MiFID II Handbook | Page 19

demand for detailed transaction cost and trade execution data . One of the biggest challenges facing firms is the multitude of data which needs to be obtained and consumed , especially in noncontinuous markets like fixed income . Tradeweb benchmarks trades in our TCA offering to a continuous and consistent composite . We spend a lot of time examining this composite and ensuring it ’ s a valid representation of where trades could be executed .

How can monitoring trading performance work as a business development tool and not just a regulatory one ?
Monitoring trade performance is not just a compliance requirement , but can also be developed into a tool for buy-side traders to better understand how they ’ re executing trades within their business strategy . A trader can discover the impact of decisions that have been made aggregated across all their activity and that information can be drilled down into individual trades . Monitoring trade performance can provide direct measurable feedback on these costs and firms can use this to improve the way their business is executed .
What services does Tradeweb offer to assist with MiFID II ?
Tradeweb is a regulated MTF trading venue and has been since the implementation of MiFID I . It continues to be a regulated venue and we have designed trader solutions ready to be deployed throughout ESMA ’ s ‘ phase-in ’ period .
We do not believe in adopting a sticking-plaster solution – a system needs to be designed that works five years from now . Only then can firms have the full confidence to carry on with the day-to-day running of their business , without the worry of additional costs and disruption to their operations or risk being non-compliant each time the calibration tests change .
Pre-trade transparency Tradeweb has seen a 131 % uptake in use of our axes functionality across Europe since the beginning of this year . Pre-trade axes are used to highlight the market makers who have indicated they have a specific interest to buy or sell in an instrument rather than a neutral market bid-offer stream . Tradeweb ’ s European government bond platform alone sees 20 % of its daily activity from buy-side transactions with axed-dealers , and around € 2 billion traded daily on dealer axes .
Effective trade execution We are comfortable that ESMA ’ s latest inclusion of a collection window for RFQ will allow this protocol to continue to function and facilitate an efficient risk transfer method . In addition , we recently developed FlexRFQ , a tool which allows our clients to launch an RFQ to up to six dealers at a time , replacing those who do not respond with new dealers while the request is live . The new protocol significantly reduces the risk of trading information leakage , which can occur with medium to larger trades being sent to the entire market .
Post-trade reporting As mentioned previously , a specialist fixed income tool has been developed for TCA to measure trades against a high quality continuous composite . It allows our clients to see the percentage composite of bid offers on spread accounts for liquidity of different instruments . Non- Tradeweb trades can be consumed as well , and give a consistent TCA across all activity . Users will also receive data on prospective transaction times and likelihood of executing a specific trade on Tradeweb , which also feeds into their best execution requirements .
Furthermore , Tradeweb will be registering as an APA to enable our clients to leverage the process and infrastructure we are building as a regulated venue in order to satisfy their own pre- and post-trade transparency requirements . We will offer a range of transparency tools and services reflecting the different needs of our clients .
Flexible connectivity Our clients understand the importance of MiFID II , and our menu of different tools is leading to many further discussions on how these can work for each firm . We understand they have different requirements in terms of their workflow infrastructure and stages of processing , so we offer a range of methods of connecting to us . Through an easy-to-deploy GUI or via integration directly or through commercial OMS providers to our system , our clients are benefitting from Tradeweb ’ s flexible and holistic approach to connectivity . l
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