Ladies and gentlemen, thank you for standing by. [Operator Instructions] As a reminder, this conference call is being recorded on April 29, 2020. I would now like to turn the call over to Dave Cresci, Investor Relations Manager at MarketAxess. Please go ahead, sir.

Good morning, and welcome to the MarketAxess First Quarter 2020 Conference Call. For the call, Rick McVey, Chairman and Chief Executive Officer, will review the highlights for the quarter; Chris Concannon, President and COO, will discuss automation and our operational resilliency; and then Tony DeLise, Chief Financial Officer, will review the financial results. 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 materially from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect the company's future results, please see the description of risk factors in our annual report on Form 10-K for the year ended December 31, 2019 and our quarterly report on Form 10-Q for the first quarter. I would also direct you to read the forward-looking statement disclaimer in our quarterly earnings release, which was issued earlier this morning and is now available on our website. Now let me turn the call over to Rick.

Good morning and thank you for joining us to review our first quarter 2020 results. First, let me start by sending our heartfelt thoughts to all of those suffering through hardship and loss caused by the COVID-19 pandemic around the world. These are extraordinarily difficult times and we hope to begin to see the seeds of recovery in the coming months. The sharp increase in credit market volatility beginning in late February led to record quarterly credit trading volume on MarketAxess of $660 billion up 29% versus Q1 2019. The value of our leading electronic trading platform was evident in record quarterly volumes for all of our core products, U.S. high-grade, high-yield, emerging markets, and Eurobonds. We also set new volume records in new and important product areas including municipal bonds and U.S. treasuries. High-grade market share was 20% for the quarter up from 17.6% one year ago. Open Trading provided a unique trading conductivity to institutional market participants during the crisis and volumes were a record $209 billion up 55% year-over-year. The acceleration of trading activity led to record financial results as well. Revenues of $169 million were up 36%, operating income jumped 44% and EPS was $1.96 up 41%. Operating leverage came through clearly during the quarter, with operating margins of 54% up from 51%. Slide 4 highlights market conditions. The sharp increase in credit market volatility started during the week of February 24, unlike the global financial crisis in 2008 average daily market volume reported to TRACE increased 27% in high-grade and 24% in high yield in the last five weeks of the quarter. Market share on MarketAxess also jumped higher during the volatile weeks. Unique liquidity available through Open Trading differentiated our platform. Open Trading average daily volume was up 67% in the last five weeks…

Thank you, Rick. Slide 6 demonstrates the growing momentum of automation and credit trading. Automated trading volumes rose to over 31 billion in the first quarter, up from 12.5 billion in the first quarter of 2019, 84 firms used our auto execution functionality in the first quarter up from 52 the prior year. The use of dealer algorithms is also growing with approximately 3 million algo responses in the first quarter, resulting in 249,000 trades. While we saw a modest reduction in the average number of responses per inquiry, we believe this was largely due to the extreme market volatility in the second half of the quarter. Thus far in April, we have seen algo responses returned to pre-crisis levels. We're seeing a growing adoption of our automated trading tools for both liquidity providers and liquidity takers and we are actively working with both of them on enhancing our functionality. Slide 7 provides a summary of our trading volume across product categories. Our U.S. high-grade volumes were up 19% year-over-year to 330 billion for the quarter, due almost entirely to an increase in estimated market share, while estimated U.S. high-grade TRACE volumes are up 28% year-over-year in March, market volumes were up marginally year-over-year for the full quarter. In the other credit category, U.S. high yield emerging markets and Eurobond trading volume were each up 30% or more compared to the first quarter of 2019. U.S. high yield was the standout, up 70% on the heels of record estimated market share of 12.2% coupled with a 25% increase in estimated TRACE market volumes. We're also highly encouraged by the growing adoption of municipal bond trading. In the first quarter 316 unique client and dealer firms traded a record 3.3 billion municipal bond volume on the MarketAxess platform, up 143% from…

