MKTX - Earnings call transcript Q3 2021 | MarketAxess Holdings Inc.

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Operator

Ladies and gentlemen, thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded on October 20, 2021. I'd now like to turn the call over to Dave Cresci, Investor Relations Manager at MarketAxess. sir. ahead, go Please

Dave Cresci

welcome MarketAxess and conference quarter call. to morning third the XXXX Good

Rick Chief Officer, growth. Chairman review the Chris product McVey, For call, And automation. and the and will for then, financial quarter expansion and President Chief the the Executive review and Concannon, international Financial Chris Gerosa, COO, discuss will highlights will Officer, results.

belief call statements turn let by are me differ that financial indicated company’s today’s forward-looking is Rick, represent that, call These remind in conditions what statements. to may statements. future over the forward-looking their Before uncertain. I actual include events The may regarding the results those from you nature, materially company’s and

XXXX. the factors company’s of XX, and results, the website. in December discussion read description disclaimer our the you direct statement issued XX-K ended this see forward-looking was earnings in future some For would risks a and the affect on of please our I risk Report which the now year available for earlier of on quarterly Annual Form to our factors also release, could is that morning

let to me over Rick. turn Now, the call

Rick McVey

suggests currently to trading last time. spreads headwinds the conditions market new XX%, revenue and persisted thank and our These X% Credit revert volatility. million XXXX us third joining the with combination you quarters results. margin reflecting in and data, spreads have of was million, three operating year-over-year. and $X.XX will $XXX to over our down QX trading post-trade and ongoing low of review morning Good history Operating credit was for income $XX faces total a mean was down quarter was EPS XX%. historically credit investments solutions. they over

bonds is business through and in showing expansion. post-trade gains and product share euro emerging international markets, services strong volume and Our market growth

credit Market government and provides volumes CIBM update on our China Direct. bonds conditions. to We offering low market an impacted the levels and negatively Chinese to by through X bond volatility. Slide are current pleased spreads yields, have add been Bond Connect of

bids shrinks temporarily. these price of dispersion During periods, and offers

pricing factors and to of volatility the liquidity possibly many volatility. high that are that most at periods times Our ahead. clearly bond And could comes we spreads there in impact normal advantage believe and through

As in from yields to maturity started low X%. Average to come factors increase about our average traded our have system fee levels, grade on is years historically high capture. the causes one down fluctuations to that years of maturity has

our against of spite around we market strong the are closely. to growth highlights, XX% emerging lower up the Eurobond of likely watching periods will Slide are markets the year-over-year the news and We Eurobond supply are and around estate levels product is more bond yields of X of likely real inflation, showing international and volumes. growth areas. in yield our volumes shortages normalized to that emerging lead We it believe market buying bank disruptions, bond levels see China on which is world. central volatility labour In a markets. the tapering chain low ahead in we that in market the backdrop world in

share estimated XX% trading. Our up volumes with are estimated in new market Emerging debt eurobonds X%, volumes up share during the market quarter. reached reflecting market in highs gains global

in APAC hard coverage Latin trading. market local We regions. China increases EM The in America, yen market strong well of currency bonds both XX local addition in rates local denominated are euros EMEA as growth markets as seeing to dollars, across our

additional cross-selling records opportunities. new active set trading and we firms. client international clients quarter, broad in client network global and This our This expands creates

and quarter expect China onboarding client ahead. We are Bond with for Connect active an underway

market opportunity. in meaningful increase the in market provides China world, As bond total the second government our a largest

an expansion update provide Now let and Chris automation. me turn on the to product to call over

