Billy Hult: Hey Craig, it’s Billy. Thanks very much. We’d be crazy to say that pricing isn’t part of the conversation with our clients. And if I didn’t say that the right way, it would be when this call was over, right. It’s a big part of the reality. That being said, we say this in a very kind of blunt way. It’s not the main focus, right. Clients are focused on being able to do their job more efficiently and more intelligently. And it’s important for us to always appreciate that when clients think about value, that we provide, it goes just a lot past that sort of execution fee. It starts with liquidity and functionality, but it stretches to pre-trade analytics, and really how we describe this like flow of information and Tom was talking about Aladdin but this flow of information to OMSs. And so the convenience of trading multiple products from a single platform, that’s a big deal, that one-stop shop sort of emphasis that we continue to kind of make.
I say this again in my – in sort of a little bit of my own language. If pricing was the main focus, our largest competitor in institutional rates market would have all that business. And if it was the main focus, we’d be the full leader in the credit market, right. So these are kind of complex dynamics, sometimes with a complex dynamic, you simplify, right. Simple strategy, continue to provide our clients with more innovation or bang for the buck and pricing conversations always take care of themselves. And I don’t say that flippantly. I say that with a lot of rigor in terms of the analysis. So we’re going to continue to innovate with protocols, connecting our markets. We believe we provide a lot of value to our clients, and we have that loyalty and support, and we feel quite good about where our pricing model is today.
It’s a good question, Craig, thank you.
Operator: Thank you. Our next question comes from the line of Ken Worthington with JPMorgan. Your line is now open.
Ken Worthington: Hi, good morning, everybody. Congrats, Ashley. On high-yield, connection with ETF managers seems like a no-brainer to me for Tradeweb and high-yield. How big a part of the high-yield trading ecosystem are ETFs? How is rebalancing and high-yield ETFs done currently? And what needs to happen for Tradeweb to win more business in that part of the market?
Tom Pluta: Hey Ken, good morning. Yes, high-yields, I should say, ETF market makers and ETF volumes coming into the cash markets continue to be a significant part of what we’re seeing and a significant part of our growth strategy. We’ve also seen ETF market makers using portfolio trading to replicate some of those baskets. So I think us having the full range of protocols, a thorough ETF market offering, strengthen portfolio trading, RFQ and the cash bonds, all complement one another. So as far as what has to continue to happen, we continue to work on all of these protocols, building out the network, building out the responses, building out the volume and what we’ve seen increasingly is these players interacting across the various protocols, and we’re working on ways to try to make it easier for clients to access those protocols within Tradeweb in terms of doing more than one trade or doing a package of trades at one time.
So we’re focused on all those things. The results have been quite promising, and it’s a big part of the focus going forward. Thanks for the question.
Operator: Thank you. One moment for our next question, please. Our next question will come from the line of Brian Bedell with Deutsche Bank. Your line is now open.
Brian Bedell: Great, thanks. Good morning. Thanks for taking my question. Most have been asked and answered, but maybe just one on your views on the potential clearing of treasuries, new regulations coming around and I realize it’s still potentially a couple of years out, but how do you see that changing the landscape for Tradeweb in any major way and are there opportunities for you to expand your business with that new paradigm.
Tom Pluta: Sure, Brian. So just to recap, the SEC did announce the final clearing rules in December and set the deadlines for the end of 2025 for cash treasuries and mid-2026 for treasury repo. In cash treasury, essentially the rule will scope in more dealers, essentially the PTFs to clear their trades. But this rule fell short of scoping an even wider variety of market participants that some had expected. So it’s not as dramatic in cash treasuries. In treasury repo that is the bigger change. So substantially all of the market will be required to clear repo going forward or essentially clear repo going forward. There’s a few exclusions out there, but it is most of the market. I guess what I would highlight is that there’s still a number of open questions that the industry is wrestling with such as, will there be other clearing houses other than FICC entering the space as competitors and one or more have suggested that they will enter.
