WGBI to Incorporate Tradeweb FTSE Benchmark Closing Prices

Rhea-AI Summary

Tradeweb Markets Inc. (Nasdaq: TW) has announced that FTSE Russell will incorporate Tradeweb FTSE benchmark closing prices for U.S. Treasuries, European Government Bonds, and UK Gilts in its global fixed income indices, including the World Government Bond Index (WGBI). This change, disclosed on October 8th, 2024, is expected to take effect in March 2025.

The WGBI, launched 40 years ago, measures the performance of investment-grade sovereign debt from over 25 countries, with a market value exceeding $30 trillion. Tradeweb's benchmark prices, administered by FTSE Russell, comply with EU and UK Benchmark Regulation and IOSCO Principles.

This inclusion validates Tradeweb's commitment to developing next-generation fixed income pricing and index trading products. Tradeweb also plans to expand electronic trading functionality for FTSE Russell Fixed Income indices and customized baskets, offering tools like RFQ, AiEX, and Portfolio Trading.

Positive

• Inclusion of Tradeweb FTSE benchmark closing prices in FTSE's global fixed income indices, including the WGBI
• Validation of Tradeweb's commitment to developing next-generation fixed income pricing and index trading products
• Planned expansion of electronic trading functionality for FTSE Russell Fixed Income indices and customized baskets

Negative

• None.

Insights

Financial Analyst

The inclusion of Tradeweb FTSE benchmark closing prices in FTSE Russell's global fixed income indices, particularly the World Government Bond Index (WGBI), is a significant development for Tradeweb Markets Inc. (TW). This change enhances TW's position in the fixed income market infrastructure and potentially increases its revenue streams.

Key points:

• The WGBI covers over $30 trillion in market value across 25+ countries
• Implementation is set for March 2025, giving time for market preparation
• Tradeweb's closing prices will be used for U.S. Treasuries, European Government Bonds and UK Gilts
• This move validates Tradeweb's pricing data quality and could attract more institutional clients

Long-term, this partnership could lead to increased trading volumes on Tradeweb's platform, as index-tracking funds and ETFs may prefer to trade where official closing prices are sourced. The expansion of electronic trading functionality for FTSE Russell indices further solidifies Tradeweb's competitive advantage in the electronic trading space.

Market Research Analyst

This development signifies a shift in the fixed income market structure, potentially impacting how institutional investors trade and value their portfolios. The inclusion of Tradeweb's prices in such a prominent index suite could:

• Increase market share for Tradeweb in government bond trading
• Enhance the company's data licensing revenue
• Improve price discovery and transparency in bond markets

Competitors like MarketAxess and Bloomberg may need to respond to maintain their market positions. For investors, this move might lead to more accurate bond valuations and potentially lower trading costs due to increased competition and efficiency. The partnership also aligns with the trend towards greater electronification of fixed income markets, which could accelerate as a result of this collaboration between Tradeweb and FTSE Russell.

NEW YORK & LONDON--(BUSINESS WIRE)-- Tradeweb Markets Inc. (Nasdaq: TW), a leading, global operator of electronic marketplaces for rates, credit, equities and money markets has announced that FTSE Russell will make a price source change to include Tradeweb FTSE benchmark closing prices for U.S. Treasuries, European Government Bonds and UK Gilts in FTSE’s global fixed income indices, including its premiere World Government Bond Index (WGBI).

FTSE Russell disclosed this change during its semi-annual country classification announcement on October 8^th, 2024. The WGBI, which was launched 40 years ago, measures the performance of fixed-rate, local currency, investment-grade bonds and comprises sovereign debt from over 25 countries, denominated in a variety of currencies, and with a market value of more than $30 trillion. The inclusion of Tradeweb FTSE Closing Prices is expected to go into effect in March 2025.

These benchmark prices are administered by FTSE Russell in accordance with the EU and UK Benchmark Regulation and the IOSCO Principles for Financial Benchmarks and can be used in index construction, as well as reference rates for a broad range of use cases, including trade-at-close transactions and derivatives contracts.

Lisa Schirf, Global Head of Data & Analytics at Tradeweb, said: “The World Government Bond Index is FTSE’s flagship global index and a leading global benchmark for fixed income markets. The inclusion of Tradeweb’s benchmark closing prices in FTSE’s indices validates our continued commitment to develop the next generation of fixed income pricing and index trading products for traders and investors worldwide.”

