MarketAxess and DirectBooks are moving their bond market partnership into its next phase, expanding the integration of DirectBooks’ new-issue data and workflow tools within the MarketAxess trading platform. Speaking at the Fixed Income Leaders’ Summit in Boston, MarketAxess CEO Chris Concannon and DirectBooks CEO Richard Kerschner said the collaboration will provide buy-side firms with greater workflow efficiency and flexibility while supporting the continued electronification of fixed-income markets. The next phase will include automating allocation booking into back-office systems, with further enhancements guided by client feedback.
Interview
Josephine Gallagher – Welcome to Trader TV. We’re here at the Fixed Income Leaders Summit in Boston, and we’re here to discuss the integration and partnership between DirectBooks and MarketAxess earlier this year for primary market efficiencies. And I’m here joined by Chris Concannon, CEO of MarketAxess, and Rich Kerschner, CEO of DirectBooks. Gentlemen, welcome.
Chris Concannon – Thanks for having us.
Rich Kerschner – Excited to be here.
Josephine Gallagher – Excellent. So, first off, your partnership was announced earlier this year. So, what strategic gap does this address?
Chris Concannon – Well, it’s actually quite exciting to partner with DirectBooks, because what they bring to the market is an organized way for the new issue process to work seamlessly. What we’ve been able to do in our partnership is redistribute that service out to a broader list of clients and make it seamlessly integrated with their current credit trading. Think secondary is meeting primary markets for the first time, so it’s very exciting for us, but it’s very exciting for our clients.
Rich Kerschner – And we’re excited to partner with MarketAxess. The DirectBooks mission is really to evolve the global financing markets. It’s in our tagline, and we do that by providing actionable, structured data to the buy side, and expanding the ways in which the buy side can access that data is really important to us, and so this is a great evolution for our mission, and it’s great to partner with such an engaged, active player in the market like MarketAxess.
Josephine Gallagher – Okay, so give me a full understanding of what material impact this will actually have on the investor itself.
Rich Kerschner – Sure. Well, the investor community has a wide range of workflows, and this expands choice for them. Right, we have a number of ways already in which someone can access DirectBooks, and this now expands that and really helps us to meet the buy side where they work within their own workflow and gives them more choice. And I think they’re very excited about that. We’ve talked to several of them at the conference here, and they’re just very excited about having another, another choice. They already use MarketAxess a lot, so this, this allows them to stay within the MarketAxess ecosystem and access DirectBooks.
Chris Concannon – So one of the challenges for the buy side right now with electronification expanding is desktop space, so they are fully challenged to find room on their desktop, and this allows us to bring the DirectBook services right to the desktop of the buy side, and that makes their workflow that much more seamless.
Josephine Gallagher – Okay, how do partnerships like this actually reflect the broader evolution of fixed-income market structure?
Chris Concannon – Well, what you’re seeing is the buy side is looking for tools to engage the market, whether it’s a large block, a portfolio trade, or a new issue. They want to use electronic tools to evaluate and then execute, and this is all part of that growth of electronification of the market.
Rich Kerschner – Yeah, I think that’s right. It’s just a trend that continues; electronification, automation again, actionable structured data that just helps to eliminate a lot of the messiness in the primary issuance workflow. It’s something that we’ve been working on for years, and now this is the next step for us.
Josephine Gallagher – And speaking of next steps, what, what is the next phase of this kind of like evolution for primary markets and this level of collaboration?
Chris Concannon – So the next phase is really one of the challenges for the buy side is when they get that allocation from a new issue is booking that into their back office systems, and so we’ll help facilitate that booking process, and that’s coming this summer, so we’re excited about just completing this partnership and completing how new issues are integrated into the secondary market workflow.
Rich Kerschner – Yep, this is all in the beginning for us. We’re going to take client feedback and just continue to build on this. This is only step one.
Josephine Gallagher – Step one, that is a good note to end on. Thank you very much to Rich and to Chris for their time. And thank you for watching. This has been Trader TV at FILS in Boston.
