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Fixed Income execution: how is the market structure changing

Fixed Income execution: how is the market structure changing - Downloads

Fixed Income execution: how is the market structure changing? And why LIST is the right technology partner?

It is a matter of fact that Fixed Income markets are going through a significant change compared to the traditional market making model based on broker/dealers holding large inventories and providing voice quotes to their network of clients.

Because of the Basel III prudential capital adequacy and leverage rules combined with decreasing margins, broker/dealers are lowering their market-making capacity and are focusing on less capital-intensive activities. With the consequence that liquidity sourcing is becoming more complex in a market increasingly fragmented across sell-side and buy-side inventories and a growing number of electronic trading venues and information networks.

At the same time, MiFID II is introducing strong requirements on Fixed Income trading with the objective of increased market transparency, efficiency and safety.
Pre- and post-trade transparency together with well-defined thresholds and consequent requirements on Systematic Internalization, imply an increasing level of automation in order to run an efficient, cost-effective and compliant Fixed Income trading business.

LIST has been delivering technology to support Fixed Income trading for 25 years now.
We started in the early nineties by joining the development of the first major Fixed Income electronic marketplace. A few years later LIST was pioneer in releasing an auto-quoting system for market makers on sovereign debt electronic markets. And in 2007, with the introduction of MiFID, LIST released a MiFID compliant brokerage platform (FastTrade MBP).
Because of local regulators extending the MiFID assets scope to include non-equity instruments, FastTrade MBP provides multi-asset Smart Order Routing, dynamic Best Execution, Systematic Internalization and Pre-trade Transparency for equities and bonds.

Leveraging on such a vast experience in technology for Fixed Income, LIST today delivers an advanced Execution Management System (EMS) (please find attached PDF) for Fixed Income desks that supports the increasing need for automation required by the new market structure.
Aimed at both the sell- and the buy-side desks, the system offers a consolidated view from different sources of prices and inventories together with seamless access to multiple trading destinations to manage orders across them.
Combined with FastTrade Matching Engine (FTX), the platform can be used to automate the OTC trading process by providing a more controlled and auditable environment, ready to fulfill the MiFID II requirements on Record Keeping, Pre- and Post-trade transparency and Best Execution (see also LIST LookOut for MiFID II).  

Read more about FastTrade EMS for Fixed Income in the attached Product Sheet .