An Internet start-up that aims to make trading in fixed-income products easier for retail investors has signed up Charles Schwab & Co. as its first customer.
ValuBond.com Inc., which is expected to begin operating near the end of the third quarter, will match buyers - Web brokers such as Schwab - with sellers of bond products, such as brokerages. Without leaving the e-broker's site, the customer will enter information on the type of bond desired and ValuBond will match that to inventory held by the sellers, arranged by price.
The idea is to provide more transparency and liquidity in the fixed-income market, said Lisa M. Edwards, president and chief operating officer of Atlanta-based ValuBond. It is hard for individuals to buy and sell - or get information on - individual bonds, she said.
ValuBond will charge both the buyer and the seller a "small" transaction fee but will not charge retail investors who use the site for research, Ms. Edwards said.
For Schwab, the attraction was the ability to offer more fixed-income products and lower prices, said senior vice president John Ladensack. "We've been building to deliver the same service on bonds as we have on the equity side," he said.
The ValuBond site will give retail investors access to fixed-income market data and news. Though ValuBond has a broker-dealer subsidiary, individual investors will not be able to buy bonds through the ValuBond site, but instead will be directed to ValuBond's e-broker partners.
Ms. Edwards said ValuBond is also considering setting up a service that would let banks set up links from their Web sites to ValuBond's, but it will not be available in the near future.