With several record days so far in 2025, the first half of the year has been extremely active for CME Group鈥檚 BrokerTec platform. The firm has much in the pipeline, as it lays out its strategic development plan for the second half of the year.
As the securities finance market continues to embrace electronification, the firm has rapidly grown BrokerTec Quote, expanding its global footprint and investing in new markets, corporate repo, mortgage-backed securities (MBS) repo, and securities lending.
In the second half of the year, BrokerTec is expanding its global front end to integrate BrokerTec Quote into the existing EU and US repo central limit order books (CLOBs), providing enhanced opportunities for clients and a more intuitive experience to be able to trade and manage orders between the two different market segments.
Strong volumes and continued growth
With ongoing geopolitical tensions, BrokerTec has seen an increase in volume as market participants look to hedge and manage their risk.
Providing an overview of performance, John Edwards, global head of BrokerTec, CME Group, says April was BrokerTec鈥檚 highest overall volume month on record, with US$1.01 trillion in average daily notional value (ADNV) transacted, up 31 per cent year-on-year (YoY) and up six per cent month-on-month.
On 7 April 2025, the company set a new single-day volume record of US$1.2 trillion in ADNV traded across the BrokerTec complex. Between 3-15 April, the platform saw nine consecutive days with ADNV over US$1 trillion.
BrokerTec Quote is now in its fifth year, and Edwards notes that it has seen 鈥減henomenal growth鈥� over the last 12鈥�24 months. Sara Carter, global head of repo at BrokerTec, CME Group, seconds this by noting the acceleration in growth and volumes over the past few years, but particularly in 2025, when the top 15 trading days all occurred. 鈥淲e are really pleased with the growth and we're looking forward to bringing more functionality to the market. We continue to see strong client adoption from the banks and buy side clients.鈥�
BrokerTec has been focused on growing the platform, making regular enhancements in terms of features and functionalities, onboarding new customers and further expanding into fixed income with the addition of corporate repo in 2024. Carter adds: 鈥淲e recently went live with repo on mortgage-backed securities and executed our first trades. We will be introducing US securities lending in addition to our already available European offering, and that will obviously continue to drive volumes going forward.鈥�
Clients accessing BrokerTec Quote can enter into repo transactions referencing a wide range of collateral, including all G10 products. BrokerTec continues to expand the collateral options available to participants. Issuances, for example, from Brazil, Chile, Colombia, Hong Kong, Indonesia, Mexico, New Zealand, and Qatar have recently been made available on the platform.
Connectivity and beyond
Looking to the future, Carter is excited to integrate BrokerTec Quote with the US and EU repo CLOB through its global front end in the second half of the year.
Providing connectivity between the two platforms will provide clients with enhanced opportunities regarding data analytics, efficient and transparent pricing for the sell side, who are active in the wholesale-cleared market, and provide core liquidity regarding incoming request-for-quotes (RFQs). The new connectivity will make it more intuitive for the sell side to be able to trade and manage orders between the two different market segments. As a result, the buy side should see faster price discovery for best execution.
Edwards views this as a 鈥渞eally interesting development鈥� within the repo market, but is clear that this is not about merging dealer-to-dealer (D2D) cleared volumes with dealer-to-client (D2C) RFQ, predominantly bilateral activity.
As part of this new connectivity, sell side clients will need to upgrade to BrokerTec鈥檚 back-end trading system (BETS). According to Carter, by doing so, BrokerTec will be able to bring additional features and functionalities to the CLOB, and help to deploy them more quickly.
She explained: 鈥淲e're really, really excited. The upgrade has started in the US already, and it will soon be enabled for European accounts. Additionally, the BETS upgrade provides another level of security for the banks.
鈥淏rokerTec was a catalyst in the electronification of the repo market. We are always discussing: what opportunities lie ahead? What functionalities can we bring to market? What efficiencies and trading modalities can we bring to the market as it gets increasingly electronified?鈥�
With much in the pipeline over the next 12 months, Edwards considers: 鈥淲hat other products or services can we offer our clients, whether they're trading cash bonds or whether they're trading repo and doing financing transactions?
鈥淲hat can we bring that is unique and helps to differentiate our product over some of the competitors that occupy the same space on that side?鈥�
Edwards highlights the firm's achievement in this respect, by bringing SOFR and ESTR futures to its customers through existing tools such as BrokerTec鈥檚 UI or other means of execution. He concludes: 鈥淭hose are unique products to CME Group, and we鈥檙e looking at how we can continue to leverage that going forward.鈥�
Asian expansion
Currently, BrokerTec offers repo on government and corporate bonds. These include new markets for securities, which are typically traded by counterparties or used as financing for collateral from counterparties based in the UK, EMEA, North America, etc. As Edwards and Carter continue to advance the BrokerTec repo business, the team is eager to expand its customer footprint across Asia Pacific.
