Demise of Direct Match Shows Bank Death-Grip on Treasury Market
- Trading startup couldn’t gain access to key industry utility
- Contrasts with ease IEX had breaking into U.S. stocks
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Direct Match Holdings Inc., which aimed to be an alternative to bank dominance in the $13 trillion U.S. Treasury market, died before it arranged even one trade.
The New York-based startup wanted to give hedge funds and asset managers the same type of anonymous, exchange-style trading that banks and sophisticated electronic firms have enjoyed for years. The problem: Direct Match needed to partner with one of those banks to access the Treasury market’s clearing-and-settlement plumbing. State Street Corp. initially agreed to such a deal, then canceled it, dooming Direct Match.