MarketAxess Holdings Inc. (MKTX) Earnings Call Transcript & Summary

All right. Good afternoon, everyone. Welcome to our next session here. I'm Ben Budish, Barclays analyst covering the U.S. brokers, asset managers and exchanges. And with us from MarketAxess, Chris Concannon, CEO; and Ilene Fiszel Bieler, CFO and Barclays alum. So Chris, welcome and Ilene, welcome back.

Thank you.

Thanks for having us.

Maybe just to start out, can you talk a bit about the broader shift from over the phone to electronic trading. Where are we in the major asset classes? How do you think about the ceiling? How do you think about how long it may take to get there?

Sure. And when you look at the story of MarketAxess in the sector that we're in. That's the exciting part about the story. This is not a mature electronic traded market, there's still a lot of room to grow. When you look at the most advanced in the fixed income market, it's obviously U.S. treasuries is quite electronic. But even within the U.S. treasuries, there's still more e-trading that can grow. Within the corporate world, where we're fairly dominant, particularly investment grade and high yield, we're still only halfway there. So about 50% of the market has been calculated as E and the broader part of the market is that's a big opportunity within just investment-grade. When you move over to things like emerging markets, we're still early days in the e-trading space. And obviously, we're making great headway into the emerging market, both hard dollars but also that local currency market, that local market, which is -- hasn't seen e-trading. So it's just -- again, still early innings in the e-trading space. When I look at the investment grade and high-yield market, the U.S. corporate market, what's exciting, things like portfolio trading is a real interesting outcome in e-trading or the opportunity for E. They are the most complicated block size trades that we've seen on the market, and they've already adopted e-trading. Largely because of the complexity of that trade. But now that we have the trader using E for portfolio trading, it gives us like great opportunity to convert other areas of the market to e-trading, particularly the, what I call, the larger block trade size.

And how do you think about the ceiling there? 50% IG. How high does that go? And can that look like other markets?

It's funny when I look at the market and there's this point, if you get to 80%, why isn't 90%, right? At some point, you don't stop and so there will always be a part of the market that is esoteric, complicated, large capital commitment blocks. But I see no reason once you convert the block market to more of an e-solution, let's say, with similar protocol. There's no reason for it to not stop until that 90%. If you look at other asset classes, even the block markets in other asset class futures, for example, it's largely dominated by e-solutions trading block. The futures market on screen is all E and then equities is 95%, 97% fully electronic. So at some point, when you think about the fixed income market, particularly investment grade and high yield, there's no -- once you cross that 60% to 70% barrier, you just keep going until you hit 90%.

Got it. I want to ask you a little bit more about kind of the path there, your near and medium-term outlook, but maybe just even more recently, -- can you talk about how the current macro environment impacting electronic bond trading. We clearly saw a turnaround in your results in August, maybe unpack what you saw there? And any update you can give us on how September is shaping out so far even though...

We're just a few days into September, you want to hear about September. But no, look, the August, we obviously saw from a macro perspective, a market environment was friendly to our model and certainly took advantage of some of the key offerings that we have, like all-to-all pricing and that unique liquidity. Certainly, earlier in the month, we saw a spike in volatility. That spike was probably sustained for 6 -- or 5 or 6 days. It wasn't -- it was relatively short-lived, looking at where vol typically trades. And then we saw what was interesting a fairly robust new issue market in August, which typically will impact our share given our lower share of the new issue market. So it was exciting to see overall volumes were quite high for an August. And the secondary market really picked up. But where we made sizable inroads in August was around our portfolio trading offering. We've been working on our X-Pro solution for PT and that certainly had a client impact. We're seeing clients come back using that solution, taking advantage of the unique data that we have embedded into the X-Pro offering. So we saw a lot of macro market things that benefited but also just organic blocking and tackling that we've been working on for months starting to pay dividends.