Edwards explains: 鈥淚t's a big region, and we pride ourselves on operating BrokerTec under a number of different regulated entities in different jurisdictions, which gives clients a great deal of satisfaction and confidence in terms of how we offer our services.鈥�
Carter shares that 鈥渨e are applying for a licence in Singapore to extend our BrokerTec Quote business, and we're working closely with the authorities to keep everything on track.鈥�
CME Group already has a large footprint in the region and several employees are based in Singapore helping to support the future growth of the repo business, once BrokerTec鈥檚 license is approved.
BrokerTec Quote already lists a suite of Asian products on the platform driven by London-based buy side client demand to trade these products. 鈥淏y having a licence in Singapore, it will allow us to further extend our outreach to Asia-based customers,鈥� says Carter.
鈥淥ur ambition for BrokerTec Quote has always been to provide a global offering,鈥� Edwards adds. 鈥淲hile we initially focused on growth in EMEA and the US markets, as we've diversified to cover all fixed income asset classes, we've been able to grow further in Asia.鈥�
Edwards shares that Asia continues to be a central region for US Treasury trading for clients to manage their risk in real-time in response to the overnight news cycle and market-moving events. Recent trade policy changes, which have been announced at the end of the US trading day, have immediately hit market open in the Asia time zone, which has resulted in some 鈥渆xtremely high volume days鈥� in the region.
He believes these market moves reinforce the importance of Asia as a trading centre. In April alone, as clients managed their tariff risks, BrokerTec saw ADNV for US Treasuries in the APAC and EMEA regions double the volume seen in Q1 2025. Further, between 4-8 April, ADNV in the region was four times higher than in the first quarter of this year.
During the 7 April Treasury rout, BrokerTec saw US$322.5 billion ADNV traded on its CLOB, the highest volume day since February 2021. Of this volume, 13 per cent came from Asia 鈥� nine times higher than the Q1 2025 average for the region.
A new transition
In March 2025, CME Group released details of its newest Treasury market initiative: BrokerTec Chicago. The project will introduce a second BrokerTec US Treasury CLOB, located next to the firm鈥檚 futures and options market, which is based in the Chicago data centre.
The company has been laser-focused on bringing the US Treasury cash and futures markets closer together and unlocking efficiencies for clients since it acquired NEX Group, and therefore BrokerTec, in 2018.
The first stage of this process occurred in 2021 with the migration of BrokerTec鈥檚 CLOB onto CME Globex. BrokerTec Chicago is the second phase in this process and will support spread trading between cash and derivatives markets. A purpose-built CLOB, BrokerTec Chicago will simplify the workflows or reduce some of the existing legging risk that the market typically sees as participants look to trade both products side by side.
Edwards explains that 鈥渋t really helps in terms of the efficiency for deploying relative value strategies of which there are a large number of customers very active in that space鈥�.
鈥淭his is a significant new initiative that we are bringing to the market. We鈥檝e had phenomenal customer demand, which continues to grow. We've commenced testing and we're excited to go live in Q3 of this year.鈥�
In terms of underlying market trends, over the last 10 years, liquidity in Treasury futures has grown relative to the cash market, creating increased client demand for relative-value trading strategies, the firm notes.
Due to this growth, the interdealer market in US Treasury cash on-the-runs has been segmented out into a two distinct use cases: risk transfer trades, for clients seeking larger stacks of liquidity, which the BrokerTec New York CLOB addresses, and relative value trades, between cash and futures, which typically seek out tighter prices in small trade sizes.
The New York CLOB will remain the primary venue for price discovery in the cash Treasury market, and is particularly suitable for larger risk-transfer trades.
Providing a rundown of its core capabilities, Edwards says clients of BrokerTec Chicago will benefit from co-location of the matching engine with futures and cash, which will reduce slippage and create more deterministic trading experience for customers, as well as enhance certainty of execution when trading cash versus futures.
He continues: 鈥淚t will allow for more precise hedging because we're going to offer notional sizes, which are aligned with the futures market. Our current CLOB, in New York, has a minimum trade size of one million.
鈥淭he Chicago CLOB will allow clients to trade 200,000 lots for the two-year and the three-year, and 100,000 lots for contract sizes for the five-year and out for US Treasury benchmarks.鈥�
Edwards suggests that this will significantly reduce the tails for those trading the spread between futures and cash. BrokerTec Chicago will also offer tighter price increments, which will be at a 16th of a 32nd across the curve.
鈥淲e believe this will increase matching opportunities, and encourage a greater number of counterparties to trade in this new CLOB,鈥� says Edwards.
Lastly, the new CLOB will benefit from shared connectivity for CME Globex matching and the existing BrokerTec APIs. The new release is currently available for customer testing. The firm is working with customers to go through testing, as well as the major ISVs, who are an important link in terms of bringing those customers to market
Image: CME Group 