MarketAxess Holdings Inc. (‘MarketAxess’) operates as an electronic trading platform delivering greater trading efficiency, a diversified pool of liquidity and significant cost savings to its clients across the global fixed-income markets.
Approximately 2,100 institutional investor and broker-dealer companies use the company's patented trading technology to efficiently trade U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, Eurobonds, municipal bonds, U.S. government bonds, an...
MarketAxess Holdings Inc. (‘MarketAxess’) operates as an electronic trading platform delivering greater trading efficiency, a diversified pool of liquidity and significant cost savings to its clients across the global fixed-income markets.
Approximately 2,100 institutional investor and broker-dealer companies use the company's patented trading technology to efficiently trade U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, Eurobonds, municipal bonds, U.S. government bonds, and other fixed-income securities. The company leverages its diverse set of trading protocols, automated and algorithmic trading solutions, intelligent data and index products, and a range of post-trade services to provide an end-to-end trading solution to its robust network of platform participants. The company's all-to-all Open Trading marketplace (‘Open Trading’) is regarded as the preferred all-to-all trading solution in the global credit markets, creating a liquidity pool for a broad range of credit market participants.
The company provides automated and algorithmic trading solutions. In 2024, it continued the roll-out of MarketAxess X-Pro (‘X-Pro’), its newest trading platform, to more seamlessly combine its trading protocols with its proprietary data and pre-trade analytics. The company's artificial intelligence (‘AI’)-driven technology, such as CP+, its real-time pricing engine, is a critical data input and pricing source for multiple MarketAxess trading protocols and solutions, including Auto-X and portfolio trading. In 2024, it leveraged its recent acquisition of Pragma LLC and Pragma Financial Systems LLC (collectively, ‘Pragma’), a quantitative trading technology provider specializing in algorithmic and analytical trading services, to accelerate its development of AI-driven execution algorithms across all of its key product areas.
The company also provides a number of integrated and actionable data offerings, including CP+ and Axess All, to assist clients with real-time pricing and trading decisions, and transaction cost analysis. It offers a range of post-trade services, including straight-through processing, post-trade matching, trade publication, regulatory transaction reporting, and market and reference data across fixed-income and other products. The company offers Open Trading for most of its products in order to capitalize on this addressable market by increasing the number of potential trading counterparties and providing its clients with a menu of solutions at each step in the trading process.
Strategy
The key elements of the company's strategy are to increase penetration in fixed-income markets; continue expansion into new product areas; expand trading protocols and leverage the open trading network; continue to invest in and grow its business through geographic diversification; expand data and analytical tools; and pursue select acquisitions and strategic alliances.
The Fixed-Income Products Available on the Company's Platforms
The company operates in a large and growing market, which consists of credit and rates fixed-income products. Its proprietary technology allows institutional investor and broker-dealer clients to access this market by trading both credit and rates products on its platforms.
The company's credit products consist of the following areas:
The U.S. high-grade bonds, which refers to U.S. corporate debt rated BBB- or better by Standard & Poor’s (‘S&P’) or Baa3 or better by Moody’s Investor Service (‘Moody’s’);
The U.S. high-yield bonds, which refers to U.S. corporate debt rated lower than BBB- by S&P or Baa3 by Moody’s;
Emerging market debt, which it defines as U.S. dollar, Euro, or local currency-denominated bonds issued by sovereign entities or corporations domiciled in a developing country, typically located in Latin America, Asia, or Central and Eastern Europe;
Eurobonds, which it defines generally to consist of bonds intended to be distributed to European investors, primarily bonds issued by European corporations, excluding bonds that are issued by corporations domiciled in an emerging markets country, and excluding most government bonds that trade in Europe;
Municipal bonds, which are debt securities issued by states, cities, counties, and other governmental entities in the U.S. to fund day-to-day obligations and to finance a wide variety of public projects, such as highways or water systems, and typically offer interest payments that are exempt from federal income taxation; and
Other credit products, including leveraged loans, which are senior secured commercial facilities provided by a syndicate of lenders for below investment-grade companies (credit rating below BBB- or Baa3).
