Market intelligence & eTrading for Securitized Products

eTrading for MBS Originators

eTrading in the MBS marketplace is nearing an inflection point with multiple vendors trying to disrupt the equilibrium that has existed for the last 3 decades. By the end of 2023, a set of innovative solutions will change the market landscape. Technology will be brought to bear on a market where connectivity and efficiency are critical, and velocity of production and sales are exploding.

Technology Assessment of MBS Originators

It is widely acknowledged that the MBS secondary market is plagued by workflow that is archaic and in need of an overhaul. Every originator has a proprietary BWIC communication format. Processing is laborious, error-prone and unsystematic – all factors that contribute to a lower ROI for originators. While much of the fixed-income market, including hedged products, has already benefited from new technologies, the secondary pool market lags. Digital communications software offers an opportunity to bring efficiencies to this multi-billion-dollar market.

The current BWIC process creates a resource crunch, especially on the dealer side. When dealers waste time aggregating non-standardized BWICs, they experience a “processing jam”. This problem only worsens as trading volumes pick up. The true cost of the bottleneck, however, is borne by originators who either receive no bids, or defensive bids due to inadequate time for dealers to evaluate offers. Originators including those that trade limited amounts can reap huge benefits from streamlined communications.

Surprisingly, over 90 percent of originators use an Excel-based system to run their BWICs. While easy to use, Excel has significant limitations:

  1. Prone to human error due to lack of edit checks 
  2. Inability to share changes across market participants in real-time
  3. Failure to harness historical data

The Digital Solution

BondXN enables efficient communication between MBS market participants to make transacting and participating in the market more efficient. The goal of the company is to provide value to the entire market ecosystem by improving the existing workflow – without disrupting the roles and responsibilities of current players. 

At the heart of the BondXN solution is a platform that allows efficient information exchange between market participants by standardizing data and communication. Our robust and flexible message protocol enables users to handle the full complexity of the BWIC process – including publishing BWICs, collecting bids, providing feedback, awarding winners, striking pools, ticketing, and distributing covers – all on one platform. Additionally, the system creates a robust audit history to meet all compliance requirements.

BondXN provides multiple interfaces to interact with data, allowing seamless integration with your preferred technologies:

  1. A desktop BondXN application
  2. A Web-based interface
  3. An Excel add-in
  4. An email connectivity interface
  5. API for direct integration with proprietary systems and other tools

BondXN for Originators

Most originators accept the need to change and are willing to adopt eTrading solutions. However, given the increase in volumes in a low-rate environment, coupled with inability to onboard new technology in the current Covid environment, originators are reluctant to introduce disruptive technology changes. Sensitive to these concerns, BondXN has developed a 3-step process for originators to embrace eTrading while managing disruptions.

Step 1: Use BondXN’s Email Connectivity
Most of the communication traffic and inefficiencies occur early in the BWIC process, when BWICs are published to dealers and bids are received. When dealers experience a bottleneck here, originators are completely ignored or receive suboptimal bids. BondXN guarantees that dealers receive BWICs instantaneously and in a standardized format for efficient processing. These BWICs can be pushed directly into internal BWIC management systems used by dealers and shared by their traders and salespeople.

To avail themselves of this advantage, originators email BWICs directly to a specific mailbox created for them on the BondXN platform. Here it is automatically transposed into a standard format and fed to dealers in the network. Return bids submitted by the dealers are also automatically emailed back to the originator. This solution ensures faster, tighter integration with dealers without overhauling current workflows.

Step 2: Use BondXN’s Excel Add-in
BondXN’s Excel add-in brings platform connectivity into existing spreadsheets. With minimal customization, the Excel add-in can send and receive information directly from the spreadsheet. BWICs can be published and bids can be received into an existing Excel spreadsheet with a click of a button. This simple installation can reduce common errors that come from manual entry of bids from emails.  Once again, this solution allows for tighter integration but without a change to the current technology.

Step 3: Replace Excel with the BondXN Application
The final step of the BondXN integration is to install a robust application that can manage the complete BWIC lifecycle and replace the Excel based system. The BondXN application provides end-to-end functionality, including:

  • Creation: Create a BWIC in a few easy steps
  •  Publication: Publish the BWIC on the BondXN platform and send out a customized Email blast
  • Collection: Aggregate bids from all dealers, including those submitted directly on the platform
  • Feedback provision: Rapidly send feedback on bids to dealers
  • Identification: Identify the best bids and notify bidders
  • Negotiation: Negotiate the strike and complete the trade
  • Closure: Publish covers

And critically, the system provides Data Mining that can help with price discovery, best execution, dealer activity analysis, and dealer preferences. Once fully integrated, data intelligence from the digital network has the potential to transform decision making across the origination and sales process.


Technology for MBS Securitized Products is fast-evolving. Watching from the sidelines is no longer a prudent option. Imagine a future where standardization and seamless information flows allows for greater market participation. Imagine the introduction of automation where AI systems produce bond bids in split seconds. Bid volumes will grow exponentially and manual systems will struggle to keep up.  Originators and dealers alike will need to take action to keep pace with evolving markets and technology, or risk being left behind. BondXN offers a comprehensive solution that enables originators to take incremental steps toward improved market operations and workflow – bringing them into the future.