MTS and FlexTrade have expanded their partnership through their API integration to enable buy-side firms to access the full functionality of MTS BondVision’s RFQ workflow directly through FlexTrade’s execution management system (EMS). Speaking to Trader TV, Stefano Dallavalle, fixed income and digital assets product manager at FlexTrade, and Paolo Fraccaro, head of strategic projects at MTS, say the integration reflects growing demand for API-first connectivity, allowing traders to consolidate execution workflows, liquidity and market data within a single platform. They added that the move should support greater automation, smarter order routing and lay the foundations for AI-driven trading workflows in fixed income markets
Interview
Josephine Gallagher – Welcome to Trader TV, where we explore the trends shaping global markets and institutional trading. Fixed income trading is seeing a greater focus on direct connectivity as dealers and buy-sides seek more efficient access to liquidity, data, and execution tools. But what role are API integrations between venues and EMS platforms playing in driving electronification of bond markets, in supporting automation and reshaping trader workflows? Here to discuss is Paolo Fraccaro, head of strategic projects at MTS and Stefano Dallavalle, fixed Income and digital assets product manager at FlexTrade. Stefano, Paolo, welcome to the show.
Stefano Dallavalle – Hi, Jo. Thank you for having us.
Paolo Fraccaro – Thank you for having us, Jo.
Josephine Gallagher – So to start off with, so FlexTrade has actually partnered with a variety of different trading venues over the years via their UIs. So, what does this API integration actually mean for dealers and buy-sides in terms of their workflows and tech setups?
Stefano Dallavalle – Sure. First of all, we’re thrilled to announce our partnership with MTS today. It’s a great example of a deeply integrated RFQ, you know, which we have with other venues already. And it’s adding an additional kind of liquidity pool for our customers, which is great to see. So FlexTrade’s approach is always client-driven. So, we’re very happy to integrate to any level of connectivity that our partners come to us with. And what we’re seeing today is a very good example of a deeply integrated RFQ. whereby MTS are offering all the capabilities of their front end via the API, which is very reassuring for our clients in the sense that they know that when they’re interacting with MTS via FlexTrade’s front end, they’re getting the full experience of what they would get from using MTS’ front end. So, it’s important to note that we do have deep integrations with other major venues, and adding MTS to that pool is going to be really additive for our clients.
Josephine Gallagher – Interesting. And Paolo, turning to you, what does this integration actually mean for clients downstream?
Paolo Fraccaro – Yes, at MTS Market, likewise, we are very pleased to partner with FlexTrade on this initiative. MTS BondVision not only supports, but also, in fact, incentivizes EMS integration and deep RFQ trading integration, whereby Requests for Quotes are not only staged, but also negotiated and executed using our full trading API.
Josephine Gallagher – Okay. So, historically, venues have been somewhat reluctant to embed in EMS’ before or have their data aggregated. So, what is the lead drivers behind this kind of like push to API first integration and is it reflectant of a wider move or, you know, change in relationships between EMS’ and venues?
Paolo Fraccaro – Yes, it is fair to say that historically trading venues have been reluctant to be aggregated. However, at MTS we incentivize being aggregated. We do not need necessarily to maintain ownership of the order or to control valuable trader real estate. We are very comfortable with EMS managing algos and managing orders. We will focus on providing low latency API driven and cost-effective execution venue.
Stefano Dallavalle – Yeah, I would say over the last couple of years, the relationship between the EMS’ and venues has been very good and very strong. And more and more of those capabilities are being enabled by the APIs. And what we’ve seen today with MTS is that everything is available from those APIs, from the get-go, which is great to see. But when it comes to an API-first approach, it’s really all about efficiency. If we think about where this is going and where this is heading, we’re actually getting more of our sophisticated customers coming to us right now and saying, actually, even from the EMS level, they’d like to see all their execution workflows, all the data that they have access to, all digested to them in a single API, even from their EMS level, right? So, that’s an interesting dynamic in the sense that right now, today, it’s all about integrating the venues and data into a consolidated screen from an EMS perspective. And that’s what we’re doing and that’s where we’re focused. But with the rise of agentic AI, what we’re really seeing is actually there could be a world in the future where there’s two traders on the desk, both taking a rich API with all the execution and data workflows and actually have two very different views that suit their individual workflows because being able to spin up UIs these days is going to become very easy for the buy-sides, for hedge funds, for anyone in that sense. So, there’s a very interesting dynamic developing in that sense, but we’re not there yet. We’re very much at the point where, like I said, our clients are looking at the EMS to bring all that functionality and capability into that single front end. And like I mentioned, with the integration with MTS, they’re allowing us to do that and offer their functionality through our EMS.
