MarketAxess

Proxy Statement
and Notice of
Annual Meeting
of Stockholders

Dear Fellow Stockholders and Clients, 

MarketAxess achieved its 12th consecutive year of record revenue and earnings in 2020, driven 
by strong gains in trading volume and market share across all of our core credit products.  
Despite the challenges of the pandemic, we made substantial progress on our growth strategy, 
positioning MarketAxess to further capitalize on the enormous opportunity that remains in the 
electronic transformation of the $100 trillion global fixed income market. 

In 2020, annual revenue rose 35% to a record $689.1 million, and annual operating profit was 
up 49% to a record $374.7 million. Last year’s results brought the five-year compound annual 
growth rate (CAGR) for our earnings per share to 25% and the five-year CAGR in revenue to 
18%.  During those five years, the MKTX share price rose from $111.59 to $570.59, a gain of 
411%.  With the most recent increase in the quarterly dividend to $0.66 per share, we have 
tripled our payout over the past five years, demonstrating growth in earnings and free cash 
flow generation. 

Our 2020 results were driven by advances in our three main strategic objectives: 1) increasing 
our penetration in new and existing markets, 2) expanding Open Trading , well established as
the leading all-to-all marketplace in fixed-income, and 3) continuing to invest in and grow our 
international business. 

®

Last year’s broad-based gains in market share highlighted our increased penetration within core 
markets and the strength of our competitive position.  Our U.S. high grade trading volume as a 
percentage of FINRA’s high-grade TRACE trading volume increased to an estimated 21.6% in 
2020, compared to an estimated 19.0% share in 2019. 

Our biggest market share gains in 2020 came from our U.S. high-yield business, which saw full 
year estimated market share grow to 14.6%, up from 10.4% in 2019.   This is a large and 
growing segment of global credit markets, and Open Trading is creating new trading 
opportunities in high-yield for investors and dealers. 

Our international business continued to make strong contributions to our growth in 2020.  We 
ended the year with a total of over 1,800 firms active on our network, of which approximately 
900 were international client firms, up approximately 150% from five years ago.  Trading 
volume conducted by international clients now comprises 29% of overall credit trading on the 
platform, up from 17% in 2015.   

Growth in our emerging markets trading business has also accelerated with approximately 60% 
of volume being conducted by international clients. Total emerging markets volume in 2020 
reached a record $562 billion, up 15% from the prior year.  In hard-currency denominated debt, 
volume conducted via Open Trading is now 42% of overall emerging market volume, up from 
34% the prior year.  The mix of liquidity in both hard-currency and local-currency denominated 
emerging markets debt, plus access to a global liquidity network through Open Trading, makes 
our trading platforms an attractive solution for international participants. 

We are increasingly using selective acquisitions to expand our product capabilities and client 
network.   In 2020, we built upon the new opportunity in the Rates space following our 
acquisition of Liquidity Edge in late 2019.  We are now able to offer government bond trading 

and credit hedging solutions to our dealer and investor clients.   We have expanded our 
European post trade reporting business and client base through the acquisition of the 
Regulatory Reporting Hub in late 2020.  And finally, in April 2021 we acquired an important 
piece of the municipal bond trading infrastructure through the acquisition of MuniBrokers.  All 
of these acquisitions contribute to important new growth opportunities for our investors.  

We will look back on 2020 as a pivotal year in which Open Trading established itself as an 
essential source of liquidity in global fixed-income markets.  In the initial months of 2020, the 
emerging pandemic played a significant role in boosting electronic volumes and expanding 
Open Trading adoption. While working from home, thousands of institutional traders 
worldwide remained connected to the market by relying on electronic trading and Open 
Trading protocols to navigate through a period of market stress and dislocation.   

While overall credit trading on MarketAxess increased 29% in 2020 to a new record, Open 
Trading credit trading volume surged 61% and now accounts for a third of our total volume. 
Open Trading now typically delivers institutions more than 25,000 daily trading opportunities 
and $16 billion in notional value in credit products, with more than 1,600 firms engaging in this 
central global marketplace. As 2020 progressed, adoption rates continued to accelerate even as 
markets returned to more normal conditions.  Driving the adoption pace were both traditional 
asset managers and dealers, as well as new market participants, such as systematic funds and 
ETF market makers.  

Clients who used Open Trading in 2020 saved an estimated total of $1.1 billion in transaction 
costs, which significantly exceeds the Company’s total revenue in 2020.  Such savings stand out 
in a period in which investors are highly focused on execution costs and expense ratios. 

Throughout the year, we continued to invest in and deliver innovative client solutions and 
services in support of Open Trading, even as our teams around the world worked remotely. 
These advances included the launch of Live Markets, our order-book for actively traded and 
newly issued corporate bonds, as well as Mid-X, our sessions-based matching platform that 
utilizes our artificial intelligence-powered Composite+ pricing engine.   

Momentum in the adoption of automated execution tools across our platform accelerated in 
2020.  The volume of trades using our Auto-X solution rose 60% in 2020 to $126 billion.  In 
2020, the number of algo price responses stood 52% higher than 2019, and the number of algo-
related trades were up 37%.  Responding to this growing demand for automated execution, we 
launched Dealer Direct, which allows the dealer community to stream prices to investor clients 
with enhanced visibility management and strong protection against information leakage.  

As we look ahead, we are reminded that the world’s fixed income markets are still in the early 
stages of an electronic transformation.  Greenwich Associates, a leading consulting firm, 
estimates that corporate bond electronic trading now accounts for a third of the volume in 
investment grade securities, and that’s just one segment – albeit an important one – of global 
credit markets.  To put the opportunity in context, the top 5 global banks alone had Fixed 
Income, Currency and Commodity revenue of $84 billion in 2020 and we currently estimate that 
aggregate revenues in the fixed income e-trading space are approximately $2 billion.  We 
believe that this demonstrates the incredible opportunity that lies ahead of us, particularly as 

the demand for more efficient and cost effective ways of trading grows.  Our market leadership 
and robust technology and data capabilities position us well to capitalize on this opportunity.    

Events of 2020 also inspired an even deeper commitment to our vision of MarketAxess as a 
company in which individuals of all backgrounds can find opportunity and a work environment 
of mutual respect.  Mindful of the economic pressures caused by the pandemic, we moved to 
engage more broadly with communities to provide needed support, including significant 
contributions made to City Harvest in both New York and London.  We’re also making a 
commitment to the environment by planting over 130,000 trees in critical regions across the 
world through our ‘Trading for Trees’ program linked to Green Bond trading activity on the 
platform. I urge you to download our 2020 ESG Report in the Investor Relations — Corporate 
Governance section of our website to learn more about these initiatives. 

Since our founding 21 years ago, we have taken pride in our strong governance and the 
outstanding quality of our board of directors. We are particularly proud that a leading ESG 
ratings firm scores us in the highest scoring range for governance relative to our global peers.  

In 2020, Kourtney Gibson, President of Loop Capital Markets, one of the largest privately-held 
investment banking, brokerage and advisory firms headquartered in the U.S., was elected to 
our Board, increasing the number of women directors from three to four.  Kourtney is a 
member of The Economic Club of Chicago and the Treasury Market Practices Group sponsored 
by the Federal Reserve Bank of New York. 

Looking ahead, we share in the hope for a return to our normal lives and the pleasures and 
rewards of spending time in the company of our family, friends and colleagues.  In the 
meantime, I want to express again my deep gratitude to all MarketAxess employees for their 
dedication to our clients and to each other in a stressful time. 

Sincerely 

Richard M. McVey 
Chairman of the Board and Chief Executive Officer 
April 28, 2021 

 
 
MarketAxess Holdings Inc.
55 Hudson Yards, 15th Floor
New York, New York 10001

April 28, 2021

TO THE STOCKHOLDERS OF MARKETAXESS HOLDINGS INC.:

You are invited to attend the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of MarketAxess Holdings
Inc. (the “Company”) scheduled for Wednesday, June 9, 2021 at 10:00 a.m., Eastern Daylight Time. The Annual Meeting
will be a virtual meeting of stockholders. You will be able to participate in the Annual Meeting, vote and submit your
questions via live webcast by visiting www.virtualshareholdermeeting.com/MKTX2021. The Company’s Board of
Directors and management look forward to your participation.

Details of the business to be conducted at the Annual Meeting are given in the attached Notice of Annual Meeting and
Proxy Statement, which you are urged to read carefully.

We are pleased to take advantage of the Securities and Exchange Commission rules that allow issuers to furnish proxy
materials to their stockholders on the Internet. We believe these rules allow us to provide our stockholders with the
information they need, while lowering the costs of delivery and reducing the environmental impact of our Annual
Meeting. On April 28, 2021, we expect to mail to our stockholders a Notice containing instructions on how to access
our Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2020 and vote online. The
Notice contains instructions on how you can receive a paper copy of the Proxy Statement, proxy card and Annual
Report if you only received a Notice by mail.

Your vote is important to us. Whether or not you plan to attend the Annual Meeting, your shares should be
represented and voted. After reading the enclosed Proxy Statement, please cast your vote via the Internet or telephone
or complete, sign, date and return the proxy card in the pre-addressed envelope that we have included for your
convenience. If you hold your shares in a stock brokerage account, please check your proxy card or contact your broker
or nominee to determine whether you will be able to vote via the Internet or by telephone.

On behalf of the Board of Directors, thank you for your continued support.

Sincerely,

Richard M. McVey
Chairman and Chief Executive Officer

[THIS PAGE INTENTIONALLY LEFT BLANK]

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS

Attend the Annual Meeting at:

www.virtualshareholdermeeting.com/MKTX2021

Your vote is very important, regardless of the number of shares
you own. Please read the attached proxy statement carefully
and complete and submit your proxy card via the internet or
sign and date your paper proxy card as promptly as possible
and return it in the enclosed envelope. Alternatively, you may
be able to submit your proxy by touch-tone phone as indicated
on the proxy card.

TO THE STOCKHOLDERS OF MARKETAXESS HOLDINGS INC.:
NOTICE IS HEREBY GIVEN that the 2021 Annual Meeting of
Stockholders (the “Annual Meeting”) of MarketAxess Holdings Inc., a
Delaware corporation (the “Company”), will be held via live webcast
on Wednesday, June 9, 2021, at 10:00 a.m., Eastern Daylight Time.
You can participate in the Annual Meeting, vote and submit your
questions during the Annual Meeting by visiting
www.virtualshareholdermeeting.com/MKTX2021. You must have your
16-digit control number included on your Notice of Internet
Availability of Proxy Materials or your proxy card (if you received a
printed copy of the proxy materials) to join the Annual Meeting.
At the Annual Meeting we will:
1. vote to elect the 12 nominees named in the attached Proxy

Statement as members of the Company’s Board of Directors for
terms expiring at the 2022 Annual Meeting of Stockholders;
2. vote to ratify the appointment of PricewaterhouseCoopers LLP as
the Company’s independent registered public accounting firm
for the year ending December 31, 2021;

3. hold an advisory vote to approve the compensation of the

Company’s named executive officers as disclosed in the attached
Proxy Statement; and

4. transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.

BY INTERNET
Visit 24/7
www.proxyvote.com

BY PHONE
Call 1-800-690-6903
in the U.S. or Canada to vote your
shares

BY MAIL
Cast your ballot, sign your proxy
card and return

PARTICIPATE IN THE
ANNUAL MEETING
Vote during the Annual Meeting at
www.virtualshareholdermeeting.com/
MKTX2021 using your 16-digit control
number

These items are more fully described in the Company’s Proxy Statement accompanying this Notice.

The record date for the determination of the stockholders entitled to notice of, and to vote at, the Annual Meeting, or any
adjournment or postponement thereof, was the close of business on April 12, 2021. You have the right to receive this Notice
and vote at the Annual Meeting if you were a stockholder of record at the close of business on April 12, 2021. Please
remember that your shares cannot be voted unless you cast your vote by one of the following methods: (1) vote via the
Internet or call the toll-free number as indicated on the proxy card; (2) sign and return a paper proxy card; or (3) vote during
the Annual Meeting at www.virtualshareholdermeeting.com/MKTX2021.

By Order of the Board of Directors,

Scott Pintoff
General Counsel and Corporate Secretary
New York, New York
April 28, 2021

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TABLE OF CONTENTS

PROXY SUMMARY

Annual Meeting information

Voting items

How to vote

PROPOSAL 1 — ELECTION OF DIRECTORS

Your vote

Qualifications for director nominees

Board of Directors skills and expertise

Director diversity

Director Information

CORPORATE GOVERNANCE AND BOARD
MATTERS

Director independence and tenure

Board diversity policy

How nominees to our Board are selected

Board leadership structure

Board committees

Meetings and attendance

Board involvement in risk oversight

Board evaluations, succession planning and talent
management

Code of Conduct, Code of Ethics and other
governance documents

Communicating with our Board members

Director compensation

Certain relationships and related party
transactions

ENVIRONMENTAL, SOCIAL AND GOVERNANCE
STRATEGY AND INITIATIVES

How MarketAxess defines sustainability

Trading for Trees

PROPOSAL 2 — RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

Your vote

Audit and other fees

REPORT OF THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS

1

1

1

1

2

2

3

3

4

5

11

11

11

11

12

12

14

14

15

16

16

16

19

21

22

22

23

23

24

25

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

EXECUTIVE OFFICERS

A LETTER FROM OUR COMPENSATION AND
TALENT COMMITTEE

COMPENSATION DISCUSSION AND ANALYSIS

Responding to stockholders; evolving pay
practices

Business and financial performance

How we make compensation decisions

How we determine pay levels

Elements of executive compensation

2020 compensation

REPORT OF THE COMPENSATION AND TALENT
COMMITTEE OF THE BOARD OF DIRECTORS

EXECUTIVE COMPENSATION

Summary compensation table

Grants of plan-based awards

Outstanding equity awards at fiscal year-end

Option exercises and stock vested

Nonqualified deferred compensation

Employment agreements and severance
arrangements with our Named Executive Officers

Potential termination or change in control
payments and benefits

Compensation Committee interlocks and insider
participation

PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE
COMPENSATION

Your vote

CEO PAY RATIO

OTHER INFORMATION

General information

Solicitation of proxies

Voting

Availability of certain documents

Other matters

Stockholder proposals for 2022 Annual Meeting

26

28

30

31

31

32

35

38

44

46

57

58

58

59

60

61

62

63

66

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75

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PROXY SUMMARY

This summary contains highlights about MarketAxess Holdings Inc. (“MarketAxess”, the “Company”, “we” or “our”) and
the upcoming 2021 Annual Meeting of Stockholders (the “Annual Meeting”). This summary does not contain all of the
information you should consider in advance of the Annual Meeting and we encourage you to read the entire Proxy
Statement before voting.

This Proxy Statement, the accompanying Notice of Annual Meeting of Stockholders and proxy card are first being
mailed to stockholders on or about April 28, 2021. Whenever we refer in this Proxy Statement to the “Annual Meeting,”
we are also referring to any meeting that results from any postponement or adjournment of the June 9, 2021 meeting.

Annual Meeting information

Date and Time:
Virtual Meeting:
Record Date:

Wednesday, June 9, 2021, at 10:00 a.m., Eastern Daylight Time
www.virtualshareholdermeeting.com/MKTX2021
Monday, April 12, 2021

Due to the continuing public health impact of the coronavirus outbreak (COVID-19) (the “Pandemic”) and to support
the health and well-being of our stockholders and other participants at the Annual Meeting, the Annual Meeting will
be held in virtual format only.

Voting items

The following table summarizes the items that we are asking our stockholders to vote on at the Annual Meeting, along
with the voting recommendations of our Board of Directors (the “Board” or “Board of Directors”).

Item
1.

Election of Directors

Board Recommendation
FOR

2. Ratification of the appointment of

PricewaterhouseCoopers LLP as the Company’s
independent registered public accounting firm for
the year ending December 31, 2021

3. Advisory vote to approve the compensation of the
Company’s named executive officers as disclosed in
the attached Proxy Statement

FOR

FOR

How to vote

Required Approval
Majority of votes cast
for each nominee
Majority of shares
present and entitled to
vote

Majority of shares
present and entitled to
vote

Page Reference
2

23

74

Your vote is important. Stockholders of record as of the Record Date are entitled to vote through one of the following
options:

By Mail:
Via the Internet:

By Telephone:

Cast your ballot, sign your proxy card and return.
To vote before the meeting, visit www.proxyvote.com.
To vote at the meeting, visit www.virtualshareholdermeeting.com/MKTX2021. You will need the
control number printed on your notice, proxy card or voting instruction form.
Call the phone number located on your proxy card.

2021 Proxy Statement

1

PROPOSAL 1 — ELECTION OF DIRECTORS

The first proposal to be voted on at the Annual Meeting is the election of directors. Our Board currently consists of 13
directors, 11 of whom are not our employees. Each of the nominees for director was elected by the Company’s
stockholders on June 10, 2020, except for Kourtney Gibson, who was appointed to the Board as of July 16, 2020. The
directors are nominated for a term that begins at the Annual Meeting and ends at the 2022 Annual Meeting of
Stockholders. Each director will hold office until such director’s successor has been elected and qualified, or until such
director’s earlier resignation, retirement or removal. The Board will continue to evaluate its composition as part of its
focus on self-assessment and board refreshment.

John Steinhardt, who has been a director since April 2000, has not been re-nominated and will not stand for reelection.
Mr. Steinhardt’s service as a director on the Board will cease as of the date of the Annual Meeting. Following the Annual
Meeting, and assuming the election of each director nominee, our Board will consist of 12 directors, 10 of whom are not
our employees. The Company thanks Mr. Steinhardt for his twenty-one years of service.

Your vote

If you sign the enclosed proxy card and return it to the Company, your proxy will be voted FOR all directors, for terms
expiring at the 2022 Annual Meeting of Stockholders, unless you specifically indicate on the proxy card that you are
casting a vote against one or more of the nominees or abstaining from such vote.

A majority of the votes cast by stockholders entitled to vote at the Annual Meeting is required for the election of each
director. Abstentions and broker non-votes will have no effect on the outcome of the vote.

BOARD RECOMMENDATION
The board unanimously recommends that you vote “FOR” the election of each of the
following nominees:

P

Richard M. McVey

(cid:220)
(cid:220) Nancy Altobello
(cid:220)
(cid:220)
(cid:220)
(cid:220)

Steven L. Begleiter
Stephen P. Casper
Jane Chwick
Christopher R. Concannon

(cid:220) William F. Cruger
Kourtney Gibson
(cid:220)
Justin G. Gmelich
(cid:220)
Richard G. Ketchum
(cid:220)
Emily H. Portney
(cid:220)
Richard L. Prager
(cid:220)

Each of these nominees is currently serving as a director on our Board, and each nominee has agreed to continue to
serve on the Board if he or she is elected at the Annual Meeting. If any nominee is unable (or for good cause declines)
to serve as a director at any time before the Annual Meeting, proxies may be voted for the election of a qualified
substitute designated by the current Board, or else the size of the Board will be reduced accordingly. Biographical
information about each of the nominees is included below under Director information.

2

2021 Proxy Statement

PROPOSAL 1 — ELECTION OF DIRECTORS

Qualifications for director nominees

Our Board has adopted minimum qualifications for our directors:

(cid:220) substantial experience working as an executive officer for, or serving on the board of, a public company;

(cid:220) significant accomplishment in another field of endeavor related to the strategic running of our business; or

(cid:220) an ability to make a meaningful contribution to the oversight and governance of a company having a scope and size

similar to our Company.

A director must have an exemplary reputation and record for honesty in his or her personal dealings and business or
professional activity. All directors must demonstrate strong leadership skills and should possess a basic understanding
of financial matters; have an ability to review and understand the Company’s financial and other reports; and be able to
discuss such matters intelligently and effectively. He or she also needs to exhibit qualities of independence in thought
and action. A candidate should be committed first and foremost to the interests of the stockholders of the Company.
The key experience, qualifications and skills each of our directors brings to the Board that are important in light of our
business are included in their individual biographies below.

Board of Directors skills and expertise

The Company’s directors are selected on the basis of specific criteria set forth in our Corporate Governance Guidelines.
All of our directors possess financial industry experience and a history of strategic leadership.
qualifications, listed below are the skills and experience that we consider important for our director nominees. More
detailed information is provided in each director nominee’s biography.

In addition to those

Fixed
Income/
Electronic
Trading

Corporate
Governance

Regulatory

Technology/
Cybersecurity

Mergers
and
Acquisitions

Finance /
Accounting

Risk
Management

Other
Public
Company
Board
Experience

Talent
Management

Richard M. McVey

Nancy Altobello

Steven L. Begleiter

Stephen P. Casper

Jane Chwick

Christopher R. Concannon

William F. Cruger

Kourtney Gibson

Justin G. Gmelich

Richard G. Ketchum

Emily H. Portney

Richard L. Prager

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

(cid:244)

2021 Proxy Statement

3

PROPOSAL 1 — ELECTION OF DIRECTORS

Director diversity

The Company recognizes and embraces that having a diverse Board enhances both the Board’s effectiveness in
fulfilling its oversight role and the Company’s performance. See “Corporate Governance and Board Matters – Board
Diversity Policy” for more information. Listed below are the number of director nominees that self-identify as female or
as a racial minority as well as the number of director nominees by tenure and age:

GENDER

4

33%
women

8

RACE

1

8%
racial diversity

11

TENURE

7

3

1

1

<5
yrs

5-9
yrs

10-19
yrs

20+
yrs

AGE

1
30’s

1
40’s

2
70’s

58
average age

3
50’s

5
60’s

4

2021 Proxy Statement

Director information

At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the
persons named below to serve as directors of the Company for a term beginning at the Annual Meeting and ending at
the 2022 Annual Meeting of Stockholders.

PROPOSAL 1 — ELECTION OF DIRECTORS

Richard M. McVey

Nancy Altobello

Age: 61
Director since: April 2000
Chairman of the Board of Directors
Board Committees:
(cid:220) None

Age: 63
Director since: April 2019
Board Committees:
(cid:220) Audit (Chair)
(cid:220) Compensation and Talent

Qualifications and Career Highlights:

Qualifications and Career Highlights:

Nancy Altobello was most recently Global Vice Chair, Talent of
Ernst & Young (“EY”), a professional services firm, where she was
responsible for EY’s talent and people strategy worldwide from
July 2014 until her retirement in June 2018. Previously, Ms.
Altobello held a number of senior positions at EY, including
Americas Vice Chair, Talent from 2008 to 2014, Managing
Partner, Northeast Region Audit and Advisory Practices from
2003 to 2008 and Managing Partner, North American Audit
Practice from 1999 to 2003. Throughout this time, Ms. Altobello
also served as an audit partner for a number of leading global
organizations. She currently serves on the Board of Directors of
Cornerstone OnDemand and on the Board of Trustees of Fidelity
Charitable. She previously served on the Board of Directors of
MTS Systems Corporation until its acquisition and CA
Technologies until its acquisition. Ms. Altobello received a B.S. in
accounting from Fairfield University, earned a Corporate Director
Certificate from Harvard Business School and is a licensed
Certified Public Accountant in New York and Connecticut.

Ms. Altobello was selected to serve on the Board due to her
financial, audit and Sarbanes Oxley compliance expertise, her
knowledge of talent and people strategy, and her global
business experience.

Richard M. McVey has been our Chief Executive Officer and
Chairman of our Board of Directors since our inception. As an
employee of J.P. Morgan & Co., one of our founding broker-
dealers, Mr. McVey was instrumental in the founding of
MarketAxess in April 2000. Prior to founding MarketAxess, Mr.
McVey was Managing Director and Head of North America
Fixed-Income Sales at J.P. Morgan, where he managed the
institutional distribution of fixed-income securities to investors.
Mr. McVey led MarketAxess through the Company’s IPO in 2004,
and since that time, MarketAxess has been one of the fastest
growing financial technology companies in the U.S. public
markets, with industry leading total stockholder returns. Mr.
McVey was named the Ernst & Young National Entrepreneur of
the Year for financial services in 2012, and he has been named
to the Institutional Investor Tech 40 list 15 times. Mr. McVey was
a member of the U.S. Securities and Exchange Commission’s
(“SEC”) Fixed Income Market Structure Advisory Committee, for
which he chaired the Technology and Electronic Trading Sub-
Committee from November 2017 to March 2021. Mr. McVey
serves on the Board of Directors of Miami (Ohio) University
Foundation, as well as the Board of Trustees of Colby College.
He previously served on the Board of Directors of Blue Mountain
Credit Alternatives L.P., an asset management fund focused on
the credit markets and equity derivatives markets. Mr. McVey
received a B.A. in finance from Miami (Ohio) University and an
M.B.A. from Indiana University.

Mr. McVey’s role as one of our founders and his service as our
Chief Executive Officer for over 20 years give him deep
knowledge and understanding of all aspects of the business and
operations of MarketAxess. Mr. McVey’s extensive experience in
the financial services industry, including significant leadership
roles at J.P. Morgan, has provided the Company with
comprehensive knowledge of the financial markets that we serve
and the institutions and dealers that are our clients.

2021 Proxy Statement

5

PROPOSAL 1 — ELECTION OF DIRECTORS

Steven L. Begleiter

Stephen P. Casper

Age: 59
Director since: April 2012
Board Committees:
(cid:220) Compensation and Talent (Chair)
(cid:220)

Finance

Age: 71
Director since: April 2004
Lead Independent Director
Board Committees:
(cid:220) Nominating and Governance

Qualifications and Career Highlights:

Qualifications and Career Highlights:

Steven L. Begleiter has been employed with Flexpoint Ford, LLC,
a private equity group focused on investments in financial
services and healthcare, since October 2008, where he currently
serves as Managing Director. Prior to joining Flexpoint Ford, Mr.
Begleiter spent 24 years at Bear Stearns & Co., serving first as an
investment banker in the Financial Institutions Group and then
as Senior Managing Director and member of its Management
and Compensation Committee from 2002 to September 2008.
Mr. Begleiter also served as head of Bear Stearns’ Corporate
Strategy Group. Mr. Begleiter currently serves on the Board of
Directors of Great Ajax Corp. and certain portfolio companies of
Flexpoint Ford, LLC. He previously served on the Board of
Directors of WisdomTree Investments, Inc. Mr. Begleiter received
a B.A. with Honors in economics from Haverford College.

Mr. Begleiter brings many years of leadership experience in the
financial services and private equity industries to the Board. Mr.
Begleiter also has extensive industry knowledge and expertise
relating to mergers and acquisitions and capital formation.

Stephen P. Casper is retired. Most recently, Mr. Casper was the
President of TRG Management L.P., the investment manager of
the TRG Global Opportunity Master Fund, Ltd., from April 2010
to August 2012. From September 2008 to April 2010, Mr. Casper
was a partner of Vastardis Capital Services, which provides fund
administration and securities processing outsourcing services to
hedge funds, funds of funds and private equity funds and their
investment management sponsors. Prior to this, Mr. Casper was
Chairman and Chief Executive Officer of Charter Atlantic
Corporation, the holding company of Fischer Francis Trees &
Watts, Inc. (“FFTW”), a specialist manager of U.S., global and
international fixed-income portfolios for institutional clients, and
Malbec Partners, a manager of single-strategy hedge funds.
From April 2004 to January 2008, Mr. Casper was the President
and CEO of FFTW. Mr. Casper joined FFTW as Chief Financial
Officer in 1990 and was appointed Chief Operating Officer in
May 2001. From 1984 until 1990, Mr. Casper was Treasurer of
the Rockefeller Family Office. Mr. Casper has been a member of
the Board of Directors of multiple fixed income hedge funds
managed by KLS Diversified Asset Management since July 2012.
Mr. Casper is Vice-Chairman of the Board of Directors of GMO
LLC, a global investment management firm providing clients
with asset management solutions and services, since May 2014
and a member of the Investment Committee of the Brooklyn
Museum. Mr. Casper is a Certified Public Accountant and
received a B.B.A. in accounting from Baruch College, from which
he graduated magna cum laude, Beta Gamma Sigma, and an
M.S. in finance and accounting from The Wharton School at the
University of Pennsylvania.

Mr. Casper’s experience in the fixed-income markets and
financial services industry and his experience in financial
reporting and accounting roles bring extensive public
accounting, financial reporting, risk management and leadership
skills to the Board.

6

2021 Proxy Statement

PROPOSAL 1 — ELECTION OF DIRECTORS

Jane Chwick

Christopher R. Concannon

Age: 58
Director since: October 2013
Board Committees:
(cid:220) Nominating and Governance
(cid:220) Risk (Chair)

Age: 53
Director since: January 2019
Board Committees:
(cid:220) None

Qualifications and Career Highlights:

Qualifications and Career Highlights:

Jane Chwick was most recently the Co-Founder and Co-CEO of
Trewtec, Inc., a technology advisory firm designed to help board
members and CEOs evaluate the technology function in their
companies, from September 2014 until the firm ceased
operations in August 2017. Prior to this role, she was a Partner
and Co-Chief Operating Officer of the Technology Division of
Goldman Sachs Group, Inc. where she was responsible for
financial and business planning, technical strategy and ongoing
management of an 8,000-person organization until her
retirement in April 2013. During her 30-year career at Goldman
Sachs, Ms. Chwick held a number of senior positions, including
Global Head of Technology of the Securities Division and Global
Head of Derivatives Technology. Ms. Chwick served on many
governance committees at Goldman Sachs, including the firm’s
Finance Committee, the firm-wide New Activity Committee and
the Technology Risk Committee, and served as co-chair of the
Technology Division Operating Committee. During her tenure,
she drove the design, build and integration of technology across
all of Goldman Sachs’ derivatives businesses, including fixed
income, commodities, currencies and equities. Ms. Chwick is a
member of the Board of Directors of Voya Financial, Inc.,
People’s United Financial, Inc., Essent Group and Thoughtworks,
and also serves on the Executive Board of Trustees of the
Queens College Foundation. Ms. Chwick received a B.A. in
mathematics from Queens College and an M.B.A. from St. John’s
University with a concentration in MIS and quantitative analysis.

