A year after launching MTS’ Markets BondVision partnership, Angelo Proni, CEO of MTS, says its market share has grown by nearly 50%.
The partnership program is designed to offer dealers a voice in strategic commercial decisions of BondVision and incentivise greater competition among liquidity providers and diverse protocol selection in credit, rates, and repo.
In this episode, Nick Sollom, MTS’s head of business development and strategy, looks at the challenges of developing the network underpinning the platform and creating a minimum viable solution, which can also support the growing demand for various liquidity options, including portfolio trading and bilateral trading.
Interview
Josephine Gallagher – It’s a year on since the launch of BondVision’s partnership. What was the impetus for that, and how far along has that come?
Angelo Proni – A couple of years ago, it became apparent to us that the dealer community was becoming increasingly sensitive to their cost base, cost of trading, and they needed someone to step in to help introduce more competition into our industry. So we put together a framework whereby the top 10 dealers in BondVision, in exchange for their support of the platform in terms of market share, in terms of connectivity of credit desks to the platform itself, they would receive in return, a seat at the table when it comes to important strategic decisions, including the commercial positioning, the use of data, the introduction of data products, or indeed the development of the product pipeline. Since the launch of the partnership, we’ve made great strides and are achieving what we set out to achieve, including a growth of our market share by close to 50%. We are now around 10 and above percent in European government bond trading. We went from four dealers connected with their credit desks to 15 dealers connected in less than a year, and we are expecting more to come. We have also introduced a whole host of new functionality to support those efforts and support their efforts in supporting us to the benefits of course, of the buy side.
Josephine Gallagher – One of the biggest challenges of trying to get something like this off the ground is critical mass and trying to get dealers on board as well as buy sides on board. How far along are you with that?
Nick Sollom – Yes, absolutely. So rates, we’ve been very present for nearly 25 years, so we have very much the critical mass in rates. On the buy side, again, we have that critical mass across hedge funds and real money. For credit when you’re launching a new project, of course, that’s a challenge. You know, we need to be up there. We need to be a top priority. Some dealers will want us to show evidence that volumes are coming through. So, you know, that’s been work in progress. But as Angelo said, you know, we had three to four kind of legacy streams at the start of this a year ago, and already up to 15, which, when you include algo and voice, is now 19 streams and growing. You know, there’s a big tale of dealers in credit, far more so than rates. So, you know, we’ve got more work to do.
Josephine Gallagher – And then also, a big topic these days in fixed income is PT trading, of course. What role will portfolio trading play in the continued build-out of BondVision?
Angelo Proni – For us, portfolio trading is, on the one hand, a necessary ingredient because of its growing importance in that space. But also given the significant commercial benefits that we can offer, especially in credit trading. We see that as an accelerator of our ambitions and of the take-up of bond vision for credit trading. We have also introduced other protocols, processes, and innovations that are unique to BondVision, such as the targeted firm streams, which like a centralized, direct connectivity solution we can offer.
Nick Sollom – Indeed, you know, as much as portfolio trading is a hot topic, so is bilateral streams and what we’ve been able to do is to leverage our expert trading technology that we have in our inter-determined markets where we have super low latency, and bring that to our DTC platform for an evolution of click to trade. That means that the round-trip times are second to none. It’s a very exciting protocol. It’s getting a lot of traction with real money and hedge funds and, of course, the dealers. It’s a cost-effective way for them to achieve these bilateral streams, but also one where they have a voice. They can see how we’re building this, and they get some control over their data that they wouldn’t necessarily have if they were off venue with bilateral streams to their clients.
Catch Trader TV shows each week:
To watch Trader TV This Week shows go to – Video
Or make sure to follow us on LinkedIn – Trader TV’s LinkedIn
Available as a podcast – Link
