AxeTrading – fixed income trading software company for market making, quoting, bond pricing and order execution

AxeTrading has undergone a year of transformation with a whole new layer of senior leadership brought in to drive the firm’s next stage of growth. In its first move since the appointment of new chief executive officer, Greville Lucking, the technology provider expanded its suite of products to including interest rate swaps. Raiffeisen Bank International (RBI) was the first participant to execute one of the instruments on AxeTrading in August.

The firm has also integrated its pricing library for calculation of non-standard swaps in a bid to boost quoting confidence for traders. Looking further back towards the end of 2021, the firm integrated pricing data and analytics tools from the Intercontinental Exchange (ICE) in a bid to help traders make more informed investment decisions.

The tools, including ICE’s evaluated pricing, continuous fixed income evaluated pricing, best execution services and liquidity indicators, are available via AxeTrading’s quoting and execution management system (QEMS).

BondCliQ – Centralised bond quote system

As Europe and the UK teeters on the precipice of implementing a consolidated tape, BondCliQ is set to continue making waves in the market this year and next. The firm offers several ways to facilitate the consumption of pre-trade institutional pricing data and post-trade TRACE data in the US.

Its quote platform encourages market makers to compete for client order flow based on customer service while it claims to offer dealers better access to pre-trade information and monetise quote data. As the industry’s first consolidated corporate bond quote system, it claims to aggregate 70,000 pre-trade bid and offer quotes on 15,000 bonds daily from more than 40 dealers.

It’s received backing from major institutions and venue operators including the London Stock Exchange Group (LSEG) which led a Series A funding round into it in January to support its expansion into Europe. Also, to show its support was buy-side giant Vanguard, which has formed a strategic partnership with the firm.

Glimpse Markets – buy-side data pooling network

Aimed at addressing the growing issue of rising market data costs, Glimpse Markets launched into the market earlier this year with a bang.

The post-trade data sharing network is designed to give more autonomy to the buy-side over the data accumulated through their transactions. It launched its ‘data dividend’ initiative – a system that rewards firms for their contribution of their data to the pool with a fee – in June last year and has since gained significant ground with the buy-side.

With a lack of a consolidated tape in the UK and Europe, firms are increasingly depending on disruptor initiatives such as this one to avoid soaring data costs. The data sharing network entered into a partnership with Wave Labs in April, linking to its credit trading system eLiSA ahead of its roll out due to take place this year. The two-way integration will mean that users of the eLiSA (Electronic Liquidity Seeking Application) will be able to leverage Glimpse’s European buy-side contributed trades data while also contributing to the network themselves.

The pair later extended this partnership at the end of September that will see Wave Labs provide Glimpse’s clients with access to a free web-based dashboard that will allow them to view and analyse the live and historical buy-side trade data that has been shared over the Glimpse network.

Wave Labs – eLiSA (Electronic Liquidity Seeking Application) – credit trading system

Wave Labs is the creator of eLiSA – the electronic liquidity seeking application aimed at revolutionising institutional bond trading by solving issues in fixed income that current execution management systems (EMS) do not.

Recently, Wave Labs launched an extension package, namely SIA, which is a no-code workflow automation and systematic investment toolset for fixed income.

Wave Labs started the roll out of eLiSA to its first pilot client earlier this year. It claims to offer the first technology that takes Neptune Axes and uses machine learning to predict whether a bond is mis-priced and by how much – a process that is now under way for its pilot client.

The firm also entered into a strategic partnership with Glimpse Markets – focused on complex data analysis and other trading functions including primary market trading – and also with the intention of linking it with eLiSA once launched. The partnership will see it provide a free web-based dashboard to Glimpse clients to allow them to analyse the data pooled by the network.

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BondCliQ is Wall Street’s first consolidated corporate bond quote system. The firm claims to aggregate 70,000 pre-trade bid and offer quotes on 15,000 bonds daily from 40 dealers.

Also lending its support was buy-side giant Vanguard, which has formed a strategic partnership with the BondCliq; and Aflac Ventures and SEI, which both took part in the latest $7.5 million funding round led by LSEG.

The company confirmed that the money raised would be invested for corporate purposes: including a move into new corporate bond markets, especially in Europe.

“As BondCliQ continues to develop and operate this important structure for the corporate bond industry, we look forward to working with LSEG in the US, Europe and beyond,” said Chris White, BondCliQ’s chief executive.

“We thank these participating buy-side and financial technology institutions for their commitment to BondCliQ and know these important relationships will play a critical role in creating a healthier corporate bond market that better serves the end investor. We also continue to speak with other potential investors interested in participating in the transformation of the corporate bond market.”