Ms. Chwick’s extensive technology leadership experience gained
in a global financial services firm, combined with her depth of
market knowledge and industry insight, bring valuable skills and
strategic perspective to the Board.

Christopher R. Concannon has been our President and Chief
Operating Officer since January 2019. Mr. Concannon previously
served as President and Chief Operating Officer of Cboe Global
Markets, Inc., one of the world’s largest exchange holding
companies, a position he was appointed to upon Cboe’s
acquisition of Bats Global Markets, Inc. in 2017. At Cboe, he was
responsible for the company’s transaction businesses, including
global derivatives, U.S. and European equities, and global
foreign exchange – as well as overseeing Cboe’s technology,
operations, risk, and marketing divisions. Until Bats’ acquisition
by Cboe, Mr. Concannon served as President of Bats from
December 2014, director from February 2015, and Chief
Executive Officer from March 2015. Mr. Concannon has more
than 20 years of experience as an executive at Nasdaq, Virtu
Financial, Instinet and as an attorney at Morgan Lewis and
Bockius and the Securities and Exchange Commission. Mr.
Concannon has received a B.A. from Catholic University, an
M.B.A. from St. John’s University, and a J.D. from Catholic
University’s Columbus School of Law.

Mr. Concannon brings to the Board extensive experience leading
companies in the global exchange industry. Mr. Concannon also
has deep and critical knowledge regarding automated trading,
the delivery of innovative technology solutions, market structure
and clearing operations.

2021 Proxy Statement

7

PROPOSAL 1 — ELECTION OF DIRECTORS

William F. Cruger

Kourtney Gibson

Age: 62
Director since: November 2013
Board Committees:
(cid:220) Audit
(cid:220)
(cid:220) Nominating and Governance (Chair)

Finance

Age: 39
Director since: July 2020
Board Committees:
(cid:220) Audit

Qualifications and Career Highlights:

Qualifications and Career Highlights:

William F. Cruger was most recently Vice Chairman of
Investment Banking at JPMorgan Chase & Co. where he was
responsible for key client relationships on a global basis until his
retirement in August 2013. Previously, Mr. Cruger held a number
of senior positions at J.P. Morgan, including Managing Director
in the Financial Institutions group from 1996 to 2011. During this
time, he oversaw the rationalization of the firm’s private equity
investments in trading platforms and related ventures at
LabMorgan from 2000 to 2001. Prior to this, Mr. Cruger ran the
firm’s investment banking practices in Japan from 1991 to 1996,
Latin America from 1989 to 1991 and Emerging Asia from 1984
to 1988. He currently serves on the Board of Directors of
People’s United Financial, Inc. and Virtu Financial, Inc., and has
previously served on the Boards of Directors of Archipelago,
Credittrade and Capital IQ. Mr. Cruger received a B.A. from Clark
University and an M.B.A. from Columbia University.

Mr. Cruger’s diverse experience in investment banking at a
global financial services firm, his extensive knowledge of
financial institutions and financial markets, his leadership roles
as a director of other financial services firms, and his
international business experience bring critical skills and
strategic insight to the Board.

Kourtney Gibson has been the President of Loop Capital Markets,
an investment bank, brokerage and advisory firm, since June
2016. Prior to this role, Ms. Gibson served in various roles at
Loop Capital Markets, including as Head of the Fixed Income
Division from January 2015 to June 2016 and Head of the Equity
Division from June 2005 to December 2015. Ms. Gibson
currently serves on the Board of lululemon athletica inc. and is a
member of The Economic Club of Chicago and the Treasury
Market Practices Group sponsored by the Federal Reserve Bank
of New York. Ms. Gibson also currently serves on the Board of
Trustees at the University of Miami and Viterbo University, the
Board of the Dibia Dream Foundation and as Chairman of the
Board of the Chicago Scholars Foundation. Ms. Gibson received
an M.B.A. from the Kellogg School of Management at
Northwestern University and a B.B.A. from the University of
Miami.

Ms. Gibson brings to the Board her wealth of experience relating
to the evolving market structure of both the fixed income and
equity markets, as well her broad-based experience with
institutional investor clients.

8

2021 Proxy Statement

PROPOSAL 1 — ELECTION OF DIRECTORS

Justin G. Gmelich

Richard G. Ketchum

Age: 52
Director since: October 2019
Board Committees:
(cid:220) Audit

Age: 70
Director since: April 2017
Board Committees:
(cid:220) Risk

Qualifications and Career Highlights:

Qualifications and Career Highlights:

Justin G. Gmelich has been a Partner and Global Head of
Markets with King Street Capital Management, a global
investment management company, since January 2020, where
he is also a member of the Management Committee, the Global
Investment Committee and the Real Estate Investment
Committee. Prior to this, Mr. Gmelich was the Global Chief
Operating Officer for Fixed Income, Commodities, and
Currencies (“FICC”) at Goldman Sachs from November 2017 to
March 2019. Before being named COO of FICC, Mr. Gmelich was
Global Head of Credit at Goldman Sachs since March
2012. Additionally, while at Goldman Sachs, he was a member
of the Firm’s Management Committee, Firmwide Risk
Committee, Securities Division Executive Committee, Securities
Division Volcker Committee and the Global Recruiting Council.
Earlier in his career, Mr. Gmelich worked as an associate trader
at Chase and was a vice president at Salomon Brothers. Mr.
Gmelich serves as the Chair of the Villanova University Board of
Trustees, where he also chairs the Investment Committee, and
serves on the Boards of Teddy’s Fund and Trinity Hall. Mr.
Gmelich received a B.S. in Finance from Villanova University, an
M.S. in Accounting/Taxation from the University of Southern
California and an M.B.A. in Finance from Columbia University.

Mr. Gmelich brings to the Board a deep knowledge of fixed
income market structure and valuable experience in electronic
trading. Mr. Gmelich also provides key insight into the
perspectives of our dealer customer base.

Richard G. Ketchum is retired. Mr. Ketchum was Chief Executive
Officer of the Financial Industry Regulatory Authority, Inc.
(“FINRA”) from March 2009 to July 2016 and served as Chairman
of FINRA’s Board of Governors from March 2009 to August
2016. Prior to joining FINRA, Mr. Ketchum held a range of
senior regulatory positions in the financial industry over twenty
years, including as Chief Executive Officer of NYSE Regulation,
Inc., President of the NASDAQ OMX Group Inc., a predecessor of
Nasdaq, Inc., President and Chief Operating Officer of the
National Association of Securities Dealers Inc., a predecessor of
FINRA, and Director of the Division of Market Regulation at the
SEC. Mr. Ketchum was also the General Counsel of the
Corporate and Investment Bank of Citigroup Inc. Mr. Ketchum
is on the Board of Directors of GSS, a subsidiary of BNY
Mellon. He previously served as Non-Executive Chairman of the
Board of Directors of Sculptor Capital Management, Inc. Mr.
Ketchum received a B.A. from Tufts University and a J.D. from
New York University School of Law.

Mr. Ketchum brings to the Board substantial regulatory
experience in the securities industry and deep knowledge of the
legal and compliance issues facing companies in the financial
services industry.

2021 Proxy Statement

9

PROPOSAL 1 — ELECTION OF DIRECTORS

Emily H. Portney

Richard L. Prager

Age: 49
Director since: October 2017
Board Committees:
(cid:220) Risk

Age: 61
Director since: July 2019
Board Committees:
(cid:220) Compensation and Talent
(cid:220) Risk

Qualifications and Career Highlights:

Qualifications and Career Highlights:

Emily H. Portney has been Chief Financial Officer of BNY Mellon
since July 2020. In this role, she is responsible for global financial
strategy and finance functions, including controllership, business
CFO teams, treasury, capital management, tax, corporate
development, investor relations, procurement and real estate.
Prior to this role, Ms. Portney was Head of Asset Servicing,
Americas for BNY Mellon from October 2018 to July 2020. In
that role, she oversaw the business unit that provides investment
administration, and operational and technology solutions to
alternative investment managers, asset managers, asset owners,
insurance companies, banks and broker-dealers. Ms. Portney
was Chief Financial Officer of Barclays International from
September 2016 to September 2018, where she helped to
establish the non-ring-fenced bank, and led a global
organization spanning the Corporate and Investment Bank, the
Private Bank, and the Cards and Payments businesses. From
April 2016 to August 2016, she served as North America Chief
Financial Officer for Visa, Inc. Prior to that, from June 1993 to
January 2016, Ms. Portney worked at JPMorgan Chase & Co.,
serving in various senior roles including Global Head of Clearing,
Collateral Management, and Execution; Chief Financial Officer of
Equities and Prime Services; and Chief Operating Officer of
Futures and Options. Ms. Portney previously served on the
Board of Directors of The Depository Trust & Clearing
Corporation (DTCC). Ms. Portney received a B.A. from Duke
University and an M.B.A. from Columbia University.

Ms. Portney brings leadership experience from a number of
financial institutions. Ms. Portney also has in-depth experience
relating to clearing operations and strategies and the
requirements of operating a firm in a highly regulated industry.

Richard L. Prager has been a Senior Advisor at Tresata, a data
analytics firm, since July 2019. From May 2016 to July 2019, Mr.
Prager was a Senior Managing Director of BlackRock and served
on the firm’s Global Executive Committee. In that role, he led the
firm’s global trading, cash management and securities lending
teams and played a leadership role in managing BlackRock’s
global investment platform for both active portfolios and the
iShares ETF business. Mr. Prager joined BlackRock in 2008
during the financial crisis as a Managing Director in their
Financial Market Advisory business where BlackRock assisted the
U.S. Government and many financial firms navigating the crisis.
After BlackRock acquired BGI in 2009, Mr. Prager moved
internally to the investment platform where he initially headed
fixed income trading and soon thereafter, oversaw all asset class
trading. In 2012 he assumed responsibility of the firm’s cash
management and securities lending businesses in addition to
global trading. Before joining BlackRock in 2008, Mr. Prager
worked in various senior roles for Bank of America from 2000 to
2008 including Global Head of Rates, Currencies and
Commodities. He has also held senior roles at GenRe from 1999
to 2000, ING from 1993 to 1999 and Westpac from 1984 to
1993. Mr. Prager received a B.S. from Duke University.

Mr. Prager possesses valuable expertise in the financial markets
and has been an industry leader in the areas of electronic
trading and trading technology. Mr. Prager also brings
significant experience in the areas of global asset management,
risk management and settlements.

10

2021 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS

Director independence and tenure

The Board of Directors has determined that each of our current directors, other than Messrs. McVey, our Chief
Executive Officer, and Concannon, our President and Chief Operating Officer, currently meet the independence
requirements contained in the NASDAQ listing standards and applicable securities rules and regulations. None of our
non-employee directors has a relationship with the Company or its subsidiaries that would interfere with the exercise
of independent judgment in carrying out the responsibilities of a director.

We do not have director age or term limits, as we believe our efforts to regularly refresh the Board with new directors,
as well as natural turnover, have achieved the appropriate balance between maintaining longer-term directors with
deep institutional knowledge and new directors who bring new perspectives and diversity to our Board. Our Board
reviews director tenure every year in connection with its director independence determinations. We plan to continue to
refresh our Board of Directors to ensure that it is composed of high functioning, qualified and diverse members.

Board diversity policy

The Company recognizes and embraces that having a diverse Board enhances both the Board’s effectiveness in
fulfilling its oversight role and the Company’s performance. The Company’s Board Diversity Statement cites diversity at
the Board level as an essential element in the attainment of its strategic objectives and in achieving sustainable and
balanced development. In designing the Board’s composition, diversity is considered from a number of aspects,
including but not limited to gender, age, race, ethnicity, nationality, cultural and educational background, professional
experience, skills, knowledge and length of service. In any formal search for Board candidates, the Nominating and
Corporate Governance Committee includes, and requests that any search firm that it engages include, qualified
candidates with a diversity of race/ethnicity and gender in the initial pool from which the Committee selects director
candidates. The ultimate decision on all Board nominations is based on merit and the contributions that the selected
candidates will bring to the Board, having due regard for the benefits of diversity. See Proposal 1—Election of
Directors—Director Diversity for more information.

How nominees to our Board are selected

Candidates for election to our Board of Directors are nominated by our Nominating and Corporate Governance
Committee and ratified by our full Board of Directors for election by the stockholders. The Nominating and Corporate
Governance Committee operates under a charter, which is available in the Investor Relations — Corporate Governance
section of our corporate website at www.marketaxess.com.

The Nominating and Corporate Governance Committee will give due consideration to candidates recommended by
stockholders. Stockholders may recommend candidates for the Nominating and Corporate Governance Committee’s
consideration by submitting such recommendations directly to the Nominating and Corporate Governance Committee
as described below under Communicating with our Board members. In making recommendations, stockholders should
be mindful of the discussion of minimum qualifications set forth above under Qualifications for director nominees
though meeting such minimum qualification standards does not imply that the Nominating and Corporate Governance
Committee will necessarily nominate the person recommended by a stockholder. The Nominating and Corporate
Governance Committee may also engage outside search firms to assist in identifying or evaluating potential nominees.

2021 Proxy Statement

11

CORPORATE GOVERNANCE AND BOARD MATTERS

Board leadership structure

Our Chief Executive Officer (“CEO”) also serves as the Chairman of the Board (the “Chairman”), and we have a Lead
Independent Director who is responsible, among other things, for consulting with the Chairman regarding the agenda
and meeting schedules for each Board meeting, coordinating the activities of the non-employee directors, including
presiding over the executive sessions of non-employee directors, and serving as a liaison between the Chairman and
the non-employee directors. We believe that this structure is appropriate for the Company because it allows one
person to speak for and lead the Company and the Board, while also providing for effective oversight by an
independent Board through a Lead Independent Director. Our CEO, as the individual with primary responsibility for
managing the Company’s strategic direction and day-to-day operations, is in the best position to provide Board
leadership that is aligned with our stockholders’ interests, as well as the Company’s needs. Our overall corporate
governance policies and practices, combined with the strength of our independent directors, serve to minimize any
potential conflicts that may result from combining the roles of CEO and Chairman.

Mr. Casper has been appointed by our independent directors to serve as our Lead Independent Director. Our
Corporate Governance Guidelines provide that the Chairman of the Nominating and Corporate Governance Committee
shall act as the Lead Independent Director, unless otherwise determined by a majority vote of the independent
directors of the Board.

The Board has established other structural safeguards that serve to preserve the Board’s independent oversight of
management. The Board is comprised almost entirely of independent directors who are highly qualified and
experienced, and who exercise a strong, independent oversight function. The Board’s Audit Committee, Compensation
and Talent Committee, Nominating and Corporate Governance Committee, Risk Committee and Finance Committee
are comprised entirely of, and are chaired by, independent directors. Independent oversight of our CEO’s performance
is provided through a number of Board and committee processes and procedures, including regular executive sessions
of non-employee directors and annual evaluations of our CEO’s performance against pre-determined goals. The Board
believes that these safeguards preserve the Board’s independent oversight of management and provide a balance
between the authority of those who oversee the Company and those who manage it on a day-to-day basis.

Board committees

Audit Committee

The Audit Committee of the Board of Directors oversees the accounting and financial reporting process of the
Company and the audits of the financial statements of the Company. The Audit Committee is also responsible for
preparing the audit committee report required to be included in this proxy statement, and the Audit Committee is
directly responsible for the appointment, retention, compensation and oversight of the Company’s outside auditor. The
Audit Committee currently consists of Ms. Altobello (Chair), Mr. Cruger, Ms. Gibson and Mr. Gmelich.

The Board of Directors has determined that each member of the Audit Committee is an independent director in
accordance with NASDAQ listing standards and Rule 10A-3 of the Securities Exchange Act of 1934, as amended. The
Board has determined that each member of the Audit Committee is able to read and understand fundamental financial
statements, including the Company’s balance sheet, income statement and cash flow statement, as required by
NASDAQ rules. In addition, the Board has determined that each member of the Audit Committee satisfies the NASDAQ
rule requiring that at least one member of our Board’s Audit Committee have past employment experience in finance
or accounting, requisite professional certification in accounting, or any other comparable experience or background
that results in the member’s financial sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight responsibilities. The Board has also determined that each
member of the Audit Committee is an “audit committee financial expert” as defined by the SEC. For information
regarding the experience and qualifications of our Audit Committee members, see the information in this Proxy
Statement under the section heading Proposal 1 — Election of Directors — Director information.

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2021 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS

Compensation and Talent Committee

The Compensation and Talent Committee of the Board of Directors (the “Compensation Committee”) is responsible for
reviewing and approving, and, as applicable, recommending to the full Board for approval, the compensation of the
CEO and all other officers of the Company, as well as the Company’s compensation philosophy, strategy, program
design and administrative practices. The compensation programs reviewed and approved by the Compensation
Committee consist of all forms of compensation, including salaries, cash incentives, and stock-based awards and
benefits. The Compensation Committee is also responsible for oversight of the Company’s talent management
processes, including talent acquisition, leadership development and succession planning for key roles, reviewing the
Company’s diversity, equity and inclusion programs, and reviewing the Company’s corporate culture. The
Compensation Committee currently consists of Mr. Begleiter (Chair), Ms. Altobello, Mr. Prager and Mr. Steinhardt. The
Board of Directors has determined that each member of the Compensation Committee is an “independent director” in
accordance with NASDAQ listing standards and a “non-employee director” under the applicable SEC rules and
regulations.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee of the Board of Directors identifies individuals qualified to
become Board members and recommends for selection by the Board the director nominees to stand for election at
each annual meeting of the Company’s stockholders. In connection therewith, the Nominating and Corporate
Governance Committee reviews certain policies regarding the nomination of directors and recommends any changes in
such policies to the Board for its approval; identifies individuals qualified to become directors; evaluates and
recommends for the Board’s selection nominees to fill positions on the Board; and recommends changes in the
Company’s corporate governance policies, including the Corporate Governance Guidelines, to the Board for its
approval. The Nominating and Corporate Governance Committee oversees the annual review of the performance of
the Board of Directors, each director and each committee. The Nominating and Corporate Governance Committee also
oversees the Company’s environmental, social and governance strategy and initiatives. See Environmental, Social and
Governance Strategy and Initiatives. The Nominating and Corporate Governance Committee currently consists of Mr.
Cruger (Chair), Mr. Casper and Ms. Chwick. The Board of Directors has determined that each member of the
Nominating and Corporate Governance Committee is an independent director in accordance with NASDAQ listing
standards.

Risk Committee

The Risk Committee assists the Board with its oversight of the Company’s risk management activities, with particular
responsibility for overseeing designated areas of risk that are not the primary responsibility of another committee of
the Board or retained for the Board’s direct oversight. Items delegated to the Risk Committee by the Board include
technology and cyber-security risk, credit risk, clearing risk and regulatory risk. The Risk Committee currently consists
of Ms. Chwick (Chair), Mr. Ketchum, Ms. Portney and Mr. Prager.

Finance Committee

The Finance Committee assists the Board with its oversight of the Company’s global treasury activities, mergers,
acquisitions, divestitures, and strategic investments, capital structure and capital allocation strategy, financing and
liquidity requirements, dividends, stock repurchase authorizations, investor relations activities and insurance and self-
insurance programs. The Finance Committee currently consists of Messrs. Steinhardt (Chair), Begleiter and Cruger. Prior
to April 2021, the Finance Committee was known as the Investment Committee and assisted the Board in monitoring
whether the Company had adopted and adheres to a rational and prudent investment and capital management policy;
whether management’s investment and capital management actions were consistent with attainment of the Company’s
investment policy, financial objectives and business goals; the Company’s compliance with legal and regulatory
requirements pertaining to investment and capital management; the competence, performance and compensation of
the Company’s external money managers; and such other matters as the Board or Investment Committee deemed
appropriate.

2021 Proxy Statement

13

CORPORATE GOVERNANCE AND BOARD MATTERS

Meetings and attendance

The following table sets forth the chairs and membership structure of the Board and each standing Board committee as
of April 28, 2021, and the number of Board and Board committee meetings held during 2020.

BOARD STRUCTURE AND MEETINGS
Chair: McVey
Lead Independent Director: Casper

Members: 13

Meetings: 9

Audit

Chair:
Members:
Meetings(1):

Altobello
4
6

Compensation/Talent
Chair:
Members:
Meetings:

Begleiter
4
7

Nominating/Governance
Chair:
Members:
Meetings:

Cruger
3
6

Risk

Chair:
Members:
Meetings(1):

Chwick
4
9

Finance

Chair:
Members:
Meetings:

Steinhardt
3
3

(1) The Audit and Risk Committees held one joint Audit and Risk Committee meeting in 2020.

The non-management directors met in executive session without management directors or employees at each of the
meetings of the Board during 2020. We expect each director to attend each meeting of the full Board and of the
committees on which he or she serves and to attend the annual meeting of stockholders. All directors attended at least
75% of the meetings of the full Board and the meetings of the committees on which they served, and all directors
attended our 2020 annual meeting of stockholders (not counting Ms. Gibson, who was not a director at the time of our
2020 annual meeting).

Board involvement in risk oversight

The Company’s management is responsible for defining the various risks facing the Company, formulating risk
management policies and procedures, and managing the Company’s risk exposures on a day-to-day basis. The Board’s
responsibility is to monitor the Company’s risk management processes by informing itself of the Company’s material
risks and evaluating whether management has reasonable controls in place to address the material risks. The Board is
not responsible, however, for defining or managing the Company’s various risks.

The Board of Directors monitors management’s responsibility for risk oversight through regular reports from
management to the Risk and Audit Committees and the full Board. Furthermore, the Risk and Audit Committees report
on the matters discussed at the committee level to the full Board. The Risk and Audit Committees and the full Board
focus on the material risks facing the Company, including strategic, operational, market, technology and cyber-security,
credit, liquidity, legal and regulatory risks, to assess whether management has reasonable controls in place to address
these risks. In addition, the Compensation Committee is charged with reviewing and discussing with management
whether the Company’s compensation arrangements are consistent with effective controls and sound risk
management. Risk management is a factor that the Board and the Nominating and Corporate Governance Committee
consider when determining who to nominate for election as a director of the Company and which directors serve on
the Risk and Audit Committees. In addition, the Nominating and Corporate Governance Committee is charged with
overseeing risk related to the Company’s environmental, social and governance strategy and initiatives. The Board
believes this division of responsibilities provides an effective and efficient approach for addressing risk management.

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2021 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS

The Company’s Global Management Team assists management’s efforts to assess and manage risk. The Global
Management Team is chaired by the CEO and is comprised of the Company’s senior managers with global oversight.
The Global Management Team assesses the Company’s business strategies and plans and ensures that appropriate
policies and procedures are in place for identifying, evaluating, monitoring, managing and measuring significant risks.
The Chief Risk Officer regularly prepares updates and reports for the Global Management Team, Risk Committee, Audit
Committee and the Board of Directors.

We have assembled a cross-functional team, which includes several of our executive officers, for continuously
monitoring the impact of the Pandemic on our employee base and business operations. Throughout the Pandemic, the
Board has overseen this risk management initiative, working closely with management to maintain information flow
and timely review of issues arising from the Pandemic. For information on the effect of the Pandemic on our business,
see Management’s Discussion and Analysis—Critical Factors Affecting our Industry and our Company—Economic,
Political and Market Factors in the Company’s Annual Report on Form 10-K.

Board evaluations, succession planning and talent management

Each year, the members of the Board of Directors conduct a confidential written assessment of the Board’s
performance that is reviewed and summarized by the Company’s Lead Independent Director and the Chair of the
Nominating and Corporate Governance Committee. As part of the evaluation process, the Board reviews its overall
composition, including director tenure, board leadership structure, diversity and individual skill sets, to ensure it serves
the best interests of stockholders and positions the Company for future success. Each Board committee also conducts
an annual written self-assessment of its performance during the prior year. The results of the assessments are then
summarized and communicated back to the appropriate committee chairpersons and our Lead Independent Director.
After the evaluations, the Board and management work to improve upon any issues or focus points disclosed during
the evaluation process. As part of the evaluation process, each committee reviews its charter annually.

The Board is committed to positioning MarketAxess for further growth through ongoing talent management,
succession planning and the deepening of our leadership bench. Management facilitates a formal talent management
and leadership development review on an annual basis for the Board. The review is focused on both immediate,
short-term coverage plans for all executives in the event of an unforeseen situation, as well as longer-term, strategic
succession planning. A critical element of the review is an evaluation of the Company’s formal leadership development
and talent acquisition initiatives in order to ensure that our leadership team has the skills, capabilities and experience
to effectively lead our existing, and future, global business. The review also focuses on the retention of key managers.
The annual talent management and leadership development review is supplemented by an additional year-end review
by the Board of the individual performance and year-end compensation proposals for the executive management team
and other key staff.

The Board values diversity among the management team and strives to increase the diversity of the executive
management team, as well as the management teams reporting to them. The Board considers formal and informal
In addition, in any external searches
initiatives to promote diversity as part of their annual talent management review.
for executive management team candidates in which the Company considers candidates that are not employees of the
Company, the Company will request that any search firm that it engages include qualified candidates with a diversity of
race/ethnicity and gender in the initial pool from which the Company selects such executive management team
candidates.

The Board has formal exposure to the executive team at Board meetings, as well as at Board committee meetings and
other discussions. There are other opportunities for more informal interaction with employees across the organization
throughout the year through various events and collaborative experiences.

2021 Proxy Statement

15

CORPORATE GOVERNANCE AND BOARD MATTERS

Code of Conduct, Code of Ethics and other governance documents

The Board has adopted a Code of Conduct that applies to all officers, directors and employees, and a Code of Ethics for
the CEO and Senior Financial Officers, which includes Mr. DeLise, our Chief Financial Officer. Both the Code of Conduct
and the Code of Ethics for the CEO and Senior Financial Officers can be accessed in the Investor Relations — Corporate
Governance section of our website at www.marketaxess.com. We intend to satisfy any disclosure obligations regarding
waivers of or amendments to our Code of Conduct and Code of Ethics for the CEO and Senior Financial Officers by
posting such information on our website at www.marketaxess.com.

You may also obtain a copy of these documents without charge by writing to MarketAxess Holdings Inc., 55 Hudson
Yards, 15th Floor, New York, New York 10001, Attention: Investor Relations.

Copies of the charters of our Board’s Audit Committee, Compensation Committee, Finance Committee, Risk Committee
and Nominating and Corporate Governance Committee, as well as a copy of the Company’s Corporate Governance
Guidelines, can be accessed in the Investor Relations — Corporate Governance section of our website.

Communicating with our Board members

Although our Board of Directors has not adopted a formal process for stockholder communications with the Board, we
make every effort to ensure that the views of stockholders are heard by the Board or by individual directors, as
applicable, and we believe that this has been an effective process to date. Stockholders may communicate with the
Board by sending a letter to the MarketAxess Holdings Inc. Board of Directors, c/o General Counsel, 55 Hudson Yards,
15th Floor, New York, New York 10001. The General Counsel will review the correspondence and forward it to our CEO
and Chairman of the Board and the Lead Independent Director, or to any individual director or directors to whom the
communication is directed, as appropriate. Notwithstanding the above, the General Counsel has the authority to
discard or disregard any communication that is unduly hostile, threatening, illegal or otherwise inappropriate or to take
any other appropriate actions with respect to such communications.

In addition, any person, whether or not an employee, who has a concern regarding the conduct of the Company or our
employees, including with respect to our accounting, internal accounting controls or auditing issues, may, in a
confidential or anonymous manner, communicate that concern in writing by addressing a letter to the Chairman of the
Audit Committee, c/o Corporate Secretary, at our corporate headquarters address, which is 55 Hudson Yards, 15 th
Floor, New York, New York 10001, or electronically, at our corporate website, www.marketaxess.com under the heading
Investor Relations — Corporate Governance, by clicking the Confidential Ethics Web Form link.

Director compensation

Our Compensation Committee has retained the services of Grahall LLC (“Grahall”) as its independent compensation
consultant for purposes of advising on non-employee director compensation. Grahall reports directly to the
Compensation Committee and conducts an annual review of director compensation levels and a bi-annual review of
director pay structure and practices, and in each event, shares the results of those reviews with the Compensation
Committee. The Compensation Committee then submits any proposed changes in pay level or program structure of
our non-employee director compensation to the full Board for its consideration, and if appropriate, approval.

Grahall reviews and recommends compensation structure and adjustments based on the board compensation of the
following:

• Proxy peer group (see Compensation Discussion and Analysis – How We Determine Pay Levels – Peer Group);

•

•

16

ISS peer group (updated by ISS annually); and

Industry data sources, including the National Association of Corporate Directors.

2021 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS

All directors, other than Mr. McVey and Mr. Concannon, are regarded as non-employee directors. Mr. McVey and Mr.
Concannon receive no additional compensation for service as a director.

In 2020, the Board member equity retainer was increased from $115,000 to $120,000 per year, as recommended by
Grahall. This change was effective June 10, 2020. The change was made to better align director compensation with the
above-referenced market data provided by Grahall. The director pay recommendations resulted in pay levels between
the projected medians of our proxy peers and ISS’s peer group.

