The offering will allow clients to execute anonymously, due to ICE Bonds sitting in the middle of the transaction. Requests will be transmitted electronically to a wide community of MBS dealers, market makers and investors on the multi-asset class alternative trading system ICE TMC.  

The functionality is also designed to work alongside ICE Bonds’ existing ‘click-to-trade’ functionality, with the aim of delivering increased liquidity and execution efficiency to the MBS market.  

The platform is aimed at wealth management and retail brokerage clients, and by enhancing MBS trading capabilities, ICE Bonds claims this is a step forward in achieving an electronic mortgage market and will create a “more flexible and efficient trading environment”. 

Read more: ICE Bonds and MarketAxess connect liquidity networks to bolster bond market efficiency 

Pete Borstelmann, president of ICE Bonds said: “The launch of our RFQ protocol represents a key step forward in electronification of a traditionally voice and message driven market, supporting more efficient price discovery while giving customers greater flexibility to execute trades aligned with their evolving strategies.” 

According to ICE Bonds, the functionality will address challenges facing mortgage clients, namely to move towards electronification in a market which still relies heavily on transactions over voice and chat messaging.  

The firm has also announced plans to integrate pricing and analytics from ICE Mortgage Technology (IMT) later this year, with a combined MBS execution on ICE TMC with IMT’s real estate solutions expected to deliver a unified platform for trading the MBS asset classes. 

Enhancing liquidity offerings in fixed income markets is a key focus for ICE Bonds. In August 2024, the firm connected ICE TMC with MarketAxess’ Open Trading network to bolster price transparency, best execution and overall market liquidity for all users. 

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ICE has acquired 100% of the venue from 7RIDGE. Further details of the transaction have not been disclosed but ICE confirmed that the acquisition is not expected to have a material impact on its 2025 financial results or its deleveraging and capital return plans.

ICE said the acquisition was a natural fit given its developments in the mortgage technology sphere, including the development of its network of mortgage assets for the management of the US mortgage life cycle.

This network was created to deliver ICE’s mission to lower mortgage costs for lenders and borrowers through digitising the mortgage workflow ecosystem.

“Complementing our leading global index business and our best-in-class mortgage technology network, AFX is a natural fit to ICE,” said Christopher Edmonds, president of ICE fixed income and data services.

“AFX’s focus on regional, mid-size, community and minority-owned banks covers many of the same customers ICE serves through our mortgage technology network. We look forward to continuing to serve this important market, delivering innovation and new product development made possible through the addition of AFX to our portfolio.”

AFX operates the American Interbank Offered Rate (AMERIBOR) which is set daily based on unsecured interbank loans executed on the AFX platform, producing an interest rate which reflects banks’ actual unsecured borrowing costs.

“AFX becoming part of ICE marks an extraordinary opportunity for AFX and we are confident that ICE’s leadership will amplify AFX’s success and its purpose to serve regional and local American banks by creating a transparent, robust and efficient interbank lending ecosystem,” added Carsten Kengeter, chief executive at 7RIDGE.

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Chris Edmonds

The move comes as the exchange seeks to enhance both the transparency and resilience of the US treasury market, leveraging its long-standing experience as a clearing house for credit derivatives.
 
ICE explained that it believes its offering is “strategically positioned” to take this next step and will promote competition and enable the US Securities and Exchange Commission’s (SEC) policy objectives around the standardised risk management of the treasury securities market.

“The rich experience we’ve developed creating and operating ICE Clear Credit and the work we’ve done to ensure its compliance with all US and foreign regulatory regimes has created a fertile environment for adding Treasury clearing to our suite of credit clearing services,” asserted Stan Ivanov, president of ICE Clear Credit. 

ICE’s new bond clearing business is set to leverage ICE Clear Credit – the exchange’s existing clearing house for credit default swaps (CDS). However, ICE confirmed that the new offering will have a separate rulebook, membership, risk management framework, financial and liquidity resources, and risk committee. 

Chris Edmonds, president of ICE’s fixed income and data services, said: “The history of ICE Clear Credit and the way the team at ICE identified a market need that could benefit from modernisation is the core of who we are as a company.

“As we look to add Treasury clearing to the breadth of services we offer for fixed income markets, we will leverage the successful playbook we developed in the past to offer an industry-trusted clearing solution along with the front-, middle- and back-office workflows our customers rely on to manage their daily business operations.”

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According to ICE, the TRF contracts serve as an exchange listed alternative to over-the-counter total return swaps that seek to replicate the performance of MSCI’s indices in a more “capital-efficient and transparent” way.

