MarketAxess updates platform in light of new regulations
MarketAxess has added new
functionality to its electronic bond trading platform, which now lets users better manage market impact and source liquidity in the credit markets more
The fixed income platform
operator has introduced DealerAxess, which it claims is the first anonymous
request-for-quote trading protocol for the bond market.
DealerAxess lets broker
dealers electronically send bids and offers anonymously to each other, which
the firm said helps members manage their balance sheets more actively.
Following the introduction of Basel III, the latest set of guidelines for
ensuring banks are properly capitalised, brokers will have to hold
risk-weighted collateral against the assets they hold on their balance sheet,
making the provision of liquidity for some instruments more expensive.
Over 5,000 trades from 600
users have been executed through DealerAxess following its introduction to the
market two months ago.
MarketAxess has also improved
the market lists tool on its client-to-multi-dealer system, which lets
investors display orders anonymously to the company’s 1,000-strong member
base. The new functionality allows buy- and sell-side firms to create customised
alerts and watch-lists for specific instruments and notifies them when live
orders are in the system from other investors.
In June alone, more than 9,500
US high-grade orders worth over US$6 billion were made available through MarketAxess’
market lists, according to the platform’s own data.
“Incoming regulations such as
Basel III are placing greater pressure on dealer balance sheets and credit
market liquidity,” said Rick McVey, chairman and CEO, MarketAxess. “In response
to these significant shifts in market structure, we are expanding our suite of
electronic trading options. These new liquidity
solutions will provide greater flexibility for both dealer and investor clients
as they adjust to the new regulatory environment.”