About MarketAxess Holdings

MarketAxess Holdings Inc. (MarketAxess) operates leading electronic trading platforms delivering greater trading efficiency, a diversified pool of liquidity and significant cost savings to its clients across the global fixed-income markets. Over 2,000 institutional investor and broker-dealer firms 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's Open Trading marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets, creating a unique liquidity pool for a broad range of credit market participants. 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 it robust network of platform participants. The company provides automated and algorithmic trading solutions that when combined with its integrated and actionable data offerings, help its clients make faster, better-informed decisions on when and how to trade on its platforms. In 2023, the company introduced 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 expects that 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, will accelerate its development of artificial intelligence (AI) driven execution algorithms across all of its key product areas. The company offers all-to-all trading (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. 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. The company 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. In 2023, 88.1% of its revenues were derived from commissions for transactions executed on its platforms. The company also derives revenues from information services, post-trade services and technology services. Strategy The key elements of the company's strategy are to increase penetration in credit 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; and pursue select acquisitions and strategic alliances. The Fixed-Income Products Available on Platform The company operates in a large and growing market, which consists of credit and rates fixed-income products. The company's 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 the company 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 the company 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 may be exempt from state income and other taxes; 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, 2023, were the U.S. high-grade, the U.S. high-yield, emerging market debt, Eurobonds, municipal bonds and U.S. government bonds. The company plans to leverage its Open Trading functionality to continue to capture additional market share across its core credit 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 the company's platforms are complemented by pre-trade intelligent data products and a range of post-trade services. In 2023, 88.1% of the company's revenues were derived from commissions for transactions executed on its platforms, 6.2% of its revenues were derived from its data products and 5.3% of its revenues were derived from its post-trade services. Trade Execution Solutions Through its 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, the company 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 2023, the company introduced X-Pro to select clients in the United States. The company plans to continue to expand the use of X-Pro by its broker-dealer and institutional investor clients. 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 disclosed RFQ protocol is available for transactions in all its product areas and can be used for multiple-dealer inquiries to over 140 dealers; list trading, which is the ability to request bids and offers on up to 60 bonds at the same time; portfolio trading, which allows its market participants to transact bond basket trades of up to 2,100 securities in an all-or-none trading protocol with one aggregate price for the portfolio transaction; and swap trading, which is the ability to request an offer to purchase one bond and a bid to sell another bond. In 2023, over 60.0% of all credit volume on the MarketAxess platform was executed via a form of the company's 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 the company's 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 over 1,700 potential counterparties. Open Trading participants are able to maintain their anonymity from trade initiation all the way through to settlement. Unlike the company's 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 in U.S. high-grade bonds, U.S. high-yield bonds, Eurobonds, certain emerging market debt, municipal bonds, the U.S. government bonds, agency bonds and other government bonds. Following the introduction of Open Trading on its platforms in 2013, the company has continued to build upon the technology to develop more features and services. The company offers several Open Trading protocols, including: Open Trading RFQ, which provides the company's Open Trading participants with the ability to display requests for bids and offers anonymously to the entire MarketAxess trading community, thereby creating broad visibility of their inquiry among market participants and increasing the likelihood that the request will result in a completed trade. The Open Trading RFQ protocol is typically used simultaneously with a disclosed RFQ, providing the requestor with an increased likelihood of achieving best execution by seeking pricing from a participant's known dealer trading relationships and the Open Trading marketplace at the same time; Dealer RFQ, which allows dealers to initiate RFQs to all other dealers or to the entire Open Trading network, is used by the company's dealer clients to manage risk, source liquidity, and facilitate transactions on behalf of their clients; Mid-X sessions, a sessions-based mid-point matching tool that allows broker-dealers to trade against the mid-point price established by CP+ at a given time instead of bilaterally negotiating a price; Live Markets, an order book functionality that allows participants to post one or two-way, live, executable quotes