And I think if you think about the macro market, right, and the environment that we're seeing, we are all looking at what's happening in the expected rate environment, right? Everybody is expecting, is it going to be 25 basis points cut on the [ 18 ]. Just a little while ago, people were saying, is it going to be 25, is going to be 50 basis points. We obviously all saw what happened in the labor market, right? We saw what's the job numbers were -- and when we saw that because it was different than expectations, we saw again an increase in vol, right? And so there's a question of you see these spikes involved, but do you see sustained volatility. We didn't see the sustained volatility in August. We did see those 6 days. You can look at the credit mix, you can look at different external benchmarks and indicators and get a sense for where that is. We obviously know that is good for us and we see that. And we obviously saw that it was good for our fee capture. We saw fee capture was healthy one in August. We saw that extend duration. We saw duration extended, we sold 154 versus 143 in fee capture. And a lot of that we know is macro driven. So there's these macro environmental factors that we're seeing. We're also seeing what Chris talked about in terms of some of the things that really are driven idiosyncratic to us. PT in August, we saw a 21.8% market share. And that was obviously improved from the 17.2% we had seen in July. There's a mix of things going on here.

So maybe thinking about some of these other macro factors. If we just extend out a little bit longer past September, I mean how do you see like overall bond activity evolving? How [indiscernible] declining short-term rates and potentially normalizing yield curve and maybe other factors, recent elevated new issuance, but perhaps translating into other secondary market activity? How could things shake out over the next 6, 12 months if things kind of look that way?

Well, first, if you look at the environment we're in now, there's obviously expectation around a rate adjustment downward in -- on September 18. And that's favorable to the overall environment. It allows portfolio managers to extend duration in their portfolio, feel better about extending. That obviously has an impact on our capture rate that is quite positive. So the environment we're headed into a certainly favorable. Also, whenever you see these rate adjustments, you see portfolio adjustments. And so secondary trading can pick up on the back of a rate adjustment. As PM start adjusting their overall mix and exposure to maturity across their entire portfolio. The new issue market has been quite robust. What we're also seeing in the new issue market is, it's driving a secondary market because many of our clients are taking out of their portfolio and replacing it with new issues. So they're making room for that new issue, by building a secondary trading activity that you see in just the overall TRACE volume number. So's it's quite interesting. The other piece that is noticeable, we see it in September, the volumes in the fixed income ETFs are now heightened relative to where they sat to 6 months ago. So you're seeing higher ETF, fixed income ETF activity that we weren't seeing just a few months ago?

And then just building on what Chris was saying before, obviously, we've seen in these -- it's early days, and I think you're only seeing maybe a 4 basis point differential if you look today, but you are seeing a steepening curve, at least after 2 years of seeing an inverted curve, right? So today, I think the 2s and 10s are showing 4 basis points of sort of steepening. That's not enormous steepening of the curve, but we've seen it now for a few days. We saw that happen for a split second in August. So again, these are all indicators that if they continue, would be constructive.

Chris, you talked a little bit earlier about X-Pro, which is one of your more recent initiatives. Maybe talk about the experience improvement for traders and maybe portfolio trading. For portfolio trading, in general, how does the trader decision process work between competing platforms? And how does X-Pro kind of give you a leg up here?

Sure. First, X-Pro was part of our kind of replatforming initiative. We want to give clients whether they're doing a basic RFQ or a portfolio trade, just a better experience. It also is favorable to being able to produce new outcomes for the client. So being able to move things through development, of course, client feedback, development and rollout. It's on a faster release schedule. So we are releasing X-Pro, we can release it weekly, we can release it monthly. That just makes the client experience better. We get feedback from the client, we're able to interpret that feedback, write code and put it into production quickly, and that's a new experience for our clients at MarketAxess. The other piece is it allows us to enhance unique trades, things like portfolio trading. It also allows us to carry unique data, pre-trade data analytics and put that in front of the trader and that's really what we've been doing with that X-Pro rollout was give clients a better experience, but give them experience with better pre-trade data and analytics. On the PT front, it's really about trying to understand how to curate your portfolio once you load it on the platform. What should be in that portfolio and what should be out of the portfolio. And looking before you send it off to a dealer to price, understanding what you should -- how you should construct the portfolio. Every portfolio that comes to market typically isn't the final result into a portfolio trade. There's lots of management of the list within the PT, and so having unique data that we provide allows traders to adjust those portfolios. The next important experience is once the portfolio is priced by a dealer or multiple dealers, trying to figure out is at the right price at every line item level. So we do a lot of analytics around how the single price converts to every line item. And are you better off trading that in a PT or should it be a line item. And so we do a lot of analytics for the trader. And that's a key initiative and a key difference that we get a lot of feedback on from clients that they like that ability to analyze both pre and post pricing before they even hit accept. And it's an important feature in our offering.

