The push for faster quote speeds and streamlined market connectivity is becoming critical to the next phase of fixed income trading says TransFICC founder Steve Toland. Speaking to Trader TV at the Fixed Income Leaders’ Summit in Boston, Toland says banks are handling tens of thousands of quotes per second and increasingly need technology to filter duplicate messages and optimise throughput without overwhelming trading venues. He also shares his views on how the demand for automated trading is accelerating, particularly in US credit, as firms seek greater efficiency and scalability, and unpacks the firm’s next set of priorities for the remainder of 2026.
Interview
Josephine Gallagher – Welcome to Trader TV. We’re here at the Fixed Income Leaders’ Summit in Boston, and I’m joined by Steve Toland, founder of TransFICC. Steve, great to see you.
Steve Toland – Hi, Jo. Glad to be here.
Josephine Gallagher – So the last time we spoke, we were at FILS Europe, and we spoke about how there are major advancements across fixed income in terms of improvements of quote speed between trading firms and venues. So how far along has that technology come from the last six to eight months?
Steve Toland – It’s a constant process. I mean, so we’ve got our bank customers basically want to quote faster and they want to quote to more customers. So on our side, that involves actually building up more data centre coverage, so we have data centres now in that we built in the last year in Tokyo and Hong Kong and Bergamo in Italy, etc. And then a lot of the work that we’re sort of focused on is really just helping our bank customers manage their quote throughput. People are sending us 8000, 10,000, 40,000 quotes a second for one venue because they have lots of different signals going off on their side. You’ll overwhelm the venue if you send that that that many quotes. So a lot of what we do is to basically coalesce or cut out duplicate quotes, etc. So basically, the quote throughput is at a capacity which can be handled by the venues. So that’s quite a lot of work that we do.
Josephine Gallagher – Okay. Also, a lot, like you said, a lot of the heavy lifting is around standardization and normalization of market data and APIs. So, like the next step of that would be then like automation. So, how much appetite are you seeing, and where are you seeing that appetite for auto trading?
Steve Toland – So, we’re seeing most appetite in U.S. credit markets. That’s because of these, you know, because the nature of the market being all to all. People are just getting overwhelmed with the number of quotes they receive. So banks typically receiving 20,000, 30,000 or 40,000 quote requests per day. So they need to automate. We’ve invested in a product called Credit Agent. What Credit Agent does is basically outsources some of that trade negotiation to TransFICC. It simplifies the workflow for the customer. The customer basically receives a request from us saying, you know, instrument name, customer name, venue. They can stream as a price back, we will then go and negotiate that that RFQ request (request for quote) on the trading venue for them. So it’s basically, if you like, think of it as automation in a box, or that’s what the agent is doing.
Josephine Gallagher – Okay, really, really interesting. You also have a partnership with Citadel, and you are working on an outsourced liquidity solution, how far along is that project, and what else is on the cards?
Steve Toland – Its taking up quite a lot of our time. So since we last spoke, the first customer is now live for interest rate swaps. We’re basically supporting dollar swaps and all the workflows associated with that, you know, RFMs (request to see two-sided markets), compressions, etc. The next customers sign up for US credit and US treasuries. Those customers who signed up for that are based in Europe, so there’s a lot of infrastructure that we’re sort of building out, both in terms of how we basically support the workflows for the intermediary bank, and then obviously everything’s got to be you know negotiated back to back with Citadel. So the problem comes back to what we talked about before. There is a lot of workflows which you need to support, and so we need to support all the venues and all the workflows, and that’s what we’re in progress with.
Josephine Gallagher – Okay, so big plans for the rest of the year. Where do you see that progressing?
Steve Toland – Plans for the rest of the year is just continuing to build out trading venues. So we’ve done more work on M unis (Municipals), we’ve done more work on mortgages, we’ve done credit default swaps on Bloomberg and TradeWeb earlier this year. We’re about to. We’ve just completed LTX, a new trading venue in the credit space. Next up is Real Q, which is the new name for Liquidnet. So we’re just about to kick off that work. And obviously associated with that is we have a front- end trading application as well. So building out that out with customers and basically trying to fill in the gaps as much as possible across all the different sub-asset classes in fixed income.
Josephine Gallagher – Okay, excellent. I’d like to thank Steve for his insight and, of course, for watching this has bee n Trader TV at FILS .