The underlying US funding rate Secured Overnight Financing Rate (SOFR) will be used by the contracts, which measures the cost of overnight cash borrowing.

The contracts are available to trade out the curve to 2033, with both quarterly and yearly expiries.

“We have worked directly with the market to design the TRF contracts, which allow clients to benefit from trading in a US time zone, against the closing MSCI index level and report the trade on the same day, utilising the truly global nature of ICE’s equity derivatives offering,” said Caterina Caramaschi, vice president, financial derivatives at ICE.

ICE’s futures on MSCI EAFE, MSCI Emerging Markets, MSCI ESG and MSCI Climate indices, provide participants globally with a set of tools to manage equity risk.

Last year, the average daily volume for ICE’s MSCI complex was roughly 214,000 contracts, equivalent to an estimated $14 billion of notional value. ICE MSCI futures traded over 53 million contracts in the same period.

“Goldman Sachs is excited about the launch of ICE MSCI Index TRFs. We expect it to be an excellent product for clients seeking a cost-effective solution to access a range of flagship MSCI indices,” said Daria Sentuc, managing director, emerging markets global synthetics at Goldman Sachs.

“As a long-established provider of liquidity across the MSCI complex, we look forward to supporting growth in this new product.”

MSCI’s global head of fixed income and derivatives, George Harrington, added: “We’re pleased to license ICE as they expand their TRF segment to include MSCI indices. This reflects the increasing demand for new products linked to MSCI’s global benchmarks.”

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ICE TMC offers execution of: mortgage-backed securities; certificates of deposit; and corporate, government, municipal, and agency bonds.

Tigress is the industry’s only certified disabled and women-owned financial services firm with a network of dealers and investment managers.

Cynthia DiBartolo, founder and chief executive of Tigress, said: “Since our founding, we have remained committed to providing both industry-leading access to the markets our customers need the most, while also helping our customers align their investments to match their broader sustainability objectives.

“ICE’s network allows us to quickly scale up to provide access to a leading source of liquidity across a broad and deep market set.” 

Through this connection, Tigress customers will now have direct access to ICE Bonds’ network of liquidity providers.  

ICE TMC’s platform has a network of more than 475 liquidity providers and takers, as well as more than 250,000 registered users.

“We’re honoured to work with a trail-blazing firm like Tigress Financial as they offer new price discovery and trading solutions to their growing base of customers. Our ICE TMC platform leverages our deep experience building and managing markets, and provides a unique liquidity network for Tigress Financial’s customers to access a broad range of fixed income securities,” said Peter Borstelmann, president of ICE Bonds.

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Peter Borstelmann, president of ICE Bonds, said: “TS Imagine’s cross-asset platform has become a leading tool for investors around the world and we’re pleased to be delivering ICE Bonds’ streaming municipal and corporate bond data and liquidity to their customers. 

“With seamless access over TS Imagine’s OEMS, this integration builds on our effort to expand the distribution of our markets to a broader network of investors across institutional, retail and wealth manager customer bases.”

Specifically, the connection allows access to ICE Bonds’ trading protocols for both municipals and corporates across ICE TMC and ICE BondPoint.

ICE TMC provides users with access to an all-to-all market for trading: municipal; corporate; agency and government bonds; certificates of deposit, ICE BondPoint. 

Read more: ICE relaunches sweeps protocol for corporate bonds to meet market demands

Through the connection, TS Imagine customers can access diverse pools of fixed income liquidity via ICE Bonds’ suite of trading protocols – these include click-to-trade and request for quote (RFQ). 

“Delivering an integrated platform that brings together the most important pools of liquidity from across markets is paramount for our customers, which is why we’re excited to add ICE Bonds’ leading municipal and corporate bond markets,” said Spencer Lee, chief markets officer and head of fixed income at TS Imagine.

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ICE Global Network will be leveraged by ADX to expand its global investor base by facilitating real-time access to market data and order entry.

With hubs located worldwide, the ICE Global Network offers content, delivery and execution services through fibre and wireless networks.

The addition of ADX to ICE Global Network follows previous initiatives by ICE in the region, having previously partnered with the Abu Dhabi National Oil Company (ADNOC) to create ICE Futures Abu Dhabi, alongside bringing improved accessibility to local markets.

“ADX’s collaboration with ICE Global Network, widely used by financial institutions and trading firms around the world, aligns with our strategic goal to enhance connectivity in the market and demonstrates our commitment to facilitating access for global investors in Europe, Asia and the US to one of the world’s fastest growing markets,” said Abdulla Salem Alnuaimi, chief executive of ADX.

