As US credit trading becomes increasingly electronic, could ICE’s planned acquisition of MarketAxess further intensify competition among e-trading platforms? Trader TV speaks to Lucy Carter, reporter at The Desk and Global Trading, about her and editor of Traders Magazine, Terry Flanagan’s coverage of the battle for US credit e-trading market share, Tradeweb and Trumid’s efforts to gain ground through new protocols and innovations, and whether ICE’s announcement to acquire of MarketAxess could reshape the competitive landscape.
Find the original stories below:
The Desk, MarketAxess loses grip on US credit e-trading
Traders Magazine, Final Word: Rick McVey on MarketAxess’ Journey
Interview
Josephine Gallagher – Welcome to Trader TV. Today I’m joined by Lucy Carter, one of my colleagues and reporter at The Desk and Global Trading, to discuss the top story across Markets Media titles this week. Lucy, it’s lovely to have you back on.
Lucy Carter – It’s great to be here. Thanks, Jo.
Josephine Gallagher – So for this segment, we’re going to discuss your story, which looks at some of the major market structure shifts across fixed income trading flows, and most notably, the recent announcement that ICE is set to acquire MarketAxess. So, to give our audience a little bit of context, from your story, like what are some of the big changes that have been happening across US credit and the distribution of trading flow over the past few years?
Lucy Carter – So US credit has become increasingly electronically traded. According to Coalition Greenwich, at last count, which is last month’s statistics, 51% of investment-grade credit was e-traded, and about 35% of high-yield credit was e-traded. So around this, as e-trading has grown in popularity, various new protocols have emerged. Portfolio trading, for example, being one, and competition has really started to heat up between platforms.
Josephine Gallagher – Interesting stuff. And from your understanding, what are the reasons as to why Tradeweb and Trumid have been able to grow their footprint and pull some of that market share away from MarketAxess in recent years?
Lucy Carter – Yeah, so MarketAxess was well ahead of the competition way back in 2022. We’ve got some great visualizations in the story that really illustrate that. But as the market increased and electronic trading use increased, so did the competition. So Tradeweb has come out on top in recent years, especially due to the wide range of new protocols that they’ve launched. A trader I spoke to recently was really singing their praises, talking about how efficient their operations were. And while Tradeweb has been innovating, in another recent article on The Desk, MarketAxess founder Rick McVey talked about the company having lost some of its edge for innovative trading solutions in the 2020s. So that’s where that competition has been working out. And while Trumid isn’t in the dogfight at the top, it’s been gaining significant market share over the last few years. According to our estimates, its market share peaked in April at around 29%. They’ve also been a keen innovator, announcing various new initiatives over the last few years, including cross-protocol execution automation and experimenting a lot with AI in the last few years.
Josephine Gallagher – Understood. So on July 30, we saw that ICE announced that they would be acquiring market access. It’s worth noting that LSEG also owns a primary controlling share in Tradeweb. With that context in mind, what does this mean for US credit, for fixed income markets as a whole, and do you see this heating up competition among these providers?
Lucy Carter – So it was really interesting in the interview with McVey. He mentioned that conversations between Market Access and ICE have been going on since 2010. So 2010 is when MarketAxess was really at the top of its game. For ICE to acquire it now, when market share is tumbling, might look like a bit of a Hail Mary for MarketAxess at first glance, but in reality, these conversations have been going on for 16 years. In terms of the competitive environment, McVey also believes that growth momentum is likely to increase at MarketAxess once the deal closes. ICE certainly has a lot of money that they can pump into MarketAxess if they choose to do so, and with both MarketAxess and Tradeweb now backed by major exchanges, the competition can really heat up. However, it will be difficult to really measure what’s going on. MarketAxess has announced that they will no longer be publishing their monthly volume statistics. The latest figures we have are for June. They have stopped publishing from July onwards. So that will make it difficult to really get a picture of market share in US credit e-trading. Another interesting thing is that even though this is definitely a big announcement and big news, some of the traders I’ve spoken to really do not think that they will notice any difference with this acquisition. Pretty much as long as the data and the services are working, the switch up at the top just isn’t impactful for them.
Josephine Gallagher – Excellent! It’ll be really interesting to see how this shakes out, and we’ll be following your coverage. Now to learn more about your story about Terry’s coverage and the rest of the team’s. Where can they find your reporting?
Lucy Carter – Please do check out these stories on The Desk. We’ve been tracking the market share of US credit e-trading platforms for a long time, so you can really trace the story back quite a long way. We’ve also got some great data visualizations that really help to illustrate the story.
Josephine Gallagher – Excellent. Thank you again, Lucy, for joining us.
Lucy Carter – Thanks for having me, Jo.
Josephine Gallagher – I’d like to thank you for her insight, and of course, you are watching. This has been Top Story on Trader TV.
