MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for fixed-income securities, today announced monthly trading volume and preliminary variable transaction fees per million (“FPM”) for the third quarter ended September 30, 2023.¹

Chris Concannon, CEO of MarketAxess, commented:

“Our international businesses and our municipal bond offering registered solid ADV growth in the quarter, reflecting the benefits of our geographic and product diversification. Continued low levels of volatility dampened ETF market maker activity and favored select trading protocols, including portfolio trading. Adoption of our new trading platform, MarketAxess X-Pro, continues to expand. We are seeing early signs that our unique proprietary data is enhancing the client experience, including the execution of portfolio trades, and the final week of September was our second strongest week of credit trading volume ever. Additionally, we just completed the acquisition of Pragma, which we expect to accelerate our automation and client algo strategies. We believe that the rapid increase in interest rates since 2022 and the growing risks in financial markets will drive increased credit market volatility in the coming quarters.”

Select 3Q23 highlights*

• Total credit average daily volume (“ADV”) of $11.2 billion, up 1.7%.
• U.S. high-grade ADV of $5.2 billion, up 1.1% with estimated market share of 20.0%. U.S. high-grade estimated market ADV increased 6.4%.
• U.S. high-yield ADV of $1.3 billion, down 20.4% with estimated market share of 16.1%. U.S. high-yield estimated market ADV decreased 4.5%. The decrease in U.S. high-yield estimated market share was driven principally by low levels of credit spread volatility, resulting in a decrease in ETF market maker activity on the platform. The VIX index, an indicator of volatility, was an average 15.1 in 3Q23, down 39.1% from 24.7 in 3Q22.
• 8.0% increase in emerging markets ADV to $2.8 billion, driven by a 26.9% increase in local markets trading volume, partially offset by a 4.2% decline in hard currency trading volume; 4.3% decrease in emerging markets estimated market ADV.²
• 18.2% increase in Eurobonds ADV to $1.5 billion. Eurobonds estimated market ADV increased 31.6%.³
• Municipal bond ADV of $388 million, up 7.5% with estimated market share of 5.8%. Municipal bond estimated market ADV decreased 10.1%.
• $27.5 billion in total portfolio trading volume, up 11.1% from $24.7 billion in 3Q22.
• 33% Open Trading® share⁴ of total credit trading volume, down from 37% in the prior year on lower volatility. Estimated price improvement⁵ via Open Trading in the quarter was approximately $120 million and is $529 million year-to-date through September 2023 on lower volatility.
• The preliminary FPM¹ for total credit for 3Q23 was approximately $155, compared to $157 in 2Q23 and $166 in the prior year. The decline in total credit FPM in 3Q23 compared to the prior year was due principally to a change in the mix of credit products traded, specifically a decline in U.S. high-yield trading volume, which is the highest FPM product, and the lower duration of bonds traded in U.S. high-grade. The preliminary FPM for total rates was $4.60, compared to $4.17 in the prior year.

Table 1: September 2023 trading ADV

Table 1A: September 2023 estimated market share

Table 1B: 3Q23 trading ADV

Table 1C: 3Q23 estimated market share

Table 1D: Rolling 6-month trading ADV (period ending September 30, 2023 compared to period ending September 30, 2022)

Table 1E: Rolling 6-month estimated market share (period ending September 30, 2023 compared to period ending September 30, 2022)

Reported MarketAxess volume in all product categories includes only fully electronic trading volume. MarketAxess trading volumes, TRACE reported volumes and MarketAxess Post-Trade processed volumes are available on the Company’s website at investor.marketaxess.com/volume.

Cautionary Note Regarding Forward-Looking Statements

This press release may contain forward-looking statements, including statements about the outlook and prospects for Company, market conditions and industry growth, as well as statements about the Company’s future financial and operating performance. These and other statements that relate to future results and events are based on MarketAxess’ current expectations. The Company’s actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, including: global economic, political and market factors; risks relating to the COVID-19 pandemic, including the possible effects of the economic conditions worldwide resulting from the COVID-19 pandemic; adverse effects as a result of climate change or other ESG risks that could affect our reputation; the level of trading volume transacted on the MarketAxess platform; the rapidly evolving nature of the electronic financial services industry; the level and intensity of competition in the fixed-income electronic trading industry and the pricing pressures that may result; reputational or credibility risks related to our data products and index business; the variability of our growth rate; our ability to introduce new fee plans and our clients’ response; our ability to attract clients or adapt our technology and marketing strategy to new markets; risks related to our growing international operations; our dependence on our broker-dealer clients; the loss of any of our significant institutional investor clients; our exposure to risks resulting from non-performance by counterparties to transactions executed between our clients in which we act as an intermediary in matched principal trades; risks related to self-clearing; risks related to sanctions levied against states or individuals that could expose us to operational or regulatory risks; the effect of rapid market or technological changes on us and the users of our technology; our dependence on third-party suppliers for key products and services; our ability to successfully maintain the integrity of our trading platform and our response to system failures, capacity constraints and business interruptions; the occurrence of design defects, errors, failures or delays with our platforms; our vulnerability to malicious cyber-attacks and attempted data security breaches; our actual or perceived failure to comply with privacy and data protection laws; our ability to protect our intellectual property rights or technology and defend against intellectual property infringement or other claims; our ability to enter into strategic alliances and to acquire other businesses and successfully integrate them with our business; our dependence on our management team and our ability to attract and retain talent; limitations on our flexibility because we operate in a highly regulated industry; the increasing government regulation of us and our clients; risks related to the divergence of U.K. and European Union legal and regulatory requirements following the U.K.’s exit from the European Union; our exposure to costs and penalties related to our extensive regulation; our risks of litigation and securities laws liability; our future capital needs and our ability to obtain capital when needed; limitations on our operating flexibility contained in our credit agreement; and other factors. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. More information about these and other factors affecting MarketAxess’ business and prospects is contained in MarketAxess’ periodic filings with the Securities and Exchange Commission and can be accessed at www.marketaxess.com.

About MarketAxess

MarketAxess (Nasdaq: MKTX) operates a leading electronic trading platform that delivers greater trading efficiency, a diversified pool of liquidity and significant cost savings to institutional investors and broker-dealers across the global fixed-income markets. Over 2,000 firms leverage MarketAxess’ patented technology to efficiently trade fixed-income securities. MarketAxess’ award-winning Open Trading® marketplace is widely regarded as the preferred all-to-all trading solution in the global credit markets. Founded in 2000, MarketAxess connects a robust network of market participants through an advanced full trading lifecycle solution that includes automated trading solutions, intelligent data and index products and a range of post-trade services. Learn more at www.marketaxess.com and on Twitter @MarketAxess.

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