Josephine Gallagher – Okay, really interesting. And you mentioned agentic AI and a few different types of variabilities there in terms of technologies. So, taking that a little bit step further, like what kind of role ultimately will these types of integrations or can these integrations have on the further electronification of fixed income, on automation and the inclusion of AI on the desk?
Stefano Dallavalle – So, when it comes to further electronification, it’s a really important point and we are seeing a growth in the flows and orders moving away from staging into an EMS and then passing onto the venues and staging it that way to the flows that we’re talking about today where courts are coming back into the EMS and you’re seeing those quotes and you’re managing all your orders and executions from the unified front end. But what that really, what that really does enable is it enables us to answer the kind of the two main questions why you would pursue an EMS in fixed income, right? One is where should I be trading? And the other one is how should I be trading? Right? And when it comes to the where I should be trading, you know, as we mentioned a few times today, having the deeply integrated RFQs gives clients the optionality to very quickly choose their venue of execution without needing to take up lots of real estate on their front ends for different venue UIs, for example. But then once you have that deeply integrated, it allows the EMS to layer on top of the smart order routing piece and the automation rules. So, another pain point that we hear is that managing multiple rule sets at different venues is somewhat time consuming, right? Whereas an EMS, it allows you to put that automation rule set abstracted a level within the EMS. So, you’re managing one automation rule set, whether it be eligibility and execution criteria that governs regardless of the platform that you’re executing against. So, this is an interesting development and it’s where our clients are heading from an automation and smart order written perspective. And then the second point is, how do I execute? There’s more data available and a higher frequency of data. And if the buy-side aren’t able to digest that data easily, then they’re going to be missing out on trading signals at the point of decision for those individual traders. So, you know, I know we’re talking about execution workflows today, but it’s also important that our API partners on the data side are also giving us that rich APIs and the data that we need to be able to digest analytics for our clients and surface those at the point of execution for them.
Josephine Gallagher – Interesting. Paolo?
Paolo Fraccaro – Yes, and look, I mean, we do agree that RFQ will remain the predominant protocol, especially in the institutional market. However, we also believe that leveraging low-latency infrastructure will enable order management in a more meaningful way that perhaps can open opportunities for new protocol to arise. Some key drivers that we see in the market is, first of all, API first approach. Even though we do provide a front end to our clients, we do not have UI only features and therefore all of our features are exposed via the API and certainly via our client full trading API. The second point is low-latency dealer streaming. At MTS we can leverage our inter-dealer low-latency infrastructure which in turn enables order management to be sent to price level that are not stale price levels, and this is one of the common pain points that we see in the industry out there. Best-in-class market data certainly via our liquidity providers, our Composite Price but also through our unique MTS inter-dealer order book, which is available as market data to our clients. And, last but not least, the fourth point is most competitive pricing structure. We do not charge our clients either directly or by means of a mark-up, and we provide our dealers with a competitive and transparent fee structure, which in turn enables them to provide price differentiation and therefore let their clients achieve even better execution and cost of trading.
Josephine Gallagher – Understood. So, looking ahead, like how do you see this kind of partnership developing further over the next 12 to 18 months?
Paolo Fraccaro – At MTS, we foresee this partnership with FlexTrade to progress. There are a couple of things on the radar that we certainly would like to partner with them with. The first one is our Firm Streams. These are our low-latency dealer streams, effectively a private order book, which allows dealers to stream to their clients at executable levels, which can then be addressed by means of an algo or order management without incurring stale pricing, as we discussed. The second one is we are launching a new asset class in BV (BondVision Swaps protocol. This would go live in the, and certainly we would look at FlexTrade to implement this in their suite of instruments available on the MTS market.
Stefano Dallavalle – Yeah, thank you, Paolo. Yeah, just to add from a FlexTrade perspective, we love to be first to market with innovation across equities, FX, derivatives, and also fixed income. So, we’re looking forward to strengthening the partnership and offering our clients the protocols and the optionality within the fixed income space around new products that MTS is offering. So yeah, looking forward to continuing that into the future.
Josephine Gallagher – Excellent. Brilliant. Thank you, Stefano. Thank you, Paolo, very much for joining us.
Paolo Fraccaro – Thank you for having us, Jo.
Stefano Dallavalle – Thank you.
Josephine Gallagher – I’d like to thank Stefano and Paolo for their insight and of course you for watching. This has been Trader TV.
