Andy Mahoney

Specifically, T.Rowe Price is live on Propellant’s Digital’s fixed income transparency data offering via FlexTrade’s fixed income EMS, FlexFI. 

Speaking to The TRADE,  Andy Mahoney, managing director, EMEA, FlexTrade, asserted that the firm has seen the adoption of EMS solutions on fixed income trading desks continue to grow this year, with expectations for this to accelerate further into 2025.

He adds: “The drive for this deployment is twofold. Firstly, the continued electronification in fixed income and the need to handle increasingly sophisticated data sets have seen desks needing technology to handle their bond trading activities efficiently.

“Outside of this, we also see broader-scale transformation initiatives to rationalise and streamline multiple asset class-specific EMS solutions to a single, scalable platform to provide a common set of cross-asset tools, processes, and automation logic across equities, fixed-income, FX, and derivatives trading.” 

Propellant Digital’s solution is used by both global and regional banks, as well as asset managers, quant hedge funds, trading venues, regulators, and industry associations.

Through the availability of Propellant’s insights alongside other internal and external data sources within a single interface, FlexFI users benefit from enhanced processes “without leaving the context of their fixed-income trading blotter,” said the firms.

Specifically, T. Rowe Price’s fixed income trading teams can now view a comprehensive dataset within the FlexFI Order Blotter, which includes real-time market activity, historical trade prices, and aggregated trade volumes.  

Vincent Grandjean, chief executive of Propellant Digital, tells The TRADE: “Integrating our pre-trade analytics into FlexFI EMS allows their team to access a full market view without leaving the order blotter. In addition, our technology can support them in both TCA and research efforts. Our solution is well-placed to help firms like T. Rowe Price stay ahead in their data journey.”

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Fixed income ETFs have continued to prove their worth as an extremely flexible product for investors. They’ve enabled market participants to transfer risk quickly, even when the underlying bond market is restrained. ETFs have several different use cases for investors, including but not limited to cash equitisation and tax management, hedging vehicles and lower impact ways to express short-term tactical views on the market. All of these use cases should continue to proliferate next year, especially as we see the industry trend towards a heightened focus on trading costs, the rise of multi-asset trading and the continued liquidity demands.

Steve Toland, co-founder, TransFICC 

Over the past few years automated trading has grown slowly in fixed income, but we expect 2024 to be the year when this really accelerates. All trading firms are looking for increased efficiencies, but many workflows have been seen as too complex to automate, meaning that manual trading persists in many parts of fixed income. This is no longer the case, as technology is flexible enough to follow any workflow currently performed by a person. Credit trading provides a good example of the benefits, where RFQ negotiation and trading can all be automated. Moving smaller trades to an automated process will improve response times, increase the number of trades dealt, and allow traders to focus on larger more profitable deals.

Legislation will also feature highly as firms prepare for DORA (Digital Operational Resilience Act), where compliance is expected by early 2025. DORA applies to more than 22,000 financial entities in the EU. Importantly, it also applies to technology providers in the EU, as well as those supporting EU entities from elsewhere. The aim is to strengthen the financial sector’s resilience to technology-related incidents and introduces very specific and prescriptive requirements, like having robust measures and controls on systems, tools and third parties, and having the right operational continuity plans, while continuously testing their effectiveness.   

Vincent Grandjean, co-founder and chief executive officer, Propellant 

As 2024 unfolds, the fixed income market landscape is experiencing a rapid transformation, driven by both technological advancements and regulatory changes. A key focus in this evolving arena is the enhancement of transparency and the efficient utilisation of data. A significant development is the integration of unique product identifiers, marking a stride towards standardisation in market transparency. Yet, this contrasts with regional divergences, especially in the UK and Europe, where transparency thresholds and reporting requirements vary. Navigating these diverse regulations requires a meticulous approach.

The transformative power of big data is also coming to the fore. With an abundance of data now available, there’s a shift towards using these vast datasets to inform pre-trade decision-making, thereby enhancing market strategies and risk assessment. Moreover, as technology increasingly becomes central to data processing, the industry faces rising costs and complexities in maintaining such infrastructures. This has led to a trend towards outsourcing to balance efficiency and cost-effectiveness. Additionally, the application of AI in extracting actionable insights from complex datasets is gaining momentum. This trend is expected to provide a competitive edge in the market. Overall, the fixed income markets are set to become more informed, efficient, and dynamic, navigating this evolving landscape with a renewed focus on clarity and strategic foresight.

Venky Vemparala, global fixed income product manager, FlexTrade Systems

This year saw a rapidly evolving fixed income EMS space, and in 2024, we expect innovation to continue at a lightning pace. Over the next year, I envision automation as a central theme, with data and analytics being adjacent solid themes. The buy-side will continue to push for efficiency in managing their trading blotters. In turn, venues and platforms will respond with increasingly rich automation functionalities, each with a distinct set of workflows, which is where an EMS is now becoming a crucial tool on bond trading desks to aggregate. 

The buy-side will see additional value and optimise their overall trading workflows by opening the lifecycle of the venue’s automation via API and touchpoints to achieve more granular access and overall control of the automation functionality. In turn, venue and platform automation solutions will become more “algo” like with templated parameters, with the potential for common slippage and performance benchmarks defined and standardised in 2024. Alongside automation, the drive for sophisticated, actionable data will also be at the forefront of innovation, with deeply integrated analytics being crucial to assist with automation decisions and portfolio trading list iterations. It will be fascinating to see the innovation 2024 brings.

