Dave Cresci - IR Manager Rick McVey - Chairman, CEO Tony DeLise - CFO.

Kyle Voigt - KBW Hugh Miller - Macquarie Ashley Serrao - CreditSuisse Mike Adams - Sandler O'Neill Patrick O'Shaughnessy - Raymond James.

Good day ladies and gentlemen. Thank you for standing by. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded July 22, 2015. I would now like to turn the call over to Dave Cresci, Investor Relations Manager at MarketAxess.

Please go ahead, sir..

Good morning. And welcome to the MarketAxess Second Quarter 2015 Conference Call. For the call Rick McVey, Chairman and Chief Executive Officer review the highlights for the quarter and provide an update on trends in our businesses and then Tony DeLise, Chief Financial Officer, will review the financial results.

Before I turn the call over to Rick, let me remind you that today's call may include forward-looking statements. These statements represent the company's belief regarding future events that by their nature are uncertain. Company's actual results and financial condition may differ materially from what is indicated in those forward-looking statements.

For a discussion of some of the risks and factors that could affect the company's future results, please see the description of Risk Factors in our Annual Report on Form 10K for the year-ended December 31, 2014.

I would also direct you to read the forward-looking disclaimer in our quarterly earnings release, which was issued earlier this morning and is now available on our Web site. Now, let me turn the call over to Rick..

Good morning. And thank you for joining us to discuss our second quarter 2015 results. This morning we reported strong results for the second quarter on a back of record volumes across our core products U.S. high-grade, high-yield and emerging market volumes.

Total trading volumes were record $245 billion up 32% compared to the second quarter of last year. Continued strong momentum in market share gains drove our record volumes with estimated adjusted U.S.

high-grade market share up 3 percentage points year-over-year, this was the third consecutive quarter that we achieved year-over-year estimated share gains in U.S. high-grade of more than 2 percentage points. This increase in volumes and share grow our robust year-over-year revenue growth of 16% to $76 million.

Pre-tax income was $37 million up 28% compared to last year and EPS was $0.64 up from $0.48. Volumes from European clients were up 44%. The number of active European clients continues to grow and was up 26% from a year ago.

We continue to develop unique data products and post-trade solutions in the region to help our dealers and investor clients prepare for their new and extensive regulatory obligations under MiFID II. Open trading adoption rates continued at a healthy pace during the quarter with record open trading participation and trading volumes.

Slide four provides an update on market conditions. Credit spreads and credit spread volatility remain above year ago levels. Combined U.S. high-grade and high-yield market volumes were up 6% year-over-year with down slightly from Q1. New issuance remained a close to record levels with $328 billion in U.S. high-grade issue during the quarter. U.S.

high-grade and highyield debt outstanding is now close to $8 trillion. The boom in corporate -- over the last five years has lead to a significant increase in a number of corporate bond issuers and a number of corporate bonds outstanding.

This has caused the markets become more fragmented with more issues trading each month and less concentration of volume in the actively traded 1,000 corporate bonds. The increase fragmentation in the market combined with the increased bank regulations places further strength on secondary market liquidity. U.S.

highgrade and highyield market volume in July are off to a weaker start compared to the second quarter of 2015 but are in line with July 2014 levels. Slide five provides an update on open trading. We are very pleased with the continued growth in open trading participation this quarter.

Completed open trading transactions more than doubled year-over-year to 38,000 and open trading volume was $21 billion, up 153% compared to the second quarter of 2014. 375 different firms provided open trading liquidity during the quarter, up from 260 a year ago with liquidity being provided by a diverse group of firms.

41% of market list trades were won by a traditional long only assets managers, 35% by dealers and 24% by alternative liquidity providers, such as -- market makers and hedge funds.

Among our most active buy side clients, approximately 30% are regularly acting as price makers on the platform with many more working on adapting their internal training process to enable more -- engagement with open trading.

According to a recent investors survey by Woodbine Associates 60% of respondents planned to increase their use of MarketAxess open trading and 60% plan to break up log trades into multiple smaller transactions.

