Future Focus – All Change in Fixed Income and FX Tech
Ion trading is to sell the Broadway Fixed Income business in order to satisfy competition fears and complete the overall Broadway purchase.
In a report published by the UK's Competition and Markets Authority it states that Ion plans to retain Broadwa's FX business but divest Broadway Fixed Income. This demonstrates Ion's ambition in FX, as once the deal is complete, they will own Broadway FX, Barracuda FX, and MarketFactory.
Ion already is the largest provider of Fixed Income technology to banks, so it is not surprising that they have been forced to spin off Broadway FI. However, the main question on everyone's lips seems to be, "Who will buy Broadway FI?"
In the FI market vendors' offerings either fall into an end-to-end solution like the dominant Ion, or specialists like TransFICC and AxeTrading, there seems a limited appetite for vendors (like Broadway) which seem to sit in the middle. Added to this, banks are increasingly moving towards a model where they have the flexibility to build certain technology elements themselves, combining these with modules from vendors in areas where it makes sense to do so - like connectivity.
However, everything has its price, so presumably there will be interest from some technology firms, although the timing is a significant challenge.
Watch this space