So what else can you do, in your view, to make the protocol more competitive? Last quarter, you talked about a global multi-product portfolio trading solution, AI Dealer Select. Can you unpack some of the newer developments on the innovation front?

The first piece that we've added is a unique data of product that we have, called Tradability, and it really analyzes each line item of the portfolio, what the outcome would look like if that traded as a single RFQ as opposed to a portfolio. Our unique data CP+ also prices every line item on an individual CUSIP basis. And it gives you a sense of is the dealer providing price at market? Or is it slightly off for individual line items? What we've analyzed in our -- and we look at every portfolio trade in the market, that happens and the larger the trade size, the worse you price the portfolio. So you should expect if you have a large line item within a broad basket that you're going to get worse pricing. So we analyze that before you even put the trade in and will actually help you decide what goes into the portfolio and what comes out. The real key to the portfolio trading is should they put a PT up or should they trade it as a line item? And many times, these portfolio trades are preselected by PMs, they tell the trader just trade it as a PT. And there's a lot of analysis that should go in to determine, one, should the entire list via PT or are there ways to break it down and improve your pricing by taking certain line items out? So it's all the analytics that we provide and we will provide in the future to help construct the PT that I think is a key ingredient.

Interesting, there's this question of like how big can portfolio trading be as a percentage of the market? Is it high single-digit 10%, will we -- kind of been lately? Or is it much bigger? Is it smaller? It almost sounds like you think -- or it does sound like you think there's an opportunity to maybe grow the protocol, but also find ways to take certain line items out in order to provide ultimately better execution. So maybe the question to you, how much market activity do you think eventually could be handled through like these larger risk trade transfers, and then what are the P&L implications for MarketAxess?

Sure. And when I think about portfolio trading, one, it's a tool that's going to be around for a long time. So people are going to use this protocol for quite some time because there's times when it makes complete sense for example, an inflow comes in or an outflow is requested. It's a fast way to put exposure on or take exposure off. So it's a very efficient way to get exposed or to take off exposure. Another way to do that is use ETFs. I do think portfolios and ETFs will be combined at some point where you might -- it might be preferential to trade the ETF versus trading a full basket? And sometimes you have to look at the overall market to make that decision. So I do think we'll see more iterations where there'll be a PT or an ETF option or a combination of both, where within your basket, a subset of your basket is made up of an ETF. Just for that better priced solution that might be in the market at that moment in time. So it really depends on the market environment, the PT or not to PT or to trade in ETF. Because on the other side of every basket is a market maker trading in ETF. And so should you go right to the ETF and pay the spread that the dealer is charging? Or should you trade the basket and get exposure? The way -- and the way I think about this is when the ETF is trading at or below NAV, that might be the right time to trade your basket. Other solutions in the market that I think can impact how big of a portfolio trade. What I hear from our clients about why they are using portfolio trading solution, it's efficiency. It's -- I can get $1 billion done and exposed in a fast moment in time. As I see secondary trading become more evolved, the question is, is that efficiency that you gain at the expense of the cost of the trade. And so you have to start making decisions around, well, if I can do these blocks electronically and it's really efficient, maybe I can move exposure in an alternative way to a PT. So for someone to predict where will the PT market share be in 5 years, you really have to predict where we are evolving as an e-trading component of the market. I think it's too early to make that prediction. I do think there's moments of low volatility. Portfolio trading becomes a very attractive tool because you have dealers willing to price almost at mid and so that's a very attractive pricing model for most traders trading bonds.