Over 500 firms benefitted from this new liquidity by completing an open trading transaction representing over half of our active system participants during the quarter. In the second quarter open trading represented approximately 10% of our U.S. trading activity, up from 5% during the second quarter of 2014.

The increased efficiency and access to our extensive all to all trading network continue to generate significant cost seedings for participants along average 3 basis points in yield or about $1,800 per million traded in U.S. highgrade.

We continue to invest heavily to enhance our open trading protocols to provide our clients with a broad range of trading options for all trade sizes and we believe that there is significant runway ahead for open trading adaption. Slide six provides insights into our U.S. highgrade market-share gains.

We saw increased momentum in our market-share gains during the quarter. Our analysis shows a positive correlation overtime between credit spread volatility and broken our market-share. Greater volatility in the market was one of the drivers of our record share.

Share growth has been consistent across all trade sizes and we are especially encouraged by our growing share of log trading. During the second quarter, 72% of volume traded on MarketAxess was in trade sizes of over $1 million and 20% of volume on the platform was over $5 million in size.

Our block trade account increased 35% from the second quarter of last year. Increased regulatory obligations including compliance requirements under the Volcker rule that came into effect this week are putting further pressure on secondary market liquidity particularly for larger trade sizes.

According to FINRA in 2009 trades greater than $25 million in size made up 23% of trades volumes and so far in 2015 trades of this size make up only 14% of trades volumes. This suggest that investors are increasingly breaking up large blocks into smaller trades.

Client inquiry count on the platform was up 34% year-over-year demonstrating growing engagement as investors seek to utilize our all-to-all marketplace to access new sources of global liquidity. Now, I would like to turn the call over to Tony for additional detail on our volumes and financial results..

Thank you, Rick. Please turn to Slide 7 for a summary of our trading volume across product categories. Our overall global trading volumes were up 32% year-over-year to $245 billion. U.S. high-grade volumes were a record $149 billion for the quarter, up 28% from the second quarter of 2014.

The majority of the high-grade volume gain was attributable to an increase in estimated market share. Volumes in the other credit category were up 42% compared to the second quarter of 2014 driven by an over 50% increase in order flow.

We registered record trading volumes for high-yield in emerging market bonds and continued substantial growth in euro bond trading volume. Trax and TRACE data indicate that overall emerging markets and euro bond market volumes declined by 15% or more where high-yield market volume was up approximately 6% year-over-year.

This means that market share gain more than offset the overall market volume challenges. Slide 8 displays our quarterly earnings performance. Revenues of $75.5 million were up 16% from a year ago driven by the estimated market share gains and resulting growth in commission revenue.

For the second consecutive quarter the stronger dollar dampened revenue growth by approximately $900,000. Excluding the impact of foreign currency changes, information in post-trade service revenue, the majority of which is derived from our Trax business was up 3%.

The drop in technology products and services revenue reflects the lying down of a professional services engagement. Prospectively, we expect this revenue line item to taper modestly from the second quarter level. Total expenses were $38.4 million up 7% from the second quarter of 2014.

Absent the impact of the stronger dollar, the expense increase was approximately 10% year-over-year. Operating margin expanded more than 400 basis points year-over-year to 49%. The effective tax rate was 34.6% for the second quarter and 35.4% on a year-to-date basis.

The year-to-date effective tax rate is running approximately 150 basis points below the 2014 level and reflects an income shift to lower tax rate jurisdiction and a reduction in certain statutory foreign and state tax rates. We are updating our full year 2015 guidance range and now expect the effective tax rate will be between 35% and 36.5%.

Our diluted EPS was $0.64 on a diluted share count of 37.6 million shares. The year-over-year decline in our diluted share count was principally due to share repurchases. On Slide 9, we've laid out our commission revenue, trading volumes and fees per million.

Total variable transaction fees were up 32% year-over-year consistent with the growth in trading volume. Our U.S. high-grade fee tax was influenced by a number of factors including the duration of bonds traded on the platform.