And then what are the specifics of the protocols that are introduced by clearing houses with respect to cross margining and netting and things that. And then is there enough capacity for bank dealers who are sponsoring a large number of clients into the clearing houses and how those margin costs we shared. So these are the types of things that are being discussed in the market, being discussed in the panels. And then how might that impact liquidity. So these details are still being worked out. But ultimately, your question is what’s the impact to Tradeweb? Generally speaking, more central clearing is positive for our business. It does go hand-in-hand with electronification. And as we are a large player in critical infrastructure provider in the treasury and repo markets, we’re already fully connected to FICC.
We already manage clear treasury business today through Dealerweb. We’re very familiar with how all that works. And as these deadlines approach, we’re going to work closely with our clients and help them navigate the rule changes as we’ve done in interest rate swaps. So mild positive, not a dramatic change, but this direction of travel in the regulation continues to be supportive for Tradeweb.
Billy Hult: And our ability to have a voice around how this regulation ultimately gets implemented in the market. From my perspective, there’s some pretty good feelings about that because it mimics a little bit the way that we were able to kind of get in there around, as you guys all know very well, the derivatives regulation and how SEFs reform and very important decisions that were made around really how clearing would work and the market structure of that market that gives us now, again, a bunch of years later, confidence, but also the credibility to be in there with the right people and really shape how that regulation winds up really affecting the markets that we live and breathe in. So that’s a big part of this and Tom answered that perfectly.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Alex Kramm with UBS. Your line is now open.
Alex Kramm: Hey. Hello, everyone. Just wanted to come back on the discussion we had earlier about RFQ. Sounds like you’re being successful there. But I know there’s limited disclosures. But when I look at some of the foundational RFQ numbers that you give every quarter, I think over the last 10 quarters, you’re kind of stuck in the low to high 4% market share of trade. Now that’s combined high yield in IG. So I don’t know if that’s a fair way to look at it. But doesn’t seem like you’ve been really able to break out, and I think 1Q was actually down a little bit over the – from the last few quarters. So just wondering if we’re looking at this right, is there’s still a lot to do and what there is to do because it seems like you’ve been stuck a little bit. So just maybe rectify that a little bit. Thanks.
Billy Hult: Yes, how are you? I made the sort of analogy about the painting to the first question that Alex from Goldman asked me, I’m not saying you’re going to like smudge our Picasso, but I kind of hear where you’re coming from. I think at the end of the day, as we talk about sort of where we’re headed with RFQ trading and the real significant progress that we’ve made around that and the emphasis around that. At the end of the day, the success around that has been, I think, higher around kind of IG. And we’re pretty blunt here. I think we do a lot of things very, very well. We still have more work to do on high yield. And some of that work is around the penetration of RFQ trading into high-yield. But from our perspective, also it’s about the adoption of portfolio trading into the less liquid areas of the market.
And it’s also about, and Tom described, this work that we’re doing with Aladdin in terms of increasing the responder network in high-yield, that’s going to be a big piece of it as well. So if you felt like just everything we do in RFQ trading would perfectly apply from IG to high-yield, not so fast. It’s again, the collaborative effect of really impacting the clients’ workflow. And the focus in high-yield have to be three-pronged. It has to be around, yes, RFQ, but also the continued confidence around portfolio trading plus rounding up this network of responders through integrations like Aladdin. So it’s always a sort of pure focus that we have. It’s a good question. Thanks a lot.
Operator: Thank you. One moment for the next question. Our next question comes from Craig Siegenthaler with Bank of America. Your line is now open.
Elias Abboud: Hi, good morning. It’s Elias Abboud from Craig’s team. Thanks for taking the question. You mentioned earlier that you’ve completed Phase 2 of the Aladdin integration, which was for all-to-all trading. I was wondering if you could quantify the inflection you’ve seen in institutional all-to-all volume since that integration was completed. So maybe we can get a peek into what the results from Phase 3 could look like down the road. Thanks
Tom Pluta: Yes. So we’ve definitely made significant progress there. We don’t actually break out and disclose that, but I think it’s safe to say that we are making progress. We see more. It’s a little bit too soon, I’d say, to see the full effect because these are still coming online. And I think we’ll see more of the impact later this year and into next year, but it has been a steady growth and what’s been contributing to the overall market share gains that you have – that we have been experiencing over the last year or 1.5 years. Thanks for the question.
Operator: Thank you. And this concludes our Q&A portion. I’ll now turn the call back over to Mr. Billy Hult for closing remarks.