The development comes at a pivotal moment for Europe in its journey towards implementing a consolidated market data source.

In amendments to MiFID II announced in November, the European Commission and the European Markets Securities Authority (ESMA) proposed to implement a single pre-trade consolidated tape provider for each asset class. The plans have proved contentious because of their revenue model, which would see the profits of the tape largely fed back into incumbent exchanges and venues.

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Wave Labs, founded by Miles Kumaresan in 2018, has made various partnerships as it prepares to begin a three-month phase of controlled trading with one or two asset management clients before the platform goes live in September.

Known as eLiSA (Electronic Liquidity Seeking Application), the execution system is now certified to send dealer request for quotes (RFQs) via APIs with Bloomberg and UBS BondPort. Connectivity to MTS, now owned by Euronext, has also been completed with certification pending.

Wave Labs is also working on a connectivity to the ICE Bonds ecosystem, which includes the BondPoint and TMC Bonds platforms, which exchange operator ICE acquired several years ago. The start-up is also hoping to connect with Tradeweb and other sell-side institutions to provide clients with tradeable streaming prices.

Speaking to The TRADE, Kumaresan said partnerships with venues can be a major hurdle for new entrants as start-up platforms are expected to have clients before connecting to venues, but in most cases need clients before gaining access.

“We have been very fortunate to have so many buy-side backing eLiSA,” he added. “eLiSA is in fact a product that is shaped by these backers. Every single one of them have contributed to taking eLiSA to where it is now.

“An eLiSA demo is typically a mini-brainstorming session. Shortly after a recent demo, I received an email detailing request for new functionality. Within 48 hours, we had implemented a first cut of this feature and got back to the trader who had asked for it. This is what it is all about for us, to create a technology that the buy-side has actually asked for.”

Kumaresan added that as eLiSA specialises in credit trading, Wave Labs will connect to major execution systems that cover all areas of fixed income trading. He confirmed that work has already started on connecting the platform with Bloomberg TSOX and other EMSs on behalf of clients.

Highlighting the importance of system interoperability as an emerging trend between established players and specialist start-ups entering the space, Wave Labs also teamed up with IHS Markit and integrated its cross-asset order management and portfolio modelling system (PMS) thinkFolio.

“Enhancing trader user experience and delivering capabilities that facilitate collaboration with portfolio management are key focus domains for thinkFolio,” said Brett Schechterman, global head of thinkFolio at IHS Markit. “Wave Labs have developed a highly complementary workbench and market intelligence hub in eLiSA that offers traders a unique operating lens and streamlined workflow.”

Elsewhere, Wave Labs has also made various connections to data sources with eLiSA providing an open data portal to traders and portfolio managers which can channel structured and unstructured data.

The dataset includes continuous estimated prices, IOIs (indications of interest), axes, TRACE data and credit research. Data partnerships have also been formed with Neptune, Bloomberg and upcoming data pooling network Glimpse Markets.

“Connectivity to buy-side clients’ core workflow tools, such as order or execution management system (OMS/EMS), is integral to Neptune’s strategy,” Byron Cooper-Fogarty, acting CEO of Neptune, commented on the firm’s partnership with Wave Labs. “As such we continue to work with partners such as Wave Labs to provide the highest quality fixed income data to mutual clients.”

More recently, Wave Labs expanded its partnership with IHS Markit forged a data agreement with thinkFolio to source fixed income data and price discovery. New York-based corporate bond analytics provider BondCliQ will also provide the eLiSA platform with real-time quotes from more than 45 dealers covering 15,000 CUSIPS for 120,000 price points each day.

“We look forward to building on the strong partnership between Wave Labs’ eLiSA system and thinkFolio by collaborating further across bond pricing and reference data to deliver additional insights around liquidity and price discovery,” Nathan Kirk, executive director of fixed income strategy for EMEA at IHS Markit, commented.

As liquidity continues to migrate from traditional liquidity providers to trading venues and all-to-all trading in fixed income continues to rise, Kumaresan added that both makers and takers of liquidity need better systems for efficient trading. The buy-side is also increasingly taking on the role of price maker, which eLiSA aims to cater for by allowing asset managers to make prices in bonds.

“Growth in all-to-all trading will give rise to formation of more complex fixed income market micro-structure for the first time, a relatively new concept in fixed income,” Kumaresan said. “Liquidity will still remain fragmented, however, it will become more uniformly divided among the different venues. This trend will pose new challenges to the buy side trading desk – how do you harness this form of larger pools of fragmentation?

