Marketaxess Holdings Inc (MKTX) 2007 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by and thank you for the MarketAxess Second Quarter 2007 Earnings Conference Call.

(OPERATOR INSTRUCTIONS)

I would now like to turn the call over to Stephen Davidson, head of Investor Relations at MarketAxess.

Please go ahead, sir.

Good morning and welcome to the MarketAxess Second Quarter 2007 Conference Call.

For the call this morning, Rick McVey, Chairman and Chief Executive Officer of MarketAxess, will provide the strategic update for the Company.

Kelley Millet, President of MarketAxess will provide an update on our North America businesses, and then Jim Rucker, our Chief Financial Officer, will review the financial results for the quarter.

We will then go back to Rick for closing comments before the Q&A session.

Before I turn the call over to Rick, let me remind you that today's call may include forward-looking statements.

These statements represent the Company's belief regarding future events that, by their nature, are uncertain.

The Company's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements.

For a discussion of the risk factors that could affect the Company's future results, please see the description of risk factors in our annual report on Form 10K for the year ended December 31, 2006.

I would also direct you to read the forward-looking disclaimers in our quarterly earnings release that was issued earlier this morning and is available on our website.

I would now like to turn the call over to Rick McVey.

Rick?

Good morning and thank you for joining us.

I am very pleased to share our record second-quarter 2007 results with you, which reflect strong momentum in revenues and earnings and improving diversification from our pipeline of new products and services.

For the second quarter of 2007, MarketAxess reported net income of $3.6 million, or $0.10 per share on record revenues of $25.3 million.

This compares to $0.02 per share on $20.1 million in revenue in the prior-year period.

Our pre-tax margin expanded to 24%, an increase of 17 percentage points above the prior-year period, reflecting the strong operating leverage in our business.

These strong results were driven by record commission generation in our core high-grade corporate bond business.

We achieved record U.S.

high-grade volume of $68 billion, up 56% over the prior-year period, driven primarily by year-on-year market-shared gains and further bolstered by an 8% increase in TRACE overall market volumes.

Following our success in the U.S., we transitioned to a new fee plan in Europe during the quarter, with 18 dealers signing new fee agreements.

Other volumes, driven primarily by higher agency and CDS volumes, were up 50% to a record $20 billion, helping to drive record overall trading volume of $111 billion, up 40% over the prior-year period.

On the expense front, second-quarter-2007 expenses were up 3%, compared to the second quarter of 2006, reflecting continued expense discipline.

Our financial position continues to be a source of strength.

We ended the second quarter with $122 million in cash and securities, compared to $113 million on March 31, 2007.

Strong operating cash flow is replenishing cash balances utilized during our share buyback and annual employee bonus payments.

Finally, we have recently strengthened our franchise with the election of Ingres Corporation President Roger Burkhardt to our Board of Directors.

Roger brings a deep knowledge of electronic-trading technology to MarketAxess, having spent many years in capital-markets related-technology positions, including serving as the CTO at the New York Stock Exchange.

We are pleased to have him and his advice and will be invaluable to the Company and the Board.

In summary, our second-quarter results reflect the power of the operating leverage in our business model.

Increasing market share and new-product growth are driving revenues higher, leading to a significant improvement in earnings.

Slide four more clearly shows the earnings momentum over the past four quarters.

Since the second quarter of 2006, we have delivered four consecutive quarters of revenue, pre-tax income and net-income growth, leading to a significant expansion of our margins.

Slide five presents a picture of the operating leverage in our business.

Looking at the second quarter, versus the prior-year same period, a revenue increase of 26%, combined with slightly higher expenses, drove a 336% increase in pre-tax income and a 344% increase in net income.

These results reinforce the fact that we have very attractive incremental margins in our business.

On slide six, we provide an update on some of the market drivers that impact the corporate-bond market.

And given the recent volatility of the credit markets, I would like to walk you through what we are seeing.

The upper left-hand corner shows the impact of the recent reversal of conditions in the corporate-bond market.

Liquid high-grade spreads have widened a full 30 basis points in July alone from the end of June.

The upper right-hand corner shows the benign volatility of the Credit Suisse U.S.

Corporate Index of the previous six quarters, which came to an abrupt end in July.

In the short run, the sudden and severe correction in credit markets has led to a reduction in liquidity and trading activity in corporate bonds.