On sequential basis, lower duration on slightly higher yield and slightly lower duration on slightly higher yields and slightly lower average years to maturity accounted for the declines in the US high-grade fees per million.

The sequential uptake in the other credit category fees per million was previously due to mix shift within this category with the heavier weighting in the current period to high-yield bonds and lower weighting to euro bonds. Distribution fees were consistent with the first quarter level. Slight 10 provides you with the expense detail.

Total second quarter expenses were consistent with the first quarter level. And more granular level, the decline in compensation of benefits was largely attributable to seasonally higher first quarter employment taxes and benefits of $800,000 offset by an increase in wages on some headcount expansion.

The sequential market expense increase reflects greater strength on advertising campaign customer events and sales activities. On the year-over-year basis the 12% growth and compensation and benefits was due to a combination of higher variable bonus accruals which is tied directly to operating performance and higher equity based compensation.

The year-over-year change in non-compensation cost was consistent with variations over the past several quarters.

Depreciation and amortization increased as a result of the significant investment in product enhancement and technology over the past several years, professional consulting fees decline on lower IP consulting cost and G&A expenses increased mainly due to higher clearing cost.

We still expect full year 2015 expenses will be within our expense guidance range. On slide 11, we provide balance sheet information. Cash and securities available for sale as of June 30th, were $237 million and trailing 12 months free cash flow reached $100 million.

During the second quarter, we paid our quarterly cash dividend of $7.5 million and repurchased 63,000 shares at a cost of $5.5 million under our share buyback program. At the June 30th, approximately $48 million was available for future repurchases under the program.

Our board approved the $0.20 regular quarterly dividend payable on August 20, to record hold on August 6, there was no change in our capital structure during the second quarter; we have no bank debt outstanding and didn’t borrow against our revolving credit facility. Now, let me turn the call back to Rick for some closing comments..

Thanks Tony. We are encouraged by the trends evident in our business during the second quarter. Investors and dealers are using market access for a growing proportion of their secondary trading needs, new open trading solutions are providing a much neat expansion of the secondary liquidity pool.

We see many opportunities that had in this new regulatory environment to serve our clients with innovative technology solutions for pre-trade data trade execution and post-trade reporting and matching. Now I would be happy to open the line for your questions..

Thank you. [Operator Instructions]. Our first question comes from the line of Kyle Voigt with KBW. Your line is open. Please go ahead..

Hi thank you for taking my questions.

I guess touching on the non-commission revenue on technology line, sorry I heard you say that you expect revenue to taper from here, by this exactly what the decrease was cause by and then just on the information in post-trade revenue, I know you said its some effects headwinds in the release, so I just wondering if you happen to have the organic growth rate on a constant currency basis?.

Two questions there on tax service and then information on post-trade.

The first one on tech service if that revenue line item, it was combination of professional services where we are project managing for companies in our space there are some software licensing and maintenance in support all of the net tech services line item, its not a big piece of our revenue plan and today really not a core emphasis report area, this is for us.

We did have one, we’ve mentioned in our prepared remarks one engagement in the second quarter, we were using contractors to deliver much of that engagement that's one of the reason you see decline in professional and consulting fee.

And prospectively I mentioned that we are tapered -- that line item will be somewhere around $500,000 per quarter in the near-term. Quite frankly we are probably going to vary that line item in other income building or it is just not of the year event.

And -- one more thing to note on that, this is not a high margin product or business for us even though with the decline we did not have a material impact on earnings. And you could see where our focus is, we are focused today on our core opportunity credit -- right now. So that handles the fact services piece.

You did have that information in post trading. If you are thinking about the year-over-year, the year-over-year gains, it was excluding foreign currency was about 3% year-over-year.

But when you take a deeper dive on that one, we had two areas within information for post trade about 40% of our revenue is post trade reporting and matching that is very much tied to market volume about 60% today is in data products. And when you look at year-over-year, adjusting for foreign currency it's up about 3%.