Thank you, Chris. On Slide 9, we provide a summary of our quarterly earnings performance. Overall revenue was a record $169 million, up 36% year-over-year. The 29% increase in credit trading volume and the inclusion of U.S. Treasury trading commissions resulted in a 38% uplifting in commissions. Information services revenue was up 17% in the first quarter and includes one-time data sales of approximately $800,000. Expenses were up 27% and operating income was up 44% year-over-year. We're particularly pleased with our operating margin of 54% in the first quarter. Strong trading results are providing the resources required to simultaneously expand margins, increase investments in new growth areas and increase dividends to our shareholders. The effective tax rate was 18.4% in the first quarter and reflects $6.3 million of excess tax benefits related to share based compensation awards. We continue to expect the full year effective tax rate will be within our previously stated guidance range of 20% to 22% although we do expect variability in our quarterly rate based on the timing of equity award exercises and vestings. Our diluted EPS was a record $1.96. The year-over-year increase in our diluted share count was largely due to the 146,000 shares issued as part of the LiquidityEdge acquisition. On Slide 10, we have laid out our commission revenue, trading volumes and fees per million. Total variable transaction fees were up 45% year-over-year driven by the increase in credit trading volume, higher U.S. high-grade fee capture and the inclusion of U.S. Treasury trading commissions. U.S. high-grade fee per million was $5 higher on a sequential basis, mainly due to slightly longer years to maturity on bonds traded over the platform. Our other credit categories fee per million increased $8 on a sequential basis, principally due to a shift in volume mix among…

Thank you, Tony. This was the most challenging quarter in modern times for people and economies around the world. We certainly hope that medical advancements and good judgment will bring an end to this pandemic in the quarters ahead. We are proud of the role MarketAxess played in helping to keep credit markets functioning. We will continue to invest heavily to create lasting improvements in global fixed income markets. I would like to thank all of our employees for their dedication and unwavering client focus. We could not have achieved these results without their extraordinary efforts. We would now be happy to open the line for your questions.

[Operator Instructions] Our first question comes from Rich Repetto of Piper Sandler. Your line is open.

Yes. Good morning, Rick and Chris and Tony. I guess I believe Chris said April-to-date was up 35% year-over-year. If that – and just making sure that's correct, but if it is, just wanting to get sort of the open trading percentage and I think he said that algo responses had gone back to pre-crisis levels. So does that speak to open trading as well?

Sure. Rich, I'll take the question. In – yes, you did hear my comments correctly for April volumes. We have seen liquidity stabilize across the market in April and we have seen consistent market share of our open trading platform. As you are well aware liquidity in March was much like toilet paper was hard to find but OT or open trading solution clearly was a critical part of the ecosystem throughout the March crisis. And so its market share did increase, but relative to the first quarter we continue to see open trading perform at quite high levels in terms of the overall volume on the platform, but even across individual assets like minis, like EM and other products; so continued to see robust performance in the open trading solution.

So I guess I interpret that as the open trading percentage of volume is similar to 1Q on the percentage basis? And I guess, and the last...

I would just say it's actually similar to March levels. So we still have very high credit market spread volatility and that is creating an important layer of new liquidity through open trading and the open trading percentage of our volume is actually closer to March levels.

Wow. That's impressive. And then my follow-up would be, yet the Fed stepping in and just trying to get to see whether you can sort of parse out sort of the impacts, did that – how does the Fed stepping in? Improved liquidity and improved volumes during the month that carried over and I know there was a lot of new issuance at the end of the quarter. So that probably is trading in the secondary market more freely now, so just trying to parse out sort of the impacts of those two things on volumes?

Yes, sure. Happy too. I think the Fed's initial focus was on short-term funding markets and the liquidity programs where we're generally focused on repo and other short-term funding markets to make sure that they were functioning properly. It's our understanding that they continue to make preparations to be able to participate actively in the primary and secondary corporate bond markets and the ETF markets for fixed income shares. We are not certain that any of that has started yet, but we believe that they're making their preparations to be able to do so. So right now, in terms of the bond activity, I don't think that is directly related to the Fed, but they obviously had a material impact and improving liquidity conditions in the short-term financing markets.