Chris Concannon

participants X Despite due to continues to daily of million by trading continues liquidity update to offering to drive $XXX Rick. support credit billion trading delivered an our The the diversity and to during open also clients acquisitions MuniBrokers highlight the have orders credit increased value transaction all improvements landscape. quarter. marketplace. trading. and available opportunities. prior across $XX growing our and The $XX Treasury on the Thanks LiquidityEdge all during In executed engage up $XXX billion in trading of open price trading year. quarter Slide grew XX% market the spread, with RFQ Open all realized market by increasingly trading on compressed volume open the cost of estimated expansion. open through participation liquidity. was year-over-year product saving anonymous chance the Dealer in saved Dealers third XX% open over XX,XXX the an was and billion notional volume the US of market. application investment of quarter, seeking in provides are income the to in new from benefits trading markets the costs MarketAxess quarter, and fixed

up our All-to-All us platform US to in for have the billion platform, launch of MuniBrokers, the year. up MarketAxess dealer electronic the grew The on same functionality as marketplace saw the highlights enhancements third and RFQ targeting solutions year-over-year. total currently growing X recent the XXXX. are the solutions The underway a of quarter GXX solutions. average our responses a of liquidity million revenue our acquisition driving and inner our our initial trading the for extending phase through in algorithms In include Through and Combined from from Click-to-Trade of demonstrates data our has the automated Both quarter, recent initiatives. last XX% and data from dealer seven approximately the revenue through billion growth do drive to This Algo from Slide was unique critical trades, quarter have are business Trading $X.X trading result records volume additional our post-trade year. bond enhancements count services conducted services the dealer XX% which is to Auto-X All approximately in use Composite+. X% into diversifying we XXXX. trading MarketAxess. to quarter quarter year-over-year. we account our Regulatory drive expansion and totals. orders. revenue on $X.X network. XX% volume. trading increased responses municipal and well XXX,XXX XX% in of in platform bolstered quarter All efforts steady in of types The for data volume Municipal grow Today, volume clients automated aligns up dealer capabilities bond million to total on XXX% our per platform regulatory in dealer to period in investments sources, open reporting of government sizable credit-trading, to total and of quarter, $X.X muni $XX.X of European our bond our for The community. Treasuries. million an is open we and trading and not add of third on in further X.X our an The momentum long-term which MuniBroker and quarter, the these in billion an investor of Treasuries growth All-to-All trading trade average Continental this with Reporting engagement $XX for made the Access of opportunity. like Reach the integration offering of these priority responses Hub with our of total in suite continuing We Axess demonstrates the the versus of the over believe algorithms several inquiry are services Composite+ information last is helped reach addition in of the client for a in benefits third of recommendations X our We post-trade information months, to a X.X including trading automated diverse in from our firms our and of up quarter represents XX leveraged we XX% market and fourth growing market will access X% trading number in third XXX automation, the the acquisition of quarter, new tools revenues, our increase help bond of to in addressable Integration Slide XX% post-trade protocols services to now seen up

volumes We portfolio our record and on and solution we in Mid-X active the seen with Mid-X our the volume in client to market trading have of session group believe dealers Following of today. the investor in same is firms active in functionality. protocol later portfolio active XX expanding Eurobonds significant record Activity drove based credit billion since May our quarter. unique group billion. were $X.X May, new our participants the We in US this $X.X XX plan of year. enhancements wide traction to trading quarter beyond reached

over our financials. me provide on let call turn the update Now to Chris to an

Chris Gerosa

provides of you, Thank Chris. quarterly a Slide summary X our performance. earnings

year anticipate up The maturity all transaction rate the of to in months revenue. rate in to foreign to as recurring bonds The yields the lines about was acquisition. run value was up fees first to quarter US clients was positive to $X trading million million. credit was years tax exchange sales due decline offset attributable increase expense. X% nine of the lower XX.X% XXXX. for to XX.X% The new generated in expense Hub Regulatory added trade decline XX% in over mainly revenue we the effective XXX% in $X.X $XXX of year-to-date. in has by decrease overview traded and X US and in to of post-trade Reporting The due prior was revenue of the variable decline for driven and from annual the year. The rate X% commissions to losses, high the service excluding bond due weaker dollar. increase revenue, activity impact of commission year income volume reporting overall average exceeded post-trade fees data quarter contract quarterly US provides and other and The million an was on sequential The revenue by duration, contract from platform. X% other due shorter pick exchange sales million, data lower the revenue the be Third currency a capture. down gains, such trading foreign XXXX XX% transaction in per Information for uplift Slide million includes foreign income gains the for and per fee volume in new of was the new grade fees the