“The buy side has to respond to these changes to stay competitive. The question is no longer whether to invest in new trading technology, but more which technologies would offer flexibility to adapt and stay ahead. Now more than ever before, this responsibility falls on the shoulders of heads of trading to have a technology vision for their desk and lead this technology transformation as thought leaders.”  

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The partnership will see IHS Markit’s thinkFolio clients gain click-to-view, consolidated, and pre-trade institutional bond quote data from 34 dealers, as well as post-trade and normalised TRACE data.

“Given the fragmented and dynamic liquidity profile of fixed income markets, we are focused on continually enhancing thinkFolio to provide richer pre-trade insights and analytics to our users,” said global head of thinkFolio, Brett Schechterman.

“Our client base, regardless of domicile, continue to participate heavily in the US investment grade and high yield marketplace. Having direct, actionable, BondCliQ aggregated dealer quote information and historical TRACE intelligence embedded within thinkFolio screens will facilitate corporate bond price discovery, streamline communication between portfolio managers and traders, and offer deeper best execution insights.”

BondCliQ offers a consolidated quote display and generates a centralised institutional pricing quote for both buy-side institutions and sell-side dealers. Combined with thinkFolio order and execution management workflow, both firms added BondCliQ’s data will boost pre-trade liquidity insights for traders.

“By collaborating with IHS Markit, BondCliQ dealers can distribute their markets directly to the global thinkFolio client network which instantly improves the link between market-maker quotes and customer engagement,” BondCliQ chief executive, Chris White, commented. “This simple and efficient approach reduces disintermediation by bringing the buy-side and the sell-side closer together.”

Last month, asset manager Allianz Global Investors confirmed it would be adopting thinkFolio to support its global fixed income business. The thinkFolio platform will provide Allianz with enhanced decision support, portfolio modelling and trade generation.

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The deal will provide traders and portfolio managers with pre-trade institutional price quotes in US corporate fixed income securities, and post-trade TRACE data via the Charles Rivers IMS, which combines order and execution management functionality.

“Incorporating BondCliQ’s innovative pricing solutions in the Charles River IMS provides our clients with an important new source of actionable pricing data and analytics, helping them adapt to rapidly changing fixed income markets and growing regulatory mandates,” said John Plansky, CEO of Charles River. “Expanding our relationships with leading data providers such as BondCliQ empowers traders and portfolio managers with real-time intelligence, and improves price discovery and liquidity access.”

BondCliQ will offer its consolidated quote display for centralised pricing data for buy- and sell-side firms, in a bid to provide a more efficient secondary trading market with accurate and reliable dealer quotes. The pricing will also allow fixed income asset managers to manage pre-trade liquidity for best execution requirements, and traders will be able to view bids and offers, with attribution and size details sourced from 27 major dealers.

“The ability to access BondCliQ’s pricing data directly from the Charles River platform streamlines the trade lifecycle for fixed income managers, from idea generation and pre-trade analytics through to trade execution and regulatory reporting,” Chris White, CEO of BondCliQ, added.

In November last year, BondCliQ inked a similar partnership with the London Stock exchange Group’s MTS Markets business. The deal saw MTS combine its BondsPro pricing with BondCliQ’s data visualisation technology to provide clients with a more holistic view of liquidity.

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Combining MTS BondsPro’s real-time pricing information with BondCliQ’s data visualisation technology, BondTIQ, and TRACE data the service aims to provide users with a holistic view of pre- and post-trade information on liquidity.

“By harnessing MTS BondsPro’s data to power the Liquidity Mapping tools from BondTIQ, BondCliQ is able to provide a unique service which enables traders to better understand the market and quickly see prices for their potential trades and existing positions on the BondsPro platform,” said David Parker, head of US sales at MTS. “This is the perfect collaboration between MTS’ heritage in electronic fixed income and innovative new approaches to providing traders and portfolio managers with the tools they need.”

The US corporate bond liquidity mapping toll also provides a multi-dimensional interface that supports execution requirements by identifying sources of liquidity and assessing fair value according to the quoted MTS BondsPro market.

Chris White, CEO of BondCliQ, added that in today’s market liquidity is fractured and securing the bet price can be a complex challenge for market participants. “Through this partnership, we are making liquidity visible and allowing traders to understand liquidity flows and identify the right opportunities,” White said. “MTS BondsPro offers deep, real-time trade data into close to 20,000 US corporate bonds, making them the perfect partner to provide the data to power this innovative tool.”

Last month, MTS upgraded its electronic bond trading platform BondVision to include automated execution for request for quote (RFQ) orders and introduced several new features for more efficient low-touch trades.

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