What is the difference between the “Direct Trade” and the “Indirect Trade” methods on the BL TradeXchange?
A Direct Trades requires both counter-parties to disclose who each other are prior to a trade confirmation. In this instance, the cost for the trade is 10 bps of par value. An Indirect Trade is for those member firms who would like to remain completely anonymous and remove counter-party risk from the process. In this method, BL Update works with broker/dealer intermediaries from our FI TradeXchange platform who have agreed to act as an intermediary and take counter-party risk on a trade. Our broker/dealer partners bid for this role, so there is an additional cost. However, as multiple broker/dealers bid, we believe this drives down the ultimate cost to our members. Broker/Dealers who are also the agent on that loan will not be invited to participate in this process.