million all emerging higher but an a distribution this from fee fees plan fixed fee to fixed in increase due a distribution year-over-year mix plan, the fixed to fee US movement and lower Eurobond lower and fees, variable fees. fees volume hybrid dealer some market experienced as transaction credit provided that fees. was also for lower command higher We per of Other explains plans

credit The third of Slide quarter XX license expense other and subscription MuniBrokers includes fees. XXXX $X.X distribution fees detail. million provides

enhancements. benefit amortization $X.X our increase to in continue Third and XX% compensation and geographical year-over-year were million were acquisition include The higher regulatory costs these reflects intangibles benefit of support million we acquired integration expenses and exclude If salary costs, non-recurring expense The up quarter product we and expansion. employees MuniBrokers as expenses, and with the and X.X%. add expenses reporting increase benefits hub to up acquisitions. – $X.X to of associated operating in continue includes costs we as amortization integration in contributed and cost intangible to back acquired expense, high M&A to year transaction professional model fees higher invest strategic in acquisitions XXXX. expense The consulting depreciation of development decline from software reflect a XX% and our fees to in in decision million convert and system savings $X.X clearing August increase trading costs costs the self-learning amortization year. recruiting from over

expense updated $XXX other range costs. of expense to million, cash XX to and from reflects, are million. items, million provides updating flow year our XXXX $XXX clearing guidance a million on variable to We range guidance $XXX down compensation among lower an and capital incentive update Slide $XXX The full management.

and investments and cash September XX trailing of million. free our XX, cash flow $XXX million, our month $XXX was were As

million shareholders to paid we shares. $XX and quarter, dividend the repurchased quarterly X,XXX During our approximately the

quarter approved $XXX we facility we third XX, under one And three million borrowings did have During replaced one million credit credit new quarter, any dividend. year $XXX directors on third or the the the quarterly the of board with year, revolving Based our facility. results, our a not facility. $X.XX year secured facility on revolving October regular

me Rick. the Now to turn let call back

Rick McVey

Thanks, Chris.

term, the growth than protocols we expansion While the our are new we strategy business and with short in average of rates new new evident pleased slower clients. products, in experiencing are

the market credit confident our conditions trading once will improve are in benefits pool. open We liquidity again of unique highlighting

Treasuries, New trade growth revenue opportunities periods valuable and add post in in China, data the to ahead. Munis, US and promise show diversification

Now, the I to your open would happy for line be questions.

Operator

Instructions] the of Dan Jefferies. Thank line Our with question you. comes [Operator from first Fannon

open. Your line is

Dan Fannon

couple years? about I kind others about talk has kind in offering the and that of but around wanted just as to framework changed of competitive about has backdrop the how spreads very of the dynamic think today could market and gave over how last context being Thanks. you versus you talk volatility understanding that you – low, your the that

Rick McVey

continue two the continue same indefinitely. of the at so a there impact market. from conditions and I impacted say spreads the listen, overall I'll to year the we we happy I trading orders we turn with certainly I stories on as saw are very was last more this volatility seeing that And are going Sure. with current voice platform. ago developed here trading you rapid this And year clearly open pilot quarter fixed is Dan. starting year-over-year When either. these levels probably one year XX% of and One And trading, take year. we're that trading volatility into a banks the transition very should no income more think expect initiating revenue than so, to to market same they the a see to cut low based to conditions from low electronic conditions also first competitors, market But will to said this levels expect also call see shouldn't our for big the you is of from and of what down that by trading, in to dealer a that brokerage we I’m I competition, are. large dealer business that. dealers do credit quite our on index this are exactly as

of been deployed year, is So that's firms, moved to on the been now very dealer one the this of the has dealer of traditional themes from away it as some areas It's trading business trading brokerage entry voice big open not the providing of our focus, not, trading. networks, has including electronic own. an is but it point historically one DXD been our for actively

trading around are is trading, the trace portfolio second from ago X% or trace the grown The growth year processing of portfolio for around significant. And X% something now. X.X% where benefits portfolios to of of has a

competitive progress and of today processing So is see our electronic portfolio It given think the large two themes conditions time. to are forms they the quite and think I point CXD story with market clients number those is would I this of critical front items, been own the beyond not does of year out to I this utilizing effort. and we're part confident include change new and solution. will liquidity, that, over line And it dealers are trading that trading have on happy pure we the