Very interesting. What about larger block trades. So you've talked before about the sort of $5 million-plus trade size being more difficult to move electronically. We also talked publicly about your automation suite and how you kind of break into this. So talk a little bit about some of the frictions there and kind of what you're doing to try to crack into that opportunity?

The #1 feedback we received from our clients was with regard to blocks is the challenge of e-trading, which typically leverages all to all is that information leakage. If I put a block on MarketAxess, and it goes to all. I'm sharing information with the broader market, and there can be a reaction because it's block size. And so the simple solution for that is, don't go to all, don't have that information leakage fear, put it on the platform and go to a subset of dealers, dealers that you trust or dealers that you already use on chat or on the phone. And that offering is now coming out at MarketAxess. We call it our high touch or block offering, and it's rolling out this September, and we're excited about how it's -- one it's dealer-friendly. It allows dealers to price bonds without everyone having knowledge of that trade. And that's what -- when it goes to all, everyone knows that there's a bond for sale or being purchased out there. For block size, it's much more friendly to avoid any information leakage. So both dealer and client like that. But you're replicating what a client does in E, you're replicating what they do on chat or on the phone. Targeted to 1 or 2 dealers, you're providing that client with pretty robust pre-trade information, not just access, but we're helping the clients select the right dealer using our AI Dealer Select. We're also providing a pricing tool called CP+ Inquiry, which is our additional CP+ product but we then look at the trade direction whether you buying or selling and what's the size of your trade and we'll predict what the pricing outcome should be for that block size trade. So it's a very powerful tool. And we're just asking clients put your order on if you want to trade on the phone, go ahead and trade on the phone. It's -- we're protocol agnostic, but it's more likely that clients will just hit the button to trade with a single dealer or a small subset of dealers.

Got it. And then can you remind us -- I think we talked about this with portfolio trades and X-Pro, but how is the user experience changing such that before a client might have said, I don't want to put this trade into all, so I'm going to pick up the phone. What's changing such that now they'll press the button on MarketAxess and trust that the trade goes to the right place?

Well, the key ingredient for us is when we rolled out portfolio trading, it's a direct-to-dealer solution, right? There's no all in a PT. So it's very -- information leakage of a portfolio trade is quite important to the client. So we've already won the client on how we can provide an offering with little to no information leakage and that's in our PT offering. They've also been exposed to our enhanced market data and what they can see pre-trade before they even launch the portfolio trade. Now we're just taking that type of offering, and we're rolling in block trading solutions, very basic, call it, 3 million to 10 million in size. The nice part about the portfolio trading distribution is its most portfolio trades are done by high-touch traders or block traders. Typically, most of our clients will put their portfolio trading obligations with someone who is used to trading large block size and complicated trades. So we're already embedded with that trader, so we're really just rolling out a new enhancement for that same trader to not only trade giant block portfolio trades, but to trade smaller size of block trades. And they're already familiar with the data that we provide. So it's just an enhanced data solution, a lot of pre-trade analytics and the ability to go in a more targeted way right to a dealer.

Very interesting. Maybe last question here. I think on the last earnings call, you talked about 40 clients using Adaptive Auto-X. So can you talk about engagement, the pace of rollout and maybe kind of tie in the pace of rollout more broadly, X-Pro, these platform enhancements? At what point is this sort of broadly disseminated across your client base?

