04.07.2022

Tradeweb Launches AI Pricing for US Municipal Bonds

04.07.2022

Tradeweb Markets Inc., a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, today announced the launch of Tradeweb Ai-Price for municipal bonds, which will use machine learning and proprietary data science to calculate daily prices for municipal bonds.

The $4 trillion municipal bond market plays a critical role in the United States economy, financing operations and projects for state and local governments and their agencies. While municipal bonds are widely held by retail and institutional investors, only 1.9% of tax-free fixed coupon municipal bonds traded on a daily basis during the month of March 2022.[1] This relatively low turnover impacts price discovery, making it potentially costlier and/or more time-consuming to buy, sell or hold these bonds.

Ai-Price for municipal bonds addresses this problem through a combination of proprietary data, machine learning and other advanced data science methods, producing reliable pricing levels regardless of how often these bonds trade. Tradeweb Ai-Price for municipal bonds will initially publish end-of-day prices for approximately 880,000 securities and custom portfolios, based on data published by the Municipal Securities Rulemaking Board (MSRB) and through trading activity on the Tradeweb platform. In time, Tradeweb will expand the model to calculate intraday price updates.

Lisa Schirf, Managing Director, Global Head of Data Strategy at Tradeweb, said: “Ai-Price represents the next frontier in applying data science to help make markets more efficient. We collaborated with clients as we developed this tool, and we are excited to offer increased transparency, accessibility and reliability to clients who trade and invest in the municipal bond market.”

John Cahalane, Managing Director, Head of Tradeweb Direct, said: “The municipal bond market is ripe for further electronification, and this service represents a powerful step forward by providing our clients with enhanced price discovery. Ai-Price for municipal bonds will optimize our clients’ trading experience and lead the municipal bond market into a new era of innovation.”

Investors in every major fixed income asset class rely on Tradeweb data to price trades and portfolios. In addition to Tradeweb Ai-Price, Tradeweb also calculates IOSCO certified end-of-day prices for U.K. Gilts and U.S. Treasuries, which traders and investors can access through a variety of formats, including the cloud-based AWS Data Exchange.

With more than 240 dealers, roughly 300 institutional clients and over 40,000 financial advisors as users, Tradeweb facilitates one in every six trades reported to the MSRB on a daily basis. [2]

Source: Tradeweb

Related articles

  1. The AI-powered investment management and asset servicing platform has closed a $40m funding round.

  2. Saphyre uses AI technology to reduce the time to set up a new fund.

  3. JPMorgan Chase's chairman and CEO said the importance of implementing new technology cannot be overemphasized....

  4. Two dozen dealers and more than 50 asset managers have joined AI-driven digital bond trading platform.

  5. OPINION: Artificial, Yes. Intelligent? Maybe.

    SeMI Technologies spun out from ING’s innovation Labs in 2019 to become an independent firm.