Chris Concannon

what market, price I a environment, And protocols. share. a particularly that, just gravitation will portfolio actually mean do forming see protocols have in you Dan, they involve in vol derived tight of or that differences using sessions that that price if also in environments, the like And a suffer those spread would market, mid-market in it's Chris. environments, you protocols mention to different you'll price fast deriving price end Low are we in by and mid-market low a a I solutions are volatile portfolio trading lose things see trades market the from volatility where market, sessions market,

seen of of So the the the get portfolio benefits by - overall feeling mid-market lack now. in past and mid we've volatility. actually trading right sessions They're hurt volatility both

Dan Fannon

terms Thanks. of of current kind those development of initiatives and the on have spending ongoing just of in the still early. as a but the change kind internally. the we guidance that know growth think of and Any of of kind more is in That's and helpful. change understanding expenses spend of then environment, in rate the And reflects kind And XXXX, which about bit the terms areas? I you on

needed context the and Just you're thinking address to these those? and kind of the how environment spend of today of of that's initiatives about level the new kind

Chris Gerosa

talked fourth be yeah, G. will specific provide where Chris the for budget this But David, XXXX to is you on we're question. We're we and through the in that Yeah. guidance Thank quarter work our to going as Day continuing call. years. we're very we have next in about looking great back talked us a to XX forward to of and list in long of years we Investor and the ahead about detail today the on XX opportunities December,

invest committed are enhancements expansion, to geographical trading our product and expansion. protocol to system our focusing we footprint those So on and in opportunities

we think reduced investments. consistent as guiderail, just do to levering growth has would our historical to variable expenses with fact that don't going to do I So with we’re that XXXX expense as the guidance I digit operating to and year our the with on rates. those a growth expect all double we It's next look say back nothing

Operator

you. Thank

Rich Our Repetto next with question comes the from Piper of line Sandler.

Your open. line is

Rich Repetto

Good guys. Yeah. morning,

So on do to with, follow-up my I guess has first I expenses. the question guess,

you're – in back headcount into mainly to and implies increase because X%. am I XX% behind the or is And it But expenses increase can XX% a environment. you like XQ? what year-over-year by, getting XQ. can guidance I for give you this I volatile it I what's guess you despite I headcount, or the and we in low If into X% volume going continue stated invest slow calculate if did back think, to

Rick McVey

Yeah.

year-over-year we're the So to we do fact need that the have year. costs not embedded acquisition you that consider last in additional

apples out apples cost, the strip low-teens acquisition related rate range more Rich. you I normalized when So a see think that in that to you'd double-digit

Chris Concannon

into is the in much conversion to that our formula, other and to And particularly XXXX. may scale things, Richard, which we the around into Europe, clearing globally, last your thing of be complicating made changes add better self-clearing year some

on costs of you trading when start clearing should our much of about side. trading that our So we open scale expenses variable on costs, reflecting a think better of growth

Rich Repetto

it's question, out really of So you of Rick, guess the know can to know investors the here next or about, don't that's part sort more -- one you you say, what know, And what's environment I on know, there. all frame you either give But typical the question. I turn. time give

The And [indiscernible] there corporate credit you this a talked and so any brokerage on issues market but side? -- on side. like in of Treasury It the impacts doesn't to that whether environment. other hear then least China your I'd get the regulatory China, like it's your review the credit, in -- is look focused much about on at on efforts

Rick McVey

managed fine, course. sit limit XXXX don't have totally spread XXXX, done Okay, we've dozen on a long levels of we But the five for two really do of similar you time is spreads levels happy but so make market quarters and previously what the those and which model at low take our pointed know, is improve was we to years question topic, credit did volatility. conditions at the and through in out or looked question answer good. we've conditions of to short a and low business last and a know, Rich, But all we those. it two is, to go you when

basis high So far. in spread sitting of the range XXXX we're a grade with X already all point index beyond so that today

increases that not change. we're what increasing. energy transitory, in in the does would nor as history say for clearly seeing – I volatility my pressures are will the prices. So see in that from Certainly, we're And earlier, some do ingredients mentioned a we of perspective, seeing the wage feel