“The strengthening of Abu Dhabi’s dynamic capital market will serve to support the long-term sustainable growth of the UAE economy and the exchange will continue to explore partnerships that support both regional and global connectivity as well as a deeper and more liquid market.”

The ICE Global Network offers banks, asset managers, hedge funds and other market participants direct market access to data and execution services from more than 150 exchanges and marketplaces around the world.

The network’s managed services provide customers with end-to-end hosting, hardware procurement, connectivity and support through a single ICE Global Network solution.

“Our network was designed to connect investors with marketplaces and opportunities globally and our work with ADX is a perfect match for that purpose,” said Margaret Niche, head of ICE Global Network.

“The ICE Global Network offers a portfolio of solutions for low latency data delivery that connects firms around the world and is part of our global data business which provides multi-asset market data and analytics, desktop solutions, hosting and connectivity that provide greater market transparency and helps our customers manage risk in evolving markets.”

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The trans-Atlantic data service offers a new route that removes significant latency and optimises costs for investors utilising the development.

The ICE Global Network will also be expanded by the service, providing connectivity and managed services to the most active US, European and Asian marketplaces.

“We are excited to expand our ultra-low latency offering by enabling an end-to-end market data solution between US and European markets, which is designed to improve the speed and access to international financial markets,” said Margaret Niche, head of ICE Global Network.

“This new service will complement our existing offering. It will connect to the key data centres in Europe and will leverage our existing data delivery platform to ease integration for customers and provide a consistent service, including our comprehensive fibre back-up.”

A system of wireless networks on each continent will be combined by the solution, with high-speed transatlantic fibre to connect US and European markets.

The offering allows market participants to work with a single vendor enabling operational challenges linked to building and supporting a global end-to-end market data solution to be simplified.

The initial route available will transport market data Eastbound from Illinois to various locations across the London Metro Area and Europe, including Frankfurt and Bergama. ICE stated that it plans to launch more hybrid routes – both Eastbound and Westbound – between Europe and the US at a later stage.

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Over recent months, historical Level 3 data provider BMLL has seen a surge in activity as it continues to expand its equities and ETF data coverage. Its products now include data from the Hong Kong Stock Exchange (HKEX), Cboe Europe Indices, and more recently this month, the Shenzhen Stock Exchange.

Speaking to The TRADE last week, Paul Humphrey, chief executive of BMLL, explained that these recent moves had come in response to client demand for enhanced coverage.

“Our clients and market participants overall are demanding increasingly comprehensive, high quality data sets to understand market behaviour and we are delighted to provide them with the insights they need to make more informed trading decisions.”

Data from the added exchanges are available to BMLL users across the buy- and sell-side, as well as global exchange groups. Other inclusions earlier this year include: Cboe Japan, Japannext, and Singapore Exchange.

In other exchange news, the Johannesburg stock exchange launched a joint venture with big xyt in a bid to offer greater accessibility to data analytics to international trading venues and firms of all sizes.

The JV – big xyt ecosystems – is set to offer the Trade Explorer data platform, recently launched in South Africa, to financial centres globally.

Speaking at the time, Leila Fourie, chief executive of JSE Group, said: “All trading venues understand the need for a market data business adjacent to the core mission of providing high quality markets.”

There has also been notable movement in bonds offerings, which included updates from Overbond, Mizuho EMEA, and Intercontinental Exchange (ICE).

In May, Overbond entered into an agreement to integrate European fixed-income transaction data from Deutsche Börse into its AI-aggregated data feeds and automated bond trading.

With this move, Overbond plans to “generate a robust European fixed-income trading data set,” aimed at plugging the gap in the fixed income markets in Europe that continue to be challenges for traders. The firm said its combination with Clearstream transaction data would create “the most robust European AI training data set available for the benefit of a better informed fixed income in Europe”.

The following month, Mizuho EMEA joined Neptune network as axe dealer for bonds in a move linked to a desire from the buy-side to access higher quality data from liquidity providers.

Byron Cooper-Fogarty, chief operating officer at Neptune, at the time highlighted that “this has been a client driven addition, as buy-side traders and portfolio managers continue to ask for high quality data from liquidity providers such as Mizuho.”

More recently, ICE made some updates to its corporate bond offering, relaunching its sweeps protocol – ICE RMA – in response to market demand.

Peter Borstelmann, president of ICE Bonds, highlighted that there was a notable demand for improvement in the space and the development of a product superior to that already in the market.