However, we believe the increase in spreads and volatility will, ultimately, cause an increase in trading activity among investment managers as they increase allocations to the corporate-bond sector.

In the lower left-hand corner, the inversion of the yield curve, beginning in 2006, has caused many investment managers to concentrate more of their trading at the short end of the curve, where we are in lower trading fees.

The recent steepening of the yield curve has led to an increase in average maturities traded on our system.

The lower right-hand corner shows high-grade, new-issue volumes -- while robust in the first half of the year, have slowed significantly in July, due to the difficult funding environment.

The deal pipeline remains full, pending a stabilization of credit-market conditions.

On slide seven, we have the value proposition for our new European high-grade fee plan for institutional investor and dealer clients, as well as our shareholders.

As you may recall, back in June of 2005, we pioneered a new e-trading fee plan in fixed income for our U.S.

high-grade product.

When we implemented this plan back in 2005, we were confident that the plan would serve to accelerate the growth of a more liquid and efficient electronic marketplace for the benefit of our broker-dealer clients, our institutional-investor clients, and MarketAxess stockholders.

It has.

Since that time, our share of NASD high-grade TRACE has grown from 7.1% to 11.1% in the second quarter of 2007.

Dealers are now, more than ever, willing to see client-flow business trade over our platform, and our shareholders have the attractive combination of a growing base of recurring revenue and a more scalable model for variable transaction revenue.

The details of the new European plan are very similar to the U.S.

plan.

For our broker-dealer clients, we are automating the transaction fee by electronically adding it into their bids and offers.

This allows dealers to capture and account for their transaction fee trade-by-trade.

This more favorable economic model will allow us to preserve and grow our critical base of dealer liquidity.

Dealer support for the new plan has been very strong, with 18 dealers signed up to the new fee agreements.

On slide eight, we show the extensive pipeline of products that we have in our portfolio to drive future revenue growth.

Our pre-tax margin has expanded from 7% in the second quarter of 2006 to 24% in the second quarter of 2007, primarily through strong growth in our core high-grade product.

We have done this while, at the same time, continuing to invest in newer products, some of which dilute short-term earnings, but we believe will be drivers of future revenue-generation.

We have an attractive portfolio of growing, high-margin products and high-potential new markets that we believe will deliver superior revenue and earnings growth over the next three years.

CDS and DealerAxess both represent significant market opportunities in very early stages.

Now, I would like to turn it over to Kelley for an update on our North American businesses.

Thank you, Rick.

The second quarter of 2007 was very strong for our North American businesses.

We experienced double-digit revenue growth across the North American businesses, highlighted by U.S.

high-grade.

The growth in our core clients and dealer high-grade business accelerated in terms of revenue, volume and market share.

Our newer products, including EM and high-yield, continue to show positive, year-over-year revenue increases.

And we have other revenue opportunities away from our core trading businesses.

These include our information-and-data business and technology services, and should become drivers of future revenue growth.

DealerAxess momentum continues to build, driven in part by our emerging market CDS offering, launched in May this year, which has helped our overall CDS volumes.

Lastly, in terms of dealer liquidity, we've expanded the global dealer group to 30, from 25 at year end 2006.

On slide 10, you can see our core high-grade client-to-dealer-cash business drove the strong performance of our North America businesses.

Our core high-grade business registered record revenue, volume and market share in the second quarter.

Record quarterly market share of 11.1% in the second quarter of 2007 was punctuated by record monthly market share of 11.3% in June.

Second-quarter 2007 market share represented the highest ever year-over-year percentage-point increase in our share, a full 3.5 percentage points.

While our focus remains on maximizing our growth and share of the client-flow business, in the first half of 2007, we executed 57 trades greater than $100 million in size, compared to just 37 trades for all of 2006.

This clearly demonstrates client confidence in using our system to execute large-sized trades.

A quick comment on trading activity in July -- current market conditions, combined with normal seasonally adjusted factors have dampened trading activity in July.

July year-over-year trade volumes are up only 4.6%, versus an average of 7.7% for each of the prior six months in this year.

July is down 20.5%, versus June, just slightly above the 17.1% average-to-client, June to July for the prior two years.

Furthermore, we tend to see some seasonality in August in both the U.S.

and Europe, given summer holidays.

On slide 11, I have included highlights regarding two of our newer products, as well as two important non-trading related revenue opportunities.

Our other trading category registered record volumes of $20.1 billion, driven by strong increases in U.S.

agency and CDS volumes.

