Fixed income voice trading “not dead yet”, say experts

Industry experts debated the future of voice trading in fixed income at the FIX Trading Community conference in London today.

The future of voice trading in fixed income markets remains relatively uncertain due to MiFID II, but the impending regulation does not necessarily mean the death of voice trading, according to a panel of experts.

A panel of fixed income experts at the FIX Trading Community conference in London this week debated the issue and concluded voice trading will still be utilised despite MiFID II ‘favouring’ electronic trading.

One panellist from a broker dealer told delegates voice trading does have a future.

“Voice trading in some instances can be more difficult to trade in fixed income, but it is an efficient method for large, illiquid, complex and bespoke trades,” he said.

He added inter-dealer brokers are able to package multiple trades and execute more efficiently through voice trading.

A regulatory expert from a technology company countered it’s not a secret that MiFID II supports electronic trading over voice trading in fixed income.

“Voice trading compliance is difficult and costly and those are added challenges. It won’t die necessarily, but electronic trading is more simple”.

An investment banker on the panel added she does not disagree with either view, but it is clear the divide between high- and low-touch trading will be starker post-MiFID II. 

A recent study found the number of investors trading fixed income electronically has continued to grow year-on-year, with 46% now stating they trade at least some of their volume electronically.

In 2011, just 18% of fixed income was traded electronically globally on a volume-weighted basis, but this surged to 37% in 2016.