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.
Bryan Cross, who heads UBS Asset Management's QED group, joins to discuss alternative data and AI.Subscribe to Weekly Wrap emails
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