The company's rates products consist of the following areas:
The U.S. government bonds, which are government instruments issued by the U.S. Department of the Treasury;
Agency bonds, which are securities issued by a federal government department or by a government-sponsored enterprise, including the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation; and
Other government bonds, including European government bonds, which are bonds issued by governments of countries in the European Union (‘E.U.’) and non-E.U. European countries, as well as bonds issued by other supranational organizations, agencies, and sovereigns, including the European Commission.
The six largest product areas available on the company's platform for the year ended December 31, 2024, were U.S. high-grade, U.S. high-yield, emerging market debt, Eurobonds, municipal bonds, and U.S. government bonds.
The company plans to leverage its investments in X-Pro and automation, as well as its Open Trading functionality, to capture additional market share across its core fixed-income markets while increasing its footprint in newer product areas.
End-to-End Trading Solutions
A key principle of the company's strategy is connecting the most robust network of participants through its end-to-end trading solutions. The diverse trading protocols available on its platforms are complemented by a range of pre-trade intelligent data products, post-trade services, and technology services. In 2024, 87.1% of its revenues were derived from commissions for transactions executed on its platforms, 6.2% of its revenues were derived from its data products, 5.2% of its revenues were derived from its post-trade services, and 1.5% of its revenues were derived from its technology services.
Trade Execution Solutions
Through the company’s platforms, the company's broker-dealer and institutional investor clients have access to a wide range of trading protocols to assist them with achieving best execution. In addition, it is innovating and modernizing its platforms by integrating a suite of automated and algorithmic trading solutions, as well as order and execution workflow solutions, to help clients manage risks, establish guardrails, streamline processes, remain compliant, and improve execution quality.
In 2024, the company continued the roll-out of X-Pro to its client base. It plans to continue to expand the use of X-Pro by its broker-dealer and institutional investor clients for a variety of workflows, including automated trading and portfolio transactions.
Disclosed Request for Quote
The company's traditional disclosed RFQ protocol allows its institutional investor clients to simultaneously request competing, executable bids or offers from its dealer clients and execute trades with the dealer of their choice from among those that choose to respond. The company is not a counterparty to any of the disclosed RFQ trades that are executed on its platforms between institutional investor clients and dealer clients; rather, its platforms enable them to meet, agree on a price, and then execute and settle the transaction directly with each other. The disclosed RFQ protocol is available in all its product areas. In 2024, over 60.0% of all credit volume on the MarketAxess platform was executed via a form of its disclosed RFQ protocol.
Open Trading
The company offers Open Trading, its all-to-all trading solution, for most of its products and trading protocols. Open Trading complements its disclosed RFQ protocol by increasing the number of potential counterparties through allowing all participants to interact anonymously in an all-to-all trading environment of approximately 1,800 potential counterparties. Open Trading participants are able to maintain their anonymity from trade initiation all the way through to settlement. Unlike its disclosed RFQ protocol, in connection with its Open Trading protocols, the company executes bond transactions between and among institutional investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in matching back-to-back trades.
The company offers Open Trading protocols for most of its products, including U.S. high-grade bonds, U.S. high-yield bonds, Eurobonds, certain emerging market debt, municipal bonds, U.S. government bonds, agency bonds, and other government bonds. Following the introduction of Open Trading on its platforms in 2013, it has continued to build upon the technology to develop more features and services. Its Open Trading protocols include Open Trading RFQ, Dealer RFQ, Mid-X sessions, Live Markets, and its Diversity Dealer Initiative. In 2024, approximately 35.0% of all eligible credit volume on the MarketAxess platform was executed via Open Trading protocols.
Automated and Algorithmic Trading Solutions
Some of the company's fixed-income automation tools include Auto-X RFQ, Auto-X Responder, Adaptive Auto-X, and U.S. Treasury Hedging.