Sure. As I think about all the initiatives that we have going on at MarketAxess, automation and Adaptive Auto-X, which is just part of our automation suite is a sizable investment that we're making. The feedback there from our clients is quite high, our automation suite is growing double digits. Last year, it grew at over 30% in terms of the overall volume. And we just see that continue in 2024. So we're super excited about the opportunity in the automation suite. What Adaptive Auto-X does is it attempts to take larger block sizes from the client and trade them in a fully automated way with no information leakage. So it slices those orders into smaller sizes, allows the client to benefit from all to all without revealing the full size of the order and carefully over time, trade that order. The other key ingredient to Adaptive Auto-X, which is unique to the bond market, it allows the client to respond to other clients' RFQs. What we found on the platform is when you have a human trader attempting to price a bond for another investor's RFQ that human trader just isn't fast enough. They can't watch enough funds, enough CUSIPs. There's just too much activity in the market. When you have an algorithm always laying in weight, willing to respond, it can automatically respond at any moment. So it's a much more efficient way for clients, big investors to be passive in the market and not cross full spread. That's a meaningful savings in the world of fixed income. When it comes to the rollout, we're now over 60 clients now enabled for our Adaptive Auto-X and we continue to see it grow. A broader automation suite is growing as well. And that's really our pipeline of clients for that enhanced automation, which we call Adaptive Auto-X. The other lines of investment are really X-Pro. Think, X-Pro for basic RFQ, X-Pro for enhanced portfolio trading. And now this month, month of September, X-Pro for block size trading. X-Pro is fairly rolled out across U.S. corporate bonds. We've just entered into Europe with our global PT solution for EM and Eurobonds. And soon, X-Pro will be rolled out in Europe for all RFQ and high-touch solutions.

I wanted to ask about open trading, but just kind of thinking about what you're talking about here, can you maybe remind us how does Pragma fit in an asset you acquired recently. How is that technology being kind of deployed across the firm? It sounds like a lot of what you're talking about is related to the use of automation to kind of facilitate these trades. So you -- is there update on sort of the Pragma integration and how you're utilizing the asset?

Yes, Pragma is an important advancement for us from an acquisition perspective. In terms of acquiring technology that is quite modern for the fixed income market. So think algorithms, think smart order routing, think EMS, these are things that now -- just now the market is starting to embrace in fixed income. Also, it came with lots of developers. So we enhanced our entire development suite with pretty cool developers that have advanced technology and high-speed trading capabilities. And as I think about the future of fixed income, not just in rates, but also in corporate credit, we're seeing faster price production from the dealers. We're seeing folks like ETF market makers, pricing bonds at a faster rate. So the ability to take price and take activity faster and convert it to an RFQ is an important component of our future. And Pragma allows us to have better capacity to do that. Where you see Pragma impacting really directly is around that Adaptive Auto-X. That's really Pragma algorithms that we're running behind the scenes that are running fully in production, executing client workflow. The other areas that we're seeing Pragma integration is, today, we have auto RFQ, where you can just have a traditional RFQ go off on an automated timer. Pragma is consuming all of that suite of products. So we're moving our entire automation suite into the Pragma like tech stack. And so you'll have enhanced RFQ or just basic electronic Auto-X RFQ. So we have a full suite of products now coming out, all based on Pragma algorithms.

Interesting. So where does Open Trading fit in. I think the sort of share of Credit Trading has been somewhat range bound like the mid-30s. It almost sounds like from what you're talking about BT, block trading, it should probably go down over time. Not in terms of absolute, but in terms of share. So maybe just how do you think about the relative importance of this protocol relative to some of your other initiatives?

I think about Open Trading as a critical ingredient to the MarketAxess product suite. If you think about areas, all of MarketAxess growth over the last 10 years has been driven by all-to-all and the unique liquidity that it brings. So when I think about the future of MarketAxess and our competitive moat, all-to-all is that key ingredient. We have unique liquidity providers on the platform. Early on, it was certain ETF market makers that were on the platform providing price and liquidity that has expanded to hedge funds that are trying to do an ETF arbitrage. We're now systematic funds that are running kind of complex systematic strategies on the platform, all with a goal of providing liquidity to other investors requesting price. And now with Adaptive Auto-X, we actually have traditional buy sides, buy and hold investors providing liquidity in an automated way on the platform. That all feeds that all-to-all liquidity profile, and it becomes very unique. And I just don't see anyone else building that level of liquidity into the fixed income market. Even in treasuries, that kind of level of liquidity doesn't exist today. So I just think it's a unique key ingredient. The question is where does the market go in the future? Will portfolio trades be block size, will block size, stay block size? In other electronic conversions, we've seen blocks start to disappear and get cut up into smaller size. And so my prediction is, over time, we'll see exactly that. Blocks will be reduced to smaller trade sizes, leveraging things like all-to-all to get better pricing over time.