A summary of the structure of our director pay program that is in effect as of June 2020 is as follows:

Director Compensation Pay Structure - Effective June 2020

Annual Retainer – All
Audit Committee
Compensation / Talent Committee
Governance / Nominating Committee
Finance Committee (1)
Risk Committee
Lead Independent Director (2)

Cash Board
Retainer ($)
85,000
—
—
—
—
—
—

Cash Chair
Retainer ($)
—
25,000
20,000
15,000
10,000
20,000
22,500

Cash
Committee
Retainer ($)
—
12,500
7,500
7,500
2,500
7,500
—

Restricted
Stock ($)
120,000
—
—
—
—
—
22,500

(1)

(2)

Prior to April 2021, and for the entirety of the 2020 fiscal year, the Finance Committee was known as the Investment Committee.

The Lead Independent Director can elect to receive his retainer in cash or in a combination of cash and equity.

In June 2020, we granted 238 shares of restricted stock to each non-employee director except for Ms. Gibson, who was
granted a prorated amount of 209 shares on August 1, 2020 after joining the Board in July 2020. Mr. Casper, as Lead
Director, received 45 additional shares equating to half of his applicable retainer. All shares are scheduled to vest on
May 31, 2021. The number of shares of restricted stock granted was determined on the grant date by dividing the
equity grant value of $120,000 by the average of the closing price of our Common Stock for the ten trading days up to
and including the grant date. We expect to continue to compensate our non-employee directors with a combination of
cash and equity awards. All equity awards to non-employee directors are made under the Company’s 2020 Equity
Incentive Plan.

2021 Proxy Statement

17

CORPORATE GOVERNANCE AND BOARD MATTERS

Below is a summary of the amount and form of actual compensation received by each non-employee director in 2020:

Director Compensation for Fiscal 2020

Name
Stephen P. Casper, Lead Independent Director
Nancy Altobello
Steven L. Begleiter
Jane Chwick
William F. Cruger
Kourtney Gibson
Justin Gmelich
Richard Ketchum
Emily Portney
Richard Prager
John Steinhardt

Fees Earned
or Paid in
Cash (1)

Stock
Awards
($)(2)(4)

All Other
Compensation
($)(3)

Total($)

116,250
117,077
106,794
112,500
115,000
44,819
97,500
92,500
103,299
100,000
103,206

136,423
114,730
114,730
114,730
114,730
107,990
114,730
114,730
114,730
114,730
114,730

422
408
360
360
360
—
356
360
360
320
360

253,095
232,215
221,884
227,590
230,090
152,809
212,586
207,590
218,389
215,050
218,296

(1)

(2)

The amounts represent Board, Committee, Committee Chair and Lead Independent Director retainers earned in 2020. For Ms. Gibson, the
amount represents Board and Committee retainers earned for the portion of the year that she served on the Board.

The amounts represent the aggregate grant date fair value of stock awards granted by the Company in 2020, computed in accordance with
FASB ASC Topic 718. For further information on how we account for stock-based compensation, see Note 11 to the consolidated financial
statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Ms. Gibson received a prorated
number of shares (209 shares) based on her length of service in 2020.

(3) Represents accrued dividends paid on restricted stock.

(4)

The table below sets forth information regarding the aggregate number of stock awards outstanding at the end of fiscal year 2020 for each
non-employee director, including unvested stock awards granted in fiscal year 2020 and, in relation to Messrs. Begleiter and Cruger and Ms.
Chwick, RSUs for which the director previously elected to defer receipt. There are no stock option awards granted in fiscal year 2020 that were
outstanding at fiscal year end.

Equity Awards Outstanding

Stephen P. Casper, Lead Independent Director
Nancy Altobello
Steven L. Begleiter
Jane Chwick
William F. Cruger
Kourtney Gibson
Justin Gmelich
Richard Ketchum
Emily Portney
Richard Prager
John Steinhardt

Aggregate Number
of Stock Awards
Outstanding at
Fiscal Year End (#)
283
238
756
724
1,210
209
238
238
238
238
238

18

2021 Proxy Statement

CORPORATE GOVERNANCE AND BOARD MATTERS

Share Ownership & Holding Guidelines

To keep the interests of non-employee directors and stockholders aligned, the Board of Directors has adopted stock
ownership guidelines for our non-employee directors. Non-employee directors are required to hold not less than the
number of shares of Common Stock equal in value to five times the annual base cash retainer payable to a director, or
$425,000. As of April 2021, the holding requirement was equal to 834 shares, calculated using a price of $509.46 per
share, which was the average of the daily closing price of our Common Stock for the twelve-month period ended on
March 31, 2021. The holding requirement must be achieved within five years after the director has become a Board
member and maintained throughout the non-employee director’s service with the Company. All shares of Common
Stock beneficially owned by the director, including shares purchased and held personally, vested and unvested
restricted shares, vested and unvested restricted stock units, settled performance shares, and shares deferred under a
non-qualified deferred compensation arrangement, count toward the minimum ownership requirement. Vested and
unvested stock options and unearned performance shares are excluded.

In addition to the ownership guidelines, all non-employee directors must hold all shares granted for service for a
minimum of five years from the date of grant. Directors are also required, for a period of six months following his or
her departure from the Board, to comply with the Company’s Insider Trading Policy that, among other things, prohibits
trading in the Company’s securities during specified blackout periods.

All of our non-employee directors have either achieved the designated level of ownership or are in the five-year period
following their appointment or election to the Board during which they are expected to achieve compliance:

Directors' Stock Ownership

Name
Stephen P. Casper, Lead Independent
Director
Nancy Altobello
Steven L. Begleiter
Jane Chwick
William F. Cruger
Kourtney Gibson
Justin G. Gmelich
Richard Ketchum
Emily Portney
Richard Prager
John Steinhardt

Elected

Multiple of Cash Retainer
Requirement Current Holdings

April 2004
April 2019
April 2012
October 2013
November 2013
July 2020
October 2019
April 2017
October 2017
July 2019
April 2000

5x
5x
5x
5x
5x
5x
5x
5x
5x
5x
5x

320x
4x
52x
35x
35x
1x
3x
11x
9x
9x
128x

Our equity plan provides for the accrual of dividends (or dividend equivalents) on unvested shares. However,
dividends are not paid and are subject to forfeiture until all restrictions on the shares have lapsed.

We do not provide any retirement benefits or other perquisites to our non-employee directors.

Certain relationships and related party transactions

Review and approval of related party transactions

Our related parties include our directors, director nominees, executive officers, holders of more than five percent of the
outstanding shares of our Common Stock and the foregoing persons’ immediate family members. We review
relationships and transactions in which the Company and our related parties are or will be participants to determine

2021 Proxy Statement

19

CORPORATE GOVERNANCE AND BOARD MATTERS

whether such related persons have a direct or indirect material interest. As required under SEC rules, transactions that
are determined to be directly or indirectly material to a related party are disclosed in this Proxy Statement. In addition,
the Audit Committee reviews and, if appropriate, approves and ratifies any related party transaction that is required to
be disclosed.

Though not considered related party transactions that are required to be disclosed under SEC rules, each of the 5%
stockholders that are listed under Security Ownership of Certain Beneficial Owners and Management or their affiliated
entities is a party to a user agreement or dealer agreement that governs their access to, and activity on, our electronic
trading platforms. These agreements were each entered into in the ordinary course of business and, subject to our
usual trade terms, provide for the fees and expenses to be paid by such entities for the use of the platform.

20

2021 Proxy Statement

ENVIRONMENTAL, SOCIAL AND GOVERNANCE
STRATEGY AND INITIATIVES

MarketAxess is committed to integrating sustainability into our everyday actions to help create long-term value for our
stockholders and the communities in which we operate. We aim to operate the company responsibly while managing
risks and using our resources wisely. The Company’s environmental, social and governance (“ESG”) strategy and
initiatives are overseen by the Board’s Nominating and Corporate Governance Committee. We have also established
an ESG Working Group comprised of employees from across the Company, including members of senior management.
As further described in the Company’s 2020 ESG Report, MarketAxess demonstrated its ESG commitment in 2020 by
practicing sustainability, advocating volunteerism and philanthropy and actively partnering with our employees, clients
and others on environmental, social and governance initiatives. Our 2020 ESG Report can be accessed in the Investor
Relations — Corporate Governance section of our website.

We believe that our growing role in making the global credit markets work better brings with it the obligation to be a
responsible corporate citizen. MarketAxess’ vision of corporate citizenship has four pillars:

• An enduring commitment to high standards of governance. We believe the touchstones of responsible

leadership are integrity and fairness. In 2020, we continued to strengthen our Board of Directors with new members
who value the interests of all our stakeholders – clients, employees, investors and business partners. We benefit
greatly from having board members who bring proven leadership to our ESG efforts.

• Helping communities become more resilient. We expanded our support in 2020 to organizations that are on the
frontline of addressing the impact of the Pandemic, particularly the immediate challenge of food insecurity. To
address community resilience over the long term, we established the MarketAxess Charitable Foundation, whose
mission is to work with organizations that support underserved communities, with an emphasis on youth education,
diversity, equity and inclusion.

• Building a strong, diverse workforce. We believe a strong culture built on accountability and mutual respect has
been a significant factor in our success, and will continue to be even more so in the future. This year’s ESG Report
details the initiatives we have taken to sustain our culture and ensure its continued vitality as we grow. Diversity,
equity and inclusion must remain a priority if we are to continue to be prosperous over the long term, and our
management team is working hard to strengthen this important part of our ESG program.

• Adopting sound sustainability practices across our business operations. We are in the process of improving our
ability to measure our Company’s impact in areas such as climate, waste, and water use. As an initial part of that
effort, we are reporting for 2020 against metrics outlined by the Sustainability Accounting Standards Board (SASB)
for the first time for the following sectors: Security & Commodity Exchanges, Professional & Commercial Services
and Software and IT.

2021 Proxy Statement

21

ENVIRONMENTAL, SOCIAL AND GOVERNANCE STRATEGY AND INITIATIVES

How MarketAxess defines sustainability

We define sustainability as a business’ commitment to advancing economic prosperity while improving the world in
which we operate. Our commitment to sustainability and corporate responsibility is in line with our goal of applying
our ingenuity, innovative technology and electronic network to make global credit markets work better for the people
who depend on them. In pursuing this commitment, we embrace our responsibility as a corporate citizen to ensure
that our global activities positively impact our communities and our environment.

Trading for Trees

Green bonds are fixed income instruments designed to fund projects that have positive environmental and/or climate
benefits. In 2020, $27 billion in corporate and municipal green bond trading volume was executed globally on
MarketAxess, an increase of 42% from 2019. In the U.S., where public data is available, MarketAxess ranks as the largest
corporate and municipal green bond marketplace with an estimated market share of 20.3% in TRACE-reported
corporate and municipal green bond volume.

The second year of our “Trading for Trees” initiative with our partner, One Tree Planted, a 501(c)(3) non-profit that
focuses on global reforestation, proved successful. Our clients’ green bond trading on the MarketAxess platform
resulted in over 130,000 trees being planted across five continents and eight countries, including India, Papua New
Guinea, Canada and New Zealand. In 2020, One Tree Planted created 1,498 jobs and planted over 2 million fruit trees
to support almost 30,000 families in critical regions around the world.

22

2021 Proxy Statement

PROPOSAL 2 — RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

The Audit Committee of our Board has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered
public accounting firm to audit our consolidated financial statements for the year ending December 31, 2021 and to
audit the Company’s internal control over financial reporting as of December 31, 2021, and the Board is asking
stockholders to ratify that selection. PwC has audited our consolidated financial statements each year since our
formation in 2000. The Audit Committee periodically considers whether there should be a rotation of independent
registered public accounting firms and the Audit Committee currently believes that the continued retention of PwC is
in the best interests of the Company and our stockholders. Although current law, rules and regulations, as well as the
charter of the Audit Committee, require our independent registered public accounting firm to be engaged, retained
and supervised by the Audit Committee, the Board considers the selection of our independent registered public
accounting firm to be an important matter of stockholder concern and considers a proposal for stockholders to ratify
such selection to be an important opportunity for stockholders to provide direct feedback to the Board on an
important issue of corporate governance. In the event that stockholders fail to ratify the appointment, the Audit
Committee will reconsider whether or not to retain PwC, but may ultimately determine to retain PwC as our
independent registered public accounting firm. Even if the appointment is ratified, the Audit Committee, in its sole
discretion, may direct the appointment of a different independent registered public accounting firm at any time during
the year if the Audit Committee determines that such a change would be in the best interests of the Company and its
stockholders.

In 2011, the Company, in the ordinary course of its business, entered into a bulk data agreement with PwC for the
purpose of supporting valuation conclusions reached by PwC in the normal course of PwC’s audit and other work for
its clients, which has been amended from time to time. Pursuant to the agreement, the Company provides bond
pricing data to PwC on terms consistent with the terms of similar data sales agreements entered into by the Company.
The aggregate annual revenue to the Company from the data agreement is $295,000. On an annual basis, the Audit
Committee evaluates the effect of such agreement on the independence of PwC and has concurred with the opinion of
the Company’s management and PwC that the arrangement constitutes an “arm’s-length” transaction that would not
affect PwC’s independence.

Representatives of PwC will be present at our Annual Meeting, will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions from stockholders.

Your vote

Unless proxy cards are otherwise marked, the persons named as proxies will vote FOR the ratification of PwC as the
Company’s independent registered public accounting firm for the year ending December 31, 2021. Approval of this
proposal requires the affirmative vote of the holders of a majority of the shares present in person or represented by
proxy and entitled to vote on the proposal.

BOARD RECOMMENDATION
The board unanimously recommends that you vote “FOR” ratification of PwC as the
Company’s independent registered public accounting firm for the year ending
December 31, 2021.

2021 Proxy Statement

23

PROPOSAL 2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit and other fees

The aggregate fees billed by our independent registered public accounting firm for professional services rendered in
connection with the audit of our annual financial statements set forth in our Annual Report on Form 10-K for the years
ended December 31, 2020 and 2019 and the audit of our broker-dealer subsidiaries’ annual financial statements, as
well as fees paid to PwC for tax compliance and planning, if any, and other services, are set forth below.

Except as set forth in the following sentence, the Audit Committee, or a designated member thereof, pre-approves
100% of all audit, audit-related, tax and other services rendered by PwC to the Company or its subsidiaries. The Audit
Committee has authorized the CEO and the Chief Financial Officer to purchase permitted non-audit services rendered
by PwC to the Company or its subsidiaries up to, and including, a limit of $10,000 per service and an annual aggregate
limit of $20,000 for all such services.

Immediately following the completion of each fiscal year, the Company’s independent registered public accounting
firm submits to the Audit Committee (and the Audit Committee requests from the independent registered public
accounting firm), as soon as possible, the written disclosures and the letter required by the applicable requirements of
the Public Company Accounting Oversight Board (“PCAOB”) regarding the independent registered public accounting
firm’s communications with the Audit Committee concerning independence.

Immediately following the completion of each fiscal year, the independent registered public accounting firm also
submits to the Audit Committee (and the Audit Committee requests from the independent registered public
accounting firm), a formal written statement of the fees billed by the independent registered public accounting firm to
the Company in each of the last two fiscal years for each of the following categories of services rendered by the
independent registered public accounting firm: (i) the audit of the Company’s annual financial statements and the
reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q or services that are
normally provided by the independent registered public accounting firm in connection with statutory and regulatory
filings or engagements; (ii) assurance and related services not included in clause (i) that are reasonably related to the
performance of the audit or review of the Company’s financial statements, in the aggregate and by each service; (iii) tax
compliance, tax advice and tax planning services, in the aggregate and by each service; and (iv) all other products and
services rendered by the independent registered public accounting firm, in the aggregate and by each service.

Set forth below is information regarding fees paid by the Company to PwC during the fiscal years ended December 31,
2020 and 2019.

Fee Category
Audit Fees(1)
All Other Fees(2)

Total

2020
2,765,478 $
4,460
2,769,938 $

2019
2,261,404
4,838
2,266,242

$

$

(1)

The aggregate fees incurred include amounts for the audit of the Company’s consolidated financial statements (including fees for the audit of
our internal controls over financial reporting) and the audit of our broker-dealer subsidiaries’ annual financial statements.

(2) Other Fees are comprised of annual subscription fees for accounting related research and service fees related to XBRL conversion services.

24

2021 Proxy Statement

REPORT OF THE AUDIT COMMITTEE OF THE BOARD
OF DIRECTORS

The Audit Committee currently consists of Ms. Altobello (Chair), Mr. Cruger, Ms. Gibson and Mr. Gmelich. Each member of the Audit
Committee is independent, as independence is defined for purposes of Audit Committee membership by the listing standards of
NASDAQ and the applicable rules and regulations of the SEC.

The Audit Committee appoints our independent registered public accounting firm, reviews the plan for and the results of the
independent audit, approves the fees of our independent registered public accounting firm, reviews with management and the
independent registered public accounting firm our quarterly and annual financial statements and our internal accounting, financial
and disclosure controls, reviews and approves transactions between the Company and its officers, directors and affiliates, and
performs other duties and responsibilities as set forth in a charter approved by the Board of Directors.

During fiscal year 2020, the Audit Committee met six times. The Company’s senior financial management and independent
registered public accounting firm were in attendance at such meetings. Following each quarterly meeting during 2020, the Audit
Committee conducted a private session with the independent registered public accounting firm, without the presence of
management. The Audit Committee also had one joint meeting with the Risk Committee during 2020.

The management of the Company is responsible for the preparation and integrity of the financial reporting information and related
systems of internal controls. The Audit Committee, in carrying out its role, relies on the Company’s senior management, including
particularly its senior financial management, to prepare financial statements with integrity and objectivity and in accordance with
generally accepted accounting principles, and relies upon the Company’s independent registered public accounting firm to review or
audit, as applicable, such financial statements in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (“PCAOB”).

We have reviewed and discussed with senior management the Company’s audited financial statements for the year ended
December 31, 2020 which are included in the Company’s 2020 Annual Report on Form 10-K. Management has confirmed to us that
such financial statements (i) have been prepared with integrity and objectivity and are the responsibility of management and
(ii) have been prepared in conformity with generally accepted accounting principles.

In discharging our oversight responsibility as to the audit process, we have discussed with PwC, the Company’s independent
registered public accounting firm, the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.

We have received the written disclosures and the letter from PwC concerning their communications with us concerning
independence, as required by applicable requirements of the PCAOB, and we have discussed with PwC their independence.

Based upon the foregoing review and discussions with our independent registered public accounting firm and senior management
of the Company, we recommended to our Board that the financial statements prepared by the Company’s management and audited
by its independent registered public accounting firm be included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2020, that was filed with the SEC.

Submitted by the Audit Committee of the
Board of Directors:

Nancy Altobello — Chair
William F. Cruger
Kourtney Gibson
Justin G. Gmelich

2021 Proxy Statement

25

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock
as of April 12, 2021 by (i) each person or group of persons known by us to beneficially own more than five percent of
our Common Stock, (ii) each of our named executive officers, (iii) each of our directors and nominees for director and
(iv) all of our directors and executive officers as a group.

The following table gives effect to the shares of Common Stock issuable within 60 days of April 12, 2021 upon the
exercise of all options and other rights beneficially owned by the indicated stockholders on that date. Beneficial
ownership is determined in accordance with Rule 13d-3 promulgated under Section 13 of the Securities Exchange Act
of 1934, as amended, and includes voting and investment power with respect to shares. The percentage of beneficial
ownership is based on 37,607,108 shares of Common Stock outstanding at the close of business on April 12, 2021.
Except as otherwise noted below, each person or entity named in the following table has sole voting and investment
power with respect to all shares of our Common Stock that he, she or it beneficially owns.

Unless otherwise indicated, the address of each beneficial owner listed below is c/o MarketAxess Holdings Inc., 55
Hudson Yards, 15th Floor, New York, New York 10001.

5% Stockholders

The Vanguard Group (1)
BlackRock, Inc. (2)

Named Executive Officers and Directors

Richard M. McVey (3)
Nancy Altobello (4)
Steven Begleiter (5)
Stephen P. Casper (6)
Jane Chwick (7)
Christopher Concannon (8)
William F. Cruger (9)
Kourtney Gibson (10)
Justin Gmelich (11)
Richard G. Ketchum (12)
Emily H. Portney (13)
Richard Prager (14)
John Steinhardt (15)
Antonio L. DeLise (16)
Kevin McPherson (17)
Scott Pintoff (18)
Christophe Roupie (19)
Nicholas Themelis (20)
All Executive Officers and Directors as a Group (18 persons) (21)

Less than 1%.

Number of
Shares
Beneficially
Owned

Percentage
of Stock
Owned

4,165,820
3,435,510

11.08%
9.14%

545,992
606
8,223
53,408
5,877
27,454
4,892
209
446
1,760
1,497
1,526
21,313
17,041
91,265
4,979
8,331
28,362
823,181

1.45%
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
2.19%

*

(1)

(2)

26

Information regarding the number of shares beneficially owned by The Vanguard Group was obtained from a Schedule 13G filed by The Vanguard Group
with the SEC on February 10, 2021. The principal business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.

Information regarding the number of shares beneficially owned by BlackRock, Inc. was obtained from a Schedule 13G filed by Bl ackRock, Inc. with the SEC
on January 29, 2021. The principal business address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055.

2021 Proxy Statement

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Consists of (i) 431,930 shares of Common Stock owned individually; (ii) 2,000 shares of Common Stock owned by immediate family members; (iii) 41,314
shares of unvested restricted stock; and (iv) 70,748 shares of Common Stock issuable pursuant to stock options granted to Mr. McVey that are or become
exercisable within 60 days. Does not include (i) 160,877 shares of Common Stock issuable pursuant to stock options that are not exercisable within 60
days; (ii) 5,735 unvested restricted stock units; (iii) 285,452 deferred restricted stock units or (iv) 7,930 performance shares.

Consists of (i) 368 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days.

Consists of (i) 7,985 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days. Does not include
518 deferred restricted stock units.

Consists of (i) 8,317 shares of Common Stock owned individually; (ii) 44,808 shares held indirectly in a trust for which Mr. Casper’s spouse is the trustee;
and (iii) 283 unvested restricted stock units that vest within 60 days.

Consists of (i) 5,153 shares of Common Stock owned individually; (ii) 238 unvested restricted stock units that vest within 60 days; and (iii) 486 deferred
restricted stock units that will deliver within 60 days.

Consists of (i) 8,540 shares of Common Stock owned individually; and (ii) 18,914 shares of unvested restricted stock. Does not include (i) 81,226 shares of
Common Stock issuable pursuant to stock options that are not exercisable within 60 days; (ii) 15,522 unvested restricted stock units or (iii) 5,343
performance shares.

Consists of (i) 4,654 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days. Does not include
972 deferred restricted stock units.

(10) Consists of 209 unvested restricted stock units that vest within 60 days.

(11) Consists of (i) 208 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days.

(12) Consists of (i) 1,522 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days.

(13) Consists of (i) 1,259 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days.

(14) Consists of (i) 1,288 shares of Common Stock beneficially owned by Mr. Prager by trust; and (ii) 238 unvested restricted stock units that vest within 60

days.

(15) Consists of (i) 21,075 shares of Common Stock owned individually; and (ii) 238 unvested restricted stock units that vest within 60 days.

(16) Consists of (i) 7,053 shares of Common Stock; (ii) 381 shares of unvested restricted stock; and (iii) 9,607 shares of Common Stock issuable pursuant to

stock options that are or become exercisable within 60 days. Does not include (i) 2,025 unvested restricted stock units; (ii) 18,172 deferred restricted stock
units or (iii) 1,851 performance shares.

(17) Consists of (i) 68,534 shares of Common Stock; (ii) 343 shares of unvested restricted stock; and (iii) 22,388 shares of Common Stock issuable pursuant to

stock options that are or become exercisable within 60 days. Does not include (i) 2,211 unvested restricted stock units or (ii) 2,103 performance shares.

(18) Consists of (i) 4,661 shares of Common Stock; and (ii) 318 shares of unvested restricted stock. Does not include (i) 1,494 unvested restricted stock units or

(ii) 1,346 performance shares.

(19) Consists of (i) 4,601 shares of Common Stock; and (ii) 3,730 shares of unvested restricted stock. Does not include 885 performance shares.

(20) Consists of (i) 14,513 shares of Common Stock owned in joint tenancy with his spouse; (ii) 416 shares of unvested restricted stock; and (iii) 13,433 shares
of Common Stock issuable pursuant to stock options that are or become exercisable within 60 days. Does not include (i) 2,658 unvested restricted stock
units or (ii) 2,515 performance shares.

(21) Consists of (i) 638,469 shares of Common Stock; (ii) 65,416 shares of unvested restricted stock; (iii) 3,120 shares of restricted stock units that vest or

deliver within 60 days; and (iv) 116,176 shares of Common Stock issuable pursuant to stock options that are or become exercisable within 60 days. Does
not include (i) 242,103 shares of Common Stock issuable pursuant to stock options that are not exercisable within 60 days; (ii) 29,645 restricted stock
units that are unvested or (iii) 21,973 performance shares.

2021 Proxy Statement

27

EXECUTIVE OFFICERS

Set forth below is information concerning our executive officers as of the date hereof.

Name
Richard M. McVey
Christopher R. Concannon
Antonio L. DeLise
Kevin McPherson
Scott Pintoff
Christophe Roupie
Nicholas Themelis

Age
61
53
60
50
50
55
57

Position
Chief Executive Officer and Chairman of the Board of Directors
President and Chief Operating Officer
Chief Financial Officer
Global Head of Sales
General Counsel and Corporate Secretary
Head of EMEA and APAC
Chief Information Officer

Richard M. McVey has been Chief Executive Officer and Chairman of our Board of Directors since our inception. See
Proposal 1 — Election of Directors — Director information for a discussion of Mr. McVey’s business experience.

Christopher R. Concannon has been President and Chief Operating Officer, and a member of the Board of Directors,
since January 2019. See Proposal 1 — Election of Directors — Director information for a discussion of Mr. Concannon’s
business experience.

Antonio L. DeLise has been Chief Financial Officer since March 2010. From July 2006 until March 2010, Mr. DeLise was
the Company’s Head of Finance and Accounting, where he was responsible for financial regulatory compliance and
oversight of all controllership and accounting functions. Prior to joining us, Mr. DeLise was Chief Financial Officer of
PubliCard, Inc., a designer of smart card solutions for educational and corporate sites, from April 1995 to July 2006.
Mr. DeLise also served as Chief Executive Officer of PubliCard from August 2002 to July 2006, President of PubliCard
from February 2002 to July 2006, and a director of PubliCard from July 2001 to July 2006. Prior to PubliCard, Mr. DeLise
was employed as a senior manager with the firm of Arthur Andersen LLP from July 1983 through March 1995. Mr.
DeLise received a B.S. in accounting from Fairfield University, from which he graduated magna cum laude.

Kevin McPherson has been Global Head of Sales since June 2014. From January 2008 to June 2014, Mr. McPherson was
the Company’s U.S. Sales Manager. From March 1999 to December 2007, Mr. McPherson was a Sales Representative
for the Company, running the Company’s West Coast sales and distribution effort. From June 1996 to March 1999, Mr.
McPherson worked within the Emerging Markets Fixed Income Group of Scudder Stevens & Clark, where he traded
emerging market fixed income securities and supported portfolio administration. Mr. McPherson began his career at
State Street Bank & Trust, where he worked from June 1994 to June 1996 as an accountant and auditor for fixed
income and equities portfolios. Mr. McPherson received a B.A. in business administration from the University of Maine.

Scott Pintoff has been General Counsel and Corporate Secretary since February 2014. Prior to joining us, Mr. Pintoff
was General Counsel and Corporate Secretary at GFI Group, a position he held since 2003. At GFI, Mr. Pintoff was
responsible for all legal, regulatory and compliance matters, including their IPO, all acquisitions and implementation of
the Dodd-Frank Act. Mr. Pintoff joined GFI Group in 2000 as Associate General Counsel. Prior to GFI, Mr. Pintoff was at
Dewey Ballantine LLP from 1996 to 2000 within the mergers and acquisitions group. Mr. Pintoff received a B.A.
(Honors) from Wesleyan University and a J.D. from the New York University School of Law.

28

2021 Proxy Statement

EXECUTIVE OFFICERS

Christophe Roupie has been Head of EMEA and APAC since May 2020. From March 2017 through May 2020, Mr. Roupie
was the Company’s Head of Europe and Asia. Prior to joining us, from October 2015 until October 2016, Mr. Roupie
was the CEO of HiRock AG, a family office in Switzerland. From May 2005 to October 2015, Mr. Roupie was Global
Head of Trading and Securities Financing at AXA Investment Managers. While at AXA Investment Managers, he
managed trading teams in Paris, London, Hong Kong and Greenwich, Connecticut across equities, fixed income, FX,
derivatives, repo and stock lending. Prior to this, Mr. Roupie was the Global Head of Fixed Income Trading at IXIS AM
(now Natixis Asset Management) from October 2000 to March 2005.

