LiquidityHub, the central fixed income pricing aggregator for swaps trading backed by 16 dealers, has been shut down just five months after going live.
LiquidityHub was set up to act as an aggregator for streaming prices for its 16 participating banks. Reuters and Bloomberg were signed up to distribute the service.
The system launched in October 2007 - a year later than originally expected - and was touted as a challenge to fixed income e-trading models such as TradeWeb by facilitating liquidity distribution for its members. The service was also seen as a way to counter the increasing power exercised by third party dealing venues in the fixed income market.
But in a short statement - which was released just before end of play in London on Friday - LiquidityHub says it will "cease electronic trading operations from close of business today".
"The decision has been taken due to recent market conditions which have called into question the current scalability of the LiquidityHub model," says the statement.
Rumours have been circulating that take-up of the service in a rapidly detoriorating market had been disappointing and that bank support for the platform was lukewarm at best.
LiquidityHub says "strategic options for the future of the company are being evaluated".
Last year many of the banks involved in the LiquidityHub venture - including Deutsche Bank, Goldman Sachs, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, The Royal Bank of Scotland and UBS - acquired a minority stake in the rival TradeWeb platform, which they initially sold off to Thomson Financial in April 2004.