Within the Financials sector, MarketAxess Holdings Inc. (MKTX, Financial) owns and operates the dominant electronic platform for trading corporate bonds and other fixed income securities. Trading across asset classes continues to migrate away from trading pits and phones to electronic venues. Regulations enacted after the global financial crisis of 2007-08 have accelerated this shift as higher capital and liquidity requirements for banks have restricted their ability to act as market-makers. We believe the corporate bond market is in the early stage of a secular transition from voice-based to electronic trading, and that MarketAxess, as a leading electronic platform, will be a prime beneficiary of this shift.
From Baron Asset Fund first quarter 2017 shareholder letter.