Nicholas Themelis has been Chief Information Officer since March 2005. From June 2004 through February 2005,
Mr. Themelis was the Company’s Head of Technology and Product Delivery. From March 2004 to June 2004,
Mr. Themelis was the Company’s Head of Product Delivery. Prior to joining us, Mr. Themelis was a Principal at
Promontory Group, an investment and advisory firm focused on the financial services sector, from November 2003 to
March 2004. From March 2001 to August 2003, Mr. Themelis was a Managing Director, Chief Information Officer for
North America and Global Head of Fixed-Income Technology at Barclays Capital. From March 2000 to March 2001,
Mr. Themelis was the Chief Technology Officer and a member of the Board of Directors of AuthentiDate Holdings
Corp., a start-up focused on developing leading-edge content and encryption technology. Prior to his tenure at
AuthentiDate, Mr. Themelis spent nine years with Lehman Brothers, ultimately as Senior Vice President and Global
Head of the E-Commerce Technology Group.

2021 Proxy Statement

29

A LETTER FROM OUR COMPENSATION AND TALENT
COMMITTEE

Dear Fellow Stockholders,

As members of MarketAxess’ Compensation and Talent Committee (the “Compensation Committee”), we endeavor to
create an executive compensation program that is performance-based, directly correlated with business and financial
results, and designed to attract, reward and retain high caliber executives.

2020 was a challenging year for the global economy as a result of the Pandemic. During this time, despite the volatility
caused by the Pandemic, MarketAxess maintained strong financial performance and delivered on our operating
expectations. The Compensation Committee took into account the Company’s performance, in addition to the direct
feedback we heard from our stockholders, as we implemented the 2020 compensation program and structured the
compensation program for 2021. In consideration of the Company’s strong financial and operating performance, we
did not make any changes or adjustments to our executive compensation program as a result of the Pandemic.

In 2020, following a thorough review of the compensation program and significant stockholder engagement, the
Committee implemented a number of substantive enhancements that both responded to stockholder feedback and
continued to support our core compensation principles. These changes were designed to enhance the performance-
based nature of the program, while retaining the key elements of the program that have been highly successful for
both our executives and our stockholders for many years. Stockholder feedback since these changes were
implemented, through the 2020 say-on-pay proposal, which received 93.7% support, and subsequent stockholder
engagement in late 2020 and early 2021, has generally been positive.

The Compensation Committee seeks to include the input of our stockholders in the regular evaluation of our programs
and welcomes continued stockholder feedback regarding our executive compensation practices. We remain
determined to understand your perspectives and committed to considering constructive changes in response to your
feedback.

Our Committee is and will remain committed to the ongoing evaluation and improvement of our executive
compensation program. We look forward to continuing the dialogue and encourage you to reach out with any
questions or concerns related to our program before making your voting decision. Thank you for your investment in
MarketAxess.

Submitted by the Compensation and Talent
Committee of the Board of Directors:

Steven L. Begleiter – Chair
Nancy Altobello
Richard L. Prager
John Steinhardt

30

2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes the Company’s executive compensation program and
provides an overview of the Company’s pay for performance methodology and compensation decisions for our CEO,
CFO and our three other mostly highly compensated executive officers (collectively, our Named Executive Officers
(“NEOs”)). For fiscal year 2020, our NEOs and their respective titles were as follows:

Name
Richard M. McVey
Christopher R. Concannon
Antonio L. DeLise
Kevin McPherson
Nicholas Themelis

Title
Chairman of the Board, Chief Executive Officer (“CEO”)
President and Chief Operating Officer (“President”)
Chief Financial Officer (“CFO”)
Global Head of Sales (“Head of Sales”)
Chief Information Officer (“CIO”)

We did not make any changes or adjustments to our executive compensation program as a result of the Pandemic. Any
consideration given to the impact of the Pandemic by the Compensation Committee in their evaluation of a NEO’s
performance during 2020 is described below in “How We Determine Pay Levels—Individual Performance”.

Responding to stockholders; evolving pay practices

Say-on-Pay Support

Our annual say-on-pay vote (“Say-on-Pay”) is one of our opportunities to receive feedback from stockholders
regarding our executive compensation program. At the 2020 Annual Meeting of Stockholders (the “2020 Meeting”),
approximately 93.7% of the votes cast approved the Say-on-Pay proposal, an increase from 73% in 2019. Management
and the Board had conducted extensive outreach with our stockholders before and following our 2019 Annual Meeting
of Stockholders to better understand investors’ perspectives on our compensation program. As a result of investor
feedback, the Compensation Committee approved several changes to our compensation program for 2020 in an effort
to enhance the performance-based nature of the program, while retaining the key elements of the program that have
been highly successful for both our executives and our stockholders for many years.

2020 Stockholder Engagement

Since the 2020 Meeting, we reached out to stockholders who collectively represented over 60% of our outstanding
common stock and had conversations with eight stockholders who requested engagement representing more than
21% percent of our outstanding common stock. During our outreach, we discussed a range of relevant topics with
stockholders, including the changes to our executive compensation programs that were put into place in 2020, for
which we received consistently positive feedback. Most of the meetings also covered a variety of ESG matters.
Stockholder feedback was relayed directly to the Board of Directors.

During our meetings with stockholders, we heard strong support for the performance of the Company, our CEO and
senior management team, as well as appreciation of our outreach efforts. Stockholders also generally reacted positively
to our decision to directly tie 50% of each NEO’s target annual cash incentive award to the Company’s operating
income goals and 50% to the NEO’s delivery against individual goals and key strategic initiatives for the Company.
general, stockholders preferred that we disclose more details, and provide more transparency around the use of
individual performance metrics for each NEO, including how such metrics are determined and how they relate to the
Company’s strategic goals. We also received positive feedback on the implementation of a three-year measuring
period for performance equity awards beginning with the performance shares awarded in 2020.

In

With regard to non-compensation matters, the stockholders with whom we spoke welcomed the continued
refreshment of the Board, the publication of our first Sustainability Report and the success of our Trading-for-Trees
initiative. As our ESG program evolves, certain stockholders also requested that the Company implement a formal ESG
disclosure framework and provide more disclosure relating to the diversity of our Board.

2021 Proxy Statement

31

COMPENSATION DISCUSSION AND ANALYSIS

Actions in 2020

We took the following actions and implemented the following changes to our executive compensation program for
performance year 2020:

(cid:220) NEO’s Annual Cash Incentive Compensation Program – Beginning in 2020, 50% of the NEO’s targeted annual
cash incentive is tied to the Company’s Adjusted Operating Income performance for the fiscal year based on the
2020 budget, while 50% is tied to the executive’s delivery against individual goals and key strategic initiatives for
the Company.

(cid:220) Annual Equity Award Performance Share Metrics – Beginning in 2020, the performance shares granted in

January, representing 50% of our NEOs’ annual equity award in relation to prior year performance, are awarded
with a three-year performance period based on a combination of operating margin and market share metrics.
Performance targets for years two and three will be based off of previous years’ actual results.

(cid:220)

Continued Committee Refreshment – In January 2020, the Chair of the Compensation Committee was rotated to
Mr. Begleiter, and Ms. Altobello joined the Compensation Committee.
responsibilities and charter to include talent management and succession planning, the Committee also formally
changed its name to the Compensation and Talent Committee (although referred to as the Compensation
Committee in this CD&A).

In addition, the Compensation Committee updated its charter.

In addition, as a result of updating its

Business and financial performance

MarketAxess 2020 Performance

Performance year 2020 marked our 12th consecutive year of record financial results driven by estimated market share
gains across all of our global credit products and a healthy increase in U.S. credit market volumes. The 2020 results
reflect record volume and revenue in U.S. high-grade, U.S. high-yield, emerging market corporate and sovereign
bonds, European credit, U.S. municipal bonds and U.S. treasuries. In 2020, we continued to invest in new protocols,
technology and platform functionality, new product areas and expanding our geographic reach. To support our
investment agenda, our global staff count increased to 606 at year end 2020, a 15% increase year-over-year. The
headcount growth was largely concentrated in technology, customer facing and business support areas. We also
completed the acquisition of Regulatory Reporting Hub in November 2020, which further expands and enhances our
transaction and trade reporting services across a broader European client base, particularly in Germany, France and the
Nordics.

How COVID-19 Impacted Performance

As a result of the Pandemic, we experienced significant changes in our daily operations in 2020.
we successfully implemented a global work from home mandate for all our employees and we were able to continue to
provide our trading platforms and other services to our clients without interruption. In particular, we believe that Open
Trading liquidity has been increasingly essential to the functioning of credit markets during the Pandemic, and
MarketAxess has played a valuable role keeping our clients connected to the market as traders moved from their
centralized trading floors to home offices. During the first several months of the Pandemic, we helped over 10,000
individual users connect to our trading platforms from their homes. Although we have reprioritized certain technology
projects due to the changing needs of our clients in the current market environment, we have largely continued with
our hiring plans, capital expenditures and the expansion of our trading platforms and services into new jurisdictions.

In mid-March 2020,

32

2021 Proxy Statement

Our performance in key metrics include:

Revenue: This was our 12th consecutive year of record
revenue with our core four products producing record
revenues. Total revenues exceeded $689 million, up 35%
from 2019. Commission revenues were over $634
million, up 37% from 2019.

COMPENSATION DISCUSSION AND ANALYSIS

Volume Growth: We delivered credit trading volumes of
$2.6 trillion, up 26% from 2019. This included record
volumes in all four of our core products. We delivered
record estimated U.S. high-grade and U.S. high-yield
market share of 21.6% and 17.1%, respectively. We have
1,823 active global institutional clients, up almost 6% from
2019. Our 899 active international institutional clients
increased 8% from 2019, representing almost 29% of our
trading volume in 2019.

REVENUE ($THOUSANDS)

TOTAL GLOBAL CREDIT TRADING VOLUME

689,125

511,352

367,730

393,422

435,565

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

)
s
n
o

i
l
l
i

b
$
(
e
m
u
o
V
e
d
a
r
T

l

2,630

2,082

1,660

1,405

1,237

3,000

2,500

2,000

1,500

1,000

500

-

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

Earnings Growth: This was our 12th consecutive year of
record operating income. Operating income of almost
$375 million was up 49% from 2019. Diluted earnings per
share of $7.85 was up over 45% as compared to 2019.

In addition to a 50%

Stock Price and Capital Returns:
increase in stock price, we increased our annual dividend
from $2.04 to $2.40 per share, or 18%, and returned over
$107 million of capital to stockholders through our stock
buyback and dividend programs.

OPERATING INCOME ($THOUSANDS)

YEAR ENDING MARKETAXESS STOCK PRICE

$450,000

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$0

$374,728

$189,985

$199,615

$212,584

$250,882

$570.56

$379.11

$201.75

$211.31

$146.92

$700.00

$600.00

$500.00

$400.00

$300.00

$200.00

$100.00

$0.00

2016

2017

2018

2019

2020

2016

2017

2018

2019

2020

2021 Proxy Statement

33

COMPENSATION DISCUSSION AND ANALYSIS

Relative Performance

For 2020, we evaluated our year-over-year financial growth as compared to our Peer Group (as defined below under
How We Determine Pay Levels – Peer Group). For the period ending December 31, 2020, our operating income growth
outperformed all of our 18 peers in the Peer Group. We ranked third out of 18 in year-over-year revenue growth, fifth
in EPS growth, fourth in year-over-year stock price growth and third in three- and five-year stock price growth.

Our share price growth as compared to the following indices for the one-, three-, and five-year periods ended
December 31, 2020 was as follows:

Share Price Growth

MKTX
Stock
Return

50.5%
182.8%
411.3%
2641.8%

Russell 1000

NASDAQ Comp.

S&P 500

Stock
Return

MKTX
Outperformance

Stock
Return

MKTX
Outperformance

Stock
Return

MKTX
Outperformance

18.9%
43.1%
87.4%
204.3%

31.6%
139.7%
323.9%
2437.4%

43.6%
86.7%
157.4%
385.8%

6.9%
96.1%
253.9%
2255.9%

16.3%
40.5%
83.8%
198.7%

34.2%
142.3%
327.5%
2443.1%

1-year
3-year
5-year
10-year

In 2020, we continued to deliver long-term value for our stockholders as evidenced by ranking 188th in five-year total
stockholder return (“TSR”) (approximately 89th percentile) and 12nd in ten-year TSR (approximately 99th percentile) of
all 2,236 U.S. public companies with over $1 billion in market capitalization (as reported by FactSet).

How 2020 Performance Affected Executive Compensation

A significant portion of each NEO’s compensation is dependent on our financial performance. The Company generated
$423.6 million of Adjusted Operating Income in 2020, which was above our 2020 internal target Adjusted Operating
Income goal of $334.3 million. Accordingly, the accrual under our cash incentive plan was higher than budgeted,
resulting in higher cash incentive compensation for our NEOs. Further details about how the Adjusted Operating
Income affected the NEO’s cash incentive can be found in Annual Cash Incentive Awards below.

The Compensation Committee considered the Company’s relative outperformance in determining the size of the equity
awards granted in January 2021 for 2020 performance.

The chart below shows the change in base salary, total cash (which includes base salary and incentive cash) and total
direct compensation (“TDC”) (which includes cash payments, annual equity awards made in relation to prior year
performance (e.g., January 2021 awards for 2020 performance) and the annualized value of multi-year equity awards)
for each NEO (see Annual Cash Incentive Awards and Total Direct Compensation below). The figures in the chart below
differ from those shown in the Summary Compensation Table in Executive Compensation, as the Summary
Compensation Table (“SCT”) reflects the full grant date value of any multi-year performance equity award received by
the NEOs in the year actually granted (as required by the SEC). Additionally, the SCT includes equity awards granted in
January 2020 for 2019 performance, which are included in the 2019 data in the below chart.

34

2021 Proxy Statement

Base Salary
2019

2020

Change

Richard M. McVey, CEO (1)
Christopher R. Concannon,
President
Antonio L. DeLise, CFO
Kevin McPherson, Head of
Sales
Nicholas Themelis, CIO

500

500

500
300

300
300

500
300

300
300

0%

0%
0%

0%
0%

COMPENSATION DISCUSSION AND ANALYSIS

2020

Total Cash Compensation
2019
($ in thousands)
500

2,750

450%

Change

Total Direct Compensation
2019
2020

Change

8,500

7,750

10%

2,000
1,200

1,500
1,500

2,000
1,175

1,400
1,500

0%
2%

7%
0%

5,500
2,400

2,850
3,200

5,250
2,085

2,500
2,800

5%
15%

14%
14%

(1)

In 2019, the CEO received a commensurately higher equity award in lieu of a cash incentive.

How we make compensation decisions

Executive Compensation Principles and Strategy

Our executive compensation program is designed to promote the following core principles that are aligned with our
Company’s business strategy:

(cid:220) Alignment: we align and reward Company and individual performance and decision-making with long-term

stockholder value creation;

(cid:220) Retention: attract, reward and retain high caliber executives;

(cid:220) Motivation: motivate high performance from our NEOs by offering greater incentives for superior performance and

reduced awards for underperformance;

(cid:220) Prudence: discourage imprudent risk taking by avoiding undue emphasis on any one metric or short-term goals;

and

(cid:220) Fairness: be transparent and fair to both our NEOs and our stockholders.

We believe these principles have served us well for many years, and we are continuing to refine them in response to
input from our stockholders.

Our compensation principles place a majority of our executive officers’ compensation at risk and emphasize incentives
tied to individual and Company performance, as well as continued service. As a result, the only fixed compensation
paid is base salary, which represented 6% of our CEO’s total compensation and no more than 12% of the other NEO’s
total compensation in 2020. We also seek to promote long-term commitments from our NEOs because we believe
that continuity of the Company’s leadership team benefits both the Company and our stockholders. As such, we utilize
long-term (three- to five-year) equity incentives in conjunction with short-term incentives (performance-based annual
cash awards). Ultimately, the value realized by our NEOs from our equity incentive awards will depend on our financial
performance, changes in our Common Stock price, and satisfaction of an award’s vesting schedule. Taken together, we
believe these factors help create a comprehensive scheme that both reinforces our long-term performance-based
orientation and is aligned with the interests of our stockholders.

To assess the financial impact of our compensation programs and ensure alignment with the interests of our
stockholders, we focus on managing our aggregate compensation and benefits expense expressed as a percentage of
our total annual revenues (“C&B Ratio”). We believe that monitoring this measure improves our overall profitability.
The NEOs’ annual incentive payments are a component of aggregate compensation expense. Additionally, the C&B
Ratio provides a normalized efficiency measure by which we can compare our compensation structure to those
maintained by our peers and other financial and technology industry companies. Since 2012, our C&B Ratio has been
below 30%, which we believe is an appropriate target given our current revenues, employee base and strategic plans.

2021 Proxy Statement

35

COMPENSATION DISCUSSION AND ANALYSIS

Best Practices in Compensation Governance

Our pay practices align with our compensation principles and facilitate our implementation of those principles. They
also demonstrate our commitment to sound compensation and governance policies.

Compensation Policies and Practices

What We Do

What We Avoid

√ Emphasis on performance-based compensation
√ Use of clawbacks
√ Stock ownership guidelines
√ Use of long-term equity awards that align with

stockholder interests

√ Automatic reduction of severance payments subject

to §280G excise tax
√ Engage with investors
√ Dividends and dividend equivalents on restricted

stock and RSUs are paid only when the awards vest

√ Engage independent compensation consultants

Role of the Compensation Committee

X No guaranteed bonuses except for new hires
X No pension / SERP plans
X No single-trigger change in control benefits
X No §280G excise tax “Gross-Up” Benefits
X No recycling of shares
X No dividends on performance shares until earned
X No "repricing" underwater options without

stockholder approval

X No hedging or pledging of MarketAxess stock
X Limited perquisites and personal benefits

The Compensation Committee administers the compensation program for our NEOs. The Compensation Committee
reviews all components of remuneration (both cash and equity) and decides which elements of compensation, if any,
should be adjusted or paid based on corporate and individual performance results and competitive benchmark data.
The Compensation Committee also determines performance award payouts for the prior fiscal year based on actual
results against performance goals.

In performing its duties, the Compensation Committee:

(cid:220) annually reviews competitive compensation data, recent compensation trends and any other relevant market data

obtained by its compensation consultants and considers the impact on our compensation architecture, policies and
strategies;

(cid:220) reviews all compensation, including equity holdings (both vested and unvested amounts) earned by each NEO,

including each NEO’s past wealth realization and future equity incentive opportunities as well as a sensitivity analysis
to help assess the Company’s ability to retain and motivate each NEO;

(cid:220) consults with the compensation consultants and full Board regarding market and performance data when

considering decisions concerning the structure and amount of our CEO’s compensation;

(cid:220) considers the recommendations of our CEO relating to the performance of our NEOs (other than himself) and the

recommendations of its compensation consultants relating to market data and compensation trends when
considering decisions concerning the structure and amount of compensation of our NEOs.

The Compensation Committee’s function is fully described in its charter, which is available on our corporate website at
www.marketaxess.com under Investor Relations – Corporate Governance.
Committee receives assistance from management and our independent compensation consultants. The Compensation
Committee’s decisions relating to compensation for our NEOs are reviewed by our full Board of Directors.

In performing its duties, the Compensation

Role of Independent Compensation Consultants

Pursuant to its charter, the Compensation Committee may retain and terminate any consultant or other advisor, as well
as approve the advisor’s fees and other engagement terms. For fiscal year 2020, the Compensation Committee retained
FW Cook (“FW Cook”) as its independent compensation consultant for purposes of advising on executive

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2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

compensation. Representatives from FW Cook attended Compensation Committee meetings, participated in executive
sessions and communicated directly with the Compensation Committee. During 2020, FW Cook provided the following
services to the Compensation Committee:

(cid:220) Executive Compensation Design – Provided the Compensation Committee with executive compensation design

suggestions and alternatives;

(cid:220) Pay Analysis – Reviewed and benchmarked competitive market pay levels and conducted retention analyses with

respect to 2020 compensation for our NEOs;

(cid:220) Peer Group Construction – Reviewed and recommended changes to the Company’s peer group composition (as

discussed below in Peer Group);

(cid:220) Equity Plan – Advised on the structure and terms of the MarketAxess Holdings Inc. 2020 Equity Incentive Plan (the
“Equity Incentive Plan”) that was approved by the Company’s stockholders at the 2020 Meeting, as well as the
Company’s usage of authorized shares (i.e., “burn rate”); and

(cid:220) General Advice/Compliance – Provided general compensation-related recommendations to the Compensation

Committee and performed other services, including providing advice regarding regulatory and advisory compliance
issues, and other governance issues.

Grahall Partners LLC advised the Compensation Committee with regard to the compensation for our Board of Directors
and our non-executive employee population.

Each compensation consultant reported directly, and is directly accountable, to the Compensation Committee. The
Compensation Committee assessed the independence of Grahall and FW Cook pursuant to SEC rules and determined
that their work did not raise any conflicts of interest. The Compensation Committee will continue to monitor the
independence of its compensation consultants on an annual basis.

Role of Senior Management

Senior management, including the CEO, President, and Head of Human Resources, set the agendas and prepare the
materials for Compensation Committee meetings and attend those meetings, other than during executive session.
Other senior managers, such as the CFO and General Counsel, may also assist in the preparation or presentation of
relevant material. The CEO recommends annual compensation for the NEOs, other than himself, to the Compensation
Committee for consideration, but the Compensation Committee is responsible for the final recommendations. No
member of management is present in the Compensation Committee meetings when matters related to their individual
compensation are under discussion.

Compensation Risk Assessment

The Compensation Committee is responsible for reviewing and assessing potential risk arising from the Company’s
compensation policies and practices. The Compensation Committee regularly reviews the Company’s compensation
policies and practices to ascertain any potential material risks that may be created by the Company’s compensation
programs. FW Cook provided the Compensation Committee an assessment of the effectiveness of all major
components of the Company’s compensation programs, including the mix between annual and long-term
compensation; short and long-term incentive program design; incentive plan performance criteria and corresponding
objectives; the Company’s severance and change-in-control policies; its claw-back policy; and its stock ownership
guidelines. The Compensation Committee’s review includes the compensation practices for our entire employee base
to ensure that our pay practices, compensation programs and business strategies do not motivate imprudent risk-
taking by any employee.

The Compensation Committee considered these items in determining the appropriate compensation programs for the
Company. The Company utilizes many design features that mitigate the likelihood of encouraging excessive risk-
taking behavior. Among these design features are:

(cid:220) Significant use of equity compensation with long-term vesting (three to five years);

2021 Proxy Statement

37

COMPENSATION DISCUSSION AND ANALYSIS

(cid:220) Use of holding periods or cliff vesting for long-term equity awards;

(cid:220) Strong compensation recoupment policy;

(cid:220) Stock ownership and retention guidelines that meet market standards;

(cid:220) The Compensation Committee’s ability to exercise downward discretion in determining payouts, including after

consideration of regulatory, compliance and legal issues; and

(cid:220) Training on our Code of Conduct and other policies that educate our employees on appropriate behaviors and the

consequences of taking inappropriate actions.

Based on the foregoing, the Compensation Committee and management agree that our compensation policies and
practices do not encourage excessive risk-taking or create risks that are reasonably likely to have a material adverse
effect on the Company. We believe that our compensation programs do not provide incentives that encourage risk-
taking beyond the Company’s ability to effectively identify and manage significant risks and is compatible with the
internal controls and the risk management practices of the Company.

How we determine pay levels

Peer Group

The Compensation Committee assesses the Company’s financial performance and executive compensation
competitiveness against a group of peer companies that it selects based on input from FW Cook. A key objective of
our executive compensation program is to ensure that the total compensation package and structure that we provide
to our NEOs is competitive with the companies with whom we compete for executive talent. The 2020 peer group
consisted of companies that are similar to the Company in terms of competitive positioning, financial size, operating
characteristics, market sector or industry classification. FW Cook engages with the Compensation Committee to review
the peer group annually and periodically make changes.

In 2020, FW Cook completed an annual review of the composition of our peer group. Factors considered in
determining the peer group (“Peer Group”) included:

(cid:220) financial size – market cap and revenues, generally based on a methodology similar to the method used by

Institutional Shareholder Services (“ISS”) of +/- 2.5 times the Company’s most recent annual revenues and +/- 5
times the Company’s most recent market capitalization;

(cid:220) whether companies compete with us for clients, executives or other employee talent;

(cid:220) market sector, asset class or product offering;

(cid:220) peers of peers, as well as peers designated by ISS in its annual review; and

(cid:220) reviewing the broader market for additional firms in financial services, IT services and software industries, based on

relative revenue, market capitalization and operating income similarity.

For the 2020, our Peer Group was comprised of the following firms:

ACI Worldwide, Inc.
Alliance Bernstein Holding L.P.
Aspen Technologies, Inc.
BGC Partners, Inc.
Black Knight, Inc.
Cboe Global Markets, Inc.

2020 Peer Group

Cohen & Steers, Inc.
Envestnet, Inc.
Factset Research Systems, Inc.
Fair Isaac Corporation
Guidewire Software, Inc.
Morningstar, Inc.

MSCI Inc.
Nasdaq Inc.
SEI Investments Company
Tradeweb Markets Inc.
Virtu Financial, Inc.
Verisk Analytics, Inc.

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2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

In 2020, we added Aspen Technologies, Inc., Nasdaq Inc., SEI Investments Company and Verisk Analytics to our Peer
Group. We removed GAMCO Investors, Hercules Technology Growth Capital, Main Street Capital, Virtus Investment
Partners, and Wisdom Tree Investments.

Benchmarking – Importance and Process

In addition to the peer group, FW Cook also used leading industry compensation surveys for the financial services and
financial technology sectors for benchmarking purposes. The surveys provide a broader view of compensation levels
and trends, which is useful in combination with the Peer Group data. The Compensation Committee considered this
data, in conjunction with the Company’s performance and each NEO’s individual performance, contribution and
expertise in determining how each NEO is paid vis-à-vis the recommended pay range role. The Compensation
Committee is presented summary statistics and does not review the list of individual companies that participate in the
surveys.

It is important to note that the Company’s upper quartile TSR over multiple years has resulted in our market
capitalization being significantly higher than most of the companies in the Peer Group and surveys. From a
benchmarking perspective, we note that market long-term incentive grant levels (and total compensation) will
therefore be inherently lower than a performance-adjusted market rate for MarketAxess. While it would be helpful to
introduce more peer companies with a comparable market capitalization, there are a limited number of such
companies in our industry. Therefore, the differences in market capitalization should be kept in mind when selecting
peer companies and interpreting the results of the benchmarking.

Individual Performance

The Compensation Committee assesses the individual performance of the Company’s NEOs in connection with the
determination of each NEO’s annual cash incentive award, annual equity award and TDC.
In addition to the specific
objectives for each NEO that support our strategic initiatives that are set at the beginning of the performance year, we
measure the performance of all of our NEOs against the following criteria that we believe are paramount to our success
in a highly competitive market:

(cid:220) Innovation: we are leading the ‘electronification’ of the corporate bond market, which is resulting in significant

market structure changes. This market evolution requires our NEOs to be innovative as they help set the Company’s
direction and determine the role it plays in the financial markets;

(cid:220) Ability to deliver technology-driven market solutions: we are a financial technology company whose NEOs must
combine an expertise of the fixed-income securities market with the knowledge and ability to conceptualize, create,
implement and deliver technology-driven market solutions; and

(cid:220) Strategic decision making and execution: we are a relatively flat organization with approximately 600 employees
globally; therefore, our NEOs must have the ability to balance strategic decision making with tactical execution, and
they must be able to effectively communicate with, and lead, broad teams of employees across all levels of the
organization.

