The FIX Trading Community, the global industry association that maintains the FIX Protocol, is joining forces with the International Capital Market Association (ICMA) and the wider bond trading ecosystem to tackle long-standing inefficiencies in how “axes” — trader indications of buying or selling interest — are used and distributed across fixed income markets.
This collaborative effort, led by the FIX Fixed Income Axe Standards Working Group, seeks to improve both the accuracy and the usefulness of axes data. The group aims to help restore their original purpose: to support genuine price discovery and facilitate best execution across increasingly electronic bond markets.
Understanding the Problem
As electronic trading has reshaped fixed income markets, demand for axes has soared. However, according to the FIX Trading Community, the quality of these signals has simultaneously deteriorated. The result is a proliferation of axes that are often outdated, misleading, or incomplete — undermining their role as reliable indicators of market interest.
For institutional investors on the buy side, this has meant greater difficulty identifying genuine liquidity and executing efficiently. For dealers on the sell side, competitive pressure to display axes in order to be included in Request for Quote (RFQ) selection processes has created incentives to post axes even when they are not based on real positions or executable interest.
“This is not a new issue but it’s one that has irritated both sides for years,” said Jim Kaye, Executive Director of the FIX Trading Community. “FIX is ideally placed as a neutral, independent space for all members of the bond trading community to come together to sort this out and improve the bond trading experience for everyone.”
How Electronic Trading Changed the Axe Landscape
In modern electronic fixed income markets, axes play a vital role as pre-trade transparency tools. They help investors identify counterparties with genuine appetite to buy or sell specific bonds, thereby improving market efficiency. Yet, as trading venues and protocols have evolved, so too have the dynamics driving how axes are generated and consumed.
Matthew Coupe, FIX EMEA co-chair and Director at Susquehanna, explained that dealer selection protocols on electronic platforms have amplified the problem. “RFQs are routed toward dealers who show axes, applying pressure for firms to show them to ensure they are included in RFQ selection. This has led to a reduction in quality,” he said. “Sell side firms are well aware of these issues and are putting a lot of effort into making axes more accurate.”
However, Coupe emphasized that the issue now requires structural, industry-wide solutions: “We’re looking for higher-level strategic solutions that work for both sides, raise the quality of axes, and allow buyside firms to use them effectively when selecting trading counterparties.”
Two Strategic Deliverables Identified
The FIX Fixed Income Axe Standards Working Group has already pinpointed two concrete deliverables designed to bring more transparency and reliability to the use of axes:
- 1. Enhanced Data Standards for Liquidity Identification: The group is working to define new FIX data fields and flags that can distinguish between different types of liquidity and liquidity provider interest. For instance, a dedicated “real position” flag could identify axes based on genuine trading intent rather than indicative interest, improving counterparty selection.
- 2. Standardized Axe Quality Metrics: The group aims to design a standard reporting framework that can be adopted by electronic platforms and trading venues. These reports would provide quantitative metrics allowing firms to assess the reliability of axe data and identify patterns of poor-quality submissions.
Together, these efforts aim to restore confidence in axes as a core element of market transparency and to give regulators, platforms, and traders consistent tools for evaluating liquidity signals.
Industry Collaboration with ICMA
The ICMA, which represents participants across primary and secondary bond markets, will work alongside FIX to ensure that any new standards align with regulatory requirements and market structure realities. The two organisations will also co-author a joint discussion paper to be published in the coming months, detailing proposals and inviting feedback from across the market.
The collaboration builds on both groups’ long-standing engagement in promoting efficiency and standardisation in fixed income trading. While FIX contributes its expertise in electronic communication standards, ICMA brings its deep understanding of market conduct and infrastructure across dealer-to-dealer and dealer-to-client venues.
Firms interested in contributing to the initiative are encouraged to join the working group via fixtrading.org or through ICMA’s Electronic Trading Working Group.
The Broader Context: Data, Liquidity, and Automation
This initiative comes at a critical time for fixed income markets. The shift toward automation and data-driven execution has made high-quality pre-trade information essential. At the same time, regulators are tightening scrutiny on best execution, transparency, and market fairness under evolving frameworks such as the Markets in Financial Instruments Regulation (MiFIR) review.
By creating standards that improve the quality and comparability of axe data, FIX and ICMA aim to lay the groundwork for a healthier, more efficient electronic trading ecosystem. Better-quality axes could enhance liquidity discovery, improve pricing accuracy, and reduce information asymmetry between buy and sell sides.