In addition, the company supports a large and growing base of dealer market-making algorithms. Dealer market-making algorithms enhance the liquidity available on its platforms by increasing the number of competitive responses to each RFQ, thereby increasing a participant’s likelihood of completing a trade at the best price. In 2024, there were 40.9 million dealer algorithmic responses on its platforms. In 2024, there were 245 client companies using its automated and algorithmic trading solutions.
The company had acquired Pragma, expanding its automated and algorithmic trading solutions offerings to include equities and foreign exchange for institutional clients, banks, broker-dealers, and securities exchanges. The Pragma360 platform provides a customized software-as-a-service algorithmic trading solution with hosted and dedicated trading environments for clients, which is integrated with Panorama, Pragma’s advanced, web-based algorithm management system.
Order and Execution Workflow Solutions
The company provides order and execution workflow solutions designed to meet the specific needs of its institutional investor and broker-dealer clients. For example, LiquidityBridge is its execution management system offered to dealers that allows users to manage and facilitate the complex liquidity flows across multiple trading platforms, including the MarketAxess system. LiquidityBridge brings together real-time comparison and execution of bond prices across multiple sectors, allowing users to rapidly react to trading opportunities. In addition, Axess IQ is its order and execution workflow solution designed to meet the needs of the wealth management and private banking community by improving liquidity discovery, execution efficiency, and alpha generation for companies with large numbers of individual client orders.
Integrated and Actionable Data Products
Timely and accurate data is particularly important in the fixed-income markets where real-time data has traditionally been scarce and transparency has been limited. Traders are increasingly using the company's data solutions for pre-trade analytics, automated execution, transaction cost analysis, and liquidity metrics. Its data products are based on the trading activity, completed transactions, and trade reporting services that occur on or through its platforms, as well as public sources, such as TRACE.
The company's integrated and actionable data products include:
Liquidity solutions for pre-trade analysis, including Relative Liquidity Score, which provides a defined measurement of the current liquidity for individual bonds and highlights the relative potential ease; counterparty selection tools, such as an AI-driven dealer selection tool, which predicts which counterparties are most likely to win a trade; and per-trade expectations of dealer responses.
Real-time pricing solutions, such as CP+, a pricing algorithm that generates near real-time pricing for U.S. high-grade, U.S. high-yield, Eurobonds, emerging markets, European government bonds, and municipal bonds, based on a variety of data inputs, including feeds from its trading platforms, its post-trade services, and TRACE; and Axess All, the first intra-day trade tape for the European fixed-income market, that is sourced from the thousands of daily bond transactions processed by its post-trade services business and includes aggregated volume and pricing for the most actively traded European fixed-income instruments.
Market data solutions that offer additional price discovery and liquidity analysis, including end-of-day and intraday volume and pricing files for TRACE and non-TRACE securities.
The company also seeks to develop new strategic data partnerships to increase the distribution of its data products. For example, it announced a strategic collaboration with MSCI Inc. to create co-branded fixed-income indices incorporating its liquidity data. Today, such indices include the MSCI MarketAxess EUR HY Tradable Corporate Bond Index, MSCI MarketAxess EUR IG Tradable Corporate Bond Index, MSCI MarketAxess USD HY Tradable Corporate Bond Index, and MSCI MarketAxess USD IG Tradable Corporate Bond Index. Finally, in 2024, it partnered with S&P Global Market Intelligence to integrate S&P Global Bond Reference Data into its suite of data products and include CP+ real-time pricing in S&P Global’s Evaluated Bond Pricing.
Post-Trade Services
The company provides post-trade matching and regulatory reporting services for E.U. and U.K. investment companies and market and reference data across a range of fixed-income products. In response to the requirements of the E.U. Markets in Financial Instruments Directive (‘MiFID II’) and the U.K. equivalent, it has developed a comprehensive suite of value-add solutions, including SensAI, pre-trade transparency services, systematic internaliser (‘SI’) determination and monitoring, best execution reporting, commodity position reporting, data quality analysis, and peer benchmarking.