So do you think that with all the volumes in – at least on – while the volumes in appositive more driven by the incremental volumes by the issuance?

I think that they're driven by ongoing credit spread volatility. Credit markets bottomed out around March 23rd and fortunately credit spreads have been narrowing and we've retraced about half the move over the four weeks since the lows. And it is – these are unbelievable new issue numbers and we were up around 250 billion in new issuance in March most of it in the last 10 days of the month and it looks like we're going to be even higher than that in April. And that those are remarkable new issue numbers as, as corporations are really tapping the high grade market in particular to create more liquidity on their balance sheet. But to put that in context, a good month for high grade new issuance is normally a bit over $100 billion, this will be the second month in a row that we've been up at around $250 billion. And for you and others that have been following us for a long time, you'll know that when new issuance is high you normally see some short-term dip in our share. That has not been the case in March and April. So I think it speaks very well to the long-term trend in market share on the MarketAxess system that share has remained high even though new issue levels are so robust.

Thank you, Rick, and hope you and your team and your families all stay safe and healthy.

You too, Rich. Thanks.

Thanks very much.

Thank you. Our next question comes from Dan Fannon from Jefferies. Your line is open.

Thanks. I guess following up on that last portion, just trying to desegregate some of the long-term structural changes that continue to be at your benefit versus the near term benefits of spread widening. And so you gave some good stats around price improvement and activity. I guess, if you could just elaborate in terms of how you're thinking about either new customers that have been interacting with your venue or how we can think about kind of – at some level of normalization and one thing I think would be interesting is, the work from home environment, one of the dynamics around adoption of electronic trading has been behavioral from a user perspective. I'm wondering if you think this is sort of a kick start or a catalyst around some of that.

Sure. Happy to take that one, thank you. But in March, was a really interesting month because we started the month with all of the major dealers and major investment managers trading off their main trading floors. And by the middle of the month everyone was trading from home. And I think it's personally remarkable that TRACE volumes grew the way that they did and MarketAxess volumes grew the way they did through that difficult transition. And I do think the work from home environment puts a premium on electronic trading. It's just easier to access the entire market from home using electronic venues. And I do think that that was one of the reasons for uplift in share and volume on our system. We expect that to last through most of the second quarter when we look at the plans to return back to main headquarters and trading floors. It's a very gradual process that most people expect to begin in June. So I think this quarter will be a full quarter of work from home. Third quarter will be a little bit of mix of both as people test getting back into their main offices. But what we saw in March and carrying into April is that our volume gains were a very healthy mix of more volume from existing clients and new clients using the system for the first time, and not only new firms but new individual trading users within existing firms. And the net result was in March, we had a new record in terms of the total number of active trading firms and a new record in terms of total active individual trading users. So we're really seeing this as an inflection point where more firms and more individuals are taking advantage of the efficiency of electronic trading as well as the transaction cost savings that are available.

Thank you. [Operator Instructions] Our next question comes from Jeremy Campbell of Barclays. Your line is open.

Hey, thank you. Rick, so the Fed taps BlackRock to quarterback the credit purchases in the market. And obviously BlackRock is a very large user of the MarketAxess’ electronic platform. I'm just kind of wondering if you guys are seeing any disproportionate part of the Fed purchase flow through the electronic venue, either on, you know, a first order level, like BlackRock Fed purchasing cash bonds themselves to the electronic venue or maybe through a second order level, like the Fed purchases of credit ETFs or the underlying oddlot baskets might trade through electronic pipes?

Sure. First of all, we don't comment on any individual client activity on the trading system. We –it's our belief that BlackRock is actively advising the Fed on all aspects of the program including primary and secondary corporate bond activity and ETF, fixed income, share purchases. But we don't believe that there's been any sign that they've been in the market yet. So what you're seeing right now is traditional customer and dealer business flowing through our platform at very high levels. And I remain optimistic that credit spread volatility is likely to remain high through the balance of this year. I made the comment in my prepared remarks; we would expect issuance levels to stay very high throughout the balance of this year given the challenges that are going on for many corporations that are likely to last for a few quarters. There's also more credit spread dispersion than we've seen a long time across different sectors and across different issuers and that leads to more trading activity. So our expectation is that, you're going to have higher levels of credit spread volatility than we expected throughout this year and combined with active new issuance and that combination is likely to keep market trading volumes elevated throughout the balance of the year.

