SIX Launches Quote on Demand for Bonds to Improve Trading

In recent years, RFQ has become the dominant market model in bonds trading. To strengthen the market share of SIX Swiss Exchange, SIX introduces QOD for CHF Bonds, a RFQ functionality aimed at improving liquidity, automating processes, and reducing costs and risks for trading participants on the Swiss stock exchange.

Ueli Goldener, Head Fixed Income, SIX Swiss Exchange, explains the benefits: “QOD for CHF Bonds allows buy-side participants to initiate a RFQ on a specific CHF Bond. This request is sent via existing interfaces to the QOD for CHF Bonds book, which operates alongside the Central Limit Order Book. Participating liquidity providers receive the request and submit their quotes for the bond. The QOD system aggregates these quotes, enabling the participant to view multiple offers and choose the best one or opt for auto-execution if chosen. The transaction is then processed through infrastructure of SIX, ensuring efficient settlement and clearing.”

QOD on SIX Swiss Exchange has become the largest on-exchange RFQ service in Europe. SIX first introduced QOD for ETFs and ETPs, developed in close cooperation with market makers and leading trading participants for these segments, in December 2020.

QOD has evolved into a driver of trading turnover and transaction volumes, reflecting the growing interest of market participants in price improvements and narrower trading spreads. For instance, April 2024 was a record month for ETF QOD with over CHF 600mn traded while over 10,000 trades were recorded in recent months.

With the introduction of QOD for CHF Bonds, SIX has even expanded the range of RFQ services further. Marco Wirz, Senior Product Manager Fixed Income, SIX Swiss Exchange, highlights: “With the introduction of Quote on Demand for CHF Bonds, we are now offering the dominant market model through existing interfaces, thereby improving liquidity in CHF Bonds trading. Since Requests for Quote or Quotes on Demand can be priced more competitively and complements firm quotes in our Central Limit Order Book, the benefits for our customers are significant.”

Quote on Demand Bonds was introduced as part of the SWXess Maintenance Release 13 (SMR13). SMRs mark the introductions of various enhancements and innovations to improve the offering on SIX Swiss Exchange for different types of clients. The releases in 2023 for example introduced in particular Auction Volume Discovery (AVD) and the new Retail Order Types Stop Loss and Stop Limit (SMR11 in May) as well as ETF Quote on Demand Europe (QOD Europe), a novel service extension for ETF (SMR12 in December).  

Further information on the SWXess Maintenance Release is provided in the SMR13 Release Guide.

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