for the most active corporate bonds and U.S. government bonds, including newly issued debt, benchmark issues and news-driven securities; Public Axes, which is an order book-style price discovery process that gives participants the ability to view and execute trades upon anonymous or disclosed indications of interest from the inventory posted on the company's platforms; and Diversity Dealer Initiative, which leverages the liquidity-enhancing features of Open Trading, but also allows institutional investor clients to select minority-, women- and veteran-owned broker-dealers to intermediate the resulting Open Trading transaction. In 2023, approximately 35.2% of all eligible credit volume on the MarketAxess platform was executed via Open Trading protocols. Automated and Algorithmic Trading Solutions The company's automated and algorithmic trading solutions, which allow clients to set eligibility criteria for their orders that its platforms will use to determine whether to execute a trade in accordance with the pre-defined parameters, increase trading efficiency and allow traders to focus on higher-value trades. The company expects that bond trading velocity will grow in the years ahead due to the increased adoption of trading automation by both broker-dealer and institutional investor participants. Some of the company's fixed-income automation tools include: Auto-X RFQ, which allows clients to automatically execute a request-for-quote using simple variables such as trade size, price and number of respondents. In 2023, Auto-X RFQ represented 23.1% of total trade count and 9.7% of the company's credit trading volume. 41.0% of Auto-X RFQ trades in 2023 were no touch, meaning such trades were initiated automatically by clients using pre-specified instructions, up from 33.0% in 2022; Auto-X Responder, which allows clients to automatically respond to requests using either a specified response level or a mid-point price generated by one of the company's data products; Adaptive Auto-X, which provides the company's clients with a suite of AI-driven algorithms that integrate many of oitsur key trading protocols to help the trader decide the size of their order, which MarketAxess protocol to use, which counterparty to trade with and what time of day to trade; and The U.S. Treasury Hedging, which automatically provides a U.S. Treasury hedge for trades in credit products available on the company's platforms. In addition, the company supports a large and growing base of dealer market making algorithms. Dealer market making algorithms enhance the liquidity available on the company's 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 2023, the company acquired Pragma, expanding its automated and algorithmic trading solutions offerings to include equities and foreign exchange for institutional clients, banks and 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. Pragma also provides Polaris, a customizable trading platform available to floor brokers of the New York Stock Exchange and their clients. 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 the company's 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 the company's 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 firms with large numbers of individual client orders. Integrated and Actionable Data 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. We offer the following data products and index solutions: Data Products The company's data strategy is centered on using its data offerings to support trading activity through its diverse trading protocols and growing its revenues from its commercial data offerings. The company's electronic trading platforms allow institutional investors to compile, sort and use information to discover investment opportunities that might have been difficult or impossible to identify using a manual information-gathering process or other electronic services. The company's 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 data products include: CP+, a pricing algorithm that generates near real-time pricing for U.S. high grade, U.S. high yield, Eurobonds, emerging markets and European government bonds based on a variety of data inputs, including feeds from the company's trading platforms, its post-trade services and TRACE. CP+ is used by clients as a pre-trade reference price to enhance trading outcomes and transaction cost analysis. CP+ can be combined with its auto-execution service, providing clients with an alert if a response is off market. Axess All, the first intra-day trade tape for the European fixed-income market, is sourced from the thousands of daily bond transactions processed by the company's post-trade services business and includes aggregated volume and pricing for the most actively traded European fixed-income instruments. Axess All Prints, which is an enhanced, real-time transacted price service for the most actively traded European fixed-income instruments. BondTicker, which provides real-time TRACE data enhanced with MarketAxess trade data and analytical tools in order to provide professional market participants with a comprehensive set of corporate bond price information with associated analytical tools that are not otherwise available. Relative Liquidity Score, a product that provides a defined measurement of the current liquidity for individual bonds and highlights the relative potential ease that a trader can expect when transacting in such instruments. Index Solutions To meet the increasing need for passive fixed-income investment strategies, the company has also introduced liquid indices powered by real-time data. In 2022, the company introduced the MarketAxess U.S. Investment Grade Corporate Bond 400 Index (the MKTX 400 Index), which is an index constructed to measure the performance of 400 U.S. dollar denominated investment grade corporate bonds with higher-than-average liquidity relative to the broader