Great. Thanks.

Thank you. Our next question comes from Ari Ghosh with Credit Suisse. Your line is open.

Hey, good morning everyone. So heading into the year, you have several growth initiatives from live markets, portfolio trading, expansion of your rates complex. There was a lot of these different initiatives in place. So could you give us an update on maybe how some of these initiatives look for this year, just given ones that might get pushed back because of the COVID crisis versus others that are perhaps easier to execute near-term despite the disruption? And then like the way some of these ins and outs might filter into the expense outlook for the year as well as it stands right now? Thank you.

Great. And great question, a little open-ended, but I'll try and cover as much as I can. Obviously as you could see from our prepared remarks, our employees were phenomenal throughout the COVID crisis in their ability to migrate to home office, while maintaining high levels of performance and even in some situations improving their overall performance that we've seen. And so we are on track across all of our initiatives for 2020. There are a couple initiatives where we're relying on some third parties that are likely going to be slightly delayed. But in terms of rates I'm certainly excited about the rates performance on the D2D business in the first quarter, obviously record volumes there. With regard to our integration of the rates platform we continue to move forward unimpeded by the current crisis. Our hedging which went live in Q4 is continues to roll out. We have several dealers already live and a robust pipeline of dealer’s right behind them. Our integration of the liquidity – the formerly known LiquidityEdge platform into our institutional business is underway as well. Our first phase of that integration begins at the end of May where we will have institutional clients trading through the MarketAxess network, the MarketAxess broker-dealer into the Rates platform. So I'm happy to see that integration moving smoothly. Phase 2 of that integration is where our institutional clients can use full OMS integration into our rates platform and that's in second half of 2020 and on schedule. The last piece of rates integration is our net hedging solution, which is on-track as well for second half of 2020 certainly the earlier part of second half where we'll be able to provide a net hedging of client orders across the platform. So we're excited about those integrations. Other…

Great, color. Thank you very much.

Okay.

Thank you. Our next question comes from Kyle Voigt of KBW. Your line is open.

Thank you. Good morning. Thanks for taking my question. First is just on the U.S. Treasury market, there's a lot of press around liquidity in the U.S. cash treasury market in late March. The dealers kind of stepped back from providing liquidity, especially in off-the-runs. Just wondering, if your experience in the U.S. credit markets with open trading being a real solution to the market as dealers stepped away? Did that experience make you more confident? That's some form of all-to-all trading solution could eventually be successful in U.S. cash treasuries?

It's a great question, because as we've all seen the U.S. Treasury market was hampered by a liquidity challenge across the market, obviously not just in off-the-runs, but even on-the-runs. And so it was an unusual liquidity event for the treasury market. We did however on our rates platforms see market share increase because we think the unique liquidity solutions that our platform provides. It's not a traditional club. It does allow for customized liquidity provision both for dealer and for clients. So we do think that, that model is the future of the liquid product market. It also was an anonymous all-to-all. And so to your point are anonymous all-to-all open trading solution that performed exceptionally well in the middle of the most challenging crisis – most challenging times of the crisis. We do expect that an all-to-all solution that does allow you to customize liquidity for rates would be a very viable solution as we go forward. So the performance of both our open trading for credit and the performance of our rates platform in the most severe moments of stress really provides us with a great confidence as we start to integrate those two markets.

Thank you.

Thank you. Our next question is from Chris Allen of Compass Point. Your line is open.

Hey, good morning guys. I just wanted to ask a quick one on pricing, specifically investment grade. Maybe you could just walk through some of the dynamics, how that filtered through in the quarter in terms of duration, yield-to-maturity and yields and then just how the second quarter is kind of setting up and the outlook there? I'm just trying to think about how that would be changing moving forward?