This demonstrates the increased diversification of our business.

Our high-yield business was up in excess of 50% across all metrics.

Trade count was up 52%, inquiry account was up 61%, volume was up 76%.

And, most importantly, revenue was up 77%.

On the right side of the chart, we have two promising growth opportunities.

First, our information-and-data product currently contributes approximately 7% of our total annual revenue.

Corporate bond ticker and bulk data fees make up the majority of this revenue stream.

Given the recurring, annuity-like profile of the data-and-information business, we will focus on growing this attractive revenue stream.

Our new technology-services business leverages the core competencies and expertise that has made us the leader in e-trading solutions for the credit market.

We have taken this expertise and knowledge and formed a new business, providing technology solutions to credit-market participants.

We want to combine this work with developing license and other repeatable revenue streams.

On slide 12, I wanted to provide you with an update on our DealerAxess business.

At the end of the second quarter, we moved the DealerAxess business beyond the co-investment stage with our dealer partners to a transaction-fee-only model.

This model will help drive the long-term development of the business, and create a sustainable revenue stream for our shareholders and a cost-effective, compliance-friendly e-trading experience for our dealers.

The improvement in trading volumes that we saw in the first quarter continued into the second quarter, with the highest monthly trading volumes ever in June.

This momentum has continued in July.

This increase in trading volume, driven by high-grade and emerging-markets trading gives us confidence that we will be able to close the gap between the monthly minimums that rolled off at the end of the second quarter of 2007 and pure transaction fees.

On slide 13, I wanted to provide you with an update of our credit-default-swaps business.

Building momentum in a European CDS business has driven an average 40% month-to-month volume increase for the first half of 2007.

The launch of DealerAxess emerging-market CDS -- both single-name and indices -- has been a critical driver of the positive overall year-over-year results.

Our strategy to attack the CDS market through multiple touchpoints is bearing fruit, and we will continue to drive that product forward.

We will do this by deploying efficient technology solutions across single dealer, client-to-dealer and dealer-to-dealer trading protocols.

We will focus on sustaining the client reach through involvement of both traditional money managers and the leading hedge funds.

And we will build deep dealer liquidity with the major CDS dealers involved.

In sum, we are building the network effect across many touchpoints.

And while we have work to do, we are upbeat with a building momentum in CDS.

On slide 14, we are pleased with the recognition of our leading position in the credit market.

Recently, MarketAxess was named the Best Multi-Dealer CDS Platform in the United States and Europe by several hundred of the largest institutional investors, surveyed in a 2007 Credit Magazine award.

This is clear validation that we are on the right track with our CDS product, as we continue to address this important and growing market.

And for the third consecutive year, we were named the Best Multi-Dealer Corporate Bond Trading Platform.

In addition, Greenwich Associates, a leader in research in the financial-services space, interviewed over 1,300 U.S.

[fixings] of investors as part of its annual Fixed Income study.

MarketAxess was dominant in e-trading in the credit market, with top rankings in high-grade corporate bonds and emerging markets.

Now, I'd like to turn it over to Jim for review of the financial performance.

Thank you, Kelley.

On slide 15, we've outlined our volumes from the 2006 and 2007 second quarters.

The second quarter of 2007 was another record quarter for trading volumes.

Total trading volume of $111 billion was up 40% over the second quarter of 2006, with record trading volumes in the U.S.

high-grade and the other category, which registered increases of 56% and 50%, respectively, compared to the second quarter of 2006.

Slide 16 provides you with the revenue detail.

Record second-quarter trading volumes translated into another record quarter for commission revenue of $21.5 million and record total revenue of $25.3 million.

A key driver of these record results was the growth in our U.S.

high-grade volumes, which drove a 49% increase in U.S.

high-grade variable transaction fees, compared to the second quarter of 2006.

Other revenue was up 12% on the back of other volumes that were up 50% compared to Q2 2006.

The increase in other trading volume was driven primarily by increases in U.S.

agencies and CDS indices, where our fees per million are much lower than the other products in this category.

As a result, while it's difficult to predict the volume mix in the other category, we see the fees per million here trending towards the level of the variable fees per million in the U.S.

and European high-grade businesses.

I'd also like to highlight three other contributors to revenue in Q2 2007.

First, we received $1.7 million and the minimum fee commitments for our end-to-dealer business, DealerAxess, most of which expired at the end of second quarter.