That does not tell the whole story, because when we look at data revenue in local currency or excluding the impact of foreign currency, data revenue is up about 17% year-over-year, much of that was from our -- where we are delivering new data products market and liquidity products, where we saw the decline in information post trade was in post trade services tied to market volumes when you look at overall Eurobond equity market volumes in that region, it was down year-over-year.

So it maps a little bit -- the improvement in data revenues maps a little bit by the decline in post trade volume..

Okay. Thanks Tony, it's really helpful. Next on the follow up on the post trade line. I guess on the Axess All product in Europe, I guess last quarter you mentioned that you would potentially reevaluate the pricing of this product in the coming months.

And so I was just wondering if there is any update there with respect to either charging for the product or having plans to do so?.

No real change. We are seeing growing adaption of the Axess All real time trade tape by both dealers and investors and have some plans in the coming quarter to deliver that through API which will make it even more efficient for our clients.

We do see consistent and growing demand for all of our volume products which made sense that dealers are trying to determine on a more quantitative basis, the likely demands for bonds that they may be making markets in and clients are trying to better measure liquidity in their portfolios.

So we are seeing very good growth around the volume products within the tracks data..

Okay. Thanks. And then just last one from me and I will get back in line. Just on capital, you currently have $237 million in cash in the balance sheet and -- built in the back-half of the year. And I know you previously said that you want to keep excess cash in the balance sheet just to facilitate open trading.

But I guess the first question is low level, do you feel that you have enough cash to adequately support open trading if are not there already? And then if you did have enough additional cash above that level at year-end will be the preferred mean to return that cash to shareholders? Thanks..

On the capital management and on the cash; the first part of your question in support of open trading; we do feel that we have adequate capital today to support what we are doing in open trading.

And just as a reminder what we are doing in open trading, does not affect the regulatory capital, but we are cautiously holding excess capital in our regulated businesses to support the open trading initiative. And we are comfortable with that cash position today, given the level of activity.

We do think having a healthy capital -- clients or counterparties is comfortable with taking credit. So in terms of the amount of cash we do believe we have enough to support our business. Right now, our capital management is also dividends and buybacks where we are active on that front.

We have an active dividend program in place we have been consistently paying out about a third of our free cash flow in earnings, we are increasing that dividend as pre cash flow and earnings increased.

If they top it with the board every quarter on the level of that dividend, and right now, yes we have more flexibility with that cash position growing but right now we are staying with course on the dividend side and I'll tell you on the other side, its the same story where we have a researchers' plan in place.

Its serving the purpose of offsetting a delusion from employee equity grants. We are staying on course right now with that dividend program we already have more flexibility. Its an ongoing target with the board meeting and staying on course for the time being with that researchers' plan..

Thank you. Our next question comes from the line of Hugh Miller with Macquarie. Your line is open. Please go ahead..

Hey, good morning. Thanks for taking my questions. I guess I had a question or two on the high yield topic. Looks like from the data you presented us with that you guys saw a nice increase in high yield volumes quarter over quarter up, you know, maybe 4 or 5%.

I was wondering if you could give us a sense of how that trended to route the quarter as we look at some of the industry data. It looks like industry data started to soften a bit during the quarter. If you could give us some clarity there..

Yes, on the high yield side, it did taper off as you pointed out throughout the quarter. You know we look at some volatility specific. It looks like volatility has dipped down during the quarter. In fact, we're seeing in July, we are seeing high yield volume down high yield trade volume is down from the second quarter level.

It's not down appreciably and it is up compared to July 2014. You know, so if we look at volatility there is an impact there but not an appreciable year over year change. At least, that's what we are seeing so far in July..

Okay and as we take a look at the kind of U.S. high grade fee capture, I know that you mentioned that the duration was down during the quarter and I guess its a period where we saw the yield curve steep in.

Were you guys kind of surprised at how things traded, just given that typically, you would anticipate the steep yield curve will probably you know cause investors to go a bit longer than you to benefit there.