Sure. Chris, this is Tony. On the investment grade side, you know there's lots of different factors that influence the investment-grade fee capture. You've got a year’s maturity where yields are trade size matters under our tiered fee plan. Dealer mix matters whether dealers are on distribution fee plans or all variable plans. At times, floating rate note activity also matters. But when you look at it – you look at it sequentially, the fee capture was up $5 from the fourth quarter to the first quarter, a years-to-maturity we're a little bit longer and less than a half of the year longer there was no impact from changes in the size buckets. There was a little bit of dealer mix change there. So it really was all about years-to-maturity. When you look year-over-year, much bigger change year-over-year first quarter of last year to first quarter of this year. But again, that was all duration related. It was longer years-to-maturity, on average lower yields. Going forward and on the April numbers, what I tell you on, on April right now is not just for investment grade, but looking across the Board. It's early in the quarter right now. There are lots of factors that I just mentioned that could influence fee capture, but if you're looking at April activities, there is not a lot to report on any variance of note at any product, not only investment grade but for high yield, emerging markets, Eurobonds, right now the fee capture all looks similar to the first quarter. Remember though, early in the quarter and that could change. But right now it looks similar to the first quarter.

Got it. Thanks guys.

Thank you. Our next question comes from Chris Shutler of William Blair. Your line is open.

Yes. Everyone, good morning, hope you're all well. Can you talk about the breadth and depth of loan-only asset managers providing liquidity or being price makers on the platform in March? And then also touch on what you've been seeing in April, any longer term changes you see from the current crisis to client workflows?

Yes, happy to take that one, Chris. The number of client firms that are providing liquidity on the system continues to grow and we think that's the differentiator. When you have volatility like we had in the last five weeks of the quarter, the more trading connections you have, the better off you will be in terms of sourcing liquidity and reducing transaction costs. So we had a record during the quarter of over 900 firms that provided liquidity on the MarketAxess system. The vast majority of those over 700 were asset managers. So this is where we think we're making a big difference is that when markets get to these sorts of stress levels, our technology connects investors and dealers all around the world and the best price can come from anywhere. And you did see asset managers taking advantage of opportunities when there was heavy selling in the market, you saw dealers taking advantage of using the platform to take liquidity when they needed to reduce risk. So we think that this as an important quarter in terms of the advancement of all-to-all trading. And clearly the transaction cost savings that were approximately three times greater than the average quarter in 2019 validate the value of what we're doing and create behavioral changes, because the pricing during the stressful days oftentimes were just so significantly better than what clients were able to find through other means. So very broad-based in terms of liquidity providers, 1,500 active firms utilized Open Trading during the quarter. It's really becoming a very important global marketplace for credit.

Thank you. And our next question comes from Alex Blostein of Goldman Sachs. Your line is open.

Hey guys. Good morning. Thanks for taking the question. I was hoping to peel back the layers a little bit on the trading activity that you saw in the course of margin, maybe what you're seeing today in terms of the average trade size both on the IG side and the high yield side. I'm just curious to think about, whether penetrating some of the larger size trades was also part of the story here, given the liquidity in the rest of the market or the majority of the increase was really predicated on some of the smaller kind of typical sized trades for MarketAxess.

Yes. Alex, its Tony, I'll take the question. You're looking at the market share gains where we're obviously pretty healthy year-over-year and those market share gains were across all trade sizes and all maturity buckets. So, even in realizing, our block trading market share was around 10% and if you looked at it year-over-year, it was up more than 0.5. So regardless of trade size, regardless of the maturities market share did improve year-over-year.

Okay. That's helpful. And then just as a quick follow-up, I was wondering if you guys could give us a sense of how a potential, a large number of downgrades in the IG market could play a role into kind of opportunities for high yield opportunity on the MarketAxess side, meaning that, BBB is obviously a big part of the market, we're probably going to see a bunch of downgrades as those occur. Do they come through as a high yield trade at obviously a higher capture rate for MarketAxess or an IG trade?

