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What's New in Fixed Income?

Traders Magazine Online News, February 12, 2019

Travis Schwab

These are Notes from the STAC Mid-Winter Conference Panel on Fixed Income

Fixed income is an area that our customers are increasingly interested in and we will be doing more with regard to trade surveillance, compliance and risk in these markets in the year ahead. I had the opportunity to join in a panel discussion on fixed income at the Security Traders Association of Chicago Mid-Winter Conference last week and came away with several observations.

  1. Markets are like snowflakes: each one is distinct but their similarities outweigh their differences. In the case of fixed income, lower regulatory oversight coupled with a large number of liquidity providers resembles FX but the distinct liquidity challenges posed by off-the-run issues is unique.
  2. Much is made of the absence of a single, central regulator for market behavior but the actual impact of this will be diminished with time. On the one hand, the increase in electronic trading has already brought forth market conduct issues and, on the other, regulators are increasingly focusing on cross market and cross asset class activity. No market or asset class is an island anymore.
  3. Looking forward, the enthusiastic and nearly unanimous response from the panel regarding the biggest issue for 2019 was the purchase of BrokerTec by CME Group. As much as fixed income has evolved in the past several years, this tie-up will create even more change going forward.

We love watching market structure unfold before our eyes and fixed income is certainly at the top of that list these days. We’ve written about similar developments happening in cryptos and think 2019 is going to be a pivotal year of change for fixed income trading. We look forward to helping our customers solve their FI trade surveillance and market risk needs.

--Travis Schwab is CEO at Eventus Systems


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