Tradeweb wins bid to power European Central Bank’s trading operations
“We are grateful for the opportunity to provide trading services and solutions to the European Central Bank for another term. We remain focused on continuing to collaborate with the ECB, while enhancing the trading experience for central bank and sovereign wealth fund clients across our platform.”
Tradeweb Markets Inc. has announced that the European Central Bank (ECB) and Eurosystem National Central Banks (NCBs) have renewed their ongoing partnership.
The prominent global electronic marketplace operator won a competitive procurement process orchestrated by the ECB to continue to supply its Electronic Trading Platforms (ETPs) to the two European entities.
The renewal marks a continuation of its partnership since winning a similar tender in 2015.
A wide range of financial instruments
The awarded contracts encompass a wide range of financial instruments including EUR-denominated bonds (encompassing European government, covered, and corporate bonds), repos, deposits, certificates of deposits, U.S. Treasuries, Japanese government bonds, as well as USD- and EUR-denominated bonds issued by supranationals, sovereigns, and agencies (SSA), plus USD- and JPY-denominated interest rate swaps.
These agreements are set for an initial term of four years, with an option to extend for up to two additional two-year periods.
Billy Hult, CEO of Tradeweb Markets, said: “We are grateful for the opportunity to provide trading services and solutions to the European Central Bank for another term. We remain focused on continuing to collaborate with the ECB, while enhancing the trading experience for central bank and sovereign wealth fund clients across our platform.”
Founded in 1996, Tradeweb Markets offers access to markets, data and analytics, electronic trading, straight-through-processing, and reporting for more than 50 products. The company serves a diverse client base spanning institutional, wholesale, and retail markets, in over 70 countries.
Tradeweb has reported facilitating an average of more than $1.4 trillion in notional value traded daily over the past year, showcasing its significant role in global financial markets.
Tradeweb recently reported trading volumes of $37.9 trillion for February 2024, with an average daily volume of $1.87 trillion, a notable 31.1% increase year-over-year.
That followed a previous report of a total trading volume of $28.9 trillion in December 2023, with an average daily volume (ADV) of $1.46 trillion, marking a significant 43.3% YoY increase. For Q4 2023, the total trading volume reached $104.4 trillion, and the ADV was $1.68 trillion, reflecting a remarkable 56.9% YoY growth. Notably, the average variable fees per million dollars of volume traded stood at $2.54.
Tradeweb now boasts eSpeed and r8fin for US treasuries
In April 2023, Tradeweb Markets completed the technology integration of Nasdaq’s US fixed income electronic trading platform, formerly known as eSpeed, which it acquired two years ago in a $190 million, all-cash transaction. Since then, Nasdaq’s central limit order book (CLOB) for electronic trading in on-the-run (OTR) US treasuries has been serving Tradeweb’s wholesale clients via Dealerweb.
In November 2023, Tradeweb agreed to acquire r8fin in a deal that positions Tradeweb to significantly bolster its capabilities in algorithmic-based execution, particularly in U.S. Treasuries and interest rate futures. Founded in 2016 and based in Chicago, r8fin has carved a niche in the market with its suite of algorithmic tools and a thin-client execution management system (EMS) trading application.
These tools are tailored to enhance futures and cash trades, complementing Tradeweb’s existing array of trading platforms and services, such as Dealerweb Active Streams, Dealerweb Central Limit Order Book (CLOB), Tradeweb Request-for-Quote (RFQ), and Tradeweb AiEX (Automated Intelligent Execution).
The expected completion of this acquisition in the first quarter of 2024, subject to regulatory approvals and customary closing conditions, is anticipated to modestly boost Tradeweb’s revenue growth and operating margins, and be accretive to its 2024 earnings per share.
r8fin’s existing client base includes 65 relative value hedge funds, systematic hedge funds, professional trading firms, and primary dealers. Its technology is a pivotal tool in the market, facilitating algorithmic-based execution for an impressive daily average of over $23 billion notional in U.S. Treasury bonds and 350,000 futures contracts.
