ICE and MarketAxess will connect their respective liquidity networks to provide retail, institutional and middle-market investors with greater efficiency, better execution and access to more liquidity, the companies said.
A new partnership will enable ICE Bonds’ automated trading system, ICE TMC, and MarketAxess’s open trading network to communicate with each other, according to a press release.
In the initial phase of the partnership, ICE Muni Center customers will be able to respond to RFQs from MarketAxess customers, bringing the “ICE liquidity component into the MarketAxess ecosystem,” said Daniel Kelly, head of Munis at MarketAxess.
The aim is to “improve price transparency, best execution and overall market liquidity for all participants,” the press release states.
The networks of ICE and MarketAxess “complement each other,” says Peter Borstelmann, president of ICE Bonds. The former is “deep and rich” in the retail wealth segment, while the latter is “deep and rich” in the institutional space.
“As there is more trading in separately managed accounts, more trading in exchange-traded funds and (smaller) trade sizes in municipal and corporate bonds, it made sense to connect these pools and allow more institutional investors to interact with retail and asset, opening up liquidity to both sides and creating more opportunities,” he said.
“Clients have been asking for partnerships like this,” Kelly said. “They don’t want to have to source liquidity from three different places… they want one point of contact for all of those liquidity channels.”
The partnership arose from a mutual customer who was familiar with ICE’s liquidity and needed to remain on the MarketAxess front end due to some of its system limitations, Borstelmann said.
The client, he said, wanted to know if there was a way to bring ICE’s liquidity into this ecosystem.
And during that process, other customers indicated that they would also like to see ICE liquidity within the ecosystem “where they live and breathe,” Borstelmann said.
Kelly said it will be an evolving partnership, with the possibility of future expansion.
“We did our homework. We wanted to make sure it made sense for both sides and complemented the network,” Borstelmann said. “We are optimistic that this will add value to our user network and their user network.”
