Background:

At MarketAxess, I wrote an entry article to submit the firm as a candidate for "Best Securities Trading Platform" at the 2024 edition of Asia Asset Management's Best of the Best Regional Awards. The entry secured the title and MarketAxess was named the best trading platform for securities.

Format: 

Award entry article

Best Securities Trading Platform

With rising interest rates, heightened geopolitical tensions, increased volatility, and decreased liquidity, 2023 has been yet another challenging year for Asian fixed income investors. More than ever, they needed a one-stop trading platform like MarketAxess that can help them navigate this complex environment. Building on a record year in 2022, we have addressed these challenges by providing our participants with deep pools of liquidity, a comprehensive toolkit to optimize trading execution and transparency, and actionable data to aid decisions.

In 2023, MarketAxess’ Open Trading (OT), the world’s largest all-to-all fixed income network, has continued to fill the role as the go-to trading network for bond investors and dealers looking to access valuable liquidity anonymously. Time and again, OT has proven to mitigate the risk associated with the dependency on a small pool of dealers, especially when market conditions are tough, by providing a global network of potential counterparties.

By allowing dealers to become liquidity takers and buy-side clients to become liquidity providers, the OT network vastly increases both sides’ ability to access additional unique pools of liquidity. For the first six months of 2023, over 34% of trading volume on the MarketAxess platform was executed via OT. In the same period, 91% of buy-side inquiries for Asia Credit went sent via OT, resulting in an average price improvement of $0.33 per bond*.

The increase in OT adoption was instrumental to our overall growth in Asia. In 2023, Requests-for-Quotes (RFQs) initiated by dealers in Asia had a third consecutive record, demonstrating the confidence dealers have in MarketAxess pricing and capabilities.

Today, we have over 2,000 active buy-side firms and dealers on our platform and our APAC business continues to become stronger. This is especially evident in our Asian Local Markets segment with Asia local market debt trading volume being up 54% year-over-year (YoY) in the third quarter of 2023. This translates to Asia Local Markets representing about 33% of the whole firm’s global local markets trading volume.

These numbers are testament that more fixed income participants in Asia are now turning to MarketAxess’ comprehensive and global product offering, which includes a suite of innovative data solutions.

One of them is CP+, MarketAxess’ real-time pricing engine which has pioneered a new era of smart trading. It allows investors and dealers to leverage the power of machine learning to predict bond prices more accurately based on actionable, and not indicative, transaction data – across both hard currency and local currency bonds.

CP+ is designed to support a variety of trading functions including pre-trade discovery, liquidity provision, transaction cost analysis, auto-execution and crossing. It outputs an unbiased, two-sided market for more than 290,000 instruments globally. Updated every 15 to 60 seconds (depending on the liquidity of the instrument), CP+ generates ~approximately 50 million levels per day.

In 2023, CP+ was enhanced to price in 10 local currencies (including MYR, SGD and IDR) to provide some of the most accurate and relevant price data possible, particularly in opaque Emerging Market bonds.

As a technology innovator, we are constantly developing new solutions to ensure that we are helping clients increase transparency, efficiency and their ability to access deeper pools of liquidity providers. Besides OT and CP+, we also rolled out Request-for-Market (RFM)** Workup in 2023, a new feature that allows clients to upsize their original trade with dealers upon execution of their RFM Local Market trades. This workflow creates more orderly market conditions and importantly, reduces information leakage to the broader market.

Our Axess All solution continues to be a beacon of market transparency in the region as well. As the first intra-day tape for APAC fixed income markets, Axess All combines post-trade matching and regulatory reporting engine including voice and electronic flow data (TraX***) to inform market participants about what is trading, which direction, and at what price.

Despite the bumpy ride that Asian market participants have had in 2023, our efforts have helped them make the most of the opportunities they have been presented, and to better optimize the efficiency of their trading desks. Working closely with our clients, we will continue to develop and enhance all our products across the platform in 2024 and beyond.

*Estimated price improvement consists of estimated liquidity taker price improvement (defined as the difference between the winning price and the best disclosed dealer cover price) and estimated liquidity provider price improvement (defined as the difference between the winning price and then current CP+ bid or offer level, offer if the provider is buying, bid if provider is selling) at the time of the inquiry.

**Request-for-Market (RFM) is our unique block trading solution which allows for two-way price requests, with undisclosed direction, to a host of dealers within hard and specified local currency bond markets. Inquirers receive two-way prices from multiple dealers within seconds, which can be executed on either side of the trade. The direction of the transaction is only disclosed to the inquirer and winning counterparty.

***MarketAxess TraX aggregates both OTC (voice) and electronic (agnostic of MarketAxess platform) bond market activity executed by European and APAC market participants that is validated in near real-time through a post-trade regulatory reporting and trade confirmation engine. It publishes over 13,000 bonds daily from its coverage of over 77,000 transactions across APAC and European fixed income markets.