We anticipate that based on current DealerAxess volumes the expiration of the minimum commitments will result in a reduction in revenue in Q3 of approximately $1.2 million versus the second quarter.

Second, in June we introduced our new European fee plan, which generated higher revenue for the month of June than we would have earned under the old plan, as I'll explain in further detail on the next slide.

We estimate that at current volume levels, the new fee plan will generate approximately $900,000 in additional revenue in the third quarter.

And lastly, other revenue increased 34%, driven primarily by a $600,000 contribution from our new technology-services business that Kelley discussed earlier.

Slide 17 shows the positive impact of the new European fee plan.

Let me first talk about the variable-fee component of the plan.

The variable transaction fees is based on the type and maturity of the bond traded, and will therefore be impacted by the mix of business executed over the platform.

We anticipate that average variable transaction fees going forward will be approximately $90 per million.

With regards to the fixed fees, European dealers will pay fixed monthly distribution fees, but will be eligible to receive rebates if they reach certain variable-transaction-fee thresholds.

With volume levels up to 50% higher than the European credit volumes that we currently experience, we expect that the fixed-distribution fees, net of rebates, will be between EUR$2.3 million and EUR2.5 million or $3.1 million to $3.3 million.

Based on the mix of the fixed-distribution fees and variable-transaction fees, at current volume levels, our revenue is higher under the new fee plan than under the old plan.

If the new plan had been in effect for the entire second quarter, we estimate that European commission revenue would have been $5.5 million, based on the $23.8 billion in trading volume, compared to actual commission revenue of $4.5 million for the quarter.

Remember that actual commission revenue for the quarter included one month's impact from the new fee plan.

Slide 18 provides you with the expense detail.

Total expenses in the second quarter of 2007 were $19.3 million, an increase of $530,000, or 3%, compared to second quarter of 2006.

Employee compensation and benefits increased 5% to $11 million, driven by an increase in cash-incentive compensation for our employees, based on the improved business results, which was partially offset by a decrease in salaries as a result in the decrease in headcount.

Headcount as of June 30 was 174, compared to 186 a year ago.

Employee compensation and benefits as a percentage of revenue decreased to 44%, down from 52% in the second quarter of 2006.

On slide 19, based on first-half expenses of $38.6 million, we are reiterating our full-year 2007 expense guidance of an increase of 4% to 8% over full-year 2006 expenses, and revising our full-year CapEx guidance.

We expect expenses for the full-year 2007 to be in the bottom half of the previously stated guidance range, assuming the current mix of business.

And we are revising down our 2007 CapEx guidance from the previously stated range of $6 million to $9 million, to a range of $5 million to $6 million, based on first-half CapEx of $2.4 million.

As a reminder, we have significant non-cash expenses, including depreciation and amortization, as well as stock-compensation costs.

A full 29%, or $11 million, of the $38.6 million in year-to-date expenses are non-cash expenses.

Please turn to slide 20 for our earnings performance.

The operating leverage of the platform is clearly evident in our results.

A 26% increase in revenue, with a modest 3% increase in expenses drove a 336% increase in pre-tax income, a 344% increase in net income and a five-fold increase in earnings per share.

Given our tax-loss carry-forwards, the majority of the tax provision is a non-cash charge.

On slide 21, we have summary balance-sheet data.

During the second quarter, we repurchased 315,000 shares at a total cost of $5.3 million.

As of today, we have purchased a total of 2 million shares at a total cost of $28.6 million.

That leaves $11.4 million remaining in the current program.

The fact that our cash balances of $122 million are only $9 million below the year-end levels after 23.8 million in stock repurchases and after paying out in January of this year approximately $11 million in employee bonuses accrued during 2006, highlights our underlying strong free-cash-flow generation.

For the full-year 2006, our free-cash-flow generation was 1.9 times our reported net income.

And we expect to be at a similar or higher ratio for full-year 2007.

Total stockholders' equity was $175 million, representing book value on a diluted basis of $5.06 per share, and we continue to have no debt.

Now, I'd like to turn the call back to Rick for closing comments before the Q&A.

Thank you, Jim.

The second quarter was gratifying from many different angles.

We are pleased with the acceleration of revenue growth, driving our first-ever quarter above $25 million in revenue.

Our business is becoming broader and stronger, and we are driving earnings higher.

We believe that the future growth prospects for e-trading and fixed income continue to be bright.

Now, I would like to open up the call to your questions.