Yes. Good question, Alex, happy to take that one. Two things, when you have a period like we're seeing currently with more downgrades than we've seen in a long time and fallen angels, it does create trading opportunity. Those bonds oftentimes have to come out of investment grade portfolios and move into high yield or crossover portfolios or insurance portfolios that have the flexibility to operate in either place. So it's good for overall trading activity and yes, at the margin as large high grade issuers slide into high yield and begin to trade on price not spread that is also positive for our fee capture. And you can see from the first quarter volumes by product, high yield was the standout, volumes were up nearly 30% overall, but high yield more like 70%. So that's where the standout has been. We're taking share there and high yield volumes have been robust. This two is something I would expect to carry on throughout the year. We have not had an active period of default concerns in nearly 10 years; there really hasn't been a distressed market, large concerns about defaults until we got into this crisis earlier in the first quarter. So this is a very different credit market than what we expected when we started the year in January. And I do think for a host of reasons, that it will require more risk transfer, which leads to secondary trading. And I think we'll also continue to bring out the importance of all-to-all trading to source liquidity from any place in the world.

Great, thanks for the answers there.

Thank you. Our next question comes from Brian Bedell of Deutsche Bank.

Great, thanks. Good morning guys. Maybe most of the questions have been answered, but maybe just to follow on the issuance question in the market share. Yes, obviously the market share tends to dip when new issuance is heavy. And appreciate your comments about the calendar likely remaining pretty intense. But is there any way to – in this environment assess what kind of headwind do you think that is on your market share? In other words, if that did normalize, how much your market share would increase, and the underlying question there is how much is the – is sort of the permanent changes that you think might occur in electronification of trading the underlying growth of that actually increasing and being masked by the new issuance, having new issuances?

It varies and there are so many factors that come into play in terms of overall market volume as well as the electronic share volume that it does vary, but more often than not when you get a new issue as high as it's been the last couple of months, you also see the block trading percentage of TRACE grow and our share can be 1%, 2% lower during those months before those bonds are distributed and start trading with the rest of the secondary market over the following three or four weeks. So we do feel really good about March and April share expense, given that new issue activity is well above anyone's expectations for the pace that we would be on this year. It's clear that, there's a transition going on with institutional client behavior, 95% of our order flow is initiated by institutional customers. And when we look at our institutional share of TRACE for high grade, for institutional customer volume, it's now up around 24%. So we're getting close to a quarter of the activity with institutional clients taking place on the platform. We think that the combination of trading efficiency and transaction costs that we can reduce, and we also saw an incredible number of orders that were completed in March where Open Trading was the only price. So this is to us all going to create a more permanent behavioral change given the experience that clients have had in our platform, sourcing liquidity at the most difficult time. And we're pleased to see the underlying trends in share are taking place across all of our products, quite frankly.

That's a great perspective. Thank you.

Thank you. Our next question comes from Ken Hill with Rosenblatt. Your line is open.

Hey, good morning. Wanted to build on, so you guys had a lot of success with Open Trading during the quarter, we also had that exposed in new issuance activity, but I kind of thought something like live markets which was supposed to build on the Open Trading activity could help maybe kind of get you guys into a little bit more flow on the new issuance as it kind of gets into the secondary market there. I was hoping to comment, I know that's still early days, but maybe kind of the recent activity you’ve seen in the market has helped some clients along getting live markets kind of going on their platform or if you're seeing any increased interest because of that. Thanks.

No. Great question, I'll take that one. So live markets which we were piloting in the first quarter late fourth quarter, obviously we've been focused on on-boarding dealers to provide their streams. That process obviously is a bit of a setback given the current crisis, but what we have seen is a number of our clients, as Rick mentioned looking to provide liquidity, seeking methods and techniques for providing liquidity, live markets is an obvious solution for them to provide liquidity because they can join the bid side or the offer side of that market. So we are seeing higher levels of demand from our client base, looking to provide liquidity and achieve some of those huge cost savings that the OT market is providing. So again, slight setback given dealers have been distracted with the crisis in their own internal technology needs, but again the client side demand continues to grow as a result of the crisis and the current liquidity challenges.

Got it. Thanks for the update there.