buying in think some And So central have I there new of issuance the longer bonds in net corporate. a you banks, here Europe especially the ECB, US, the and story certainly core that lot inflation of nature of government and in our of parts the case the and the term are mortgages. even still in

have of up quantitative would still have some reverse inflation trajectory to certainly I market on expect the going regularly data. the easing liquidity start So you above relatively have that that the showing excess numbers you will of in and now because a soon in we lot

market one conditions So that would are sign, be I that the improving. think

talk income course front, the see regulatory transparency support. greater wholeheartedly of continued there's we we On markets, fixed in which that about

moved Treasury high do US has idea have data, increase now bonds just transparency the given not no to of market, they corporate and We as treasury that why for FINRA the collects yield.

would reporting Chris taking our So in to steps proponents transparency byproduct as big earlier, growing fixed in transparency we continually increase We're business. as be a post-trade income, European increasing mentioned of treasuries. reg of also

rules, regulatory which sure I course, FinTech. question, we with making audit domestically, very structure, busy We think list. then to in for registered public And are are very much flow, valuable perfectly are agenda think tools and clients a attached of equity on has to regularly our fixed those payment I'm accounting and companies So transparency at a some trade high does is the the that focus at back them. which but and ATS the here he crypto the retail of understood improvements US income like to sure lot equity makes we're and focused on Clearly, we on I'm trading that see to of Gensler we Chair in front not complying topics But the order a hip, the to US mentioned him. market provide service potentially sense. providing those trying

Operator

you. Thank

comes Kyle of KBW. line next Voigt the Our with from question

open. Your line is

Kyle Voigt

point credit remarks, environment from on responses pretty I'm and of obviously, from noted wondering the how in and much assuming spreads think higher. sudden kind think the is think automated guess continued is fashion? -- a a you I I wondering, Hi, and you Does per all standpoint. comfortable Maybe certain rate executing I'm customers tipping of I'm secular? and get then guess to just increase of if an it a feel good is. And response here. wondering move over this executing of slide this kind just you a just inquiry of most -- more the then morning. volatility prepared a benign just just you credit the that in there's automation just

Rick McVey

Yeah, three questions.

quarter And automation growth in their will really by to it really client have automation on really growth seen Our mean that need volatility XXXX. times I continues. quarter fund particularly desk. are trading of multiple It's we're on There complexes based over investment client tickets where largest rate, grow penetration. the and slower, that but going it's after they what the that solve and adoption

level. And The comfortable penetration using seeing client or at and increasing size low is a really touch so solution. a clients the we’re the are increased increase workflow for no it's touch those trading really that solution credit

actually achieved, solutions, now expect which open particularly continue a request we participate in volume. tools solutions, We seek touch of result our auto XX% RFQ key total There responses is we like that or clients – price. to it's reached in trading would of dealers, to of continue X% clients as one it's workflow automation that's other of no close or to responder, to for growth, to see to through automation to things adoption benefits now continue rolled the other of in our out. It's trading a why environment. So are grow as touch allowing clients is and to activity that our low a

the So pool. that’s having it – liquidity has interesting to overall an dynamic

Kyle Voigt

Thanks. it. Got

year stocks is back bump so and up stated the there? whether capital offset repurchase and increase just whether I'm or any to has the come there's have environment dilution above date question on to wondering now or operating a deployment, objective Second challenging. no equity obviously the program change the just in appetite been you to

Chris Concannon

Yeah, this is Christy.

the that the strategy, one have of to our that third and one dilution with during our And so to repurchase goal us, offset for program capital our we in equity was invest Our business the number in budget. to believe from deploy us capital investment the management look repurchase connection priority employee and we for as to quarter, is business satisfied opportunity revisit and grants. our continue XXXX the number to what's program the and we we'll investing

in capital management change our strategy. So no

Kyle Voigt

Got it. you. Thank

Operator

you. comes the next line Instructions] Cyprys from Our Stanley. of Morgan question Michael with Thank [Operator

open. Your line is

Michael Cyprys

capture Hey, good in your And morning. initially information how regulatory to in fixed this interested may some seems and on just landscape that requirement I hoping dealers it dig little was now the side XXcX-XX be require would wanted regulatory think is like been back just about ensure has the thinking. there on circle just maybe in credit the issuers see issuers noise private. to but apply supposed we at was side landscape. there are corporate may to further the bit could I I on income and a updated, and you Rule thoughts the around evolving it to particular to equities least it was many that

much how How just of a see you thoughts and just challenge was is to fixed you regulatory that do that of I broadly, income more markets? on out playing do curious So any the sort see landscape?