(OPERATOR INSTRUCTIONS)

And your first question comes from the line of Howard Chen of Credit Suisse.

Please proceed.

Good morning, everyone.

Good morning, Howard.

Thanks for hosting the call.

Rick, in your prepared remarks, you mentioned the recent spread-widening as a potential catalyst to drive more business over the intermediate-to-longer term.

I guess, with that spread-widening, I was wondering what your thoughts on when we might see improving revenue-capture trends in the core U.S.

high-grade business as risk appetite improves and investors stretch out -- further out -- on the yield curve.

As I mentioned, I think the steepening of the curve just recently has started to increase the maturities traded on our system, which, as you pointed out, drives the fees per million in our high-grade product higher.

And it is our core beliefs that because of the all-time low levels in credit spreads over the last six or seven quarters, that investment managers have been underweight -- the corporate-bond sector.

And it's our belief that this move back to what is, at least, the middle of the long-term range in corporate-bond spreads will ultimately cause investment managers to increase their allocation to the corporate-bond sector, which drives our optimism about future trading activity.

But when we look at the trends over the course of the next few quarters from -- just in an overall blended perspective, can you mention kind of -- or, Jim, I know you talked to some of the things like agencies -- but what dampens that blended pricing from continuing to trend higher?

I'm just trying to think of the plusses and minuses.

I think the key point was the one made earlier, which is in the other category, we do have a broad range of products with very different fee structures, ranging from high-yield at the high end to agencies and CDS indices at the low end.

And, obviously, we're very pleased to see the volume growth across all new product areas.

But the recent quarter has been driven more by growth in agency and CDS index products, which do come with lower fees per million because of the lower margins and bids -- bid-offer spreads -- in those products.

So I think what we've given you is our best forecast based on the mix of businesses we see at today.

Okay.

And then, apologies if I missed this in the prepared remarks, but with regards to the technology-development contract with the broker-dealer, can you split out how much of that $600,000-revenue contribution this quarter is -- should we think about that as being recurring versus one-time in nature, just relating to this one contract?

Howard, it's Kelley.

We are continuing to engage our clients within our core competency and within the core credit space.

We do believe there can be recurring revenues with that existing client.

And we do believe we have the ability to diversify our client base.

And, as I stated earlier, it's really the beginnings of a new business for us.

And at this point in time, we're pleased with the opportunity that we do see in the marketplace, but we're also very careful about the types of both customers, as well as projects, that we will undertake.

Our core mission, obviously, within our technology, is to enhance and to deliver world-class technology within our core trading capabilities.

Okay, thanks, Kelley.

And then -- and this is kind of switching gears.

When the Company revised its fee plan in the U.S., I remember you experienced maybe a month or two of drop-off in volumes as some of the customers adjusted to the new fee plan.

I know every market is different from a competitive standpoint and pricing, et cetera.

I was wondering if you had experienced any of those same near-term fluctuations in the European business as you've revised that fee plan.

Yes.

Obviously, we've already posted our June volumes one month into the new European fee plan.

And I think if you look at June of '07 in Europe, the trading activity was very comparable to June of '06.

So in the early days, Howard, the answer is we think that the transition is going through smoothly in the European market.

Okay.

And then final one -- Jim, a quick one on the numbers -- if we annualize the year-to-date expenses, we still get to a level slightly below your full-year guidance.

I'm curious at just what drives that expense base higher in the second half, especially if the business is seasonally weaker in the summer quarter and in some of the year-end periods due to holidays.

Yes.

As I think I said in my prepared remarks, Howard, my best estimate at this point is that we will come in at the lower bar of the guidance range.

What could change the expense numbers up or down is the extent of new projects that we might undertake -- in particular, what we might do on the technology-services front.

Okay, great.

Thanks so much.

Thanks, Howard.

(OPERATOR INSTRUCTIONS)

Your next question comes from the line of Daniel Harris of Goldman Sachs.

Please proceed.

Hi.

Good morning.

Hi, Daniel.

Hi.

Hi, how are you?

I'd like to just touch on market share for a couple seconds.

You know, certainly, we've seen some real good acceleration over the past year, and the second quarter is well ahead of the first quarter.

But on a trajectory basis, the last few months have sort of been in a tight range between 11% and 11.3%.

With the changes that you guys implemented in the U.S.

with the pricing scheme a while back, how do you think about near and mid-term market share going from here?