And, you know, is there anything you're seeing right now with the duration that's solid in July?.

You know, really nothing to speak of. There may have been a slight steep in of the yield curve. You know, that doesn't always have to serve its [indiscernible] immediately and directly in client trading behavior. That changed sequentially lately, the $8 per million change.

It mentioned that it was a slight increase in yield and a slight decline in years to maturity. Those years to maturity is still within the post crisis range of bond to our traded platform. It was still close to 8 years and not a big change there..

Ok. And then, on the Euro bond activity, obviously you've seen a meaningful increase year over year in part because of some of the share gains you guys have enjoyed. Do you look like, you know, that it was down on a quarter over quarter basis where we were seeing a softening in activity for year gone for the industry.

But, I was wondering, can you talk about what you're seeing at other competitors as you guys have made changes to the platform.

You know, are you seeing reaction from your competitors and are you seeing, kind of, any differences in trading activity as a result of some of their changes?.

Not really. We're pleased with the results that we had in the second quarter there was a modest shift in the product mix traded by the European clients on the MarketAxess system.

But the 44% volume gained year over year, it feels like a very good progress to us and the number of clients that are engaged in using the system each month and each quarter continues to grow. So, it really feels like we are on the right track.

With respect to competition, we haven't seen anything terribly new from the incumbents they are forming new platforms in Europe as you are aware, just like we see in the US but we are not really aware that if those new platforms gaining any significant traction..

Our next question comes from the line of Ashley Serrao with CreditSuisse. Your line is open. Please go ahead..

Good morning. Rick, I just want to get a sense if there is a noticeable difference in the geographic adoption of open trading.

I mean looking at your European and US clients and also what is the pipeline of new liquidity providers look like?.

Sure, its hardly tell really because we are in a such early gates of open trading in Europe. We are seeing growing adoption from European client they trade US high grade highly over emerging markets products which was consistent with the pattern that we’ve seen in the US.

With respect to Eurobond, its very early gate because we just really launched open trading about three months ago and more appliances are documenting with MarketAxess each week in order to be able to utilize those tools and the anecdotal feedback were getting is very positive because you probably say in the past that look [indiscernible] even more challenge in Europe then it in the US but it still difficult to make a comparisons directly given the early stages that we are in Europe.

.

Okay. Then on this stress test what do you think that they could potentially do to accelerate markets structure changes.

What do you hearing from both clients directly this year?.

When you say clients actually give me an investor manager you’re talking about?.

Yes, Investor Managers..

We’re hearing consistently from the large investors that they’re meeting more regularly with regulators. And to talk about liquidity stress testing within their portfolios and basically what the regulators are trying to better understand is whether investment manager have sufficient liquidity in their portfolios to meet various redemption scenarios.

Our census this is very early stages by take it’s at a great sign of the regulators are spending so much sign in the industry participants to better understand those trends.

And we see investor managers taking a variety of steps to be prepared for any redemption scenarios from adding liquidity to their portfolios to using electronic trading to our greater extend which is closely reflecting in our market share gains.

There are sign that they are using ETFs more actively more actively as it liquidity to its portfolios setting up back stop lines so there are brightest stuff that we know investor managers are taking to make sure that they do have sufficient liquidity in their portfolios to meet potential redemptions. .

Okay. And then on the increase in block trading, its picked up nicely over the past few quarters.

Just wanted to get some cover and what’s driving the uptake and also whether you’re seeing any client to client blocks being transacted here means active here or its still mainly that deal is driving the bus?.

It’s a little bit above. We are seeing block trades crossing unnecessary client to client but capturing in open trading with non-traditional liquidity providers and we’re are seeing more electronic increase from investors and block trades sides that they are going to the deals.

And quite also we consistently we see that the price responses or even better and in block trade increase and what we’ve seen in round like that odd lines. So, if we have suddenly and peer to ask that the liquidity advantage and that reduction and transaction process equally relevant for clients trading on blocks, blocks are market access.