Mike Sobel, co-CEO and president, Trumid

US bonds recorded their best month in nearly 40 years in November. With attractive yields and increasing accessibility of the asset class, fixed income is drawing in a more diverse set of market participants. New interest players, such as systematic quants and retail investors, along with more traditional buy- and sell-side institutions are focused on the credit market. 

With alternative participants entering the credit space, technological advances, and the proliferation of market data, the tailwinds for the adoption of more advanced electronic workflows are giving rise to a new era of tech-enabled credit trading. Client interest in intelligence and automation is accelerating as tech-savvy and data rich users seek agile platforms that can rapidly innovate alongside them and provide the aggregated and customised insights that they need.

The credit electronification story is far from over. Greater adoption is creating a network effect – driving liquidity and the velocity of the asset class. Over the next 12 months, we therefore expect technology to play a greater role with intuitive workflows, protocol flexibility, and data-driven decision-making tools adding the greatest value to traders and investors.

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The appointment follows the hiring of Charlie Gibson as head of EMEA sales last month.

In this new role, Haste will focus on enhancing Propellant’s platform and oversee the client experience from beginning to end.

Speaking to The TRADE, Vincent Grandjean, chief executive, highlighted how the move fits into the company’s overall vision: “Following our capital raise in July this year we are investing in enhancing our range of analytics and scaling our platform. Hiring Oliver Haste in Product Management [and Charlie Gibson in Sales] will help us to hit our ambitious growth plans.”

Read more – Fireside Friday with… Propellant’s Vincent Grandjean

London-based Haste was previously VP, head of product for marquee data services and securities master at Goldman Sachs, overseeing a series of data-related projects and Mifid II client innovations.

He has also previously served in roles at Accenture and Deutsche Bank.

Allan Horgan, chief technology officer at Propellant told The TRADE: “In just over two years we have launched our data analytics service and gone live with 30 clients, including eight of the top ten fixed income dealers, two asset managers, two hedge funds and five trading venues.

“As we begin our next stage of growth Oliver will help to satisfy client demand for new innovative services to be added to our analytics platform.”

Propellant serves eight of the top ten fixed income dealers, including two asset managers, two hedge funds and five trading venues. 

Through this appointment, the firm is continuing its growth plan aimed at enhancing its data analytics offering in the fixed income space. 

Speaking to his appointment, Haste told The TRADE: “It is an exciting time to work in data analytics. Regulators understand that data holds the key to market transparency while investors realise that the data they need for better investment outcomes is within reach – but organising and analysing it remains the real challenge.

“Propellant’s unique solution unlocks the full potential of market data and I aim to push the boundaries of what all market participants can expect from data analytics software.”

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What are the key challenges within the fixed income data space right now? Where are the gaps?

Even where data is brought together, like with Mifid data, it is in multiple different formats, or contains errors or missing data fields. There have been numerous negative comments about the quality of Mifid data, but by using the right logic and tools it can be brought together and cleaned. Only then can real value be obtained from analytics. 
 
What specific problem are you trying to solve?  
 
Participants want to be able to base their analysis on the whole fixed income market and Propellant provides the technological capability to do this for buy-side, sell-side, platforms, regulators and industry associations. Propellant is currently the only data analytics provider that enables firms to analyse a combination of their own proprietary trading data and public data, such as Mifid data. 
 
What impact will a consolidated tape have for data consumers, and what are the hurdles to effective consumption? 
 
The consolidated tape is meant to improve transparency and create a level playing field for the EU fixed income market. For consumers, price is a key consideration, as is ease of access, and robust and resilient technology. If complexity and costs are too high, or the quality proves to be too low, buy-side market participant adoption will be impacted. 
 
What differences across jurisdictions do you see in terms of data usage and consumption, and do these confer any advantages/disadvantages? 
 
Just considering both the EU and UK jurisdictions, divergences will naturally happen as the regulatory framework and underlying data are different. If we add the US into the picture then there are different rules – for example the cap size on bonds and derivatives. All of that increases complexity and costs for the end users. Most participants hope that European and UK regulators will work closely together to come up with very similar regimes. 
 
What are the biggest inefficiencies in terms of data usage (both buy and sell-side)? 
 
In general, people have a high level of knowledge on the transparency rules but a lot of them have not actually worked with big data samples for them to fully understand how they can leverage data in their workflow. It is a major gap. People are surprised by the complexity in understanding and interpreting these new data sets. We provide high touch guidance to all clients focusing on explaining rules on market data transparency and how our technology can be best utilised. But once our clients have understood, they are able to see how this can improve their workflow. 
 
Why is there a demand for data services like this, and are they scalable? 
 
Up to this point firms have relied on their own data or they have bought data from one or two platforms. This only provides a limited view of the market. With a market-wide view there are many benefits, such as the buy-side can see which bonds have traded in what size to better inform their trading decisions, and banks can analyse the trades they won and lost, and refine their client pricing. 

Although this data is publicly available, three skills are required to leverage it fully: business, regulatory and technology. It is hard for firms to bring these three resources together in a project. This is what our technology services do for them: provide a specialised solution to address this problem. We leverage the benefits of the cloud infrastructure to provide our clients scalability on demand. 

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