Consolidation of alternative trading system (ATS) vendors in the fixed income marketplace is set to continue, according to a new report from Meridien Research.
The report, 'Fixed income ATS: Bonding with the Investor', estimates that domestically there will be between two and four fixed income ATSs per product class within the US marketplace.
According to Damon Kovelsky, analyst at Meridien Research, the two present categories of ATSs - interdealer and multidealer - will not survive in their current form as more and more large orders are coming from fewer buy-side firms. These orders will instead have to be welcomed into all ATSs.
Meridien also predicts that the markets and participants will change at a slower than expected pace, due in part to the lack of readiness of fixed income investors to execute trades electronically, especially on the buy-side.