U.S. corporate bond market. The index utilizes Relative Liquidity Scores and CP+ in the construction and evaluation processes. State Street Global Advisors has launched an exchange traded fund that seeks to track the MKTX 400 Index. In addition, in 2022, the company also announced a strategic collaboration with MSCI Inc. to create co-branded fixed-income indices incorporating the company's liquidity data. The first of such indices, the MSCI MarketAxess USD HY Tradable Corporate Bond Index, which uses Relative Liquidity Scores to identify and select the liquid fixed-income securities, launched in November 2022. Post-Trade Services The company provides post-trade matching and regulatory reporting services for European investment firms and market and reference data across a range of fixed-income products. In response to the requirements of the Markets in Financial Instruments Directive (MiFID II) in Europe, the company 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 U.K., all firms regulated as investment firms 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. Firms may either report directly to their regulator or use an entity that is licensed as an Approved Reporting Mechanism (ARM), such as its subsidiaries in the U.K. and the Netherlands, to validate and submit such reports to their regulator. The company's multi-asset class ARM reporting solution allows its clients to report to 23 different European regulators. We have 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 firms 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. Firms are required to utilize an Approved Publication Arrangement (APA), such as the company's APAs in the U.K. and the Netherlands, to comply with the post-trade transparency requirement and many firms utilize a third-party provider to satisfy the pre-trade transparency requirement. The MarketAxess transparency and APA trade reporting solutions are available through the company's 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 confirming all economic details within minutes of trade execution, the company 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 firms, venues and aggregators. Clients Over 2,000 institutional investor and broker-dealer firms are active users of the company's platforms. Since its founding, the company 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 firms, proprietary trading firms and other non-traditional liquidity providers have increasingly provided liquidity on its platforms through Open Trading. Certain of the company's clients may account for a significant portion of its trading volume. Market knowledge and feedback from these clients have also been important factors in the development of many of its offerings and solutions. The company's 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. The company's sales organization follows a team-based approach to covering clients, deploying its product and regional expertise as best dictated by evolving market conditions. The company's 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. The company's 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. 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. CME Group operates platforms that compete with the 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, CP+, Axess All and Now You're In The Market 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 the 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 the 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. Outside of the United States, the company 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 (AFM) in the Netherlands, the European Securities and Markets Authority (ESMA) in the E.U., the Monetary Authority of Singapore (the MAS) in Singapore, the Investment Industry Regulatory Organization of Canada (the IIROC) and provincial regulators in Canada, and 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 (Consob), 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 (PBC) and China's Bond Connect Company Limited. E.U. regulations provide for a cross-border passporting regime, which allows the company to provide the company's regulated services to customers throughout the E.U. in reliance upon its authorization from any E.U. member state or ESMA. As a result of the U.K.'s departure from the E.U. in 2020 (commonly referred to as Brexit), the company obtained AFM authorizations for its subsidiaries in the Netherlands and provides regulated services to its clients within the E.U. in reliance on the cross-border services passport held by its Dutch subsidiaries. The company has also established regulatory branches in Italy and Germany, which allows it to have a physical presence in those jurisdictions. MarketAxess Corporation is an SEC registered broker-dealer and a member of FINRA, the MSRB, and the Securities Investor Protection Corporation (SIPC). MarketAxess Corporation is registered as a clearing broker with FINRA. Pragma LLC is an SEC registered broker-dealer and a member of FINRA and the SIPC. MarketAxess Canada Company is registered as an Alternative Trading System with the Ontario Securities Commission (OSC), the Autorite des Marches Financiers ("AMF"), the British Columbia Securities Commission (BCSC) and the Alberta Securities Commission (ASC) and is a member of IIROC. MarketAxess Plataforma de Negociacao Ltda. is authorized through its parent (MarketAxess Holdings Inc.) by Comissão de Valores Mobiliários (CVM) 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 (SOFC) as an Information System. MarketAxess Capital Limited is authorized and regulated by the FCA as a MiFID investment firm (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 a multilateral trading facility (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. 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.. was founded in 2000. The company was incorporated in Delaware in 2000.