In this inaugural episode of OpenYield’s Monthly Markets with Mark, host Mark Hebert dives into the evolving landscape of fixed income automation with two pioneers in the field, Marty Mannion and Matthew Schrager. Both co-heads of TD Automated Securities, they share their insights into the transformative impact of automation on fixed income markets.

Marty and Matt's journey into automation started in the municipal bond market, where they saw an opportunity to address inefficiencies through technology. They explain how they built the foundation of Headlands Securities, which would later be acquired by TD, and discuss the challenges and advantages of automating fixed income markets, especially in comparison to faster, more centralized markets like equities.

They delve into the role of latency, liquidity, and technology, noting how automation is catching up in fixed income. They highlight how recent regulatory changes and advancements in automation are driving market efficiency, resulting in reduced friction and costs for both institutional and retail investors. This trend has significantly improved liquidity, especially for retail clients, who now have better access to fixed income markets.

The discussion also touches on the future of retail involvement in fixed income markets, with innovations like apps and platforms making bond trading more accessible to the average investor. Marty and Matt emphasize the importance of educating retail investors and building infrastructure to support their participation.

As the conversation shifts to the integration of voice and automated trading, they share how TD is handling various trading formats, including ETFs, RFQs, and voice trading, and how these synergies enhance market liquidity and efficiency.

Finally, they explore the potential for change in the primary market, which has traditionally been slow to evolve, and discuss how advances in technology and transparency could bring new opportunities for both issuers and investors.

Marty and Matt are excited about the future of automated fixed income markets and the role of new players in accelerating innovation. They conclude by reflecting on the progress made and the long journey ahead, stressing the enormous potential of the fixed income space in the coming years.