Plate tectonics...
OK… we know the fixed income space is really changing shape when we read the news from MarketAxess…
~~ “MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for U.S. and European high-grade corporate bonds, emerging markets bonds and other types of fixed-income securities, today announced two new dealer initiatives in response to institutional investor demand.
The Company has added 12 regional dealers to its market-making community, primarily to respond to investors’ high-grade corporate bond inquiries in smaller trade sizes. MarketAxess has also added nine diversity dealers, who will now be able to compete for institutional investors’ fixed-income order flow on the MarketAxess trading platform…” ~~
Years ago I asked Rick McVey if they had any plans to provide a liquidity venue for odd-lots… he gave me such a polite but bewildered look… never did institutional and odd-lot trading meet… it was a stratified market… connectivity, mark-ups, interfaces, sales forces, inventory, market data… all separate… the big boy stuff here and the retail stuff over there…
Now my guess on the MKTX announcement today is that they will be the crossing network for all the auction rate securities that have to come off the IB’s balance sheets… which is fine… although the NYSE Bonds platform would have been the very best spot… we would have had a lot more transparency on the NYSE platform… but it serves the dealers better to stay a little opaque…
I think this buttresses my recent arguments on the need to create more linkages and transparency between the fixed income “trading platforms”…
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