Bloomberg, through its IOI Network, broadcasts what it calls "routable" indications of interest from brokers. These are similar to what the buyside says actionable IOIs are supposed to be, where one simply clicks on an IOI and a trade is completed.
IOIs are electronic messages from brokerage firms, expressing willingness to trade a block of stock. Once they were thought to be nothing more than fishing expeditions to capture an order. However, the buyside has demanded IOIs become more actionable and natural. Bloomberg’s routable IOIs put the trader one step closer to the Holy Grail of IOIs – the actionable one.
Palak Patel, global head of equity trading and connectivity product development at Bloomberg, explained that a routable IOI can be clicked from the company’s EMSX execution management system and attaches a buyside trader’s order to his IOI response. A routable IOI can represent natural or non-natural liquidity. This is part of the next generation of IOIs, he added, and is available now.
"Clicking on the routable IOI doesn’t always execute a trade, as the broker has to approve the trade, but it usually leads to one," Patel said. It automates the process further by minimizing the number of calls to a high-touch desk. However, routable IOIs are not fully actionable, by definition.
For routable IOIs, Bloomberg is working with nine of the top 20 global institutional brokers (by banking and markets revenue) in getting the product into use. Other brokers are testing them.