Speaking to The TRADE, he explained: “We heard from our partners that they wanted a strong competitor in this space and nobody had yet been able to step [into] that capacity.  We saw this as an opportunity to invest in something that we were the initial creators of and would be a nice complement to our existing ATS liquidity network […] we invested in both human capital and technology to bring an intuitive and easy product to market and the initial adoption and activity validates this investment.”

Also launched into the market in recent months were updates to FX offerings from several players. Earlier this month, August, Bloomberg announced that it had added a new suite of FX pricing quality tools in a bid to enhance RFQ pricing requests.

The tools – available to clients of its premier multi-bank FX trading platform (FXGO), through MISX, Bloomberg’s multi-asset reporting tool for electronic trading – allow price markers to more quickly identify where and why opportunities to price are being missed.

Tod Van Name, global head of foreign exchange electronic trading at Bloomberg highlighted the importance of this enhanced tool and the transparency and availability of real time information that it provides to their clients for trading operations.

“These new pricing quality analytics in MISX provide both buy- and sell-side market participants with unparalleled breadth and depth of analysis and output, that can help them make more informed trading decisions and achieve better outcomes.”

Guillaume Carreno, global head of electronic client connectivity at Crédit Agricole CIB, added: “The additional information, especially the “Best Alternative” data, has enabled us to identify areas where we can further improve the pricing quality for our clients. The productivity efficiency we gain with this new feature is an important added value.”

Similarly, Trading Technologies (TT) has been making a move to establish itself in FX, launching a new business line in June following its entry into the fixed income market for the first time in March with its acquisition of AxeTrading.

In August, TT acquired Abel Noser’s buy-side TCA subsidiary, building on its continued multi-asset data and analytics expansion.

“This acquisition enhances our appeal to the buy-side with an offering that spans multiple asset classes which we can fortify with the wealth of anonymised data harnessed through our platform,” said Trading Technologies chief executive officer Keith Todd.

Elsewhere, players have made enhancements aimed at assisting traders with their operational needs, seeking to optimise, secure, and streamline processes.

In June, futures industry technology provider FIA Tech enhanced its Trade Data Network (TDN) to support the operational resiliency demands of clearing firms utilising the platform. 

From now, users of TDN are able to securely replicate and store all trading activity at any exchange connected to the network, resulting in speedier recovery in the event of a systemic outage. 

Additionally, the following month, FlexTrade and TRAction announced a new integration aimed at alleviating the “operational burden” of transaction reporting on the buy-side trading desk.

Its system users can use this update in daily transaction reporting processes, by automatically reporting their data through the TRAction platform in the appropriate format. (Spark EMS users can also use TRAction for Emir, Mifir, ASIC, MAS and Canadian reporting).

At the time, the pair claimed that this direct integrated approach “removes formerly manual tasks, reducing errors and improving quality”.

More recently, MarketAxess announced plans to acquire multi-asset algorithmic trading provider Pragma, betting on this move as a sure way to enhance its clients’ workflows.

“Our acquisition of Pragma underscores MarketAxess’ commitment to innovating, integrating, and providing our clients with quantitative, AI-powered technology solutions powered by proprietary data designed to simplify and enhance their workflows,” said Chris Concannon, chief executive officer of MarketAxess. 

David Mechner, founder and chief executive of Pragma, added: “Pragma and MarketAxess share a common mission of using technology and automation to improve trader efficiency and generate superior trading outcomes for investors.”

These recent surge in activity, across various sectors and asset classes, makes clear how seriously firms are taking demands from the market. Providers are demonstrably taking note of the market’s call for better and more accessible data, acutely aware that falling behind the client demand curve now will be increasingly detrimental to business in the long run.

Whether it be through acquisitions to “plug gaps,” joint ventures to share expertise, or straightforward investment in technological updates, what is clear is that providers across the board know where priorities need to lie as the market undergoes significant change. 

Driven by mounting regulatory pressures, increased globalisation, and general uncertainty as regards future trading rules, the need for better data is clear. It’s do or die.

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Overall, CME, ICE and Eurex posted solid quarterly results, driven in large part by the demonstrably positive correlation between an uncertain macroeconomic backdrop and risk management opportunities.

Exchange and clearing house operator ICE posted a 4% year on year increase in net revenue for Q2 2023, while derivatives marketplace CME reported a double digit increase of 10%. Further, CME’s operating income was up 14% compared to the same time last year, while ICE’s operating income rose by 10%.

For Eurex, the strongest performance came from its OTC clearing, and repo volumes, posting a 23% increase in OTC and nearly double the repo volumes in June at €379 billion.

