In 1997 the SEC approved Order Handling Rules, (“OHR”) in equities, which led to orders that were automatically executable being publicly displayed alongside traditional market maker quotes requiring a response to anyone seeking to interact with them. OHR ushered in the electronification of equity markets as investors preferred interacting with electronic, “auto-ex” prices over those which were not. The evolution from a quote driven market to a fully electronic order driven market in equities did not take long. Around the same time of OHR, electronic trading in fixed income was introduced into the market and while the amount of FI traded on electronic platforms today rivals equities, the evolution has been much slower due to a number of factors. Vela’s Brian Cassin, Head of Business Development, recently published an informative overview on FI market structure. The article is reprinted below and we hope you, our readers, find it insightful.

“Trading venues have launched across fixed income markets in order to fill the void created by the concentration of market makers on the most liquid securities. From rates to credit, cash and derivatives, more than one hundred venues have been created in the last years. Some of these are using genuinely innovative new trading models, particularly all-to-all which has proven successful in the credit space, but no matching mechanism can make up for a lack of buyer/seller to your trade.” Read Brian Cassin’s full article here