Eli Abboud

Eli Abboud of Bank of America inquired about the drivers behind the strong performance in Europe, where volumes were up 21% year-to-date, asking what was causing the share gains and which protocols or customer channels were particularly strong.

Answer

CEO Christopher Concannon attributed the robust European growth to successfully 'firing on all three initiatives.' He cited high client adoption of the new block trading solution, which has rich dealer content, strong growth in portfolio trading with PT volume up 64% in July, and progress in the dealer-to-dealer business following the full rollout of MidX across the Eurobond market.

Elias Abboud asked about the motivation for acquiring the remainder of RFQ-hub, its potential financial impact, and the strategic priority of becoming a more cross-asset platform.

Answer

CEO Christopher Concannon stated the acquisition provides a multi-asset platform for ETFs and derivatives. The key synergy is offering their large fixed-income client base the ability to trade fixed-income ETFs alongside bonds, choosing the most efficient execution method. He highlighted the opportunity to leverage MarketAxess's large global client network for distribution. CFO Ilene Bieler noted that its financial contribution, currently visible in 'equity in earnings of unconsolidated affiliate,' will be consolidated into operating results post-acquisition.

Elias Abboud inquired about the geographic client mix for the emerging markets business and the potential impact of U.S. tariffs on trading volumes from American asset managers.

Answer

CEO Christopher Concannon detailed a highly diversified client base for emerging markets: approximately 30% from the U.S., 40% from EMEA, and the remainder from APAC and Latin America. He argued this global diversification insulates the business from region-specific policies like U.S. tariffs, stating that broader macro factors like interest rates and local economic health are the primary drivers of investor demand.

Eli Abboud asked about Virtu Financial's timeline for customer market making in options, whether it's a near-term or long-term objective, and if M&A could be part of the options roadmap. He also questioned the sequential decline in market making revenue despite a smaller decline in 605 quoted spread opportunity.

Answer

CEO Aaron Simon clarified that the immediate focus is on excellent options trading, with customer market making being a potential future outcome if the business scales. Co-President and Co-COO Joseph Molluso stated that M&A would be considered if returns are superior to internal growth, but currently, incremental capital is directed towards growing the business. He also explained that while 605 indicators were down, Virtu Financial's broader global operations, including strong performance in crypto, commodities, and Virtu Execution Services (VES), contributed to overall performance.

Eli Abboud inquired whether the BioCatch announcement represents a one-off partnership or a strategic adjustment for Verafin, and if Verafin could evolve into a platform provider with other firms paying for network access.

Answer

Adena Friedman, Chair and CEO of Nasdaq, stated that Verafin is architecturally a platform, built for integration via modern APIs. She described the BioCatch partnership as seamless, integrating pre-transaction signals with Verafin's at- and post-transaction analytics to create a complete fraud solution. She agreed that this is the first, but sees other partnership opportunities going forward, enhancing Verafin's capabilities and value to clients.

Eli Abboud inquired about the BioCatch announcement, asking if it's a one-off partnership or a strategic adjustment for Verafin, and whether Verafin could evolve into more of a platform provider by allowing other firms access to its network.

Answer

Adena Friedman, Chair and CEO, confirmed that Verafin is architecturally a platform, built for seamless integration through modern APIs. She explained that BioCatch, a scaled global business, focuses on pre-transaction signals, and integrating their analytics with Verafin's at- and post-transaction analytics creates a complete fraud solution, adding significant value and easing workflows for SMBs. Friedman stated that while BioCatch is the first, Nasdaq sees other opportunities for partnerships, indicating a strategic direction towards expanding Verafin's platform capabilities.

Eli Abboud from Bank of America asked about the slower ramp-up of treasury futures compared to SOFR, seeking to understand any additional complexities. He also questioned how many of the nine connected FCMs have open interest on FMX, the drivers of the strong FX business performance, and the reasons for voice trading outperforming electronic trading in FX.

Answer

Co-CEO John Abularrage stated there are no additional impediments for treasury futures and expects them to follow SOFR's successful trajectory, adding that nearly all connected FCMs have open interest on the platform. Co-CEO & COO Sean Windeatt attributed the FX strength to a 'healing' market, normalized options volatility, and growth in the FMX FX platform. He explained that the voice outperformance in FX reflects client choice during a period of returning volatility but expects a gradual shift back toward electronic trading as the market stabilizes.

Elias Abboud of Bank of America asked about the product roadmap for FMX following the launch of treasury futures, specifically regarding longer-dated products and options. He also inquired about FMX's path to profitability, its current cash burn, and its potential normalized profit margins. Additionally, he requested an update on the status of Howard Lutnick's share divestment.

Answer

Co-CEO Jean-Pierre Aubin reiterated the three-year plan for FMX, focusing on connectivity in year one before expanding products. Co-CEO Sean Windeatt clarified that the cash burn for FMX futures is zero for BGC, as it is funded by FMX's equity partners. He projected FMX would reach breakeven in the short term and achieve long-term margins of 40-50%, comparable to other exchanges. Regarding the share divestment, Mr. Windeatt stated that all Senate Ethics Committee standards will be met, no open market sales are expected, and the 90-day deadline is approaching.

Eli Abboud, on behalf of Craig Siegenthaler at Bank of America, asked about the impact of tariffs on CME's physical commodities business and whether it has affected trading dynamics relative to European alternatives.

Answer

Senior MD & Global Head of Commodities Markets Derek Sammann explained that global uncertainties, including tariffs, are driving a realignment of physical supply chains and record results for CME's commodities complex. He stated that tariffs create price dislocations and basis risk, which in turn increases the need for risk management and drives volume in futures and options. This has led to record activity from both commercial and speculative clients, with notable growth from APAC and EMEA.

Eli Abboud, on behalf of Craig Siegenthaler at Bank of America, questioned the impact of tariffs on CME's physical commodities business and whether it has affected trading dynamics.

Answer

Derek Sammann, Senior MD & Global Head of Commodities Markets, detailed that global uncertainties, including tariffs, are driving a realignment of physical supply chains and record results for CME's commodities complex. He explained that tariffs create price dislocations and basis risk, which directly increases the need for risk management and boosts trading volume, particularly in options, across both commercial and speculative client segments.

Elias Abboud inquired about the status of Cboe's option on Trading Technologies, its expiration, and the strategic value of a larger pre-trade footprint.

Answer

CFO Jill Griebenow confirmed that Cboe has not exercised its option on Trading Technologies and that the option has not expired. She declined to provide further details on the terms, stating only that the company evaluates opportunities that make strategic and financial sense.