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Concannon 'Graduates' To Fixed Income

Traders Magazine Online News, February 19, 2019

Shanny Basar

Chris Concannon, the new president and chief operating officer at MarketAxess, said fixed income is just at the start of evolutionary change as  investors are looking to increase their use of algorithms and other electronic products.

He told Markets Media: “We are at the beginning of evolutionary change in fixed income - at stage two to three out of 10.”

Concannon joined MarketAxess, the electronic fixed income trading platform, last month from Cboe Global Markets where he was president and chief operating officer.

“MarketAxess is the leader in electronic fixed income trading around the globe, including emerging markets,” said Concannon. “Fixed income is the largest asset class, so I feel I have graduated from the junior league.”

He joined Cboe in 2017 when the firm acquired Bats Global Markets, where he had been chief executive and led the equity exchange's initial public offering. At Cboe, Concannon oversaw asset classes including global derivatives, US and European equities, and global foreign exchange.

Rick McVey, chief executive and chairman of MarketAxess, said in a statement:  “His experience in the global exchange industry, automated trading, foreign exchange and the exchange-traded market will be highly valuable as we drive further expansion of Open Trading, build on our strong presence in international markets, and continue to deliver innovative technology solutions to the market.”

Concannon continued that the best corollary for the evolution of electronic trading in fixed income is the foreign exchange market.

“The FX market used to be dealer-driven until the banks withdrew from taking risk,” he added. “Technology developed in FX can be deployed in fixed income algos, and to provide anonymous liquidity in an agency model.”

He continued that in his prior roles, which also include more than 20 years of experience at Nasdaq, Virtu Financial and Instinet, he watched the evolution of fixed income with the buy side wanting to increase their use of algos and other electronic products.

“The huge growth in assets under management in fixed income ETFs is changing the underlying market and leading to more electronic plays,” said Concannon.

Regulation such as MiFID II and capital constraints have also changed the global trading landscape. MiFID II, which went live in the European Union at the start of last year, extended best execution requirements from equities into other asset classes, including fixed income, for the first time. Concannon argued that institutional investors can get better pricing, and better meet their best execution requirements, with electronic trading.

However, it is harder to define best execution in fixed income than in equities, which are traded via a central order book on an exchange.

“MarketAxess is in the process of  defining best execution, the equivalent for VWAP [volume weighted average price] in bonds, and has provided huge cost savings in its Open Trading product,” said Concannon.

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