E-Treasury Platforms to Get Boost
CME Group’s integration of its NEX Group acquisition is moving ahead at a rapid pace, according to the exchange operator.
“Our teams are working a really collaborative way and have made good progress on the integration planning so far,” said Terry Duffy, CME CEO, during the firm’s recent fourth-quarter earnings call.
“We are very pleased with how the integration is processing,” added John Pietrowicz, CFO of the CME Group.
Over the next two years, the CME plans to move NEX’s BrokerTec and EBS platforms on to its existing Globex trading platform as the CME moves NEX on to its shared-services model.
“We have let customers know that the BrokerTec migration to Globex will begin in 2020 and the EBS customer migration we begin in 2021,” said Duffy.
Although the underlying technology will change, Duffy noted that the CME Group does not intend to use the opportunity to change the US Treasury market structure.
If there is to be a change in the market structure, it should come from the grassroots up from market participants and not from platform providers, he added. “If there is a change, it probably will be the market participants using the platforms are going to be the ones influencing the change.”
Meanwhile, rival electronic trading-system operator BGC Partners plans to double-down on its investment into its Fenics electronic Treasury-trading platform.
“We expect to grow further as we continue to invest in technology, convert our voice and hybrid business to more profitable fully electronic trading and continue to roll out new initiative across data, software, and post-trade,” said Shaun Lynn, president at BGC Partners during the firm’s fourth-quarter earnings call.
Exactly how much the firm plans to invest in Fenics’ market data, pre-trade, and post-trade business lines is still up in the air, according to Howard Lutnick, chairman and CEO of BGC Partners. “We really need to button that down.”
Electronification of the municipal bond market also presents a large opportunity.
The success of Northbound trading showed electronic execution is way forward for the bond market.
Algorithms have become more prevalent in the spot FX market.
Increased electronification has created useable and accessible real-time and historic trade data.
Buy-side firms can discover liquidity more efficiently and execute on Turquoise.