2021 Proxy Statement

39

COMPENSATION DISCUSSION AND ANALYSIS

As described below under Determination of NEO Annual Cash Incentives – 2020, in 2020, the Company adopted several
changes to the design of the Company’s executive compensation program that introduce objective performance
criteria and target payouts tied to both corporate results and individual performance.
In 2020, the Compensation
Committee also assessed the individual performance of our NEOs based on our strategic corporate objectives:

Grow Market Share in
Core Products

Build New Product
Marketplaces

Expand Data Offering

Growth through Global
Client Relationship
Management

Best in Post Trade

Corporate Development
and M&A

Corporate Culture and
Talent Development

• Expansion of Open

Trading

• Trading automation

• EM local markets
• Municipal Bonds
• Leveraged Loans
• US Treasuries
• ETF share trading
• Portfolio bond trading

• Data products and

• Penetration and

distribution

diversification of top
global client
relationships

•

•

Expansion of post
trade and regulatory
reporting services
Efficiency of clearing
& settlements solutions

• M&A
• Joint ventures and

partnerships

• Diversity, equity and

inclusion

• Attract, develop and
retain top talent

In addition to achieving a 12th year of record financial results, the NEOs were credited with the following contributions
to our key imperatives:

Strategic Imperative

Richard M. McVey, CEO

Invested in building the Company's leadership team and strengthening its succession
plans; expanded the global leadership team with key new hires and augmented the
responsibilities of some of the existing leaders; actively involved in the mentorship
and development of other high potential managers
Advocate for various DE&I internal and external initiatives, including Board diversity,
the Company's diversity and minority-owned dealer initiative, and the adoption of
the UN Women's Empowerment Principles
Established the MarketAxess Foundation to support charitable initiatives in
underserved communities
Led a significant increase in employee communications, including leading bi-weekly
global town halls and regular virtual coffee meetings for employee groups around
the world

Actively advocated for the Company through client engagement, conference and
speaker opportunities and regulatory initiatives
Contributed to the Company's automation strategy, which included Auto-X
functionality that significantly increases clients' trading efficiency

Participated in the efforts to promote growth in new product offerings; demonstrated
growth in municipal bonds and local markets EM, although internal targets were not
met for U.S. Treasury trading
Actively involved in building depth in the international management team and was a
proponent for additional technology functionality, which contributed to the increase
in Emerging Markets and Eurobond estimated market share in the applicable regions

>

>

>

>

>

>

>

>

Corporate Culture and
Talent Development

Grow Market Share in
Core Products

Build New Product
Marketplaces

Expand Data Offering >

Continued investment in the Company's data strategy resulted in double digit growth
in applicable revenue

Growth through
Global Client
Relationship
Management

>

Active involvement in the client development of our largest global investor and
dealer clients in support of the Company’s global sales effort

> Assisted with the implementation of the global client coverage strategy

40

2021 Proxy Statement

Best in Post Trade

Corporate
Development and
M&A

Other - Board of
Directors and
Regulatory
Relationships

Strategic Imperative

Corporate Culture and
Talent Development

>

>

>

>

>

>

>

>

>

COMPENSATION DISCUSSION AND ANALYSIS

Continued investment in the Company's post trade business resulted in double digit
growth in applicable revenue
Together with the Company’s President, led the response to the operational
inefficiencies which occurred in the immediate period following the Company's
conversion to self-clearing
Led the Company's successful effort to increase its revolving line of credit to support
its conversion to self-clearing

Supported the acquisition of Regulatory Reporting Hub and the execution of an
agreement to acquire MuniBrokers

Demonstrated a strong focus on corporate governance as evidenced by the
successful recruitment of independent directors that are industry leaders with diverse
background and skills
Active involvement in the SEC's FIMSAC, including chairing the Technology and
Electronic Trading Subcommittee, which led to three specific recommendations to the
SEC in 2020; on-going dialog with senior officials at the SEC, FINRA and other
regulators

Christopher R. Concannon, President

Led the Company's Pandemic response team, which allowed us to safely, quickly and
effectively move our employees to a productive work-from-home environment while
supporting clients during this period of market disruption and transition
Advocate of internal DE&I initiatives; executive sponsor of the UN Women's
Empowerment Principles and Trading for Trees
Building out and developing the next generation of the leadership team remains an
area of focus

> Sponsored the launch of Live Markets, Mid X and Auto-X enhancements

Grow Market Share in
Core Products

>

Sponsor of automation initiatives, including the integration of Auto-X automated
trading into the Axess IQ workflow, which contributed to a 66% increase in
automated trading volumes

Build New Product
Marketplaces

> Oversaw double-digit growth in municipal bonds by volume

>

>

Led the expansion and rollout of U.S. Treasuries trading solutions and net hedging
product offerings; the growth of U.S. Treasuries continues to be an area of focus
Delivered on the Company's planned technology releases despite market volatility
and employee dislocation

Expand Data Offering

> Led the development of unique data products that support automation tools
> Oversaw the double-digit growth in data revenue

Growth through
Global Client
Relationship
Management

> Active in the relationship management of our largest global clients

> Continues to expand and build deeper senior executive relationships with our clients

2021 Proxy Statement

41

COMPENSATION DISCUSSION AND ANALYSIS

Best in Post Trade

Corporate
Development and
M&A

Sponsor of the Company's conversion to self-clearing for U.S. bond trades and the
build-out of the operations and settlements functions. Took responsibility for the
operational inefficiencies that occurred in the immediate period following the
conversion
Sponsored the acquisition of Regulatory Reporting Hub that provides substantial
expansion of the Company's Post Trade business

Led the Company’s M&A efforts, including the above-mentioned acquisition of
Regulatory Reporting Hub and the announced acquisition of MuniBrokers

>

>

>

> Drove the due diligence of other M&A opportunities and strategic alliances

Strategic Imperative

Antonio L. DeLise, CFO

Corporate Culture and
Talent Development

Build New Product
Marketplaces

>

>

Attracted new talent to build depth in the Finance, Accounting, Investor Relations and
Audit groups and implemented a number of organizational changes to provide
promotional opportunities to the next generation of the Company's leadership team

Partnered with business executives and other business sponsors on designing and
implementing scalable fee plans for new products and trading protocols

Best in Post Trade

>

Organized and provided for an expanded revolving line of credit to support the new
U.S. bond self-clearing initiative; sponsored and guided the development of reporting
tools to proactively manage risk and liquidity

Corporate
Development and
M&A

Strategic Imperative

Corporate Culture and
Talent Development

Grow Market Share in
Core Products

Build New Product
Marketplaces

>

>

>

>

Led the financial due diligence of a number of M&A opportunities culminating in the
closure of Regulatory Reporting Hub acquisition and the announcement of the
MuniBrokers acquisition

Kevin McPherson, Head of Sales

Expanded and diversified the U.S. and Asian sales management teams by hiring new
talent and promoting internal high potential talent

Sales leadership has resulted in record trading volumes in the Company's core
products; however, opportunities exist for faster incubation of newer product
offerings

Actively involved in the restructuring of the leadership team in Asia and the
onboarding of the new Head of Asia; innovative approaches to virtual client
engagement, including virtual client forums resulting in the Company becoming an
integral part of clients' trading days during the Pandemic

> Opportunities exist for faster incubation of newer product offerings

Growth through
Global Client
Relationship
Management

>

>

Active involvement in the business development of our largest global investor and
dealer clients
Implemented our global sales coverage strategy and ensured proper resourcing and
executive sponsorship across the organization

> Implemented virtual open client forums across the globe

42

2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Strategic Imperative

Nicholas Themelis, CIO

Corporate Culture and
Talent Development

Grow Market Share in
Core Products

>

>

Sponsored the continued evolution to an Agile environment; provided promotional
leadership opportunities internally and created a more diverse management team;
supported all employees in the work-from-home transition, ensuring their technology
demands were met and that there was limited impact on productivity

Delivered multiple enhancements and functionality to the Company's automated
trading portfolio, including Live Markets, Mid-X and Auto-X; oversaw the risk control
development for automation projects

Build New Product
Marketplaces

> Delivered new trading protocols for South Korea and other emerging local markets
Delivered enhancements to U.S. Treasury, Municipal Bond, Portfolio and Open
Trading functionality

>

Corporate
Development and
M&A

>

>

Led the technology due diligence of M&A targets and actively participated in the
technology integration strategies
Executive sponsor of the migration to a new technology stack to increase the velocity
of new products and functionality releases

Alignment of CEO TDC and Performance

The charts below compare the growth of the CEO’s TDC to the Company’s Common Stock price appreciation, the
performance of various indices and the growth of the Company’s operating income for the six-year period ended
December 31, 2020 on an indexed basis:

CEO Pay vs. Total Stockholder Return

CEO Pay vs. Annual Operating Income

850

800

750

700

650

600

550

500

450

400

350

300

250

200

150

100

50

0

e
u
l
a
V
x
e
d
n
I

CEO Pay vs. Total Stockholder Return

CEO Pay vs. Annual Operating Income

e
u
l
a
V
x
e
d
n
I

350

300

250

200

150

100

50

12/31/14

12/31/15

12/31/16

12/31/17

12/31/18

12/31/19

12/31/20

12/31/14

12/31/15

12/30/16

12/31/17

12/31/18

12/31/19

12/31/20

CEO TDC

MarketAxess Holdings Inc.

NASDAQ Composite (COMP)

S & P 500

CEO TDC

Operating Income

(1) Calendar year 2014 is the baseline year and was the start of the measurement period.

As illustrated in the above graphs, the CEO’s annual TDC has increased 27% in the aggregate during the six-year
period ending December 31, 2020 (representing an approximately 4% compound annual growth rate (“CAGR”)).
During this same period, the Company’s operating income under U.S. generally accepted accounting principles
(GAAP) has increased 215% (approximately 21% CAGR over 6 years) and TSR has increased 708% (almost 42%

2021 Proxy Statement

43

COMPENSATION DISCUSSION AND ANALYSIS

CAGR over 6 years), while the 6-year CAGR for the NASDAQ and S&P 500 for this period increased by
approximately 18% and 10.5%, respectively.
increased market capitalization) has been created during the six-year period ended December 31, 2020.

In addition, over $18 billion in stockholder value (as measured by

We believe the CEO’s compensation has consistently reflected our pay for performance philosophy during this
period. However, because the Summary Compensation Table requires multi-year equity awards to be reported in
full in the year received, our use of such awards can make an NEO’s compensation appear to be volatile. The chart
below illustrates and contrasts TDC levels for the CEO over the past six years as reported in the Summary
Compensation Table (pursuant to SEC rules) versus the TDC calculated by the Company as a result of annualizing
multi-year equity awards over the term of each such award:

As Reported - CEO - Summary Compensa!on Table

CEO - With Annualized Mul!-Year Equity (3)

CEO Compensation

$13,696

$16,400

$5,800

$5,400

$6,200

$3,243

$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$-

$10,000

$9,000

$8,000

$7,000

$6,000

$5,000

$4,000

$7,400 $7,400

$7,000 $7,100

$8,500

$7,750

2015 (1)

2016

2017

2018 (2)

2019

2020

2015

2016

2017

2018

2019

2020

(1)

(2)

Includes $8 million performance equity grant that is spread over the five performance years from 2015 to 2019 (see Use of Multi-Year Awards
below).
Includes $11 million performance equity award that is spread over 5 years (2 months for year-end 2018, 10 months for year-end 2023, and full
year for each year-end 2019-2022).

(3) Annualized Multi-Year Equity Grants spread the grant value of multi-year equity awards over the relevant performance/vesting period.

Elements of executive compensation

The compensation structure for our NEOs is comprised of base salaries, annual cash incentive compensation and
various forms of equity which, for 2020, was granted under our Equity Incentive Plan. The combination of these
elements enables us to offer a competitive, cost effective compensation program that balances variable, or at-risk,
compensation with prudent risk taking and stockholder interests. Equity awards may be granted on an annual basis or
as special awards, including multi-year awards, that are attributed over multiple years of compensation. We believe
that equity awards serve as an important part of an NEO’s compensation in that they further ensure alignment of the
NEO’s interests with those of our stockholders.

Annual variable cash and equity compensation gives the Compensation Committee the flexibility to tie NEO
compensation to individual and corporate performance, which is an important element of our pay philosophy and each
NEO’s compensation.

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2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

NEOs also receive standard employee benefits.

Component
Base Salary

Annual Cash Bonus

Annual Equity Awards

Elements of Pay

Description

Fixed pay based on role and
responsibilities, experience and
expertise, and individual performance

Variable cash payments based on
achievement of annual corporate
financial goals and individual
performance
Equity awards that vest over three or
more years

Multi-Year Equity Awards

Other Benefits

Performance awards that vest over four
or more years, often with back-ended
vesting
Include healthcare, life insurance,
disability and retirement savings plans

Purpose
Provides a consistent minimum level of
compensation that is paid throughout
the year at a cost-effective level for the
Company
Rewards short-term performance in a
framework that discourages excessive
risk taking by limiting maximum award
opportunities
Designed to tie compensation to
stockholder value creation; rewards
attainment of corporate and individual
goals
Serve as retention tools while aligning
compensation to long-term stockholder
value creation
Provide assistance with healthcare-
related costs and income protection
in the event of disability, as well as a
base level of replacement pay upon
retirement

2021 Proxy Statement

45

COMPENSATION DISCUSSION AND ANALYSIS

Pay Mix

We believe that lower base salaries and higher levels of variable performance awards motivate our NEOs, facilitate the
achievement of our growth objectives and promote decision-making that is aligned with our stockholders’ interests. A
lower base of fixed costs (including base salary) also allows us to better manage expenses, which helps improve
profitability. We also believe that the balance among pay components in our compensation program design mitigates
against a focus on short-term results and decreases the potential for excessive or inappropriate risk taking (see
Compensation Risk Assessment above). An overview of the elements of pay provided to the CEO and, on average, to the
other NEOs for fiscal year 2020 is as follows:

Compensation and Benefits Paid in Respect of 2020

McVey, CEO

Average Distribution – All Other NEOs

Base Salary,
6%

Other
Benefits, 1%

Annual Cash
Bonus, 25%

Annual
Performance
Equity, 42%

Multi-Year
Equity
Awards, 26%

Other
Benefits, 1.8%

Base
Salary,
10.0%

Annual Cash
Bonus, 35.5%

Annual
Performance
Equity, 48.0%

Multi-Year Equity
Awards, 4.5%

In 2020, all NEOs received over 40% of their annual TDC in equity, which was intended to align each NEO’s interests
with the interests of our stockholders. Our CEO received 42% of his 2020 annual TDC through a new equity award and
an additional 26% of his 2020 TDC was attributed to a portion of his 2018 multi-year equity award. All other NEOs
received over 45% of their annual TDC in the form of new equity awards. The percentage of TDC attributed to annual
equity awards was higher than in previous years for Messrs. DeLise, Themelis and McPherson because they no longer
had the value of their previously granted multi-year equity awards attributed to their compensation, and as such, the
Compensation Committee determined to increase their annual equity awards in lieu of a portion of their annual cash
award so that they would have a greater amount of unvested equity in the Company. This is further detailed below in
Determination of NEO Annual Cash Incentives.

2020 compensation

Base Salary

Base salary is the only fixed component of our NEO’s total cash consideration and is intended to provide a minimum
consistent level of compensation throughout the year. We avoid automatic base salary increases and target our NEO’s
base salaries below applicable median base pay levels to manage our fixed compensation costs and reinforce our pay-
for-performance philosophy.

While most of the NEOs’ base salaries were at or below the 25th percentile of base salaries reported by our Peer
Group, we did not adjust base salaries in 2020.
compensation through improved variable and long-term incentive opportunities as described below. Our CEO’s base
salary has remained unchanged since 2011.

Instead, we provided our NEOs with the opportunity for higher

46

2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Determination of NEO Annual Cash Incentives

Starting with performance year 2020, 50% of the target cash incentive for our executive officers was directly linked to
the Company’s Adjusted Operating Income results and 50% was based on the executive’s delivery against individual
goals and key strategic initiatives for the Company. For 2020, the NEOs cash incentives were paid out of the 2009
Employee Performance Incentive Plan (the “Employee Cash Incentive Plan”).

Richard M. McVey, CEO
Christopher R. Concannon, President
Antonio L. DeLise, CFO
Kevin McPherson, Head of Sales
Nicholas Themelis, CIO

Target Cash Incentive

Target

Portion Tied to Adjusted
Operating Income
($ in thousands)

Actual Earned on Adjusted
Operating Income

2,000

1,500

875

1,100

1,200

1,000

750

438

550

600

1,250

938

547

688

750

As our Adjusted Operating Income was almost $424 million, 27% greater than the target of $334 million, the portion of
each executive officer’s cash award payable based on Adjusted Operating Income was paid out at 125% in accordance
with the table below.

Payout on Adjusted Operating Income

Performance

125% of Target or Higher
110% of Target
100% of Target
90% of Target
75% of Target
Less Than 75% of Target

Adjusted Operating Income
($ in thousands)
417,936+
367,784
334,349
300,914
250,762
<250,762

Payout

125%
110%
100%
90%
75%
0%

The remainder of each NEO’s annual cash incentive awards for 2020 was determined by the Compensation
Committee’s assessment of the following:

(cid:220) The Company’s financial results for 2020;

(cid:220) The benchmark data for each position;

(cid:220) The individual performance of each NEO and his contribution to our corporate objectives for 2020 as summarized in

the Individual Performance section above; and

(cid:220) Whether it was beneficial to the Company and the NEO to increase the NEO’s annual equity award in lieu of a

portion of NEO’s annual cash award.
Committee believed that, as a result of the final vesting of previously-granted multi-year equity awards in January
2021, each NEO should have a greater amount of unvested equity in the Company in order to increase the
probability of retention and alignment to the interests of the Company’s stockholders.

In the case of Messrs. DeLise, McPherson and Themelis, the Compensation

2021 Proxy Statement

47

COMPENSATION DISCUSSION AND ANALYSIS

A summary of the total cash incentives paid to our NEOs for 2020 based on both measures is set forth below. The
Compensation Committee then reviewed the summary of the payouts against the 2019 payouts and in the context of
the year-over-year growth of some key financial performance indicators:

Cash Incentive Paid Compared to Financial Metrics
2020

2019

Change

Revenues (in millions)
Operating Income (in millions)
Diluted EPS

($ in thousands)
Richard M. McVey, CEO (1)
Christopher R. Concannon, President
Antonio L. DeLise, CFO
Kevin McPherson, Head of Sales
Nicholas Themelis, CIO

$
$
$

$
$
$
$
$

689.1
374.7
7.85

2,250
1,500
900
1,200
1,200

$
$
$

$
$
$
$
$

511.4
250.9
5.40

-
1,500
875
1,100
1,200

35%
49%
45%

-
-
3%
9%
-

(1)

In 2020, the CEO received equity in lieu of a cash incentive for 2019 performance.

Non-Qualified Deferred Cash Plan

The Company offers a voluntary non-qualified deferred cash plan that allows U.S.-based NEOs and other select
participants to defer all or part of their cash bonus. For the cash bonus paid in 2021 for 2020 performance, our
President deferred 20% of his $1,500,000 cash incentive bonus or $300,000, and our CFO deferred 50% of his $900,000
cash incentive bonus or $450,000. Please see Nonqualified Deferred Compensation in the Executive Compensation
Section of this Proxy.

Long-term Equity Incentives

We grant equity awards to our NEO’s annually as part of our on-going compensation program. In addition, special
equity awards have historically been granted to our NEOs at the time of hire (“new hire” awards) or, for the CEO, upon
renewal of his employment agreement. We did not make any such awards in 2020.

Annual Equity Awards

We grant annual equity awards on January 15 using the average closing price of our Common Stock for the ten
consecutive trading days leading up to and including the date of grant. This helps to ensure that the timing of any
award will not be subject to manipulation and reduces the impact of any significant short-term swings in stock price.
All annual equity awards vest over a minimum of three years, and the first vesting date is at least one year from the
date of grant.

The value of the annual equity awarded to each NEO is considered by the Compensation Committee in determining
TDC for each NEO. The amount awarded is based upon benchmark data, the Company’s desire for our NEOs to
maintain appropriate upside leverage in our annual incentive program while managing risk, stock ownership
guidelines, and our desire to retain our NEOs.

SEC rules require that we report all equity granted during the applicable reporting year in our executive compensation
tables (see Executive Compensation below). As such, we are providing an overview of all equity awards granted in
January 2020 for 2019 performance. However, in calculating TDC for performance year 2020, we used the value of
equity granted in January 2021 in recognition of performance during 2020. Accordingly, we have also included an
overview of equity awards granted in 2021.

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2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Flex Share Program

Annual equity awards are made pursuant to our “Flex Share” program that permits our NEOs to have some input into
the form of their equity compensation, subject to a general framework and limitations imposed by the Compensation
Committee. The Flex Share program allows the Company to deliver more individualized awards without incurring
additional expense to the Company.

50% of the annual equity awards granted to our NEOs are granted as performance shares with a three-year
performance and vesting period. For the remaining 50% of their award, NEOs have the choice of receiving all RSUs or
a combination of RSUs and stock options. The RSUs and the stock options will vest in equal installments on the first
three anniversaries of the grant. For the stock options granted in January 2020, the ratio of stock options to RSUs
granted was 3.77 stock options to one RSU, based upon the relative accounting cost of each award component on the
award date.

In addition, settlement of RSU grants may be deferred at the NEO’s election, which provides an added benefit of
allowing the NEO to maintain additional upside leverage in our shares of Common Stock through delayed taxation.
Generally, deferring RSUs has no impact on an RSU’s vesting schedule, except that the initial vesting date for an RSU
deferred in the year of grant must occur at least 13 months after the grant date in accordance with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).

2020 Annual Equity Awards for 2019 Performance

The chart below shows the annual equity award value granted to our NEOs in January 2020 to reward their
performance in 2019 and the value of any special multi-year awards included in their TDC for 2019 (see Special Multi-
Year and Other Special Equity-based Awards below).

The annual equity value received by the NEOs was determined after (i) setting a target TDC for each NEO, (ii)
subtracting the base salary already paid and the actual cash incentive, and (iii) subtracting the annualized value of their
respective special multi-year grants (see Special Multi-Year and other Equity Awards below).

The chart below also shows the type of equity awarded under our Flex Share program. The 2020 annual equity awards
have the following features:

(cid:220) Fifty percent of the NEOs’ annual equity award was granted in the form of three-year performance shares;

(cid:220) The performance share metrics (operating margin and market share) are different than the metric used for the

Company’s cash incentive plan (Adjusted Operating Income), and each of the performance share metrics will have
an equal weighting in determining performance; and

(cid:220) The performance shares will cliff vest on the third-year anniversary of the grant.

The payout for the performance shares granted in January 2020 will range from 0% to 150% based on the Company’s
operating margin and market share results for the three years following the grant.

2021 Proxy Statement

49

COMPENSATION DISCUSSION AND ANALYSIS

Equity Awarded in January 2020

Multi-Year Awards

50%
Performance
Shares 3-year
Performance
Based Share
Value

1,725
1,125
275
300
350

50% - Time Vested

Stock Option
Value

($ in thousands)

862.5

RSU Value (1)

862.5
1,125
275
300
350

Granted
Prior to 2020
Attribution of
Annualized
Portion
of Previously
Granted Awards

3,800
1,000
360
500
600

Total Value

7,250
3,250
910
1,100
1,300

Richard M. McVey, CEO
Christopher R. Concannon, President
Antonio L. DeLise, CFO
Kevin McPherson, Head of Sales
Nicholas Themelis, CIO

(1)

The CEO opted to defer receipt of the RSUs awarded in January 2020

2021 Annual Equity Awards for 2020 Performance

The chart below details the annual equity award value awarded in January 2021 to the NEOs for their 2020
performance.
In the case of Messrs. DeLise, McPherson and Themelis, as discussed in the Determination of NEO Annual
Cash Incentives section above, the Compensation Committee believed that, as a result of the final vesting of previously-
granted multi-year equity awards in January 2021, each NEO should have a greater amount of unvested equity in the
Company in order to increase the probability of retention and alignment to the interests of the Company’s
stockholders.

The following table sets out the equity award value granted for performance year 2020:

Equity Awarded in January 2021

Multi-Year Awards

50%
Performance
Shares 3-year
Performance
Based Share
Value

1,775
1,250
600
700
850

50% - Time Vested

Stock Option
Value
($ in thousands)

887.5
625

RSU Value (1)

887.5
625
600
700
850

Granted
Prior to 2020
Attribution of
Annualized
Portion of
Previously
Granted
Awards

2,200
1,000
-
-
-

Total Value

5,750
3,500
1,200
1,400
1,700

Richard M. McVey, CEO
Christopher R. Concannon, President
Antonio L. DeLise, CFO
Kevin McPherson, Head of Sales
Nicholas Themelis, CIO

(1) No NEOs opted to defer receipt of their RSUs awarded in January 2021

Similar to the 2020 program, the 2021 annual equity awards have the following features:

(cid:220) Fifty percent of the NEOs’ annual equity award was granted in the form of three-year performance shares;

(cid:220) The performance share metrics (operating margin and market share) are different than the metric used for the

Company’s cash incentive plan (Adjusted Operating Income), and each of the performance share metrics will have
an equal weighting in determining performance; and

(cid:220) The performance shares will cliff vest on the third-year anniversary of the grant.

50

2021 Proxy Statement

Special Multi-Year and Other Equity-based Awards

COMPENSATION DISCUSSION AND ANALYSIS

Special awards are not a regular part of the Company’s compensation program for existing NEOs. In alignment with the
feedback we received from our stockholders, we expect that the use of special multi-year and other special equity
awards will be limited to circumstances such as the hiring of new executives or the retention of key executives.
past cases, multi-year awards granted by the Company have been attributed to four or more years of future
compensation and reduce the annual compensation awarded to the NEOs for those years of attribution.
these awards act as dollar for dollar offset against future equity awards.

Importantly,

In all

CEO 2015 Multi-Year Equity Award

In January 2015, our CEO was awarded a special performance-based multi-year equity award in connection with the
execution of a new employment agreement. The award was comprised of (i) $6 million in performance shares and (ii)
$2 million in premium priced stock options. All performance metrics were met resulting in the full payout of the
targeted number of shares.
third of the premium options (40,076 options) vested. The expiration date for all the premium options was July 15,
2020.

In January 2020, the final 50% of the performance shares (58,329 shares) and the final one-

CEO 2018 Multi-Year Equity Award

In November 2018, the Compensation Committee determined it was desirable to extend the CEO’s employment
agreement for an additional five-year term in order to secure his employment.
Company awarded him a special five-year performance award (“2018 Performance Award”) with an aggregate $11
million grant date fair value to incentivize and reward future stock price appreciation. The CEO was entering the final
year of his then-current employment agreement and the Compensation Committee noted that a significant portion of
the CEO’s January 2015 award would vest in January 2019. The Compensation Committee designed the 2018
Performance Award such that the aggregate $11 million grant date fair value of the Award will be spread over five
years of annual compensation and will reduce the amount of the annual equity award that the CEO will receive for each
of those performance years by $2.2 million on a dollar for dollar basis (the first and last years are partial year
attributions).

In connection with the extension, the

The 2018 Performance Award was issued with a grant date fair value of $11 million. The chart below shows how the
grant value is spread over a 5-year attribution period:

2018 Multi-Year Performance Award

Total Award Value

Year-End 2018 (2 months)
Each Year-End 2019 – 2022
Year-End 2023 (10 months)

Value

Attribution

($ in thousands)
11,000

—
367
2,200
1,833

All stock options and performance shares earned pursuant to the 2018 Performance Award are subject to five-year cliff
vesting and the CEO must remain as an employee or director throughout the vesting period, except in the event of
certain involuntary terminations. The CEO cannot dispose of either options or performance shares prior to the vesting
date (November 8, 2023) to capitalize on any increase in the stock price, short term or otherwise.

2021 Proxy Statement

51

COMPENSATION DISCUSSION AND ANALYSIS

As discussed above, the 2018 Performance Award is contingent both upon the Company meeting certain stock price
thresholds, as well as tenure requirements specific to the CEO. The performance thresholds were met in 2019.

The amounts attributed to the CEO’s previously granted performance awards reduced his annual incentive opportunity
by the same amount:

Attribution Years

Year-End 2018
Year-End 2019
Year-End 2020

CEO - Annual Grant Value Offset

2015
Performance
Award Value

$
$
$

1,600
1,600
-

2018
Performance
Award Value
($ in thousands)
367
$
2,200
$
2,200
$

$
$
$

Total Offset
to
Annual Award

1,967
3,800
2,200

President and COO Multi-Year Equity Award

In connection with Mr. Concannon’s hire as President and Chief Operating Officer in January 2019, he was granted a
special equity award of $11.75 million (the “President’s Award”). The award was granted to off-set unvested, forfeited
equity compensation from the previous employer and in lieu of a 2018 cash bonus payment from the previous
employer.

The equity was structured as follows:

Award Type

Value

Restricted Stock Units

$5 million

Restricted Stock Units

$1 million

Multi-Year Attribution

Vesting
3 equal installments on first
three anniversaries of grant N/A
Cliff vesting on third
anniversary of grant

N/A
$1 million per year attributed to
compensation for performance years
2019 - 2023

Performance Equity

$5 million

Performance Equity

$.75 million

Cliff vesting on fifth
anniversary of grant
Cliff vesting on fifth
anniversary of grant

N/A

$5 million of the grant value is attributed to the President’s total direct compensation over a 5-year period, thereby
reducing the annual equity award which the President may otherwise receive by $1 million each year, through
performance year 2023.

The performance portion of the President’s Award was structured similarly to the CEO’s 2018 Performance Award. The
President’s Award consisted of a grant of: (i) stock options with a grant date value of $2.875 million as determined by
an independent third party, and (ii) performance shares with a grant date value of $2.875 million as determined by an
independent third party. The performance of the President’s Award is contingent both upon the Company meeting
certain stock price thresholds, as well as tenure requirements specific to the President. All performance requirements
were met in 2019.

Other NEO Special Multi-Year Awards

In January 2016, Messrs. DeLise, McPherson and Themelis were granted multi-year awards valued at $1.8 million, $2.5
million and $3.0 million, respectively. The awards were comprised of performance shares (representing 40% of the

52

2021 Proxy Statement

award value), restricted stock units (representing 30% of the award value) and stock options (representing 30% of the
award value). Half of the outstanding equity vested in January 2020. The remainder vested in January 2021.

COMPENSATION DISCUSSION AND ANALYSIS

Total Direct Compensation (TDC)

Our compensation decisions for year-end 2020 were a balance between the Company’s record financial results for the
12th consecutive year and its performance in light of its peers, individual performance, benchmarking data, and the
impact and value of any long-term retention incentives previously awarded to each NEO. A summary of each NEO’s
2020 TDC and year-over year change in TDC can be found below:

2020 Compensation Decisions

Base Salary Cash Incentive

Richard M. McVey, CEO
Christopher R. Concannon,
President
Antonio L. DeLise, CFO
Kevin McPherson, Head of Sales
Nicholas Themelis, CIO

500

500
300
300
300

2,250

1,500
900
1,200
1,200

Total Cash

Annual
Equity (1)
($ in thousands)
3,550

2,750

Residual
Multi-Year
Equity (2)

TDC

Change 2020
vs. 2019

2,200

8,500

1,000

2,000
1,200
1,500
1,500

2,500
1,200
1,400
1,700

5,500
2,400
2,900
3,200

10%

5%
15%
16%
14%

(1) Represents an annual equity award granted on January 15, 2021 for 2020 performance

(2)

See discussion regarding special multi-year awards above

Additional Compensation Information

Common Stock Ownership Guidelines

We believe that equity-based awards are an important factor in aligning the long-term financial interest of our NEOs
and our stockholders. As such, we maintain stock ownership guidelines for our NEOs. Generally, under the guidelines,
our CEO is required to own not less than a number of shares of Common Stock equal in value to ten times his base
salary using a price of $509.46 per share, which was the average of the daily closing price of our Common Stock for the
twelve-month period ending March 31, 2021. At his current base salary of $500,000, our CEO’s required ownership
level is not less than 9,814 shares. Additionally, effective April 2016, for the remainder of the time our CEO holds this
title and for the twelve months thereafter, he will be required to maintain beneficial ownership of at least 50% of the
shares that he received as equity compensation as of the date of the guideline or thereafter. All of his vested and
unvested restricted shares, vested and unvested restricted stock units, settled performance shares, and shares deferred
under a non-qualified deferred compensation arrangement will be counted for the post-termination holding
requirement; vested and unvested stock options are excluded from the requirement.

