In 2002 the US market saw the introduction of the Trade Reporting and Compliance Engine (TRACE), a trade data vehicle creating transparency in the fixed-income markets and improving confidence in bond trading. The European market, however, has lacked a system like the TRACE for price discovery. But the winner of the Best Real-Time Market Data Initiative, MarketAxess, intends to improve liquidity and confidence in bond pricing in Europe too, making waves with Axess All, Europe’s first intraday trade tape for fixed-income markets.
Axess All covers all major bond sectors, including government bonds, corporate bonds, covered bonds and emerging market debt, and is based on data from MarketAxess subsidiary, Trax, which processes approximately 65 percent of all European fixed-income transactions through its post-trade offering. The data in Axess All is sourced from more than 30,000 bond transactions processed daily, and the platform provides buy- and sell-side firms with pricing and aggregated volume data on 2,500 bonds per day in near real time.
Judges praised MarketAxess for “a much-needed effort to support European fixed-income traders and investors”, suggesting “this is something that other vendors should have seen the opportunity to perform years ago, and something that European regulators should have mandated as a prerequisite to new regulations”.
The looming Markets in Financial Instruments Directive II (MiFID II) deadline is, however, going to result in significant changes in this area, and Joe Grochan, global head of data solutions at MarketAxess, says knowing that MiFID II was on the way—coupled with the TRACE’s success in the US fixed-income market—was a key reason for MarketAxess to launch Axess All. “With MiFID II coming out, our intention is to combine the current data with MiFID II data,” says Grochan, explaining that approved publication arrangements will be pushing out bond pricing data to follow liquidity rules under MiFID II.
In addition, MarketAxess will continue to review if there are additional datasets the market would want to see in Axess All, with one potential addition being the direction of the trade, for example.
So far, feedback has affirmed that the product already adds value to the industry. “Both the institutional side and the dealer community feel that [Axess All] is tremendous value to the market and has been needed for some time,” says Grochan. This win also underlines that Axess All is on the way to achieving its ultimate goal of creating increased transparency and confidence in pricing, thereby fueling growth of secondary trading and improving liquidity in bond markets.
Anthony and James examine some of the key themes that will be on display at the inaugural North American Innovation Summit.Subscribe to Weekly Wrap emails