That it is for smaller trade sectors. .

Thank you. The next question comes from Mike Adams of Sandler O'Neill. Your line is now open. Please go ahead..

Good morning, guys. Congrats for the strong Q2.

Following up on the block question, what is the market share that you have right now of block size trades? And what is that trends looks like, if you give map force?.

Yeah, Mike. Right now on the block trading and this is where we defining it as over 5 million in trade size. Yes, its right around [indiscernible] standard. So, I think, I cost normally because we have just continuing reporting around that if you listen to way which condition remain 40 shares around 8%.

That’s is, it is a growing consistent with the growth in market share across our other size but it which quick mention in the prepared remarks and buckets, which Rick mentioned in the prepared remarks. And I'm just opening up a sheet right now.

If you look back over the past four years, block trading market share has more than doubled over the past four years. There's been a consistent growth in block trading. We're doing better there. We think we have protocols to address trading in larger trade sizes, you know, the bigger piece of what we're doing today..

I mentioned in my prepared remarks Mike that block trade year-over-year, trade count was up about 35%, so we're gaining share at slightly faster pace in blocks than what you see overall in high grade..

And then last one for me, just want to talk about some of the liquidity concerns in the market. There were some reports that back in June, FINRA had hosted a meeting with credit traders to discuss delays to TRACE trade reporting for block size trades.

So I mean if you have any insight, do you mind commenting on the meeting and maybe the likelihood of such a delay being implemented? And then second, what would this mean for MarketAxess because I know you gus have talked about TRACE being helping grow your business?.

Sure. I think that it's the consistent theme whether you're talking to large dealers or large investor is that, they believe that some delay of reporting of the largest blocks would be helpful in secondary liquidity for large block trades. I have voiced support for that.

If you look at trade sizes over $10 million in high grade corporate bonds, the transactions are only about 300 trades per day or about 1% of TRACE trade. And if it would help the market with secondary liquidity it has some delay to allow market participants to manage their risk on those very large trades.

I think that would be a positive step for the industry. It doesn’t really sacrifice the positive steps that have been made in transparency in the U.S. markets by FINRA through TRACE because 99% of the trades would still presumably be reported in real-time.

Quite honestly the theme was consistent as I mentioned between dealers and investors, but as you would expect the regulators have plenty of questions about how that would impact market knowledge of what's taking place through the day, volume and various securities, pricing in securities, end of day closing prices et cetera.

So I don’t think that there'll be any quick changes on this but it is one of the topics being discussed in terms of how the regulators may be able to contribute to better secondary market liquidity..

Our next question comes from Patrick O'Shaughnessy with Raymond James. Your line is open. Please go ahead..

So this morning I saw a news article that said that Bondcube one of the start-up competitors in the space just shut down basically they weren’t getting any traction and then they weren’t getting enough funding to keep going.

So that's just and I think it's consistent with your commentary that a lot of these new start-ups are really struggling to get traction, but just be curious that you take -- when you're having dialogues with your customers, what is their tone in terms of all these new competitors kind of knock on their doors and trying to get in there and try out their platforms?.

I think the institutional market is struggling with bandwidth. There are so many new entrants trying to get client adoption and just in the early stages of even signing up clients that I think both investors and dealers are struggling with the bandwidth to embrace many as any of the new platforms.

And as I mentioned in the past it's not an easy decision.

I think people have to assess the liquidity benefits of any platform, but then they have to work through legal agreements, they have to think about the clearing on the platform, they have to go through technology due diligence, they have to ultimately get either their trade capture system or their OMS connected to the platform.

So this is not a quick decision and as a result those platforms that have no trading activity and limited connectivity today, I think are having the hardest time with that adoption given the number of new entrants in the market..

Next on Europe, so you guys have kind of been disruptive to the status quo in Europe and open up the platform to more than just three or four dealers and you obviously had a less success of that, how easy is it for your big competitors and by that I mean trade like Bloomberg, how easily can they replicate what you have done in terms of market structure because obviously they’ve seen your success and that's probably just the way the market is heading..

