Yieldbroker announced yesterday that UBS and RBC will be joining ABN Amro, Citi, Deutsche Bank, JP Morgan and Macquarie Bank as equal shareholders. Yieldbroker was founded in 1999 as a co-operative venture between select debt market participants to facilitate the growth of electronic marketplaces in Australian and New Zealand debt.Since then Yieldbroker has grown to become the dominant electronic trading platform in the local debt markets, providing live indicative prices and, upon request, competitive two-way markets in over 700 debt securities. However, Yieldbroker does not cover mortgage-backed securities. This is a sector of the market that has always suffered from illiquidity, in a large part because of inconsistency in the pricing methodologies used by market makers, specifically relating to the calculation of weighted average life. This has been the subject of much comment from investors in recent months and no doubt a source of frustration, sufficiently so to have attracted comment from the Reserve Bank more recently.No doubt the market for RMBS securities would gain a significant benefit if these issues could be addressed. Yieldbroker General Manager, Richard Swift, noted that, "RMBS was a priority about twelve months ago but recent events in the credit markets have caused it to be downgraded. RMBS is not particularly liquid in the secondary market and different pricing methodologies in relation to the calculation of WAL among our members make the aggregation of prices difficult."The relative illiquidity of RMBS and the differences in pricing should make the introduction of RMBS to Yieldbroker imperative, to address these issues. "Yes, it does provide an imperative and we hope to get back to it quite soon but at the moment we are focussing on our straight-through processing initiative," said Swift.The straight-through processing initiative is Yieldbroker's current project. "To date Yieldbroker has only been involved in deals to the point of execution. We are now working to extend our involvement, handling the whole transaction through to settlement and even to the allocation across funds, where one party to the transaction is a fund manager. This involves a large investment in back office capacity and third party systems," noted Swift.This project follows on from Yieldbroker's 2007 development of its inter-dealer market, which now captures a substantial share of market turnover in government and semi-government securities and Australian dollar denominated corporate, supranational, sovereign and agency, fixed and floating rate securities.It is this latter activity that Duncan Haig at UBS Capital Markets Australia is hopeful of being able to develop further; working with Yieldbroker to maximise the system's potential. "We would like to see more dealing in cash securities, bringing more liquidity into the market and encouraging greater participation by other banks," said Haig.In terms of other opportunities to maximise Yieldbroker's potential Haig noted, "The services that Yieldbroker provides are well used and there may be opportunities to expand these services to a wider range of products. Potentially, this may include RMBS but we would see greater opportunities in derivatives such as interest rate swaps, credit derivatives and similar products."