2021 Proxy Statement

53

COMPENSATION DISCUSSION AND ANALYSIS

Except for the President, the Company’s other NEOs are required to own not less than three times their base salary as
in effect on such date. The President is required to own not less than five times his base salary. At their current base
salaries, the President’s required ownership is not less than 4,907 shares and the CFO’s, Head of Sales’, and CIO’s
required ownership is not less than 1,767 shares. New NEOs will be subject to the same guidelines and will be required
to be in compliance within five years of becoming an NEO. Under our ownership guidelines, shares purchased and held
beneficially, vested and unvested RSUs and restricted shares and settled performance shares count toward the
minimum ownership requirement. Vested and unvested options and unsettled performance shares are not counted
toward the ownership requirement. Compliance with the Common Stock ownership guidelines is reviewed by our
Board’s Nominating and Corporate Governance Committee every year or more often at the discretion of the Board or
Nominating and Corporate Governance Committee. All of our NEOs are currently in compliance with the guidelines.

NEO Stock Ownership Requirements

Requirement

Current Holdings

Richard M. McVey, CEO
Christopher R. Concannon, President
Antonio L. DeLise, CFO
Kevin McPherson, Sales
Nicholas Themelis, CIO

Incentive Compensation Clawback

10x
5x
3x
3x
3x

783x
44x
47x
121x
30x

The Board is dedicated to maintaining and enhancing a culture focused on integrity and accountability which
discourages conduct detrimental to the Company’s sustainable growth. Each of our incentive plans therefore contain a
clawback provision that allows the Company to recoup all or part of the year-end incentive compensation paid to NEOs
in the event of a misstatement of financial results (whether through mistake or wrongdoing) discovered within 12
months of December 31st of the respective performance year. The clawback provisions apply to all cash and equity
incentive awards for our NEOs.
with the right to recapture all compensation paid, whether in the form of cash, Common Stock or any other form of
property, to the extent required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the
related rules of the SEC (the “Dodd-Frank Act”) and the Remuneration Code published by the U.K. Financial Conduct
Authority.

In addition, the CEO’s and President’s employment agreements provide the Company

Prohibition of Employee and Director Hedging and Pledging

The Company’s anti-hedging and pledging policy applies to all Company "insiders" including directors, employees
(including officers), consultants, representatives or independent contractors or other persons in a special relationship
with the Company who know material nonpublic information about the Company, and certain persons related to such
insiders. The policy prohibits these individuals from engaging in any hedging transaction with respect to Company
securities or transactions of a speculative nature at any time. Hedging includes the purchase of financial instruments
(including prepaid variable forward contracts, equity swaps, collars, and exchange funds) and other transactions
designed to hedge or offset, or that have the effect of hedging or offsetting, any decrease in the market value of
Company securities or limit the ability to profit from an increase in the value of Company securities. All insiders are
prohibited from short-selling Company securities or engaging in transactions involving Company-based derivative
securities (which include options, warrants, stock appreciation rights or similar rights whose value is derived from the
value of Company securities). This prohibition includes, but is not limited to, trading in Company-based put and call
option contracts, transacting in straddles, and similar transactions. These individuals are also prohibited from holding
Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

54

2021 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

Other Benefits

We provide our NEOs with the same benefits offered to all other employees. The cost of these benefits constitutes a
small percentage of each NEO’s total compensation. In the U.S. and the U.K., key benefits include paid vacation,
premiums paid for group life insurance and disability policies, employer contributions to the NEO’s retirement account,
and the payment of all or some of the NEO’s healthcare premiums in fiscal year 2020. We review these other benefits
on an annual basis and make adjustments as warranted based on competitive practices and our performance.
Comparable benefits are offered to employees in other geographic locations in which we operate.

Severance and Change in Control Arrangements

In hiring and retaining executive level talent, the Compensation Committee believes that providing the executive with a
level of security in the event of an involuntary termination of employment or in the event of a change in control is an
important and competitive part of the executive’s compensation package. We entered into employment agreements
with the CEO and President that provide for severance payments and benefits in the event of the termination of their
employment under certain circumstances. The other NEOs are entitled to severance payments and benefits in the event
of termination of their employment under certain circumstances pursuant to the terms of severance protection
agreements. The employment agreements and severance protection agreements also provide for the accelerated
vesting of outstanding equity awards in the event of termination of their employment under certain circumstances or
upon a change in control of the Company.

While the agreements with our NEOs are designed to protect them in the event of a change in control, they do not
provide for “single-trigger” protection, nor does the Company provide any 280G protection or “gross-up” for excise
taxes that may be imposed under Code Section 4999. The agreements do provide that if any payments or benefits paid
or provided to him would be subject to, or result in, the imposition of the excise tax imposed by Code Section 4999,
then the amount of such payments will be automatically reduced to one dollar less than the amount that subjects such
payment to the excise tax, unless they would, on a net after-tax basis, receive less compensation than if the payment
were not so reduced.

See below under Executive Compensation — Potential termination or change in control payments and benefits for
additional information regarding these arrangements, payments and benefits.

Impact of Tax and Accounting

As a general matter, the Compensation Committee reviews and considers the tax and accounting implications of using
the various forms of compensation employed by the Company.

When determining the size of grants to our NEOs and other employees under the Company’s Equity Incentive Plan, the
Compensation Committee examines the accounting cost associated with the grants. Under FASB ASC Topic 718, grants
of stock options, restricted stock, RSUs, performance shares and other share-based payments result in an accounting
charge for the Company. The accounting charge is equal to the fair value of the instruments being issued. For restricted
stock, RSUs and performance shares, the cost is equal to the fair value of the Common Stock on the date of grant times
the number of shares or units granted. For stock options, the cost is equal to the fair value determined using an option
pricing model. This expense is recognized over the requisite service or performance period.

2021 Proxy Statement

55

COMPENSATION DISCUSSION AND ANALYSIS

Code Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”) generally prohibited any
publicly-held corporation from taking a Federal income tax deduction for compensation paid in excess of $1 million in
any taxable year to certain executive officers and certain other individuals. Exceptions to this rule had historically
included qualified performance-based compensation. However, this performance-based exception from the deduction
limit has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to
our U.S. named executive officers in excess of $1 million is not deductible unless it qualifies for the limited transition
relief applicable to certain arrangements in place as of November 2, 2017. While the Compensation Committee
considers tax deductibility as one factor in determining executive compensation, the Compensation Committee also
looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it
determines to be consistent with the goals of our executive compensation program even if the awards are not
deductible by us for tax purposes. There can be no assurance that any compensation will in fact be deductible.

56

2021 Proxy Statement

REPORT OF THE COMPENSATION AND TALENT
COMMITTEE OF THE BOARD OF DIRECTORS

The Compensation and Talent Committee (the “Compensation Committee”) has reviewed and discussed with
management the Compensation Discussion and Analysis to be included in this Proxy Statement. Based on the reviews
and discussions referred to above, the Compensation Committee recommended to the Board that the Compensation
Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation and Talent
Committee of the Board of Directors:

Steven L. Begleiter — Chair
Nancy Altobello
Richard L. Prager
John Steinhardt

a

2021 Proxy Statement

57

EXECUTIVE COMPENSATION

Summary compensation table

The following table sets forth all compensation received during fiscal years 2018, 2019 and 2020 by our (i) Chief
Executive Officer, (ii) President and Chief Operating Officer, (iii) Chief Financial Officer, (iv) Global Head of Sales and (v)
Chief Information Officer. These executives are referred to as our “named executive officers” or “NEOs” elsewhere in
this Proxy Statement.

Name and Principal
Position
Richard M. McVey

Chief Executive Officer

Christopher Concannon

President and Chief Operating Officer

Antonio L. DeLise

Chief Financial Officer

Kevin McPherson

Global Head of Sales

Nicholas Themelis

Chief Information Officer

2020 Summary Compensation Table

Salary($)
(1)
500,000
500,000
500,000
500,000
473,717
300,000
300,000
300,000

300,000
300,000
300,000
300,000
300,000
300,000

Bonus ($)
(2)
—
—
1,890,000

—
1,500,000

—
875,000
850,000

—
1,100,000
1,100,000

—
1,200,000
1,175,000

Year
2020
2019
2018
2020
2019
2020
2019
2018

2020
2019
2018
2020
2019
2018

Stock
Awards
($)(3)(4)
2,532,567
2,715,708
7,590,245
2,209,599
8,986,309
540,189
386,473
337,809

589,032
346,942
347,762
687,447
411,128
472,087

Option
Awards
($)(3)(4)
854,119
—
6,399,840

—
2,875,003

—
—
—

—
—
—
—
—
—

Non-Equity
Incentive Plan
Co
mpensation

($)(5)
2,250,000
—
—
1,500,000
—
900,000
—
—
1,200,000
—
—
1,200,000
—
—

All Other
Compensation
($)(6)
7,000
7,000
7,000
7,000
7,000
7,000
7,000
7,000

7,000
7,000
7,000
7,000
7,000
7,000

Total ($)
6,143,686
3,222,708
16,387,085
4,216,599
13,842,029
1,747,189
1,568,473
1,494,809

2,096,032
1,753,942
1,754,762
2,194,447
1,918,128
1,954,087

(1) Mr. Concannon’s salary represented a partial year of service for 2019.

(2) As determined by the Compensation Committee, Mr. McVey received additional equity in lieu of a cash incentive for performance year 2019,

which is reflected in the Stock Awards column.

(3)

(4)

(5)

(6)

The amounts represent the aggregate grant date fair value of stock and option awards granted by the Company in 2018, 2019 and 2020,
computed in accordance with FASB ASC Topic 718. For further information on how we account for stock-based compensation and certain
assumptions made, see Note 11 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020, filed with the SEC on February 19, 2021. These amounts reflect the Company’s accounting expense for these awards
and do not correspond to the actual amounts, if any, that will be realized by the named executive officers. The amounts reported for stock
awards in 2018, 2019 and 2020 include performance shares. For 2020, the grant date fair value of the performance shares is $1,677,102,
$1,093,888, $267,427, $291,607 and $340,329 for Messrs. McVey, Concannon, DeLise, McPherson and Themelis, respectively. The grant date fair
value of the performance shares is reported based on achievement of 100% of the target performance goals, which represents the probable
outcome of the performance goals as of the grant date.
If the Company achieves the maximum performance goals, as measured at the end of
the three-year performance period ending December 2022, then the fair value of the performance shares granted in 2020 would be $2,515,653,
$1,640,832, $401,140, $437,411, and $510,493 for Messrs. McVey, Concannon, DeLise, McPherson and Themelis, respectively.

In November 2018, in connection with an extension of his employment agreement, Mr. McVey was awarded an equity grant that consists
of performance shares and performance-based stock options with an aggregate grant date fair value of $11,000,000. The performance criteria
for this award was met, in full, in 2019. The award remains subject to time-based vesting conditions and will fully vest in November 2023 if such
conditions are met.
In January 2019, Mr. Concannon was awarded a hire-on equity grant that consists of performance shares and performance-
based stock options with an aggregate grant date fair value of $5,750,000. The performance criteria for this award was met, in full, in 2019. The
award remains subject to time-based vesting conditions and will fully vest in January 2024 if such conditions are met.

These amounts represent annual cash incentive compensation earned under the Employee Cash Incentive Plan.

These amounts represent employer matching contributions to the Company’s 401(k) defined contribution plan of $7,000 to each NEO for each
year reported.

2021 Proxy Statement

58

Grants of plan-based awards

The following table summarizes the grants of performance shares, performance awards, restricted stock units and stock
options we made to the named executive officers in 2020, as well as potential payouts pursuant to certain
performance-based compensation arrangements. There can be no assurance that the grant date fair value of stock
awards will ever be realized.

2020 Grants of Plan-Based Awards Table

EXECUTIVE COMPENSATION

Estimated Future Payouts Under
Equity Incentive Plan Awards
Target
(#)
—
4,647
—

Maximum
(#)
—
6,971
—

Threshold
(#)
—
2,324
—

All Other
Stock Awards:
Number of
Shares of
Stock or
Units
(#)
2,324
—
—

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
—
—
9,342

Exercise or
Base Price
of Option
Awards
($ / Sh)
—
—
368

Grant Date
Fair Value of
Stock and
Option
Awards
($) (1)
855,464
1,677,102
854,119

—
1,516
—
371
—
404
—
472

—
3,031
—
741
—
808
—
943

—
4,547
—
1,112
—
1,212
—
1,415

3,031
—
741
—
808
—
943
—

—
—
—
—
—
—
—
—

—
—
—
—
—
—
—
—

1,115,711
1,093,888
272,762
267,427
297,425
291,607
347,118
340,329

Name

Richard M. McVey

Christopher R.
Concannon

Antonio L. DeLise

Kevin McPherson

Nicholas Themelis

Approval
Date

Grant
Date

1/14/2020 1/15/2020
1/14/2020 1/15/2020 (2)
1/14/2020 1/15/2020

1/14/2020 1/15/2020
1/14/2020 1/15/2020 (2)
1/14/2020 1/15/2020
1/14/2020 1/15/2020 (2)
1/14/2020 1/15/2020
1/14/2020 1/15/2020 (2)
1/14/2020 1/15/2020
1/14/2020 1/15/2020 (2)

(1)

The value of a restricted stock unit is based on the fair value of such award, computed in accordance with FASB ASC Topic 718. The value of a
performance share is based on the grant date fair value of such award assuming 100% of target, computed in accordance with FASB ASC Topic
718. For further information on how we account for stock-based compensation, see Note 11 to the consolidated financial statements included
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

(2) Reflects the number of performance shares that would vest based on the level of achievement by the Company of operating margin and market

share targets for the three-year performance period beginning on January 1, 2020 and ending on December 31, 2022. Each performance share
that is earned will convert into an equal number of restricted stock units that will cliff vest on January 31, 2023, subject to the participant’s
continued service.

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2021 Proxy Statement

59

EXECUTIVE COMPENSATION

Outstanding equity awards at fiscal year-end

The following table summarizes unexercised stock options, shares of restricted stock and restricted stock units that had
not vested, and related information for each of our named executive officers, as of December 31, 2020. The market
value of restricted stock awards and restricted stock units is based on the closing price of the Company’s Common
Stock on December 31, 2020 of $570.56.

Outstanding Equity Awards - Year End 2020

Option Awards

Stock Awards

Name
Richard M. McVey

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1)

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

27,020
24,515
10,744

5,293
69,113
79,411
9,342

Option
Exercise
Price
($)

101.77
156.85
203.72
203.72
257.78
278.40
368.10

Option
Expiration
Date

1/15/2022
1/15/2023
1/15/2024
1/15/2024
5/8/2024
5/8/2024
1/15/2026

Christopher R. Concannon

35,679
41,189

272.88
294.71

7/22/2024
7/22/2024

Antonio L. DeLise

1,547

8,060

156.85
103.30

1/15/2023
1/31/2022

Kevin McPherson

11,194

11,194

103.30
103.30

1/31/2022
1/31/2022

Nicholas Themelis

12,465

103.30

1/31/2022

Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(2)

Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)

Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested (#)

Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other Rights
That Have Not
Vested ($)

(3)
(3)
(5)
(4)
(4)
(6)
(7)

(8)
(9)
(10)
(6)
(7)

(3)
(3)
(3)
(3)
(4)
(4)
(6)
(7)

(3)
(3)
(3)
(3)
(4)
(4)
(6)
(7)

(3)
(3)
(3)
(3)
(4)
(4)
(6)
(7)

2,946
1,458
37,742
7,142
5,120
2,324

18,914
15,398
4,666
3,031

3,692
2,600
357
291
850
761
741

5,128
3,611
368
300
763
684
808

6,153
4,333
461
465
926
830
943

1,680,870
831,876
21,534,076
4,074,940
2,921,267
1,325,981

10,791,572
8,785,483
2,662,233
1,729,367

2,106,508
1,483,456
203,690
166,033
484,976
434,196
422,785

2,925,832
2,060,292
209,966
171,168
435,337
390,263
461,012

3,510,656
2,472,236
263,028
265,310
528,339
473,565
538,038

4,647

2,651,392

3,031

1,729,367

741

422,785

808

461,012

943

538,038

(1)

60

5,293 stock options granted to Mr. McVey vested on January 31, 2021. Of the 9,342 stock options granted to Mr. McVey, 3,176 vested on
January 31, 2021 and the remainder will vest 50% on each of January 31, 2022 and January 31, 2023, subject to time-based performance
conditions. 69,113 and 79,411 stock options granted to Mr. McVey will fully vest on November 8, 2023, subject to time-based performance
conditions. 35,679 and 41,189 stock options granted to Mr. Concannon will fully vest on January 22, 2024, subject to time-based performance
conditions. 8,060 stock options for Mr. DeLise, 11,194 options for Mr. McPherson, and 12,465 stock options for Mr. Themelis vested on January
31, 2021. The stock options will also vest and become exercisable in the event of certain terminations of employment. See Potential termination
or change in control payments and benefits for additional information.

2021 Proxy Statement

EXECUTIVE COMPENSATION

(2)

(3)
(4)
(5)

(6)

(7)

(8)

Each share of restricted stock and each restricted stock unit represents one share of the Company’s Common Stock that is subject to forfeiture if
the applicable vesting requirements are not met. Generally, vesting is subject to the NEOs continued employment through the v esting date,
except that shares of restricted stock and restricted stock units will vest in the event of certain terminations of employment and, in certain
circumstances, may vest upon a change in control. See Potential termination or change in control payments and benefits for additional
information.
These restricted shares and restricted stock units fully vested on January 31, 2021.
50% of these restricted shares and restricted stock units vested on January 31, 2021 and the remainder will vest on January 31, 2022.
37,742 shares for Mr. McVey outstanding as of December 31, 2020 represent 100% of the target unearned performance shares awarded on
November 8, 2018. The shares were settled as the applicable performance goals were met. The shares will fully vest on November 8, 2023.
For Mr. McVey, 790 RSUs vested on February 15, 2021 and 50% of the remainder will vest on each of January 31, 2022 and 2023. For Mr.
Concannon, 1,030 vested on January 31, 2021 and 50% of the remainder will vest on each of January 31, 2022 and 2023. For Mr. DeLise, 251
RSUs vested on January 31, 2021 and 50% of the remainder will vest on each of January 31, 2022 and 2023. For Mr. McPherson, 274 RSUs
vested on January 31, 2021 and 50% of the remainder will vest on each of January 31, 2022 and 2023. For Mr. Themelis, 320 RSUs vested on
January 31, 2021 and 50% of the remainder will vest on each of January 31, 2022 and 2023.
The 4,647 shares for Mr. McVey, 3,031 shares for Mr. Concannon, 741 shares for Mr. DeLise, 808 shares for Mr. McPherson and 943 shares for
Mr. Themelis outstanding as of December 31, 2020 represent 100% of the target performance shares awarded on January 15, 2020. The shares
will not settle until January 2023 and will vest on January 31, 2023.
18,914 shares for Mr. Concannon outstanding as of December 31, 2020 represent 100% of the target unearned performance shares awarded on
January 22, 2019. The shares were settled as the applicable performance goals were met. The shares will fully vest on January 22, 2024.
7,699 shares for Mr. Concannon vested on January 22, 2021. The remaining 7,699 shares will vest on January 22, 2022.

(9)
(10) These shares will vest on January 22, 2022.

Option exercises and stock vested

The following table summarizes each exercise of stock options, each vesting of restricted stock and related information
for each of our named executive officers on an aggregated basis during 2020.

2020 Option Exercises and Stock Vesting

Option Awards

Stock Awards

Number of Shares
Acquired on Exercise
(#)
143,361
—
9,334
—
17,262

Value
Realized
on Exercise
($)(1)
62,612,979
—
3,098,650
—
7,587,119

Number of Shares
Acquired on Vesting
(#)
80,069
7,931
9,821
10,109
12,611

Value
Realized
on Vesting
($)(2)
29,396,366
2,937,642
3,461,693
3,580,406
4,466,564

Name
Richard M. McVey
Christopher R. Concannon
Antonio L. DeLise
Kevin McPherson
Nicholas Themelis

(1) Value realized represents the market value on the date of exercise in excess of the exercise price.

(2) Value realized represents the market value on the date of vesting.

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61

EXECUTIVE COMPENSATION

Nonqualified deferred compensation

All U.S.-based NEOs were eligible to elect to defer the settlement of the RSUs awarded in whole or in part (see
Compensation Discussion and Analysis — 2020 Compensation — Long-term incentives — Flex Share Program above).
The following table sets forth information with respect to vested RSUs held by Messrs. McVey and DeLise as of
December 31, 2020, for which they have elected to defer the delivery of the underlying shares until the earlier of
(i) separation of service (within the meaning of Code Section 409A), subject to the six-month delay required under
Code Section 409A, (ii) a change of control of the Company and (iii) the calendar year in which the applicable
anniversary following vesting occurs:

Name
Richard M. McVey

Antonio L. DeLise

Award /
Deferral
Date
1/14/2011
1/19/2011
1/15/2013
1/15/2014
1/15/2015
1/15/2016
1/15/2017
1/15/2018
1/15/2019
1/15/2020
1/13/2012
1/15/2014
1/15/2015

Deferral Elections
Amount
Deferred
(#)

67,961
119,565
44,882
26,087
25,084
9,033
6,222
4,418
7,757
2,324
16,260
1,999
1,824

Re-deferral
Date
12/01/2015
12/01/2015
N/A (1)
11/18/2019
N/A (1)

10/18/2016
N/A (2)
N/A (2)

Deferral
Period
(Years)

10
10
7
separation of service
5
5
separation of service
3
separation of service
separation of service
10
5
4

(1) Mr. McVey took receipt of 16,206 shares from his January 2012 award in January 2020. He did not elect to re-defer his January 2013 and

January 2015 RSU awards, and he began taking receipt of the underlying shares in February 2021.

(2) Mr. DeLise did not elect to re-defer his January 15, 2014 and 2015 RSU awards. He began taking receipt of the shares underlying the RSUs in

February 2020.

The table below shows (i) the contributions made by each NEO during the fiscal year ended December 31, 2020,
(ii) aggregate earnings on each NEO’s account balance during the fiscal year ended December 31, 2020, (iii) the
aggregate amount of withdrawals or distribution made for each NEO and (iv) the aggregate balance of each of our
NEOs as of December 31, 2020:

2020 Non-qualified Deferred Compensation Table

Executive
Contributions
in Last Fiscal
Year ($)(1)(2)
2,176,620
300,000
450,000
—
—

Registrant
Contributions
in Last
Fiscal Year
($)
—
—
—
—
—

Aggregate
Earnings
in Last
Fiscal Year
($)(3)(4)
55,539,426
—
3,693,734
—
—

Aggregate
Withdrawals /
Distributions
($ )
5,965,429
—
680,318
—
—

Aggregate
Balance at
Last Fiscal
Year- End
($)(5)
181,226,715
300,000
18,084,629
—
—

Name
Richard M. McVey
Christopher R. Concannon
Antonio L. DeLise
Kevin McPherson
Nicholas Themelis

(1)

For Mr. McVey, reflects the market value of the Common Stock underlying 1,458 RSUs that vested on January 31, 2020 and 2,637 RSUs that
vested on February 15, 2020 based on the closing price of our Common Stock on such dates of $354.18 and $345.69, respectively. In addition, it
includes the value of amounts accrued and unpaid under dividend equivalent rights in 2017 through 2019 as of such vesting dates. The
dividend equivalents are equal in amount to the ordinary cash dividends paid to the holders of our Common Stock in 2017 through 2019 and
will be paid when Mr. McVey takes receipt of the underlying shares of the applicable RSUs.

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EXECUTIVE COMPENSATION

(2)

Executive contributions for Mr. Concannon and Mr. DeLise, consist of $300,000 and $450,000, respectively that were voluntarily deferred from
their 2020 cash bonuses under the non-qualified deferred cash plan. Their full cash bonus amounts are reported in the Summary
Compensation Table for 2020.

(3) Aggregate Earnings with respect to vested and undelivered RSUs include changes in the market value of the shares of Common Stock

underlying the RSUs based on the difference of the closing price of our Common Stock on December 31, 2020 of $570.56 and the closing price
of our Common Stock on the date of vesting, as well as the value of amounts accrued under a dividend equivalent right in 2020 that were
unpaid as of December 31, 2020. Additionally, Aggregate Earnings include the difference in value of shares of Common Stock underlying the
RSUs deferred by Mr. DeLise in 2012, 2014 and 2015 and by Mr. McVey in 2011, 2013, 2014, 2015, 2016, 2017, 2018 , and 2019 at Fiscal Year End
2020 versus Fiscal Year End 2019, as well as the value of accrued but unpaid dividend equivalents. These amounts are not included in the
Summary Compensation table because plan earnings were not preferential or above market.

(4)

(5)

Earnings of $546,733 were added to Mr. DeLise’s Aggregate Earnings for 2020 representing the returns he incurred through the non-qualified
deferred cash plan.

The value of the Aggregate Balance at Last Fiscal Year End for the RSUs was determined by adding all Executive Contributions for Fiscal Year-
End 2020 to any Aggregate Earnings for Fiscal Year 2020 and the Aggregate Balance at Last Fiscal Year-End as previously reported for year-end
2019 ($129,476,098 for McVey and $14,621,213 for Mr. DeLise).

Employment agreements and severance arrangements with our Named Executive
Officers

Richard M. McVey Employment Agreement

Effective November 8, 2018, Mr. McVey and the Company entered into an amendment to his employment agreement
(the “CEO Employment Agreement”) providing for an initial term ending on January 15, 2025 with successive one-year
automatic renewals unless either party elects not to extend the term at least 90 days prior to the last day of the term.

The CEO Employment Agreement provides that Mr. McVey will be employed by us as Chief Executive Officer and
Chairman of the Board of Directors, and his employment may be terminated by him or by the Company at any time.
Mr. McVey’s annual base salary under the CEO Employment Agreement is a minimum of $500,000 per year.

Under the CEO Employment Agreement, Mr. McVey is eligible to receive an annual bonus in accordance with the
Company’s annual performance incentive plan as is in effect from time to time and is entitled to participate in all
benefit plans and programs available to our other senior executives, at a level commensurate with other senior
management of the Company.

The CEO Employment Agreement provides for severance payments and benefits (subject to Mr. McVey’s execution of a
waiver and general release) if Mr. McVey’s employment is terminated under various conditions. See below under
Potential termination or change in control payments and benefits for a description of such payments and benefits.

The Company does not provide tax reimbursements to executives in the event of a Change of Control. The CEO
Employment Agreement provides that if any payments or benefits paid or provided to him would be subject to, or
result in, the imposition of the excise tax imposed by Section 4999 of the Code, then the amount of such payments will
be automatically reduced to one dollar less than the amount that subjects such payment to the excise tax, unless he
would, on a net after-tax basis, receive less compensation than if the payment were not so reduced. The CEO
Employment Agreement further provides that any award gains and annual incentive awards received by Mr. McVey are
subject to potential claw-back under policies adopted by the Company to comply with applicable law, rules or other
regulatory requirements.

For purposes of the CEO Employment Agreement, “Cause Event” generally means Mr. McVey’s:

(cid:220) willful misconduct or gross negligence in the performance of his duties;

(cid:220) conviction of, or plea of guilty or nolo contendere to, a crime relating to us or any of our affiliates, or any felony; or

(cid:220) material breach of his employment agreement or any other material written agreement with us.

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63

EXECUTIVE COMPENSATION

For purposes of the CEO Employment Agreement, “Good Reason” generally means:

(cid:220) Mr. McVey’s no longer holding the title of Chief Executive Officer, or the failure of the Board to nominate him as a

director or, once elected to the Board, the failure of the Board to elect him as Chairman;

(cid:220) a material diminution in his duties, authorities or responsibilities or the assignment of duties or responsibilities

materially adversely inconsistent with his then-current position (other than as a result of his ceasing to be a director);

(cid:220) our material breach of his employment agreement;

(cid:220) a relocation of his principal place of business of more than 50 miles; or

(cid:220) our failure to obtain a reasonably satisfactory written agreement from any successor to all or substantially all of our

assets to assume and agree to perform our obligations under his employment agreement.