I think it's difficult for us to comment on what their strategy might be. It’s from a technology standpoint it's relatively straight forward, should they choose to increase the number of dealers that investors can access on any electronic enquiry.

The far more difficult piece in my opinion is moving towards open trading all to all which is something that we’ve been investing in for many years and continue to invest in heavily every quarter. So simply a change around the number of dealers is fairly straight forward but the next step is undoubtedly a bigger one..

So I guess recently there has been a pretty high profile debate about the impact of bond ETFs on market liquidity and what happens in a rising rate environment and I think [indiscernible] 0:39:26.8 made some really public statements about that last week.

Do you kind of have take on that subject? Do you think that the growth of ETFs and fixed income has contributed to some liquidity issues that people are worried about?.

I actually think the growth in ETFs has been positive for market liquidity. It's a standardized form of being able to trade at basket or index of bonds can be traded either in shares or the APs and the dealer of the trading, the underlying assets; so we see it as a positive contributor.

The ETF business continues to take inflows at a very healthy clip, so the assets are growing. And I think the only way that changes is if there is a material increase in interest rates or default rates that are far in excess of what we’ve observed over the last three or four years, neither one of the which seems all that likely in the near term.

And we see open trading is a piece of the very positive evolution of ETF's secondary market liquidity. You see the APs active in our open order book every day. So they have more volumes and more trade opportunities to manage. There are business and provide liquidity that's critical to the functioning of the ETF market than they ever have before.

So we see this is a real positive and it certainly is becoming a bigger and bigger part of what we see on the trading system and also in open trading..

And then lastly from me, so you talk about how the sequential increase in other credit fee capture per million was function mix shift, but within the individual lines high-yield emerging markets and probably euro bonds, how has the pricing in from those products trended over the last year or so?.

Have to be -- the only, so that other credit category, it is depended on the mix shift within those three products. And you are right, there is some dynamic even among the products.

And so the only one that has been noticeable has been in emerging markets where our volume is a combination of emerging markets sovereign bonds and emerging market corporate bonds, and what we’ve seen over the past year has been a shift towards sovereign bonds, so that having you waiting for sovereign bonds for us.

That means that the fee capture is lower on sovereign bonds versus corporate bonds. So we have seen a decline in that particular part, we have seen a decline of somewhere around a 10% in the fee capture on that particular product. Again that's also to do with the mix within it not the retained pricing plan..

Thank you. [Operator Instructions]. Our next question comes from Michael Wong with Morningstar. Your line is open. Please go ahead..

Now that open trading has grown nicely do you have any revenue number to attach to all your open trading volume?.

We don't break it out specifically with open trading, but we’ve said in the past that the fee capture for open trading is similar to the fee capture for traditional clients as dealer trading and as I said this morning, it represents roughly 10% of our activity in the U.S. products currently..

Okay.

And for open trading, how much trading would you say or trading volume that's now occurring on open trading is truly incremental to the platform versus if that change in execution did on your platform?.

I think it represents almost entirely incremental liquidity on the platform, which is one of the factors that I am convinced is driving our order flow and our market-share up and faster pace.

These are non-traditional counterparties that are meeting in the open trading order book and when two parties can find a natural match in the open order book, it is driving really important transaction cost savings to both parties. So this is incremental liquidity, it's new counterparties, it's adding to the secondary market ecosystem.

And the best news in my opinion is that we are still in very early inning.

As I mentioned the participation rates are growing, but we still see about 30% of our traditional assets management clients that are actively participating in open trading, but most of the rest are telling us that they are doing the work so that in future quarters they too can take advantage of the trading opportunities within the open order book..

Thank you. I am showing no further questions. I would now like to turn the call back to Ric McVey for any further remarks..

Thank you for joining us this morning and we look forward to catching up with you next question..

Ladies and gentlemen thank you for participating in today's conference. This does conclude the program. And u may all disconnect. Everyone have a great day..