In the E.U. and the U.K., all companies regulated as ‘investment companies’ under MiFID II are required to submit complete and accurate details of qualifying transactions to their national regulator no later than the close of the working day following the date of the transaction. This process is known as transaction reporting. The company’s multi-asset class ARM reporting solution allows its clients to report to 25 different European regulators. It has also collaborated with Equilend on a full front-to-back Securities Financing Transactions Regulation (‘SFTR’) solution to support mutual clients with their SFTR reporting requirements.
Under the Markets in Financial Instruments Regulation (‘MiFIR’), all regulated investment companies in the U.K. and the E.U. are required to comply with pre- and post-trade transparency requirements pursuant to which quotes and trades must be made public subject to a system of waivers and deferrals. Companies are required to utilize an Approved Publication Arrangement (‘APA’), such as its APAs in the U.K. and the Netherlands, to comply with the post-trade transparency requirement, and many companies utilize a third-party provider to satisfy the pre-trade transparency requirement. The MarketAxess transparency and APA trade reporting solutions are available through its Insight platform, offering its clients a pre- and post-trade transparency solution, including APA trade reporting, quote publication, SI determination, and instrument liquidity classification.
Post-trade matching enables counterparties to match the economic trade details of a trade and settlement information shortly after execution, reducing the risk of trade errors and fails during settlement. The company provides a near real-time post-trade matching and exception management tool which covers a broad range of securities, including fixed-income and equities. By compiling all economic details within minutes of trade execution, it helps its clients to mitigate their operational risk, improve STP and efficiency, and address the complexities of MiFID II and the Central Securities Depositories Regulation.
MarketAxess has over 1,000 post-trade reporting, post-trade matching, and transparency clients, including investment companies, venues, and aggregators.
Technology Services
Through the company’s acquisition of Pragma, the company provides Polaris, a high-performance execution management service (‘EMS’), to the New York Stock Exchange and their clients. Polaris is customized to the requirements of the NYSE’s equity floor brokers and incorporates an HTML5 interface to provide the brokers with dynamic visualizations, customized alerting, complex workflows, and algorithmic execution.
Clients
Approximately 2,100 institutional investor and broker-dealer companies are active users of the company's platforms. It has developed trusted relationships with many of its clients and has invested in maintaining strong relationships with its largest clients. Although institutional investors, specialist market-making companies, proprietary trading companies, and other non-traditional liquidity providers have increasingly provided liquidity on its platforms through Open Trading, market knowledge and feedback from these clients have also been important factors in the development of many of its offerings and solutions. Its institutional investor and broker-dealer clients are increasingly trading multiple products on its platforms and using multiple trading protocols in order to execute upon their trading strategies.
Sales and Marketing
The company sells and promotes its offerings and solutions using a variety of sales and marketing strategies. Its sales organization follows a team-based approach to covering clients, deploying its product and regional expertise as best dictated by evolving market conditions. Its sales force, which works closely with its product management and technology teams, is responsible for new client acquisition and the management of ongoing client relationships to increase clients’ awareness, knowledge, and usage of its solutions and products. Its sales team is also responsible for training and supporting new and existing clients on their use of its trade execution services, integrated and actionable data offerings, and post-trade solutions, including how to optimize their trading performance and efficiency through its various trading protocols.
Given the breadth of the company;’s global client network, trading volume activity, and engagement with regulators, the company regularly educates market participants on market trends, the impact of regulatory changes, and technology advancements. Its senior executives often provide insight and thought leadership to the industry through conversations with the media, appearances at important industry events, roundtables and forums, submitting authored opinion pieces to media outlets, and conducting topical webinars for its clients. Additionally, it employs various marketing strategies to strengthen its brand position and explain its offerings, including through its public website, advertising, digital and social media, earned media, direct marketing, promotional mailings, industry conferences, and hosted events.
Competition
The company competes with Tradeweb (indirectly controlled by the London Stock Exchange), Bloomberg, Intercontinental Exchange, Trumid, and others in the credit and municipal markets; and Tradeweb, Bloomberg, CME Group (BrokerTec), BGC Partners (Fenics UST), and others in the rates markets.