For purposes of the CEO Employment Agreement, “Change in Control” generally means:

(cid:220) an acquisition representing 50% or more of the combined voting power of our then outstanding securities;

(cid:220) a change in the majority of the members of our Board during any two-year period, unless such members are

approved by two-thirds of the Board members who were members at the beginning of such period or members
whose nominations were so approved;

(cid:220) our merger or consolidation, other than (a) a transaction resulting in our voting securities outstanding immediately
prior thereto continuing to represent more than 50% of the combined voting power of the voting securities of such
surviving entity immediately after such transaction or (b) a transaction effected to implement a recapitalization (or
similar transaction) in which no person acquires more than 50% of the combined voting power of our then
outstanding securities; or

(cid:220) our stockholders’ approval of a plan of complete liquidation or the consummation of the sale or disposition of all or

substantially all of our assets other than (a) the sale or disposition of all or substantially all of our assets to a
beneficial owner of 50% or more of the combined voting power of our outstanding voting securities at the time of
the sale or (b) pursuant to a spinoff type transaction of such assets to our stockholders.

Christopher Concannon Employment Agreement

On January 7, 2019, the Company entered into an employment letter agreement (the “President Employment
Agreement”), effective as of January 22, 2019, with Christopher Concannon, pursuant to which Mr. Concannon became
the Company’s President and Chief Operating Officer.

The President Employment Agreement provides that Mr. Concannon will be employed by the Company as the
President and Chief Operating Officer for an initial five-year term with successive one-year automatic renewals unless
either party elects not to extend the term at least 90 days prior to the last day of the term. Under the President
Employment Agreement, Mr. Concannon’s minimum annual base salary is $500,000 per year and he is eligible to
receive an annual bonus in accordance with the Company’s annual performance incentive plan as in effect from time to
time and annual equity grants on terms and conditions determined by the Compensation Committee in its sole
discretion (provided that the annual cash incentive for the 2019 calendar year will be no less than $1.5 million; and
provided further, that the annual equity award for the 2019 calendar year, to be awarded in 2020, will be in an amount
equal to no less than $1.5 million as of the award date, subject to Mr. Concannon’s continued employment on the
grant date). The President Employment Agreement also entitled Mr. Concannon to receive certain equity awards (i) to
replace the 2018 year-end equity compensation he forfeited from his prior employer in order to commence
employment with the Company, (ii) to replace the unvested deferred compensation he forfeited from his prior
employer, and (iii) as a sign-on award with the Company, which were granted in January 2019.

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2021 Proxy Statement

EXECUTIVE COMPENSATION

The President Employment Agreement provides that Mr. Concannon’s employment may be terminated by him or by
the Company at any time. The President Employment Agreement provides for severance payments and benefits
(subject to Mr. Concannon’s execution of a waiver and general release) if Mr. Concannon’s employment is terminated
under various conditions. See below under Potential termination or change in control payments and benefits for a
description of such payments and benefits.

For purposes of the President Employment Agreement, the terms “Cause Event”, “Change in Control”, and “Good
Reason” generally have the same meaning as defined in the CEO Employment Agreement, except that Good Reason
refers to Mr. Concannon no longer holding the title of President.

The President Employment Agreement provides that if any payments or benefits paid or provided to Mr. Concannon
would be subject to, or result in, the imposition of the excise tax imposed by Code Section 4999, then the amount of
such payments will be automatically reduced to one dollar less than the amount that subjects such payment to the
excise tax, unless Mr. Concannon would, on a net after-tax basis, receive less compensation than if the payment were
not so reduced. The President Employment Agreement further provides that any award gains and annual incentive
awards received by Mr. Concannon will be subject to potential claw-back under policies adopted by the Company to
comply with applicable law, rules or other regulatory requirements.

In connection with entering into the President Employment Agreement, Mr. Concannon also executed a Proprietary
Information and Non-Competition Agreement and the Company’s standard form of Indemnification Agreement.

Severance Protection Agreements

Messrs. DeLise, McPherson and Themelis do not have employment agreements with us but are entitled to severance
payments and benefits under their respective severance protection agreements (the “Severance Protection
Agreements” or the “SPAs”), which provide for severance payments and benefits (subject to such executive’s execution
of a waiver and general release) if such executive’s employment is terminated under various conditions. See below
under Potential termination or change in control payments and benefits for a description of such payments and benefits.

For purposes of the Severance Protection Agreements, “Cause” generally means such executive’s:

(cid:220) willful misconduct, gross misconduct, or gross negligence in the performance of such executive’s duties;

(cid:220) conviction of, or plea of guilty or nolo contendere to, a crime relating to us or any of our affiliates, or any felony;

(cid:220) material breach of any material written agreement (including such executive’s proprietary information and non-

competition agreement) with us or on of our written policies signed by such executive;

(cid:220) intentional failure or refusal to follow a lawful and proper direction of the Board or the CEO; or

(cid:220) any other conduct by the executive, whether or not in the course of performing the executive’s responsibilities to

the Company, that has or is reasonably likely to have a material adverse effect on the business, assets or reputation
of the Company.

For purposes of the Severance Protection Agreements, “Good Reason” generally means the occurrence of any of the
following:

(cid:220) an adverse change in such executive’s title

(cid:220) a material diminution in such executive’s duties, authorities or responsibilities or the assignment of duties or

responsibilities materially adversely inconsistent with such executive’s then-current position;

(cid:220) a reduction in such executive’s base salary or annual target incentive bonus (as a percentage of base salary)

(cid:220) a relocation of his principal place of business of more than 50 miles;

(cid:220) we provide written notice of our intent not to renew the applicable Severance Protection Agreement;

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EXECUTIVE COMPENSATION

(cid:220) our failure to obtain a reasonably satisfactory written agreement from any successor to all or substantially all of our

assets to assume and agree to perform our obligations under the Severance Protection Agreement.

For purposes of the Severance Protection Agreements, the term “Change in Control” generally has the same meaning
as defined in the CEO Employment Agreement.

Proprietary Information and Non-Competition Agreements

Each of our U.S.-based NEOs has entered into, and is subject to the terms of, a Proprietary Information and Non-
Competition Agreement with us that contains, among other things, (i) certain provisions prohibiting disclosure of our
confidential information without our prior written consent, (ii) certain non-competition provisions that restrict their
engaging in certain activities that are competitive with us during their employment and for one year thereafter for the
CEO, President, Head of Sales and CIO and six months thereafter for the CFO, (iii) certain non-solicitation provisions
that restrict their recruiting, soliciting or hiring our non-clerical employees or consultants during their employment and
for two years thereafter and (iv) certain non-solicitation provisions that restrict their soliciting any person or entity to
terminate, cease, reduce or diminish their relationship with us, during their employment and for two years thereafter
for the CEO and President and one year thereafter for the CFO, Head of Sales and CIO.

Potential termination or change in control payments and benefits

Each of the named executive officers is entitled to certain payments and benefits pursuant to their employment
agreements and/or other agreements, as applicable, entered into between us and such executive upon a termination of
such executive’s employment in certain circumstances or in the event of a change in control of the Company. For
Messrs. McVey and Concannon, their rights upon certain termination or change in control events: (a) to base salary
continuation, bonus and healthcare benefits are governed by the CEO Employment Agreement and President
Employment Agreement, respectively; and (b) to vesting of unvested equity awards are governed by their equity award
agreements. For Messrs. DeLise, McPherson and Themelis, their rights upon certain termination or change in control
events are governed by their applicable Severance Protection Agreement, or where more favorable, their applicable
equity award agreement. The benefits described herein are subject to the applicable NEO’s, his estate’s or his legal
guardian’s, as applicable, execution of a general release of claims and covenant not to sue.

The following tables estimate the payments we would be obligated to make to each of our NEOs as a result of such
NEO’s termination or resignation under the circumstances shown or because of a change in control, in each case
assuming such event had occurred on December 31, 2020. We have calculated these estimated payments to meet SEC
disclosure requirements. The estimated payments are not necessarily indicative of the actual amounts any of our NEOs
would receive in such circumstances. The table excludes (i) compensation amounts accrued through December 31,
2020 that would be paid in the normal course of continued employment, such as accrued but unpaid salary, and
(ii) vested account balances under our 401(k) Plan that are generally available to all of our salaried employees. Where
applicable, the information in the table uses a price per share for our Common Stock of $570.56, the closing price on
December 31, 2020. In addition, where applicable, the amounts listed for bonuses reflect the average of the actual
amounts paid to the NEOs in the year following each of the performance years 2017 through 2019, since the
hypothetical termination or Change in Control date is the last day of the fiscal year.

66

2021 Proxy Statement

EXECUTIVE COMPENSATION

Payments and Benefits for Mr. McVey, Chief Executive Officer and Chairman
Death or
Disability
CCPP
Termination(1)

Prior to CIC
Termination(1)
$ 1,000,000
$ 2,520,000
$

45,510

Following CIC
Termination(1)
$ 1,000,000
$ 2,520,000
$

45,510

CIC
Trigger(1)
—
—
—

Death or
Disability
Enhanced
Non-CCPP
Non-CCPP
Termination(1)
Termination(1)
500,000
$ 1,000,000 $ 1,000,000 $
$ 2,520,000 $ 2,520,000 $ 1,260,000
$

45,510

22,755

34,132

$

$

Termination for
Cause or
Without
Good Reason
—
—
—

$ 21,534,076 $ 27,289,885 $ 27,289,885 $ 10,767,038 $ 24,411,980 $ 24,411,980

—

—

$ 2,651,392

$ 2,651,392

$ 3,753,144

$ 5,079,125

—

—

$ 1,325,696 $ 1,325,696

$ 2,539,563 $ 2,539,563

$ 44,817,882 $ 48,650,947 $ 3,833,065 $ 44,817,882 $ 24,325,474 $ 24,325,474

$ 69,917,467 $ 85,910,878 $ 38,853,468 $ 59,139,052 $ 56,168,222 $ 54,385,468 $ 1,782,755

Non-
Extension
Non-CCPP
Termination(1)
500,000
$
$ 1,260,000
$

22,755

—

—

—

—

Base Salary(2)
Bonus(3)
Health Benefits(4)
Unvested Restricted
Stock(5)
Unvested Performance
Shares(6)
Unvested Restricted
Stock Units(7)
Unvested Stock
Options(8)
Total

—

—

—

—

—

(1) A “Prior to CIC Termination” occurs if Mr. McVey resigns for Good Reason or his employment is terminated for any reason other than his

resignation without Good Reason (including due to his providing a notice of non-extension of the term of the CEO Employment Agreement at
least 90 days prior to the end of the term (a “Non-Extension Notice”)), or by us for Cause, in any case, within three months prior to a “change in
control event” within the meaning of Section 409A of the Code (such period, a “Prior Change in Control Protection Period” or a “Prior CCPP”). A
“Following CIC Termination” occurs if Mr. McVey resigns for Good Reason or his employment is terminated for any reason other than his
resignation without Good Reason (including due to his providing a Non-Extension Notice), or by us for Cause, in any case, within 18 months
after a Change in Control as defined in the CEO Employment Agreement (such period, combined with a Prior CCPP, a “CCPP”). A “CIC Trigger”
occurs if, immediately prior to a Change in Control, the Compensation Committee determines that the applicable equity award will not be
continued, assumed or have new rights substituted therefor in accordance with the applicable incentive plans. An “Enhanced Non-CCPP
Termination” occurs if Mr. McVey’s employment is terminated outside of a CCPP for any reason other than: (a) his death, (b) his voluntary
resignation without Good Reason (including due to his providing a Non-Extension Notice), (c) due to our providing a Non-Extension Notice, (d)
by us as a result of his having a disability or (e) for Cause. A “Death or Disability CCPP Termination” occurs if Mr. McVey’s employment is
terminated during a CCPP due to his death or by us as a result of his having a disability. A “Death or Disability Non-CCPP Termination” occurs if
Mr. McVey’s employment is terminated outside of a CCPP due to his death or by us as a result of his having a disability. A “Non-Extension Non-
CCPP Termination” occurs if Mr. McVey’s employment is terminated outside a CCPP due to our providing a Non-Extension Notice. An “Average
Bonus” for Mr. McVey means the average of his annual bonus amounts received for the Company’s three fiscal years immediately preceding the
termination.

(2) Represents the continued payment of base salary: (a) upon a Prior to CIC Termination, a Following CIC Termination, an Enhanced Non-CCPP

Termination or a Death or Disability CCPP Termination for 24 months; and (b) upon a Death or Disability Non-CCPP Termination or a Non-
Extension Non-CCPP Termination, for 12 months.

(3) Represents a bonus: (a) upon a Prior to CIC Termination, a Following CIC Termination, an Enhanced Non-CCPP Termination or a Death or

Disability CCPP Termination, in the amount of two times Mr. McVey’s Average Bonus, payable in 24 monthly installments; and (b) upon a Death
or Disability Non-CCPP Termination or a Non-Extension Non-CCPP Termination, in the amount of one times Mr. McVey’s Average Bonus,
payable in 12 monthly installments.

(4) Represents healthcare coverage: (a) upon a Prior to CIC Termination, a Following CIC Termination or a Death or Disability CCPP Termination, for
24 months; (b) for an Enhanced Non-CCPP Termination, for 18 months; and (c) upon a Death or Disability Non-CCPP Termination or a Non-
Extension Non-CCPP Termination, for 12 months.

(5) Represents the value of the unvested restricted stock issued to Mr. McVey upon the settlement of performance shares granted to him in

January 2018, as part of his multi-year award (the “McVey 2018 Multi-Year”), and in January 2018 (the “McVey 2018 Annual”) and January 2019
(the “McVey 2019 Annual”), each as part of his annual award, which will vest as follows: (a) for the McVey 2018 Multi -Year, (i) upon a Prior to CIC
Termination, a Following CIC Termination, a CIC Trigger, a Death or Disability CCPP Termination or a Death or Disability Non-CCPP Termination,
his unvested restricted stock shall fully vest; and (ii) upon an Enhanced Non-CCPP Termination, half of his restricted stock shall vest; and (b) for
the McVey 2018 Annual and the McVey 2019 Annual, (i) upon a Following CIC Termination or a CIC Trigger, his unvested restricted stock shall
fully vest; and (ii) upon a Death or Disability CCPP Termination or a Death or Disability Non-CCPP Termination, half of his restricted stock shall
vest.

(6) Represents the target value of the unvested performance shares granted to Mr. McVey in January 2020 as part of his annual award (the “McVey

2020 Annual” and together with the McVey 2018 Annual and McVey 2020 Annual, the “McVey Annual Awards”), which will vest as follows (a)
upon a Following CIC Termination or a CIC Trigger, his unvested performance shares shall fully vest; and (b) upon a Death or Disability CCPP
Termination or a Death or Disability Non-CCPP Termination, half of his unvested performance shares shall vest.

(7) Represents the value of the unvested restricted stock units granted to Mr. McVey as part of the McVey Annual Awards, which will vest as

follows: (a) for the McVey 2018 Annual and McVey 2019 Annual, (i) upon a Following CIC Termination or a CIC Trigger, his unvested restricted
stock units shall fully vest; and (ii) upon a Death or Disability CCPP Termination or a Death or Disability Non-CCPP Termination, half of his

a

2021 Proxy Statement

67

EXECUTIVE COMPENSATION

unvested restricted stock units shall vest; and (b) for the McVey 2020 Annual, (i) upon a CIC Trigger, his unvested restricted stock units shall fully
vest; and (ii) upon a Death or Disability CCPP Termination or Death or Disability Non-CCPP Termination, half of his unvested restricted stock
units shall vest.

(8) Represents the value of the unvested stock options granted to Mr. McVey as part of the McVey 2018 Multi-Year, the McVey 2018 Annual and
the McVey 2020 Annual, which will vest as follows: (a) for the McVey 2018 Multi-Year, (i) upon a Prior to CIC Termination, a Following CIC
Termination, or an Enhanced Non-CIC Termination, his unvested stock options shall fully vest; (ii) upon a Death or Disability CCPP Termination
or a Death or Disability Non-CCPP Termination, half of his unvested restricted stock units shall vest; (b) for the McVey 2018 Annual and McVey
2020 Annual, (i) upon a Following CIC Termination or a CIC Trigger, his unvested stock options shall fully vest; and (ii) upon a Death or Disability
CCPP Termination or a Death or Disability Non-CCPP Termination, half of his unvested restricted stock units shall vest.

68

2021 Proxy Statement

EXECUTIVE COMPENSATION

Payments and Benefits for Mr. Concannon, President and Chief Operating Officer

Termination for
Cause or Without
Good Reason
—
—
—

Death or
Disability
CCPP
Termination(1)
$ 1,000,000
$ 3,000,000
$

34,132

Death or
Disability Non-
CCPP
Termination(1)
500,000
1,500,000
22,755

$
$
$

CCPP Without
Cause or
for Good
Reason
Termination(1)
1,000,000
$
3,000,000
$
34,132
$

Non-CCPP
Without
Cause or
for Good
Reason(1)
$ 1,000,000
$ 3,000,000
$

34,132

CIC
Trigger(1)
—
—
—

Non-
Extension
Termination(1)
$
500,000
$ 1,500,000
$

22,755

—

—

—

—

—

$ 10,791,572

$

864,684

$ 12,312,400

$ 10,991,455

$ 38,994,243

$

$

$

$

$

10,791,572

$ 10,791,572

$ 5,395,786

$ 10,791,572

864,684

$

1,729,367

—

$ 1,729,367

12,312,400

$ 13,177,083

$ 11,447,716 $ 13,177,083

10,991,455

$ 21,982,910

$ 21,982,910

—

—

—

—

—

36,982,865

$ 51,715,065

$ 42,860,545 $ 25,698,022 $ 2,022,755

Base Salary(2)
Bonus(3)
Health Benefits(4)
Unvested Restricted
Stock(5)
Unvested Performance
Shares(6)
Unvested Restricted
Stock Units(7)
Unvested Stock
Options(8)
Total

(1) A “Death or Disability CIC Termination” occurs upon Mr. Concannon’s death or disability during a CCPP (as defined in footnote (1) to the

“Payments and Benefits for Mr. McVey” table). A Death or Disability Non-CCPP Termination” occurs upon Mr. Concannon’s death or disability
outside of a CCPP. A “CCPP Without Cause or for Good Reason Termination” occurs: (i) A prior termination by Mr. Concannon for Good Reason
during a Prior CCPP (as defined in footnote (1) to the “Payments and Benefits for Mr. McVey” table) or; (ii) the Company terminates Mr.
Concannon without Cause or for Good Reason during the portion of a CCPP that is not a Prior CCPP. A “Non-CCPP Without Cause or for Good
Reason Termination” means a termination by the Company without Cause or by Mr. Concannon for Good Reason that is not a CCPP Without
Cause or for Good Reason Termination. A “CIC Trigger” occurs if, immediately prior to a Change in Control, the Compensation Committee
determines that the applicable equity award will not be continued, assumed or have new rights substituted therefor in accordance with the
applicable incentive plans. A “Non-Extension Termination” occurs if Mr. Concannon’s employment is terminated due to our providing a Non-
Extension Notice (as defined in footnote (1) to the “Payments and Benefits for Mr. McVey” table, except with respect to the President
Employment Agreement). An “Average Bonus” for Mr. Concannon means the average of his annual bonus amounts received in 2019.

(2) Represents the continued payment of base salary: (a) upon a Death or Disability CIC Termination, a CCPP Without Cause or for Good Reason

Termination or a Non-CCPP Without Cause or for Good Reason Termination, for 24 months; and (b) upon a Death or Disability Non-CCPP
Termination or a Non-Extension Termination, for 12 months.

(3) Represents a bonus: (a) upon a Death or Disability CIC Termination, a CCPP Without Cause or for Good Reason Termination or a Non-CCPP
Without Cause or for Good Reason Termination, in the amount of two times Mr. Concannon’s Average Bonus, payable in 24 monthly
installments; and (b) upon a Death or Disability Non-CCPP Termination or a Non-Extension Termination, in the amount of one times Mr.
Concannon’s Average Bonus, payable in 12 monthly installments.

(4) Represents healthcare coverage: (a) upon a Death or Disability CIC Termination, a CCPP Without Cause or for Good Reason Termination or a

Non-CCPP Without Cause or for Good Reason Termination, for 18 months; and (b) upon a Death or Disability Non-CCPP Termination or a Non-
Extension Termination, for 12 months.

(5) Represents the value of the unvested restricted stock issued to Mr. Concannon upon the settlement of performance shares granted to him in

January 2019, as part of his sign on award (the “Concannon Sign On”), which will vest as follows: (a) upon a Death or Disability CIC Termination,
a Death or Disability Non-CCPP Termination, CCPP Without Cause or For Good Reason Termination or a CIC Trigger, his unvested restricted
stock shall fully vest; (b) upon a Non-CCPP Without Cause or For Good Reason Termination, half of his restricted stock shall vest.

(6) Represents the target value of the unvested performance shares granted to Mr. Concannon in January 2020 as part of his annual award (the

“Concannon 2020 Annual”), which will vest as follows (a) upon a CCPP Without Cause or for Good Reason Termination or a CIC Trigger, his
unvested performance shares shall fully vest; provided that the unvested performance shares would not vest if his employment was terminated
by him for Good Reason; and (b) upon a Death or Disability CIC Termination or a Death or Disability Non-CCPP Termination, half of his
unvested performance shares shall vest.

(7) Represents the value of the unvested restricted stock units granted to Mr. Concannon as part of the Concannon Sign On and the Concannon

2020 Annual, which will vest as follows: (a) for the Concannon Sign On, (i) upon a Death or Disability CIC Termination, a Death or Disability Non-
CCPP Termination, a CCPP Without Cause or For Good Reason Termination, a Non-CCPP Without Cause or For Good Reason Termination, or a
CIC Trigger, his unvested restricted stock units shall fully vest; (b) for the Concannon 2020 Annual, (i) upon a CCPP Without Cause or For Good
Reason Termination or a CIC Trigger, his unvested restricted stock units shall fully vest; provided that the unvested restricted stock units would
not vest if his employment was terminated by him for Good Reason; and (ii) upon a Death or Disability CIC Termination, a Death or Disability
Non-CCPP Termination, half of his unvested restricted stock units shall vest.

(8) Represents the value of the unvested stock options granted to Mr. Concannon as part of the Concannon Sign On, which will vest as follows: (a)

upon a CCPP Without Cause or For Good Reason Termination or a Non-CCPP Without Cause or For Good Reason Termination, his unvested
stock options shall fully vest; (b) upon a Death or Disability CIC Termination, a Death or Disability Non-CCPP Termination, half of his unvested
restricted stock units shall vest.

a

2021 Proxy Statement

69

EXECUTIVE COMPENSATION

Payments and Benefits for Mr. DeLise, Chief Financial Officer

Termination for
Cause or
Without
Good Reason
—
—
—

—

—

—

—

—

Severance(2)
Pro Rata Bonus(3)
Health Benefits(4)
Unvested Restricted
Stock(5)
Unvested Performance
Shares(6)
Unvested Restricted
Stock Units(7)
Unvested Stock
Options(8)
Total

SPA CIC
Termination(1)
$ 1,712,500
841,667
$
34,133
$

$ 2,706,737

$

422,785

$ 2,594,907

$ 3,766,116

$ 12,078,843

CIC Trigger(1)
—
—
—

$

$

$

$

$

2,706,737

422,785

2,594,907

3,766,116

9,490,544

$
$
$

$

$

$

$

SPA Non-CIC
Termination(1)
1,141,667
841,667
22,755

2,489,639

—

2,070,562

3,766,116

10,332,405

$
$
$

$

$

$

$

$

Death or
Disability
570,833
420,833
22,755

Multi-Year
Termination(1)
—
—
—

Multi-Year
CIC
Prior
Termination(1)
—
—
—

2,406,622

$

1,053,254

$ 2,106,508

211,392

—

—

1,297,453

1,883,058

6,812,947

$

$

$

370,864

$

741,728

3,766,116

—

5,190,233

$ 2,848,236

(1) An “SPA CIC Termination”, occurs upon termination by the Company without Cause or a termination by the applicable NEO for Good Reason
during the period beginning on the effective date of a Change in Control and ending on the second anniversary following such effective date
(such period, a “SPA CIC Protection Period”). A “CIC Trigger” occurs if, immediately prior to a Change in Control, the Compensation Committee
determines that the applicable equity award will not be continued, assumed or have new rights substituted therefor in accordance with the
applicable incentive plans. An “SPA Non-CIC Termination” occurs either upon (a) a termination by the Company without Cause prior to a
Change in Control, or (b) a termination by the Company without Cause or a termination by the applicable NEO for Good Reason following the
expiration of an SPA CIC Protection Period. A “Multi-Year Termination” applies only to the applicable NEO’s multi-year equity awards granted in
January 2016 and occurs upon a termination by the applicable NEO for Good Reason prior to a Change in Control. A “Multi-Year CIC Prior
Termination” applies only to the applicable NEO’s multi-year equity awards granted in January 2016 and occurs upon a Change in Control that
occurs within three months of the applicable NEO’s prior termination for Good Reason. The applicable NEO’s “Average Annual Bonus” means
the average of his annual bonus amounts earned and payable for the Company’s three fiscal years immediately preceding the ter mination.

(2) Represents severance: (a) upon an SPA CIC Termination, equal to one and a half times the sum of Mr. DeLise’s base salary and his Average

Annual Bonus, payable in a lump sum; (b) upon an SPA Non-CIC Termination, equal to one times the sum of Mr. DeLise’s base salary and his
Average Annual Bonus, payable in regular installments over twelve months; and (c) upon Mr. DeLise’s death or disability, equal to half of the
sum of Mr. DeLise’s base salary and his Average Annual Bonus, payable in a lump sum.

(3) Represents a pro rata bonus: (a) upon an SPA CIC Termination or an SPA Non-CIC Termination, equal to Mr. DeLise’s Average Annual Bonus,
payable in a lump sum; and (b) upon Mr. DeLise’s death or disability, equal to half of his Average Annual Bonus, payable in a lump sum.

(4) Represents healthcare coverage: (a) upon an SPA CIC Termination, for eighteen months; and (b) upon an SPA Non-CIC Termination or upon

Death or Disability, for twelve months.

(5) Represents the value of the unvested restricted stock issued to Mr. DeLise upon the settlement of performance shares granted to him in January
2016, January 2018 and January 2019, which will vest as follows: (a) for his January 2016 award: (i) upon an SPA CIC Termination, CIC Trigger,
death or disability or Multi-Year CIC Prior Termination, his unvested restricted stock shall fully vest; (ii) upon an SPA Non-CIC Termination, his
restricted stock shall continue to vest for a year from such termination; and (iii) upon a Multi-Year Termination, half of his restricted stock shall
vest; and (b) for his January 2018 and 2019 awards: (i) upon an SPA CIC Termination or CIC Trigger, his restricted stock shall fully vest; (ii) upon
an SPA Non-CIC Termination, his restricted stock shall continue to vest for a year from such termination; and (iii) upon death or disability, half of
his restricted stock shall vest.

(6) Represents the target value of the unvested performance shares granted to Mr. DeLise in January 2020, which will vest as follows: (a) upon an
SPA CIC Termination or CIC Trigger, his unvested performance shares shall fully vest; (b) upon an SPA Non-CIC Termination, his performance
shares shall continue to vest for a year from such termination (but as such shares cliff vest in 2023, no shares shall vest); and (c) upon death or
disability, half of his unvested performance shares shall vest.

(7) Represents the value of the unvested restricted stock units granted to Mr. DeLise in January 2016, January 2018, January 2019 and January 2020,
which will vest as follows: (a) for his January 2016 award, (i) upon an SPA CIC Termination or a CIC Trigger, his unvested restricted stock units
shall fully vest; (ii) upon an SPA Non-CIC Termination, his unvested restricted stock units shall continue to vest for a year from such termination;
(iii) upon death or disability or a Multi-Year CIC Termination, half of his unvested restricted stock units shall vest; and (iv) upon a Multi-Year
Termination, one quarter of his unvested restricted stock units shall vest; and (b) for his January 2018, January 2019 and January 2020 awards, (i)
upon an SPA CIC Termination or a CIC Trigger, his unvested restricted stock units shall fully vest; (ii) upon an SPA Non -CIC Termination, his
unvested restricted stock units shall continue to vest for a year from such termination; and (iii) upon death or disability, half of his unvested
restricted stock units shall vest.

(8) Represents the value of the unvested stock options granted to Mr. DeLise in January 2016, which will vest as follows: (a) upon an SPA Period
Termination, a CIC Trigger, an SPA Non-CIC Termination or a Multi-Year Termination, his unvested stock options shall fully vest; and (b) upon
death or disability, half of his unvested restricted stock units shall vest.

70

2021 Proxy Statement

EXECUTIVE COMPENSATION

Payments and Benefits for Mr. McPherson, Global Head of Sales

Termination for
Cause or
Without Good
Reason
—
—
—

—

—

—

—

—

SPA CIC
Termination(1)
2,137,500
$
1,125,000
$
34,133
$

$

$

$

$

3,487,263

461,012

3,166,608

5,230,508

$

$

$

$

CIC Trigger(1)
—
—
—

SPA Non-CIC
Termination(1)
$ 1,425,000
$ 1,125,000
$

22,755

3,487,263

$ 3,292,131

461,012

—

3,166,608

$ 2,641,598

5,230,508

$ 5,230,508

$ 15,642,024

$ 12,345,392

$ 13,736,992

$
$
$

$

$

$

$

$

Death or
Disability
712,500
562,500
22,755

Multi-Year
Termination(1)
—
—
—

Multi-Year
CIC Prior
Termination(1)
—
—
—

3,206,547

$

1,462,916

$ 2,925,832

230,506

—

—

1,583,304

2,615,254

8,933,367

$

$

$

515,073

$ 1,030,146

5,230,508

—

7,208,497

$ 3,955,978

Severance(2)
Pro Rata Bonus(3)
Health Benefits(4)
Unvested Restricted
Stock(5)
Unvested Performance
Shares(6)
Unvested Restricted
Stock Units(7)
Unvested Stock
Options(8)
Total

(1) Refer to footnote (1) under the “Payments and Benefits Payable to Mr. DeLise” table for applicable definitions.

