Patrick Scheideler is Co-Founder of MultiLynq.
What was the key theme for your business in 2022?
The expansion of our service in terms of both scope and connectivity has been a highlight for us. This year, we added support for auction style trading, feeds from market data services, and axe distribution. Support for auction style trading has been a focus for us as its high volume nature makes it an ideal candidate for automation. Additionally, amidst increased demand from the buy-side for access to pre-trade price transparency and access to liquidity, we added connectivity to five new electronic venues and enhanced MultiLynq’s comprehensive RFQ solution to deliver a more flexible tool for better price discovery.
What surprised you in 2022?
It has been surprising to see the continued increase in adoption of electronic trading in the face of rising interest rates. The credit markets have seen not only an increase in overall trading volumes, but the percentage traded electronically has grown as well. In September, electronic trading of corporate bonds hit a new record of $15 billion and November was the busiest on record with an average notional value of $38 billion – a 7% increase from last November according to Coalition Greenwich.
The continuation of the trend towards greater electronification in the face of unfavorable market conditions and heightened volatility is yet further affirmation of the staying power in this shift in market structure.
What are your expectations for 2023?
We expect there to be a continued focus on pre-trade price information and expansion of access to more diverse sources of liquidity, with the electronification trends we have seen throughout 2022 continuing in 2023. This growth will likely come from an increased focus from traditional asset managers as well as more systematic funds looking to participate in these more liquid electronic markets.
Regulators are typically the biggest drivers of significant changes to market structure. While there may not have been any meaningful regulatory changes this year, regulators have made it clear that they are focused on improving price transparency in the fixed income markets. Continuation of this narrative will only serve to benefit the electronic trading community.
