MarketAxess Looks to Give Dealers Additional Axe Control

MarketAxess is enhancing a tool for dealers that was launched late last year to stream axe information to investor clients with customizable visibility controls.

Dealer Direct is a tab within the MarketAxess single-screen trading platform. The vendor’s traditional inventory tools are still in use, but have been built upon to create Dealer Direct. 

The tool supports disclosed deals with an option for dealers to customize visibility controls, as users asked for control over who could see the particular axes that were coming through the system, says John Gallagher, head of US credit dealer relationship management at MarketAxess. For example, some dealers may only want to show the offer to their top 50 clients. In this case, through the Dealer Direct tab, the dealer can indicate the names of clients they want to be able to see the deal.

Additionally, Dealer Direct gives clients the ability to set up watch-lists based on their individual initiatives, by entering a bond’s Cusip into the system.

“Dealers of all sizes—whether large, intermediate, regional, [or] small—all have the ability on our platform to stream axes to their clients … [and] the dealers direct us to help them show which clients can receive this information,” Gallagher says. “What we like better about the Dealer Direct platform is that, unlike inventory, Dealer Direct is able to utilize what we call ‘watch-list functionality’ to alert clients on dealer axes they have interest in.”

The technology for the tool was built in-house and modeled on an existing platform launched in 2016. The minor changes that were made by the firm related to permissions on the back end.

“In a different part of the MarketAxess database, when we are onboarding a particular dealer or when we are coming out with an initiative like this, we put controls in place for the dealers to optimize the platform how they like,” Gallagher says.

Customers can stream the platform via an API that connects to MarketAxess. Gallagher says this means the trader doesn’t have to do any extra work once they publish their offerings or bids via their internal system. Once the trader connects to MarketAxess, the platform takes the bid and displays it to the clients of their choice.

The firm’s aim is to connect dealers and clients to the platform more quickly through updating its API capability. “We’ve done more work in the permissions base and the API connectivity,” Gallagher says.

Using the MarketAxess GUI, users will get alerts when a dealer is selling a certain bond. If they want to engage with that dealer, the negotiation can start from there right away.

“Nobody knows about the negotiation—it’s between the two parties,” Gallagher says. “Once it’s up on the system, those clients that have access to see it from the dealer can get an alert on it and decide whether to engage or not.”

Dealer Direct has been in production since the fourth quarter of 2019.

“People are using it already. We have a number of dealers already connected to it and we’ve got a pipeline of dealers that want to connect to it,” he says.