15 Jan

MiFID II Data To Drive Bond Market Structure

True innovation in bond market structure is two to four years away and one of the most important drivers will be the data generated by new European Union regulations.

The International Capital Market Association report said in its report for the first quarter of this year that electronic trading is increasing in the bond market, driven by pre- and post-trade efficiencies and the need to access new sources of liquidity as banks have shrunk their balance sheets.

“However, MiFID II is shifting gears and is significantly speeding up the evolution of electronification of fixed income trading,” added ICMA. “MiFID II is changing trading models.”

Illuminate Financial Management, the venture capital firm which funds fintech companies in capital markets, invested €2m in AxeTrading last year. AxeTrader, the technology provider’s flagship platform, provides banks, broker-dealers and buyside firms with an aggregated view of fixed income liquidity including axes, runs and quotes from the electronic venues, messaging platforms and voice channels used by a client and can help meet the MiFID II best execution requirements.

Another Illuminate investment, TransFICC, is joining Accenture’s sixth FinTech Innovation Lab London. TransFICC allows firms to use one connection to access multiple fixed income and derivatives venues as the volume of electronic trading increases.

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