A new electronic bond market is the NYSE-Euronext's latest attempt to diversify a bit out of equities and a reminder that not all the focus is on overseas expansion. The idea is to bring the benefits of electronic trading to retail investors who want to trade bonds. The new platform, based on Arca, will offer live, anonymous trades for NYSE-listed company bonds. The only issue is whether the retail market can generate the kind of volumes the market needs to be successful. Small orders account for three-quarters of the transactions in corporate bonds but only 2 percent of the dollar volume. So the issue will be how quickly the exchange can scale the new service up. It does not seem like the new system is optimized for large orders. So the institutions lack a good incentive, except maybe when they have a reason to execute small trades.

For more:
- here's the Financial Times article