Rick McVey

really they Michael. markets investors in because now. and and XXcX-XX particularly XX right around recently OTC lot not today in was retail or there that with everybody pronouncement there's there focus had sort it next like on about a a dealers the commission how in absolutely you're a and early provide being SEC fixed any quite originally XX about. trying because some year terms previously a income in quotation prevent review included with really penny and and and medium a from participants rule exactly discussion is antiquated in of commission it's the did to into rule is designed review long surprise change year exactly discussion fraud because been there time And for does that -- mediums. no and and and come it's implementation come discussion show. did that income this been knows not create as the it I a surprise of came broker applied a never it as did Thanks, to there to in It's what because Register quotes or are to change a the was staff guidance old delay income under is equity fixed publishing step It's and there restrictions viewed And currently, And had Federal fixed define as a nobody think, register said it mean, until stock currently, before guidance good the really year, that market rule going does industry the any that out Yeah. question, right, for been know what I of quotation

our challenge our with exempt, have are do So information those from the ones would most we exempt. bonds exactly It's to all what that but used clients the to believe validate for public comfortable bonds primarily definition issuing say of quotation fall rule. probably perspective, be we Market an fields are going that with actively the the companies. corporate are to be are believe is majority of have gotten available is because would today, by that they thing the that the that that create would here companies the for the ones participants dealers required From issue public that have not other to starts that medium. readily And are broker used are protocols and and a we not the variety subject a protocols not that of

of of focus that's some securities and treasuries still and the area and exempted. areas interpretation, Some been now. regards in are market where subject private bonds XXXas the to like is Large have munis

some market So when by going be the They in publishing of could very think to all I will and cases, the are and the is market US sliver quotes hoping institutional we said we're electronic rule the impacted hoping and we're especially that a trading about response concerns for into rule be available and all transparency as should by income done, promote that be impacted securities to could course be course, some of and of small that participants. of fixed industry for really to

we about So right it now. that's what where know stands

Michael Cyprys

response in you back much Maybe little about Thank this Maybe know coming bit of sort bit a of so a you're you you how or sense of for question around a seeing Give war taker guys the sense little growth a retention for there. in guys us today. talent comprehensive maybe around can years? that? just could couple and talk follow-up adapting to Great. we're you around just giver marketplace for the next been are BigTech? -- turnover. of growing, headcount hiring maybe where net the us give Clearly, have Any sort expectations from but you a you over you're and

Rick McVey

hardest and our out offering that Well, on our levels overall I'll is growth look from start is -- we the far in – if to overall and quite work at talent very offering, out We've you to. about to particularly as the our new home retention excited rate and talent we MarketAxess. curveball to talent the attract obviously investing retention footprint an had technology flexibility by are grow at here We're of count added have. we employment. tech But tech investing hold in good the head historically

market. with acquire. the board. program, increased work seeing the the from candidates helpful great board, great very we colleges make people over the where the hiring sophisticated seen flexibility across success around we have so we years. been to tech -- that are great seen the graduate in our with we're our that some sure that's with to in talent Across So seen new graduate country best and And and able success the talent on our market few and the highest actually coming attract across directly in we're We've program we've success past to players the

the quite opportunity have working difficult. companies hard or from talent large very whether tech companies. So and taken a to great retention that some from historically, up opened of Wall actually tech tight say has the our acquire I Street office view it's on talent is firms would

Operator

Thank you.

