ICE, MarketAxess connect liquidity networks

ICE and MarketAxess will connect their respective liquidity networks to bring greater efficiency, better execution and access to deeper liquidity to the benefit of retail, institutional and middle market investors, the firms said.

In a new partnership, ICE Bonds’ automated trading system, ICE TMC, and MarketAxess’ Open Trading network will be able to communicate with each other, according to a press release.

The initial stage of the partnership will allow ICE muni center clients to respond to MarketAxess clients’ RFQs, bringing the “ICE liquidity component into the MarketAxess ecosystem,” said Daniel Kelly, head of munis at MarketAxess.

The goal is to “enhance price transparency, best execution, and overall market liquidity for all participants,” the release noted.

ICE’s and MarketAxess’s networks are “complementary,” said Peter Borstelmann, president of ICE Bonds, as the former is “deep and rich” in the retail wealth segment, while the latter is “deep and rich” in the institutional space.

“As you see more separately managed account trading, more exchange-traded fund trading and [smaller] trade sizes in munis and corporates, it made sense to connect these pools and allow more institutional to interact with retail and wealth and open up liquidity for both sides and create more opportunity,” he said.

“Clients have been asking for partnerships like this,” Kelly said. “They don’t want to go to three different spots to access liquidity … they want one destination for all of these liquidity channels.”

The partnership sprung from a mutual client familiar with ICE’s liquidity and, due to some of his system constraints, had to reside within the MarketAxess front end, Borstelmann said.

The client, he said, wanted to know if there was a way to get ICE’s liquidity into that ecosystem.

And during this process, other clients indicated they would also like to see ICE’s liquidity within the ecosystem that “they were living and breathing in,” Borstelmann said.

Kelly said it will be an evolving partnership, with the possibility to expand in the future.

“We did our homework. We wanted to make sure that it made sense for both sides and was additive to the network,” Borstelmann said. “We’re optimistic this will bring value to our network of users and their network of users.”