and 32 basis points.
Subjects: 
corporate bonds
TRACE
electronic trading
JEL: 
G14
G23
G28
Document Type: 
Working Paper

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