In recent years, exchanges have pursued acquisitions that have put them in competition with the company. For example, the London Stock Exchange Group acquired a significant stake in Tradeweb and Intercontinental Exchange acquired BondPoint and TMC Bonds, retail-focused platforms, and IDC, a provider of fixed-income data, in an effort to expand its portfolio of fixed-income products and services. Exchanges also have data and analytics businesses, which increasingly put their offerings in direct competition with the company.
The company's data business competes with several large market data and information providers, such as Bloomberg, the London Stock Exchange (Refinitiv), Intercontinental Exchange, and S&P Global, which currently have a data and analytics relationship with virtually every institutional company.
The company's post-trade business competes with other approved regulatory mechanisms in Europe that have ARM and APA designations, such as the London Stock Exchange’s UnaVista and Tradeweb, to provide post-trade matching and regulatory transaction reporting and transparency services to European clients.
Intellectual Property
The company has registered the MarketAxess name and logo for trademark in the U.S., Europe, and in other parts of the world. The company also has a number of other registered or pending trademarks and service marks globally, including Open Trading, BondTicker, Axess IQ, and Axess All, among others. In addition, the company owns, or has filed applications for, the rights to trade names, copyrights, domain names, and service marks that it uses in the marketing of products and services to clients.
Government Regulation
One of the company's U.S. broker-dealer subsidiaries operates an alternative trading system (‘ATS’) subject to the SEC’s Regulation ATS, which includes certain specific requirements and compliance responsibilities in addition to those faced by broker-dealers generally, and an exempt ATS for U.S. government bonds. Broker-dealers are also subject to regulation by state securities administrators in those states in which they conduct business or have registered to do business. The company is also subject to the various anti-fraud provisions of the Securities Act of 1933, as amended (the ‘Securities Act’), the Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), the Commodity Exchange Act, certain state securities laws, and the rules and regulations promulgated thereunder.
In the case of the company's U.S. broker-dealer subsidiaries, the principal self-regulatory organization is FINRA. The company’s U.S. broker-dealer subsidiaries are subject to both scheduled and unscheduled examinations by the SEC and FINRA. In addition, the company’s municipal securities-related activities are subject to the rules of the MSRB and certain of its introducing broker activities are subject to the rules of the National Futures Association (‘NFA’) and Commodity Futures Trading Commission (‘CFTC’).
Outside of the United States, the company is directly regulated by the Financial Conduct Authority (the ‘FCA’) in the U.K., De Nederlandsche Bank (‘DNB’) and the Netherlands Authority for the Financial Markets (the ‘AFM’) in the Netherlands, the European Securities and Markets Authority (‘ESMA’) in the E.U., the Monetary Authority of Singapore in Singapore, the Investment Industry Regulatory Organization of Canada (the ‘IIROC’), and provincial regulators in Canada, as well as the Securities and Exchange Commission and Central Bank in Brazil. The company also holds cross-border licenses or permissions to operate in other jurisdictions with other regulatory bodies, including the Swiss Financial Market Supervisory Authority (‘FINMA’), the Securities & Futures Commission of Hong Kong, the Australian Securities and Investment Commission in Australia (‘ASIC’), the Danish Financial Supervisory Authority, the German Federal Financial Supervisory Authority (‘BaFin’), the Commission de Surveillance du Secteur Financier of Luxembourg, the Italian Commissione Nazionale per le Società e la Borsa, the Norwegian Financial Supervisory Authority, the Finnish Financial Supervisory Authority, the China Foreign Exchange Trade System (‘CFETS’), a direct subsidiary of the People’s Bank of China, and China’s Bond Connect Company Limited.
The securities industry and financial markets in the 27 member states of the E.U. are regulated by the National Competent Authorities in each member state, or with respect to Data Reporting Services Providers (‘DRSPs’), such as the company’s E.U. post-trade business, by ESMA itself. The E.U. regulations provide for a cross-border ‘passporting regime’, which allows the company to provide its regulated services to customers throughout the E.U. in reliance upon AFM authorizations for its subsidiaries in the Netherlands. The company has also established regulatory branches of its E.U. trading venue in Italy and Germany, which allows the company to have a physical presence in those jurisdictions.