James. Patrick from line with comes next question Our O'Shaughnessy the of Raymond

open. Your line is

Patrick O'Shaughnessy

all question have serve all are your the would venues morning. the on landscape. of I from you What competitive follow-up good alternative open competition in Hey, trading? to seeing an terms guys that a as

Rick McVey

we quite primarily and gains away it opinion. in dealer – Patrick, efficiency question, trading involve direct gold know, activity you honestly, and that all the Good in the to much is client see does my not trading

at session pure from look it's us, in DXD. DXD in sweeps based you is that trading activity when So away the largely growth

today really to trace But on the in potentially shows what liquidity the Portfolio exhaust the is elsewhere. opportunities up participants trading I think look DXD for is without certainly additional marketplace. DXD. XXX% tape has

the the based the which should But getting is a TRACE looks think to like again, protocol on that course them those tape. the that on the looks on at year-over-year levels are executable the ATS this and speak CXD of and we of analysis direct. the is all stages, It And clients, directly Direct protocol strained tape is with what's of all us levels. opportunity at some it's when dealer coming - trade Trumid. that the based is in right? have I So and entrant of And newer from It not talk media overall you to available like attention fully to and growth so do. you to is to early dealer are is flat us

is trade get involves always where to there on the or a off almost a point it to So negotiation completed. system

it trading So process, participants to some it's some electronic. negotiation. of of seeded market with According it

our and open really levels of through and and products trading, we that price that higher leadership significant did years our of about seven there all think will come investment our to that focus made volatility all it believe is protocols just that and all we when on XXXX. we all So when as benefit of in see of we to dispersion

Patrick O'Shaughnessy

you. well. you for and opportunity opportunity the want in else that really the to then start thinking that dig some what more to to about capture TAM meaningfully Chinese bit bond a TAM? you to of Thank And place guys are How guys it. as market of little Got has to take

Rick McVey

Good question. Yeah.

volumes, activity You levels day. billion know bond international the in billion look pure at turnover currently, per $X around $X somewhere see China if at the you or Connect

volume. Now local large it one the hand already a on know makes you that with that market

ownership On other in our view less shared others part than the daily hand, will around the you up volume government continue that smart ahead. grow to is market very Chinese the of that's that in international because it's highly indices government the waiting small in the XX% a the that the bond bond years world And know go by will Chinese market. likely

So, market. government those bond that global are will their bond, measured increasing be by indices the government in ownership Chinese

always. and and So, attractive markets as opinion, it's OTC only today in addition will Onboarding an consuming is it in complicated grow. time our

So, in fully we Chinese spite onboarding lots access, to of trade have our government documentation on a bonds there that integrated are clients we the ready through. that go will to platform market of process fact and that is

that offering. will get couple of clients it So, most our where mass, probably to of a take us quarters advantage of new critical take to can

Operator

you. Thank

Alex comes Blostein question with of Our from line Sachs. next the Goldman

line is Your open.

Alex Blostein

This as some dealer capture filling of Alex. the the more But a for from we like how bigger yields and shorter sequentially, color cited you. Sherin rate rates? jumping which played can fixed. I provide rising XQ? off to for you point was in for know should reasons us And three down variable role capture is Hi, you to decline thank duration, and moving these grade of factors High think in

Rick McVey

year-over-year a G, capture rate Chris variable variability The factors actually dealer was the you that contribute prioritize are maturity, -- all what lot of contributors, environment. the of to fee grade number increase out, items and there's to rate you it, is the factor main fee as interest those to plan a if and, pointed the This those month-to-month or interest three is rising are one had environment. years the high Yeah. year-over-year and contributed to

collectively, of You out, a years in what presented of was market fixed a my all of And for plans a to dealers that, pointed XX, spread conditions plan. from that gap Rick remarks migrating to split XX we decline. had was a which there saw year-over-year stack. contributing the $XX composition XX-year prepared to fee the And fee number fixed the a on variable I treasury out probably from plan – that maturity. was it's referenced fee side shorter XX, a on our

Alex Blostein

it. Yeah. That's Got helpful. Thank you.

Operator

McVey the in further remarks. showing call to Thank closing now turn would you. Rick no I'm I to the for queue. questions like over

Rick McVey

an quarter. next joining much again us update forward very we and Thanks to for today look

Operator

and your call. today's concludes Ladies gentlemen, Thank you participation. that conference for

have Everyone You a disconnect. day. may wonderful now

MarketAxess (MKTX) 20 Oct 212021 Q3 Earnings call transcript