Both CME and ICE referred to the uncertain macro environment over the last quarter and highlighted the continuing appetite of clients for risk management services from the businesses.

Speaking to this, Jeffrey C. Sprecher, chair and chief executive of ICE, said: “Amidst an uncertain macro environment, customers continue to access our networks to manage risk, consume data and drive workflow efficiencies.” 

For CME, in the face of a “substantial” decline in equity market volatility, the exchange delivered strong equity index average daily volume (ADV) of 6.2 million, and its equity index futures reached a new all-time high Large Open Interest Holders (LOIH) “as market participants continued to embrace Equity Index futures to manage risk during uncertain times”.

The business also posted the second highest quarterly SOFR futures and options ADV, up 154% in Q2. Elsewhere, CME reported that “a flight to liquidity late in the quarter drove Treasury futures OI [open interest] to reach a record 18 million during June,” which it linked to deep and resilient liquidity. 

As well as the macroeconomic factor, Terry Duffy, chair and chief executive of CME, also highlighted the relevance of geopolitical uncertainty and stated that “market participants continued turning to CME Group risk management products and services in Q2, with particularly noteworthy volume increases across [our] interest rate, commodity and options contracts.

“[…] Looking ahead, we will remain focused on delivering value to our clients by helping them navigate through what has become an increasingly unpredictable world.”

Recently, CME and The Depository Trust & Clearing Corporation (DTCC) enhanced their existing cross-margining arrangement to increase capital efficiencies for clearing members which trade and clear both CME Group interest rate futures and US treasury securities.

Earlier in the quarter, The TRADE spoke to Michel Everaert, head of EMEA at CME Group about the impact of market volatility, how best to manage risk exposures, and trends expected to develop within the derivative space.

Read more: Fireside Friday with… CME Group’s Michel Everaert

For ICE, the quarter ended strong with a consolidated net income of $799 million (up from $555 million in 2022) on $1.9 billion of consolidated revenues (minus transaction-based expenses), while the adjusted net income came to $802 million.

Overall, ICE’s exchanges segment revenue increased year on year by 9%, despite the ‘cash equities and equity options’ and ‘OTC and other’ segments both decreasing by 3%.

Additionally, the business reported a 17% increase in its fixed income execution net revenue, whilst its credit default swaps (CDS) clearing increased 26%, and the fixed income data and analytics revenue also rose slightly, by 1%.

Going forward, Sprecher asserted that driving innovation will be a key focus for the exchange to continue to deliver value to stockholders.

In June, ICE integrated its ETF Hub with LiquidityBook’s order and execution management system (OEMS) LBX to offer efficient access to the primary market and more recently, the exchange relaunched the ICE Risk Matching Auction (RMA) product – part of the ICE Bonds’ suite of trading protocols – expanding its fixed income liquidity offering, in response to market demand.

Speaking to the second quarter results, Warren Gardiner, chief financial officer at ICE, said: “This performance is a clear testament to the strength of our strategically diversified business model and to our ability to successfully execute amidst a dynamic macro-economic environment.”

Eurex’s second quarter results demonstrated an overall decrease in total trading volumes, in June a 14% decrease was posted, in May 9% and in April 15%.

The exchange posted decreases in equity derivates, interest rate derivatives, and index derivatives throughout the second quarter.

In equity derivatives the largest drop came in April with a 20% decrease, whilst May was stronger with no difference year on year and a lesser an 11% decrease in June.

Interest rate derivatives decreased by 12% compared to 2022 for June – going from 82 million to 72.1 million traded contracts, while index derivatives decreased by 16% the same month, trading 15.6 million less contracts.

Lee Bartholomew, head of FIC Exchange Traded Derivatives (ETD) product design at Eurex, recently addressed the decline in results for the second quarter of 2023: “In my humble opinion, the numbers do not accurately reflect the overall performance and the hard work put in by the team, our colleagues, the support of our clients, liquidity providers and stakeholders.

“[…] In short, Q2 has had its challenges which I feel the team has done a tremendous job of managing. At the same time, I am not overly cautious about the outlook in H2. I think the business will benefit from the foundations laid in H1, and I am confident that 2024 will reap the benefits.”

It was a busy Q2 for Eurex’s business, with various developments, including the US Commodities Futures Trading Commission (CFTC) approving the Eurex FTSE bitcoin index futures in May, with the business becoming the first exchange to offer bitcoin index futures in Europe.

More recently, Eurex announced its intention to include short-term interest rate (STIR) derivatives into its partnership programme in June, aiming to establish an EU-based viable alternative liquidity pool for trading and clearing EURIBOR futures and options.

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