The existing partnership between Tradeweb and FTSE Russell was announced in October 2023 and included the development of benchmark closing prices, which would be administered by FTSE Russell and derived from trading activity on Tradeweb’s platform. In June 2024, Tradeweb announced the launch of Tradeweb FTSE U.S. Treasury closing prices, utilizing an enhanced methodology, which also facilitates the calculation of bid and offer prices. Most recently, this methodology was extended to UK Gilts and European Government Bonds and is available for clients today.

Scott Harman, Head of Fixed Income, Currencies and Commodities at FTSE Russell, said: “We’re pleased to announce the price source change within our global fixed income indices to include Tradeweb FTSE closing prices for these significant global rates markets. It ensures our indices continue to incorporate transparent, representative data sets across the diverse universe of fixed income markets that they track. Additionally, FTSE Russell’s benchmark administration of these prices brings a new level of transparency and rigorousness to the valuation of fixed income markets and our indices.”

In addition to providing benchmark closing prices, Tradeweb plans to expand and enhance electronic trading functionality for FTSE Russell Fixed Income indices and customized baskets through tools and protocols such as RFQ (request-for-quote), AiEX (Automated Intelligent Execution tool) and Portfolio Trading, offering trade-at-market close, trade-at-month-end and other features conducive to index rebalancing trades. For clients seeking to efficiently express a view on FTSE Russell indices and baskets, providing enhanced trading functionality can help efficiently manage what are often their largest and most critical trades.

FTSE Russell is a business owned by the London Stock Exchange plc (“LSEG”). LSEG is the controlling shareholder of Tradeweb.

About Tradeweb Markets:

Tradeweb Markets Inc. (Nasdaq: TW) is a leading, global operator of electronic marketplaces for rates, credit, equities and money markets. Founded in 1996, Tradeweb provides access to markets, data and analytics, electronic trading, straight-through-processing and reporting for more than 50 products to clients in the institutional, wholesale, retail and corporates markets. Advanced technologies developed by Tradeweb enhance price discovery, order execution and trade workflows while allowing for greater scale and helping to reduce risks in client trading operations. Tradeweb serves more than 2,800 clients in more than 70 countries. On average, Tradeweb facilitated more than $1.9 trillion in notional value traded per day over the past four fiscal quarters. For more information, please go to www.tradeweb.com.

Forward-Looking Statements:

This release contains forward-looking statements within the meaning of the federal securities laws. Statements related to, among other things, our outlook and future performance, the industry and markets in which we operate, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions and future events are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed under the heading “Risk Factors” in the documents of Tradeweb Markets Inc. on file with or furnished to the SEC, may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. In particular, preliminary average variable fees per million dollars of volume traded are subject to the completion of management’s final review and our other financial closing procedures and therefore are subject to change. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this release are not guarantees of future events or performance and future events, our actual results of operations, financial condition or liquidity, and the development of the industry and markets in which we operate, may differ materially from the forward-looking statements contained in this release. In addition, even if future events, our results of operations, financial condition or liquidity, and events in the industry and markets in which we operate, are consistent with the forward-looking statements contained in this release, they may not be predictive of events, results or developments in future periods.

Any forward-looking statement that we make in this release speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241014818230/en/

Media contact:

Daniel Noonan, Tradeweb

+1 646 767 4677

Daniel.Noonan@Tradeweb.com



Investor contacts:

Ashley Serrao, Tradeweb

+1 646 430 6027

Ashley.Serrao@Tradeweb.com



Sameer Murukutla, Tradeweb

+1 646 767 4864

Sameer.Murukutla@Tradeweb.com

Source: Tradeweb Markets Inc.

FAQ

When will Tradeweb FTSE benchmark closing prices be incorporated into FTSE's global fixed income indices?

The inclusion of Tradeweb FTSE benchmark closing prices in FTSE's global fixed income indices, including the World Government Bond Index (WGBI), is expected to go into effect in March 2025.

What markets will be affected by the inclusion of Tradeweb FTSE benchmark closing prices in FTSE indices?

The inclusion will affect U.S. Treasuries, European Government Bonds, and UK Gilts in FTSE's global fixed income indices, including the World Government Bond Index (WGBI).

How does this announcement impact Tradeweb Markets Inc. (TW) and its business?

This announcement validates Tradeweb's commitment to developing next-generation fixed income pricing and index trading products. It also allows Tradeweb to expand its electronic trading functionality for FTSE Russell Fixed Income indices and customized baskets.

What is the significance of the World Government Bond Index (WGBI) mentioned in relation to Tradeweb Markets Inc. (TW)?

The WGBI is FTSE's flagship global index and a leading global benchmark for fixed income markets. It measures the performance of investment-grade sovereign debt from over 25 countries, with a market value exceeding $30 trillion.