And then, as all utility and credit spreads change, how do you think that your market share changes based on those changes we've seen in the market?

Good morning.

It's Kelley.

In terms of current share in a more market -- a more volatile environment in July, we haven't seen any appreciable difference.

As you know, it fluctuates and it can fluctuate month to month.

In terms of your question to the overall market share and kind of the consolation in and around that 11-plus percent share over the last quarter, there tends to be somewhat of a step function if you look at share historically.

And we, collectively, do drive our [faults] around the core mature businesses, noting that we can control, or at least influence, share to the greatest extent, versus other exogenous factors.

So we're focused on specific items with dealers as it relates to timing out, client permissioning and others.

We're working specifically with target accounts to improve and increase their level of activity.

We're constantly assessing technology tweaks and enhancements with what is a mature business.

And we do believe that we have the right sort of product mix, the right sort of value proposition and, really, unmatched connectivity between our buy-side and sell-side clients to move this share higher.

Obviously, in the U.S.

core caps business, it's really an adoption-rate change, as you know, to get them to do more business electronically, away from their traditional means of executing trades.

Yes.

I think, Daniel, our long-term view continues to be shaped by the flow category within corporate bonds that continues to be around 55% of all TRACE volume.

And in addition to that, other stats that we mentioned earlier clearly express the clients' increased comfort with trading large trades on the MarketAxess system.

So we continue to be very optimistic that the e-share and corporate-bond trading will be significantly higher over the years ahead.

Okay, great.

Thanks.

Just a quick question also, to you -- for the first time, I think, since at least 2005, we saw, actually, a small uptake in sequential headcount, if I'm right, compared to relatively -- you guys have had declines year over year, and mostly sequentially as well.

Thematically, how should we think about headcount going forward?

Do you think that you'll continue to add new personnel; and if so, what areas do you see that new personnel can really help spur new business?

Yes.

The headcount, end of 2Q '07, versus end of 2Q '06 was, actually, down slightly.

Yes.

I was -- I meant sequentially.

Right -- okay.

Yes.

No, I think, on a sequential basis, obviously, the headcount does fluctuate a little bit.

But I think, looking forward and as you can read into my expense guidance for the rest of the year, we don't see any significant changes in the level of headcount.

Typically, what really drives headcount are the different products that we're in.

So as I (inaudible) mix of products, we would expect the headcount to be right -- in a similar -- at least out over the next six months.

Okay.

And then, Richard, you mentioned that large deals had picked up during the quarter -- and I know that that's not necessarily your target trades, but I'm sure you take them when they can come.

But how do you think about attracting more deals of that size versus your standard order sizes, and how do you think the brokers generally react to these greater-than-$100-million trades going on the electronic platform, versus traditional?

I think it really depends on the type of bond and the maturity.

I think if it's a very liquid bond in a high-quality name, especially with shorter maturities or floating-rate notes, the market is very comfortable with large block sizes going through the MarketAxess system.

And this really forms our view that the e-trading share will be higher in short-duration bonds, smaller sizes and higher-quality bonds than it will be in other parts of the corporate -bond market.

But that still leaves an enormous addressable market that we think will trade electronically over the coming years.

Okay.

Okay, thanks for that color.

And then just lastly, how would you guys characterize the competitive environment at this point?

We've had another three months of the NYSE-bond platform.

You know, there's always talk about Bloomberg and TradeWeb out there, and what they're changing.

But do you think that there's -- how would you characterize any changes over the last quarter or what you see going forward?

Thanks a lot.

I don't think there's been any material change over the last quarter, and that was validated by the Greenwich Associates survey that we mentioned earlier.

Our competitive position has strengthened over the last three or four quarters, based on not only the anecdotal evidence that we can gather from dealer and investor clients, but also from surveys like Greenwich.

And as you point out, a quarter ago, there was a fair amount of publicity about the New York Stock Exchange re-launch of corporate-bond trading on the new technology.

They do post volumes daily, and it would not appear that that has led to any material change in the trading activity of corporate bonds at the New York Stock Exchange.

So from all signs, the gains that we have seen in market share continue to expand our leadership position in the high-grade corporate-bond market.

Thanks guys very much.

Thank you.

Okay.

And there are no further questions.

At this time, I'd like to turn the call back over to Rick McVey for closing remarks.

Thanks very much for joining us and we look forward to talking to you next quarter.

Thank you for your participation.

You may now disconnect.

Good day.