The electronification of fixed-income markets has faced ongoing challenges over the years, particularly as existing fixed-income portfolio management systems (PMS) and order management systems (OMS) were designed for voice-based, broker-centric trading interactions. As buy-side trading desks electronify, these systems need to be redesigned to accommodate the data volumes and processing power associated with automated order entry, and ultimately, execution.
This is where AxeTrading, a London-based fixed-income execution management system (EMS) provider, comes to the fore; it wins this year’s best buy-side newcomer (vendor or product) award, thanks to its FI EMS platform that integrates with trading venues, execution protocols, as well as other specialized vendors.
Ivan Mihov, head of buy-side fixed-income EMS at AxeTrading, says buy-side fixed-income market participants have become aware of the need to adopt a full, electronic-trading compatible front-office technology stack to achieve operational efficiencies, improved execution and comply with reporting regulations. “We observed that buy-side market participants are increasingly demanding a highly functional EMS in the most electronified asset classes, as legacy OMSs do not function seamlessly under high-volume, low-latency trading conditions,” he says.
AxeTrading provides buy-side fixed-income traders with tools to effectively participate on all-to-all fixed-income trading venues. It will continue developing its buy-side workflows as well as expand on a strategy for providing broader, firm-wide solutions for its customers. This includes extending its connectivity to more than 25 trading venues and data providers. Mihov says the firm has begun implementing a smart order router that will further streamline the low-touch execution workflows and deeper integration with big data specialist firms for transaction cost analysis (TCA) solutions, and dealer performance reports. Mark Watters, chief compliance officer and co-founder of AxeTrading, says the FI EMS can be deployed in-house or in a private cloud. He adds that the firm will remain niche and specialized in one asset class: fixed-income electronic trading.
AxeTrading has made its suite of sell-side tools available to buy-side fixed-income traders. “Buy-side fixed-income traders will be able to utilize full dealer-grade pricing engine technology, enabling them to post liquidity on all-to-all trading venues connecting traditional investors and alternative liquidity providers/seekers,” he explains. “We see further applications of our pricing engine in the area of TCA and proving best execution; however, this is a new approach in the industry and adoption will take some time.”
AxeTrading recently entered a fixed-income technology partnership with the Stuttgart Exchange, the largest bond trading venue in Germany. It expects to open an office in North America early next year to better-serve its client base there.
The founder and CEO of Imperative Execution looks at how trade execution is changing and what that means for the buy side.Subscribe to Weekly Wrap emails