In addition, as a result of the company’s self-clearing and settlement activities, one of the company's U.S. broker-dealer subsidiaries is required to finance certain transactions, maintain deposits with various clearing organizations and clearing broker-dealers, and maintain a special reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Exchange Act.
The company’s operations span jurisdictions across the Americas, Europe, and Asia, and it operates through various regulated entities. The regulatory status of many of the company's business entities is described below. The company also provides its platforms in other countries pursuant to exemptions from registration under the laws of such countries.
Americas
MarketAxess Corporation is registered as a broker-dealer with the SEC and as an introducing broker with the CFTC. It is a member of FINRA, the MSRB, the NFA, and the Securities Investor Protection Corporation (‘SIPC’).
Pragma LLC is a broker-dealer registered with the SEC and is a member of FINRA and the SIPC.
MarketAxess Canada Company is registered as an Alternative Trading System with the Ontario Securities Commission, the Autorité des Marchés Financiers, the British Columbia Securities Commission, and the Alberta Securities Commission, and is a member of IIROC.
MarketAxess Plataforma de Negociacao Ltda. is authorized through its parent (the company) by Comissão de Valores Mobiliários and BACEN (Central Bank of Brazil) to provide a system in Brazil for the trading of fixed-income securities by sophisticated institutional investors.
MarketAxess Colombia Corporation is registered with the Superintendence of Finance of Colombia as an Information System.
The U.K. and the E.U.
MarketAxess Capital Limited is authorized and regulated by the FCA as the U.K. MiFID investment company (limited license) and acts as a matched principal counterparty for Open Trading transactions.
MarketAxess Europe Limited is authorized and regulated by the FCA to operate an MTF, licensed by ASIC to have an Australian Markets License, recognized by FINMA as a foreign trading venue, licensed by BaFin under the German Securities Trading Act, licensed by the Securities & Futures Commission of Hong Kong as an Automated Trading Service, and licensed by the Monetary Authority of Singapore as a Recognized Market Operator. In addition, following Brexit, MarketAxess Europe Limited is recognized or licensed on a cross-border basis to provide its services in Italy and Finland, and on a temporary cross-border basis in each of Luxembourg, Denmark, and Norway.
MarketAxess NL B.V. is authorized and regulated by the AFM in the Netherlands as an MTF. MarketAxess NL B.V. may provide cross-border services throughout the 27 member states of the E.U. and EEA countries under the MiFID passport, and is approved by FINMA to provide cross-border services into Switzerland as a foreign trading venue, and has regulatory branches in Germany and Italy.
MarketAxess Post-Trade NL B.V. is established in the Netherlands and holds a license to operate as a DRSP under the supervision of ESMA, specifically to act as an ARM and APA. MarketAxess Post-Trade NL B.V. may provide cross-border services throughout the 27 member states of the E.U. and EEA countries under the MiFID passport, and has a regulatory branch in Germany.
MarketAxess Post Trade Limited is authorized and regulated by the FCA as a DRSP for ARM and APA services and as a service company.
Asia and Pacific
MarketAxess Singapore Pte. Limited is approved by the Monetary Authority of Singapore as a Recognized Market Operator. Additionally, MarketAxess Singapore Pte. Limited is approved on a cross-border basis by FINMA in Switzerland as a foreign trading venue, by Hong Kong as an ATS, by Germany as a foreign market operator, and holds an Australian Markets License from ASIC.
MarketAxess Information Consulting (Shanghai) Co., Ltd. is a wholly-owned foreign enterprise (WOFE) in China. Its business scope includes non-licensed information, data, and technology-related services. The MarketAxess offshore electronic trading platform is recognized by CFETS and Bond Connect Company Limited for the provision of Bond Connect and CIBM Direct RFQ connectivity services.
History
MarketAxess Holdings Inc. was founded in 2000. The company was incorporated in Delaware in 2000.
