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Tradeweb to acquire Nasdaq’s eSpeed central limit order book

  • February 2, 2021

Electronic bond market operator, Tradeweb, has agreed to buy Nasdaq’s US fixed income electronic trading platform. The Nasdaq interdealer platform, formerly known as eSpeed, is a fully executable central limit order book (CLOB) for electronic trading in on-the-run (OTR) US Treasuries. Nasdaq’s CLOB will become part of Dealerweb, serving the firm’s wholesale sector.

The US$190 million, all-cash transaction is expected to close later in 2021 subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals. Upon closing the transaction will be accretive to Tradeweb’s adjusted earnings.

Upon completion of this transaction, Dealerweb clients will be able to trade OTR US Treasurieseither via the new CLOB or Tradeweb’s direct streams protocol. Both protocols are expected to be operated on the same architecture, leveraging the same application programming interface (API) to provide a more flexible and efficient approach than currently exists in wholesale markets.

Tradeweb CEO Lee Olesky commented, “This is a great opportunity for us to add value to the wholesale US Treasuries market — one of the world’s largest and most liquid cash markets — by providing greater choice among protocols, more connected participants and lower cost. Tradeweb has been facilitating electronic trading in US Treasuries for more than 20 years, and this targeted investment allows us to introduce more innovation for wholesale markets in a way that enhances our existing platform and expands our client base.”

The addition of Nasdaq’s CLOB will expand the number of market participants connected to Dealerweb’s OTR treasuries platform, which includes primary dealers, principal trading firms, broker dealers and hedge funds.
Tradeweb president, Billy Hult, commented, “The Nasdaq CLOB has been valuable to market participants as a standalone protocol, and now offering it alongside our direct streams protocol we will provide more ways for users to adapt to various market conditions.”

Following the closing, Tradeweb will facilitate trading in US Treasuries through direct streams, CLOB, request-for-quote (RFQ), sessions-based trading, automated trading, list trading and click-to-trade to clients in the institutional, wholesale and retail sectors. In 2020, Tradeweb facilitated trading for an average of more than US$90 billion notional per day in US Treasuries across these sectors.