I would just say keeping in mind that even, again, August, we saw good numbers in a number of places. And Open Trading was again 36%, right, of what you saw in terms of Credit Trading. And that was up again from 34%. So you see -- your thesis is understandable, but we still see the real value of Open Trading, particularly when you see different types of volatility coming through as well.

Got it. Maybe switching gears a little bit to emerging markets. It's been definitely more of a bright spot of the company recently. Maybe just to level set, I think investors generally understand the sort of U.S. investment grade, high-yield kind of business. But give us just a bit of recent overview of what you're doing? What are the key products you're trading? Who are the key customers?

Sure. First, when you think about emerging markets, there's 2 parts of that market. It's a large global market. So I think emerging market isn't the right name for it when you have India and China, and these massive markets that are fully developed as part of the emerging market -- bond market. But the big opportunity that we sit in and have a great position in is the dollar-based EM market, the hard dollar EM market that's a sizable part of the market that we sit in, that's largely traded by our traditional clients across our IG and high-yield. So we've made a huge market engagement there across that EM hard dollar. We've now expanded into those local markets, which are largely driven by rates offerings or government bonds and sovereign, and that continues to grow. And so a lot of our uplift in EM is leveraging our traditional client here in the U.S. and in Europe. But more recently, it's been onboarding new clients in APAC and LATAM. We're seeing a great deal of activity in LATAM. That was a huge growth driver for us in August. We certainly are seeing the benefits of our presence in the APAC region as well. And so really, that new clients that we're adding into EM is certainly driving a lot of that growth, particularly that local market growth that you're seeing coming through the monthly numbers.

Got it. And then maybe similar to level set, so how do emerging markets different from the traditional investment-grade and high-yield markets in the U.S. So how does competition manifest? Are there different protocol preferences and how electronified are these markets? And what does the runway look like relative to that in the U.S.?

Early days, electronification. We really -- from a competitive standpoint, we see Bloomberg chat, and that's it. There's really no other competitors in the EM space. A lot of competitors talk about EM, but we don't see it just yet, we're mindful that they will come, but we don't see it on the ground. As I think about that market, you have a very -- it's heavily phone-based. And so the conversion to E is not hard, now that they start to see the benefits of the e-trading and they're seeing it in other asset classes. So our entry point is quite logical and simple in terms of a sale. The protocols that we're seeing, it obviously starts with traditional RFQ. All-to-all is an important component to the emerging market space because it allows clients that typically don't -- like a small local dealer, and a large institutional investor, they meet in all-to-all. So it's slightly different than our high-yield market where you have an ETF market maker and an investor meeting. It's much more a network effect in emerging markets. The other protocol that we're seeing grow is request for a market where the client doesn't show their side, they just show size and they request a 2-sided markets. That's a growing part of the market. We're also -- it's helping grow our block share of the emerging markets. So we're growing blocks on the platform in EM much faster than we see it in other asset classes. And finally, portfolio trading has now entered the EM space, and it's growing as a percent of the overall market. It's still small, smaller relative to IG, but we are seeing that being an important ingredient. And the good news is our X-Pro portfolio trading has now made its way into EM. So we're able to use and leverage our platform, our new platform with all its enhanced pre-trade analytics or EM portfolio trading.

Maybe switching gears. One of the newer talking points on your recent earnings presentation has been the dealer-to-dealer or dealer-initiated channel. Historically, I think this was less of a focus for you, but you kind of recently called that this was a pretty sizable chunk of the market, like 30% of the market revenue TAM. So perhaps just to level set, what's your current exposure? And what are you doing to go after this opportunity more aggressively than you've had in the past?