Thank you. [Operator Instructions] Our next question comes from Kyle Voigt of KBW, your line is open.

Hi. Thanks for taking my follow-up. There's a lot of press, especially in late March around HYG and some other bond ETFs that were trading at pretty significant discounts to their NAVs in today, what could have been made worse due to the lack of liquidity at that time. Just wondering if you think the regulators will be looking at the bond DTF market in the wake of this in terms of maybe putting certain liquidity requirements on underlying holdings or something of that nature or do you think that's going to be low on the priority list for regulators?

So happy to take that one, I guess I have a different perspective on the ETF performance during extremely volatile times, it's important to remember that the credit market is so fragmented and there are so many unique issues that oftentimes in my opinion what you were seeing was that the, the bond NAVs were behind not the ETF share price. So when you've got 7,000, 8,000 different bonds in an ETFs and anyone with a real time pricing mechanism is dealing with the level of volatility that we had during March, those prices are whipping around. There's an actual transaction taking place between two parties when the share is trade. And in my opinion, that's the best form of price discovery is an actual transaction. And when you look at the major ETF fixed income shares in March, it's a great story for risk transfer and market liquidity, share volumes were up over a 100% in the major fixed income shares and up over 70% for the full quarter. So I actually think that the ETF market held up incredibly well, it was part of the liquidity solution, not part of the liquidity problem. And I think, you're, you're seeing very clearly this new liquidity model evolve where ETF share trading is definitely part of the fabric for the institutional fixed income market now, almost all dealers and investors are using ETF shares as a way to transfer risk when they need it. They clearly did that in March. Portfolio trading held up well in March and that's another way to transfer risk and of course all-to-all trading is providing an essential layer of liquidity for all market participants as well. So I think it was a great indication that the reason the TRACE volumes were able to grow in March when they fell so sharply in 2008 is because all of those liquidity tools were at work during the crisis, ETF shares, portfolio trading and all-to-all trading through MarketAxess, Open Trading. That's why market volumes were able to go up and clients and dealers were able to transfer the risk that they needed to during those chaotic weeks.

Thanks. And then maybe a second question for Tony. Obviously it's been a really strong volume environment to start the year and especially through April, over 35% year-over-year growth, if we see similar type volume growth for the remainder of the year and that 30% type range. Just wondering how you think about the expense guide and where that leaves you in terms of the current expense guide from when you started the year, because I think there's multiple things. Obviously the volumes are going to push up certain areas of expenses, but then the COVID-19 impact specifically; maybe that reduces TNE in some other areas of expenses. So just wondering how we should kind of put those pieces together, because any help there that'd be great. Thank you.

No. I am happy to answer that. The fact that we didn't say anything in the prepared remarks about the expense guidance, you can probably assume from that, we're still expecting the expenses to be within that original guidance range of $297 million to $314 million. But under this scenario, you suggest there or propose, if market volumes for the balance of the year were consistent with the first quarter, we could be near the high-end of that guidance range. And I would tell you that that would be good news. And we've got a number of variabilities in there, so people; we've got a fairly healthy hiring plan as we entered 2020. We can't – in some ways we can't control the level of attrition or the timing of hiring necessarily, but we're on budget with our hiring through April. 4We're effectively on-boarding new hires even in this environment. We expect to continue to hire, to support our growth initiatives, that's all good news. Other line items like variable compensation that are tied directly to results, you could imagine in the first quarter we had exceptional results off of the back of significant market volumes. If that continued that would be good news. If that expense line item is running higher than expectations. Same thing with clearing costs, we clearing costs doubled year-over-year and that's because open trading volume was up massively and we had a great quarter in treasuries as well. So those clearing costs are running higher than expectations that's all good news. So I would suggest that if we hit that high-end of the range, it also likely means that that topline performance, topline revenue growth is higher than expectations as well.

Got it, thank you.

Thank you. I'm showing no further questions at this time. I would like to turn the conference back over to Rick McVey for any closing remarks.

Thank you so much for joining us this morning and we wish you all the best getting through this crisis and be well and be safe. Thanks very much.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you for participating. You may all disconnect.