Well, when I look at the dealer market -- the dealer-to-dealer market, it's made up of really 2 parts. Its retail is really within that dealer-to-dealer that 30% number. Mind you that 30% number 3 years ago was 24%. So we're seeing that overall market grow in the dealer-to-dealer space. The second piece is dealers exiting inventory. So large banks, large dealers that have taken down a position either in a portfolio trade or somewhere else in a line item, they're looking to exit that as fast as possible. And so the appetite to hold inventory among the large banks is quite low. I think with the capital rules even adjusted as we've seen in the news today, they're still going to have low appetite to hold inventory. So that dealer-to-dealer space is going to be a robust space for quite some time in the future and -- with the capital rules likely accelerate in the future. So it's important to solve for the dealers that are pricing your clients on traditional bonds, give them a solution that's efficient to exit that inventory. And so that's why I think the dealer with the dealer space is so important. And certainly an area that we have been offering dealer RFQ where dealers use our all-to-all to go out anonymously and get prices from other dealers ironically. And that's been a sizable part of our dealer-to-dealer offering. We've launched a mid-market solution, which we call Mid-X, which allows dealers to just put their inventory on the platform and look for a match at mid. It's a favorable exit for a dealer to trade out at mid, relative to crossing full spread to get out of inventory. We've made some head roads in our Mid-X solution in Europe. We're seeing hopefully some traction here. It's also an area where we've deployed Pragma. We're looking [ at Pragma ] to build a really integrated solution where it's both a Mid-X, kind of a mid-market match as well as a fully integrated dealer RFQ solution. So you can really have everything with one entry, traditionally an API-entry of the order, and we take care of everything after you drop the order off with us.

Understood. Maybe moving ahead to ICE, the partnership with TMC Bonds you announced recently. So maybe unpack this a little bit. How does it work with regards to your respective customer bases? And then how do you think more broadly about kind of opening up the platform to more of these partners over time.

I look at that announcement, it was a very important announcement. One, ICE is a great partner. We really partner with them on data products. And it was really a partnership that made sense for both parties. ICE has a fantastic retail distribution channel, one that we envy after. We don't have that retail distribution channel. And we have this huge international institutional channel. And both parties benefit from access to those channels. And certainly, we announced, obviously, early August, I'm happy to report it's in production today. It went into production in September. We're seeing early indications of benefits for both parties on the liquidity that it's introducing and transaction volume that's going over both platforms. The key ingredient for us is they have such a huge presence in the muni market. Obviously, we're growing our muni position in that market. And our institutional clients certainly want to be able to access unique points of liquidity. And they don't have appetite to build out to those unique points. So what this allows us is really service the unique institutional demand that we have on the platform. And what's great about municipals is the ticket sizes are much smaller. So really, the institutional size ticket matches well with the retail size market that ICE delivers. It's a great partnership. I see great things coming from it. It also is a signal that we are opening our network. We want to solve client needs for liquidity. That -- we'd like to solve them with our platform and everyone is on our platform, but we're open to being protocol agnostic whether that protocol is on our platform or is external to our network. And so it's really a signal to the market that we're looking at the broader market and thinking about how to solve those unique liquidity points. And we're open to other areas of liquidity that are outside our current network.

And maybe just at the last minute we have, I want to ask you a very high-level question. So we made a number of changes recently on the employee side, a new head of U.S. sales, Global Emerging Markets, Client Solutions, Ilene, new CFO. A lot of talk about new client types, automation. So just high level, maybe macro aside, how do the next 5 years look like -- look different from the last 5 years? What are all these kind of changes leading to?

Well, I mean, we're headed into a new market for MarketAxess. When you look at the level of innovation, the new tech that's rolling out, the breadth of product that we offer, and really the global reach, adding key employees to the broader management matrix is an important ingredient to really bring in one expertise across all those different products, bringing expertise around financials and balance sheets, and how to manage those -- our capital position. Certainly, it's something that we're embracing and trying to make some changes there. And we're seeing the benefits of that. We're seeing that expertise impact really what we're rolling out to clients. We're seeing an impact how we're bringing clients on to the platform internationally. So it's just been a great benefit to MarketAxess as we grow globally and as we grow horizontally across product.

Got it. Well, unfortunately, we're out of time. But thank you so much, Chris, for being here. Ilene, a pleasure to have you.

Yes, right.

Thank you.