(2) Represents severance: (a) upon an SPA CIC Termination, equal to one and a half times the sum of Mr. McPherson’s base salary and his Average

Annual Bonus, payable in a lump sum; (b) upon an SPA Non-CIC Termination, equal to one times the sum of Mr. McPherson’s base salary and
his Average Annual Bonus, payable in regular installments over twelve months; and (c) upon Mr. McPherson’s death or disability, equal to half of
the sum of Mr. McPherson’s base salary and his Average Annual Bonus, payable in a lump sum.

(3) Represents a pro rata bonus: (a) upon an SPA CIC Termination or an SPA Non-CIC Termination, equal to Mr. McPherson’s Average Annual
Bonus, payable in a lump sum; and (b) upon Mr. McPherson’s death or disability, equal to half of Mr. McPherson’s Average Annual Bonus,
payable in a lump sum.

(4) Represents healthcare coverage: (a) upon an SPA CIC Termination, for eighteen months; and (b) upon an SPA Non-CIC Termination or upon

Death or Disability, for twelve months.

(5) Represents the value of the unvested restricted stock issued to Mr. McPherson upon the settlement of performance shares granted to him in
January 2016, January 2018 and January 2019, which will vest as follows: (a) for his January 2016 award: (i) upon an SPA CIC Termination, CIC
Trigger, death or disability or Multi-Year CIC Prior Termination, his unvested restricted stock shall fully vest; (ii) upon an SPA Non-CIC
Termination, his restricted stock shall continue to vest for a year from such termination; and (iii) upon a Multi-Year Termination, half of his
restricted stock shall vest; and (b) for his January 2018 and 2019 awards: (i) upon an SPA CIC Termination or CIC Trigger, his restricted stock
shall fully vest; (ii) upon an SPA Non-CIC Termination, his restricted stock shall continue to vest for a year from such termination; and (iii) upon
death or disability, half of his restricted stock shall vest.

(6) Represents the target value of the unvested performance shares granted to Mr. McPherson in January 2020, which will vest as follows: (a) upon
an SPA CIC Termination or CIC Trigger, his unvested performance shares shall fully vest; (b) upon an SPA Non-CIC Termination, his performance
shares shall continue to vest for a year from such termination (but as such shares cliff vest in 2023, no shares shall vest); and (c) upon death or
disability, half of his unvested performance shares shall vest.

(7) Represents the value of the unvested restricted stock units granted to Mr. McPherson in January 2016, January 2018, January 2019 and January

2020, which will vest as follows: (a) for his January 2016 award, (i) upon an SPA CIC Termination or a CIC Trigger, his unvested restricted stock
units shall fully vest; (ii) upon an SPA Non-CIC Termination, his unvested restricted stock units shall continue to vest for a year from such
termination; (iii) upon death or disability or a Multi-Year CIC Termination, half of his unvested restricted stock units shall vest; and (iv) upon a
Multi-Year Termination, one quarter of his unvested restricted stock units shall vest; and (b) for his January 2018, January 2019 and January 2020
awards, (i) upon an SPA CIC Termination or a CIC Trigger, his unvested restricted stock units shall fully vest; (ii) upon an SPA Non-CIC
Termination, his unvested restricted stock units shall continue to vest for a year from such termination; and (iii) upon death or disability, half of
his unvested restricted stock units shall vest.

(8) Represents the value of the unvested stock options granted to Mr. McPherson in January 2016, which will vest as follows: (a) upon an SPA

Period Termination, a CIC Trigger, an SPA Non-CIC Termination or a Multi-Year Termination, his unvested stock options shall fully vest; and (b)
upon death or disability, half of his unvested restricted stock units shall vest.

a

2021 Proxy Statement

71

EXECUTIVE COMPENSATION

Payments and Benefits for Mr. Themelis, Chief Information Officer

Termination
for Cause or
Without
Good Reason
—
—
—

—

—

—

—

—

SPA CIC
Termination(1)
2,262,500
$
1,208,333
$
34,133
$

$

$

$

$

4,249,531

538,038

3,801,641

6,276,704

$ 18,370,880

$

$

$

$

$

CIC Trigger(1)
—
—
—

SPA Non-CIC
Termination(1)
$ 1,508,333
$ 1,208,333
$

22,755

4,249,531

$ 4,012,748

538,038

—

3,801,641

$ 3,178,780

6,276,704

$ 6,276,704

14,865,914

$ 16,207,654

$
$
$

$

$

$

$

$

Death or
Disability
754,167
604,167
22,755

Multi-Year
Termination(1)
—
—
—

Multi-Year
CIC Prior
Termination(1)
—
—
—

3,880,093

$

1,755,328

$ 3,510,656

269,019

—

—

1,900,821

3,138,352

10,569,373

$

$

$

950,410

$ 1,900,821

6,276,704

—

8,982,442

$ 5,411,477

Severance(2)
Pro Rata Bonus(3)
Health Benefits(4)
Unvested Restricted
Stock(5)
Unvested Performance
Shares(6)
Unvested Restricted
Stock Units(7)
Unvested Stock
Options(8)
Total

(1) Refer to footnote (1) under the “Payments and Benefits Payable to Mr. DeLise” table for applicable definitions.

(2) Represents severance: (a) upon an SPA CIC Termination, equal to one and a half times the sum of Mr. Themelis’ base salary and his Average

Annual Bonus, payable in a lump sum; (b) upon an SPA Non-CIC Termination, equal to one times the sum of Mr. Themelis’ base salary and his
Average Annual Bonus, payable in regular installments over twelve months; and (c) upon Mr. Themelis’ death or disability, equal to half of the
sum of Mr. Themelis’ base salary and his Average Annual Bonus, payable in a lump sum.

(3) Represents a pro rata bonus: (a) upon an SPA CIC Termination or an SPA Non-CIC Termination, equal to Mr. Themelis’ Average Annual Bonus,
payable in a lump sum; and (b) upon Mr. Themelis’ death or disability, equal to half of Mr. Themelis’ Average Annual Bonus, payable in a lump
sum.

(4) Represents healthcare coverage: (a) upon an SPA CIC Termination, for eighteen months; and (b) upon an SPA Non-CIC Termination or upon

Death or Disability, for twelve months.

(5) Represents the value of the unvested restricted stock issued to Mr. Themelis upon the settlement of performance shares granted to him in

January 2016, January 2018 and January 2019, which will vest as follows: (a) for his January 2016 award: (i) upon an SPA CIC Termination, CIC
Trigger, death or disability or Multi-Year CIC Prior Termination, his unvested restricted stock shall fully vest; (ii) upon an SPA Non-CIC
Termination, his restricted stock shall continue to vest for a year from such termination; and (iii) upon a Multi-Year Termination, half of his
restricted stock shall vest; and (b) for his January 2018 and 2019 awards: (i) upon an SPA CIC Termination or CIC Trigger, his restricted stock
shall fully vest; (ii) upon an SPA Non-CIC Termination, his restricted stock shall continue to vest for a year from such termination; and (iii) upon
death or disability, half of his restricted stock shall vest.

(6) Represents the target value of the unvested performance shares granted to Mr. Themelis in January 2020, which will vest as follows: (a) upon an
SPA CIC Termination or CIC Trigger, his unvested performance shares shall fully vest; (b) upon an SPA Non-CIC Termination, his performance
shares shall continue to vest for a year from such termination (but as such shares cliff vest in 2023, no shares shall vest); and (c) upon death or
disability, half of his unvested performance shares shall vest.

(7) Represents the value of the unvested restricted stock units granted to Mr. Themelis in January 2016, January 2018, January 2019 and January
2020, which will vest as follows: (a) for his January 2016 award, (i) upon an SPA CIC Termination or a CIC Trigger, his unvested restricted stock
units shall fully vest; (ii) upon an SPA Non-CIC Termination, his unvested restricted stock units shall continue to vest for a year from such
termination; (iii) upon death or disability or a Multi-Year CIC Termination, half of his unvested restricted stock units shall vest; and (iv) upon a
Multi-Year Termination, one quarter of his unvested restricted stock units shall vest; and (b) for his January 2018, January 2019 and January 2020
awards, (i) upon an SPA CIC Termination or a CIC Trigger, his unvested restricted stock units shall fully vest; (ii) upon an SPA Non-CIC
Termination, his unvested restricted stock units shall continue to vest for a year from such termination; and (iii) upon death or disability, half of
his unvested restricted stock units shall vest.

(8) Represents the value of the unvested stock options granted to Mr. Themelis in January 2016, which will vest as follows: (a) upon an SPA Period

Termination, a CIC Trigger, an SPA Non-CIC Termination or a Multi-Year Termination, his unvested stock options shall fully vest; and (b) upon
death or disability, half of his unvested restricted stock units shall vest.

72

2021 Proxy Statement

Compensation Committee interlocks and insider participation

The Compensation Committee is composed of four independent directors. No member of the Compensation
Committee is, or was during 2020, a current or former officer or employee of the Company or any of its subsidiaries.
Additionally, during 2020, none of our executive officers served on the board of directors or compensation committee
of any entity that had one or more of its executive officers serving on the Board or the Compensation Committee of
the Company.

EXECUTIVE COMPENSATION

a

2021 Proxy Statement

73

PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE
COMPENSATION

In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934 (which was added by the
Dodd-Frank Act), the Company is providing its stockholders the opportunity to cast an advisory vote to approve the
compensation of its named executive officers. This proposal, commonly known as a “Say-on-Pay” proposal, gives the
Company’s stockholders the opportunity to express their views on the named executive officers’ compensation. We will
include an advisory vote on executive compensation on an annual basis at least until the next shareholder advisory
vote on the frequency of such votes.

As described in detail in the Compensation Discussion and Analysis above, the Company’s named executive officer
compensation program is designed to attract, reward and retain the caliber of officers needed to ensure the
Company’s continued growth and profitability. The primary objectives of the program are to:
(cid:220) align and reward Company and individual performance and decision-making with long-term stockholder value

creation;

(cid:220) attract, reward and retain high caliber executives;
(cid:220) motivate high performance from our NEOs by offering greater incentives for superior performance and reduced

awards for underperformance;

(cid:220) discourage imprudent risk taking by avoiding undue emphasis on any one metric or short-term goal; and
(cid:220) be transparent and fair to both our NEOs and our stockholders.

The Company seeks to accomplish these goals in a manner that is aligned with the long-term interests of the
Company’s stockholders. The Company believes that its named executive officer compensation program achieves this
goal with its emphasis on long-term equity awards and performance-based compensation, in addition to short-term
(annual) incentive awards, which has enabled the Company to successfully motivate and reward its named executive
officers. The Company believes that its ability to retain its current high-performing team of seasoned executive officers
is critical to its continuing financial success and that its focus on the long-term interests of its named executive officers
aligns with the interests of its stockholders.

We urge stockholders to read the letter from the Compensation Committee found on page 30 and the Compensation,
Discussion and Analysis beginning on page 31, which describes in more detail how our executive compensation policies
and procedures operate and are designed to achieve our compensation objectives, as well as the Summary
Compensation Table and other related compensation tables and narratives beginning on page 58, which provide
detailed information on the compensation of our Named Executive Officers. For these reasons, the Board recommends
a vote in favor of the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in the Company’s
proxy statement for the 2021 Annual Meeting, pursuant to the compensation disclosure rules of the Securities and
Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative
discussion, is hereby APPROVED.”

74

2021 Proxy Statement

Your vote

As an advisory vote, this proposal is not binding upon the Company, our Board or our Compensation Committee.
Notwithstanding the advisory nature of this vote, our Board and the Compensation Committee, which is responsible for
designing and administering the Company’s named executive officer compensation program, value the opinions
expressed by stockholders in their vote on this proposal, and will consider the outcome of the vote when making
future compensation decisions for named executive officers. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock present in person or represented by proxy and entitled to vote is required to
approve this Proposal 3.

BOARD RECOMMENDATION
The board unanimously recommends that you vote “FOR” the approval, on an
advisory basis, of the compensation of the Company’s named executive officers as
disclosed in this proxy statement.

2021 Proxy Statement

75

PROPOSAL 3 — ADVISORY VOTE ON EXECUTIVE COMPENSATION

CEO PAY RATIO

The Company’s compensation and benefits philosophy and the overall structure of our compensation and benefits
programs are broadly consistent across the global organization, notwithstanding regional nuances. Our goal is to
ensure that the compensation and benefits program of each employee reflects his or her specific role, responsibilities
and contributions and is competitive for the employee’s location based on the market data provided by our
compensation consultants.

As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, our Company is required to
calculate and disclose the total compensation paid to its median employee, as well as the ratio of the total
compensation paid to such median employee as compared to the total compensation paid to the Company’s CEO. The
Company believes that the ratio of pay included in this information is a reasonable estimate calculated in a manner
consistent with Item 402(u) of Regulation S-K.

Measurement Date

We identified the median employee using our employee population on October 1, 2020.

Consistently Applied Compensation Measure (CACM)

Under the relevant rules, we were required to identify our median employee by use of a consistently applied
compensation measure (“CACM”). We chose a CACM that closely approximates the annual total direct compensation
of our employees and corresponds to how we disclose our CEO’s compensation in the Summary Compensation Table
(“Calculation”).

In our Calculation, we included:

(cid:220) Actual base salary paid;

(cid:220) Cash bonus paid in 2021 for 2020 results;

(cid:220) Other payments including, but not limited to, severance payments, overtime and allowances;

(cid:220) Value of equity awards granted in 2020, computed in accordance with FASB ASC Topic 718;

(cid:220) Value of dividends and dividend equivalents accrued on unvested equity in 2020; and

(cid:220) Company’s contribution to a pension or retirement plan, including, but not limited to, a 401(k) defined contribution

plan in the U.S.

De Minimis Exception

In
As of October 1, 2020, we had 599 employees globally, including 373 U.S. employees and 226 non-U.S. employees.
determining the median employee, we did not include employees from the following countries as they represented, in
aggregate, less than 5% of our employee population:

(cid:220) Brazil – 4 employees

(cid:220) France – 1 employee

(cid:220) Hong Kong – 11 employees

(cid:220) Singapore – 7 employees

(cid:220) The Netherlands – 5 employees

76

2021 Proxy Statement

Methodology and Pay Ratio Outcome

After excluding the countries and employees described above, we determined our median employee from a population
of 571 employees globally, including 373 U.S. employees and 198 non-U.S. employees. Our median employee
compensation was $149,138 according to the Calculation. Based on the Calculation, the CEO’s compensation in 2020
was $6,279,843 and the median employee pay ratio was 42:1.

This pay ratio information is being provided solely for compliance purposes. Neither the Compensation Committee
nor management of the Company used the pay ratio measure in making compensation decisions.

CEO PAY RATIO

2021 Proxy Statement

77

OTHER INFORMATION

General information

This Proxy Statement is furnished in connection with a solicitation of proxies by the Board of Directors of the Company,
to be used at our Annual Meeting scheduled for Wednesday, June 9, 2021, at 10:00 a.m., Eastern Daylight Time, via live
audio webcast at www.virtualshareholdermeeting.com/MKTX2021.

Holders of record of our Common Stock at the close of business on the Record Date are entitled to notice of, and to
vote at, the Annual Meeting. On that date, there were 37,607,108 shares entitled to be voted.

Due to the continuing public health impact of the Pandemic and to support the health and well-being of our
shareholders and other participants at the Annual Meeting, the Annual Meeting will be held in virtual format only. You
will not be able to attend the Annual Meeting physically, however you may vote and submit questions while attending
the Annual Meeting online via the live audio webcast.

To participate in the Annual Meeting, you must have your 16-digit control number that is shown on your Notice of
Internet Availability of Proxy Materials or on your proxy card. You will be able to submit questions during the meeting
by typing in your question in the “ask a question” box on the meeting page. Should you require technical assistance,
support will be available by dialing 800-586-1548 (U.S.) or 303-562-9288 (International) during the meeting. We are
committed to ensuring that our stockholders will be afforded the same rights and opportunities to participate as they
would at an in-person meeting.

We encourage you to vote your shares, either by voting online during the Annual Meeting or by granting a
proxy (i.e., authorizing someone to vote your shares). If you vote via the Internet or telephone or execute the
attached paper proxy card, the individuals designated will vote your shares according to your instructions. If
any matter other than the Proposals listed in the Notice of Annual Meeting of Stockholders is presented at the
Annual Meeting, the designated individuals will, to the extent permissible, vote all proxies in the manner that
the Board may recommend or, in the absence of such recommendation, in the manner they perceive to be in
the best interests of the Company.

If you indicate when voting via the Internet that you wish to vote as recommended by the Board or if you execute the
enclosed paper proxy card but do not give instructions, your proxy will be voted as follows: (1) FOR the election of the
nominees for director named herein, (2) FOR ratification of the appointment of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for the year ending December 31, 2021, (3) FOR the approval, on an
advisory basis, of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement
and (4) in accordance with the best judgment of the persons appointed as proxies with respect to any other matters
that properly come before the Annual Meeting. If your shares are held in a stock brokerage account or by a bank or
other nominee, see the information under the heading Voting — Broker authority to vote.

Information on how you may vote at the Annual Meeting (such as granting a proxy that directs how your shares should
be voted, or attending the Annual Meeting), as well as how you can revoke a proxy, is contained in this Proxy
Statement under the headings Solicitation of Proxies and Voting.

78

2020 Proxy Statement

OTHER INFORMATION

We are furnishing proxy materials to our stockholders primarily via the Internet. On April 28, 2021, we expect to mail
beneficial owners of our Common Stock a Notice of Internet Availability containing instructions on how to access our
proxy materials, including this Proxy Statement and our Annual Report. The Notice of Internet Availability also instructs
you on how to vote via the Internet. Other stockholders, in accordance with their prior requests, received e-mail
notification of how to access our proxy materials and vote via the Internet, or have been mailed paper copies of our
proxy materials and a proxy card or voting form. The proxy card includes instructions on how to vote via the telephone.
All beneficial owners will have the ability to access the proxy materials, including this Proxy Statement and our Annual
Report, on the website referred to in the Notice of Internet Availability.

Internet distribution of our proxy materials is designed to provide our stockholders with the information they need,
while lowering costs of delivery and reducing the environmental impact of our Annual Meeting. However, if you would
prefer to receive paper copies of proxy materials, please follow the instructions included in the Notice of Internet
Availability. If you have previously elected to receive our proxy materials electronically, you will continue to receive
these materials via e-mail unless you elect otherwise.

Our Proxy Statement and 2020 Annual Report to Stockholders are available at
https://materials.proxyvote.com/57060D

Solicitation of proxies

General

The attached proxy card allows you to instruct the designated individuals how to vote your shares. You may vote in
favor of, against, or abstain from voting on any proposal.

Solicitation

We will bear the entire cost of solicitation, including the preparation, assembly, printing and mailing of a Notice of
Internet Availability of Proxy Materials, this Proxy Statement, the proxy card and any additional soliciting materials
furnished to stockholders. Copies of solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others so that they may forward the
solicitation materials to such beneficial owners. In addition, we may reimburse such persons for their costs of
forwarding the solicitation materials to such beneficial owners. The original solicitation of proxies by mail may be
supplemented by solicitation by telephone or other means by our directors, officers, employees or agents. No
additional compensation will be paid to these individuals for any such services. Except as described above, we do not
presently intend to solicit proxies other than by mail.

Voting

Stockholders entitled to vote and shares outstanding

Each stockholder is entitled to one vote for each share of Common Stock held on each matter submitted to a vote at
the Annual Meeting. As of the Record Date, 37,607,108 shares of Common Stock were outstanding and entitled to be
voted at the Annual Meeting.

How to vote

Submitting a proxy via mail, the Internet or telephone

You may vote by calling the toll-free telephone number listed on the proxy card or visiting the website address listed
on the Notice or the proxy card. If you choose to submit your proxy with voting instructions by telephone or through
the Internet, you will be required to provide your assigned control number noted on the Notice before your proxy will

2021 Proxy Statement

79

OTHER INFORMATION

be accepted. In addition to the instructions that appear on the Notice, step-by-step instructions will be provided by
recorded telephone message or at the designated website on the Internet. Votes submitted by telephone or via the
Internet must be received by 11:59 p.m., EDT, on June 8, 2021 in order for them to be counted at the Annual Meeting.

If you are a stockholder of record, or otherwise received a printed copy of the proxy materials, in addition to the
methods described above, you may also submit your proxy with voting instructions by mail by following the
instructions set forth on the proxy card included with the proxy materials. Specifically, if you are a stockholder of record
on the Record Date, you may vote by mailing your proxy card, with voting instructions, to the address listed on your
proxy card.

Voting your shares online at the Annual Meeting

For Shares Directly Registered in the Name of the Stockholder: You may vote online at the Annual Meeting at
www.virtualshareholdermeeting.com/MKTX2021; however, we encourage you to vote by proxy card or the Internet
even if you plan to attend the online meeting. If you plan to attend the online Annual Meeting, you will need the 16-
digit control number included on your Notice of Internet Availability of Proxy Materials or your proxy card (if you
received a printed copy of the proxy materials) in order to be able to enter the meeting.

For Shares Registered in the Name of a Brokerage Firm or Bank: If your shares of Common Stock are held in street name,
you will receive instructions from your broker, bank or other nominee that you must follow in order to have your shares
of Common Stock voted prior to or during the online meeting, or contact your broker, bank or other nominee for such
information.

Revoking a proxy

A proxy that was submitted via the Internet or by telephone may be revoked at any time before it is exercised by
(1) executing a later-dated proxy card via the Internet or by telephone or (2) attending the Annual Meeting and voting
online.

A proxy that was submitted by mail may be revoked at any time before it is exercised by (1) giving written notice
revoking the proxy to our General Counsel and Corporate Secretary at MarketAxess Holdings Inc., 55 Hudson Yards,
15th Floor, New York, NY 10001, (2) subsequently sending another proxy bearing a later date or (3) attending the
Annual Meeting and voting online.

If your shares are registered in the name of a brokerage firm or bank, you must contact your brokerage firm or bank to
change your vote or obtain a proxy to vote your shares if you wish to cast your vote online at the meeting.

Your attendance at the Annual Meeting in and of itself will not automatically revoke a proxy that was
submitted via the Internet, by telephone or by mail.

80

2021 Proxy Statement

OTHER INFORMATION

Broker authority to vote

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered to be the
beneficial owner of shares held in street name. These proxy materials are being forwarded to you by your broker or
nominee, who is considered to be the holder of record with respect to your shares. As the beneficial owner, you have
the right to direct your broker or nominee how to vote by filling out the voting instruction form provided by your
broker or nominee. Telephone and Internet voting options may also be available to beneficial owners. As a beneficial
owner, you are also invited to attend the Annual Meeting, but you will need the 16-digit control number included on
your Notice of Internet Availability of Proxy Materials or your proxy card (if you received a printed copy of the proxy
materials) in order to be able to enter the meeting.

If your shares are held in street name, your broker or nominee will ask you how you want your shares to be voted. If
you provide voting instructions, your shares must be voted as you direct. If you do not furnish voting instructions, one
of two things can happen, depending upon whether a proposal is “routine.” Under the rules that govern brokers that
have record ownership of shares beneficially owned by their clients, brokers have discretion to cast votes only on
routine matters, such as the ratification of the appointment of independent registered public accounting firms, without
voting instructions from their clients. Brokers are not permitted, however, to cast votes on “non-routine” matters
without such voting instructions, such as the election of directors. A “broker non-vote” occurs when a beneficial owner
has not provided voting instructions and the broker holding shares for the beneficial owner does not vote on a
particular proposal because the broker does not have discretionary voting power for that proposal.

Quorum

A quorum is required for the conduct of business at the meeting. The presence at the meeting, in person or by proxy,
of the holders of a majority of the stock issued and outstanding and entitled to vote at the meeting on the Record
Date will constitute a quorum, permitting us to conduct the business of the meeting. Proxies received but marked as
abstentions, if any, and broker non-votes (as described above) will be included in the calculation of the number of
shares considered to be present at the meeting for quorum purposes. If we do not have a quorum, we will be forced to
reconvene the Annual Meeting at a later date.

Votes necessary to approve each proposal

Election of Directors. Our Bylaws include a majority voting standard for the election of directors in uncontested
elections, which are generally defined as elections in which the number of nominees does not exceed the number of
directors to be elected at the meeting. In the election of directors (Proposal 1), you may either vote “FOR,” “AGAINST”
or “ABSTAIN” as to each nominee. Cumulative voting is not permitted. Under the majority voting standard, in
uncontested elections of directors, such as this election, each director must be elected by the affirmative vote of a
majority of the votes cast with respect to that nominee’s election at any meeting for the election of directors at which a
quorum is present. A majority of the votes cast means that the number of votes cast “FOR” a candidate for director
exceeds the number of votes cast “AGAINST” that candidate for director. Abstentions will have no effect in determining
whether a director nominee has received a majority of the votes cast because an abstention does not count as a vote
cast. In addition, brokers do not have discretionary authority to vote for directors, therefore, broker non-votes will not
count as a vote cast “FOR” or “AGAINST” a nominee’s election and thus will have no effect in determining whether a
director nominee has received a majority of the votes cast.

Other Items. For each of the other proposals listed in the Notice of Annual Meeting of Stockholders (Proposals 2 and 3),
if a quorum is present, the proposals will be decided by the affirmative vote of the holders of a majority of the shares
having voting power present in person or represented by proxy. Abstentions will be counted as shares present having
voting power on these proposals and will have the same effect as votes ”AGAINST.” Brokers have discretionary
authority to vote on Proposal 2, the ratification of the appointment of PwC. Therefore, there will be no broker non-
votes on Proposal 2. Brokers do not have discretionary authority to vote on Proposal 3 (Say-on-Pay), therefore, broker

2021 Proxy Statement

81

OTHER INFORMATION

non-votes will not be counted as shares present having voting power on Proposal 3 and will have no effect on the vote
for this proposal.

Availability of certain documents

Householding of Annual Meeting materials

The Company and some banks, brokers and other nominee record holders may participate in the practice of
“householding” proxy statements and their accompanying documents. This means that only one copy of our Proxy
Statement is sent to multiple stockholders in your household. This “householding” procedure reduces our printing
costs and postage fees as well as the environmental impact of the annual meeting. Stockholders who participate in
householding will continue to receive separate proxy cards. We will promptly deliver a separate copy of these
documents to you upon written or oral request to our Investor Relations Department at MarketAxess Holdings Inc., 55
Hudson Yards, 15th Floor, New York, NY 10001 or 212-813-6000. If you want to receive separate copies of our proxy
statements in the future, or if you are receiving multiple copies and would like to receive only one copy per household,
you should contact your bank, broker or other nominee record holder, or you may contact us at the above address and
phone number.

Additional information

We are required to file annual, quarterly and current reports, proxy statements and other reports with the SEC. Copies
of these filings are available through our Internet website at www.marketaxess.com or the SEC’s website at www.sec.gov.
We will furnish copies of our SEC filings (without exhibits), including our Annual Report on Form 10-K for the year
ended December 31, 2020, without charge to any stockholder upon written or oral request to our Investor Relations
Department at MarketAxess Holdings Inc., 55 Hudson Yards, 15th Floor, New York, NY 10001 or 212-813-6000.

Other matters

As of the date of this Proxy Statement, the Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention
of the persons named in the enclosed proxy card to vote the shares they represent as such persons deem advisable.
Discretionary authority with respect to such other matters is granted by the execution of the enclosed proxy card.

Stockholder proposals for 2022 Annual Meeting

In order to be considered for inclusion in the Company’s proxy statement and proxy card relating to the 2022 Annual
Meeting of Stockholders, any proposal by a stockholder submitted pursuant to Rule 14a-8 of the Securities Exchange
Act of 1934, as amended, must be received by the Company at its principal executive offices in New York, New York, on
or before December 29, 2021. In addition, under the Company’s bylaws, any proposal for consideration at the 2022
Annual Meeting of Stockholders submitted by a stockholder other than pursuant to Rule 14a-8 will be considered
timely if it is received by the Secretary of the Company at its principal executive offices between the close of business
on November 29, 2021 and the close of business on December 29, 2021 and is otherwise in compliance with the
requirements set forth in the Company’s bylaws.

82

2021 Proxy Statement

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
☑

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

Commission File Number 001-34091

MARKETAXESS HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation)

55 Hudson Yards, New York, New York
(Address of principal executive offices)

52-2230784
(IRS Employer
Identification No.)
10001
(Zip Code)

(212) 813-6000
(Registrant’s telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class
Common Stock, $0.003 par value

Trading
Symbol
MKTX

Name of each exchange on which registered
NASDAQ Global Select Market

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in
Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

☑
☐

Accelerated filer
Smaller reporting company
Emerging growth company

☐
☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new

or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report.

☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The aggregate market value of the shares of common stock held by non-affiliates of the registrant as of June 30, 2020 (the last business day of the registrant’s
most recently completed second fiscal quarter) was approximately $16.3 billion computed by reference to the last reported sale price on the NASDAQ Global
Select Market on that date. For purposes of this calculation, affiliates are considered to be officers, directors and holders of 10% or more of the outstanding
common stock of the registrant on that date. The registrant had 37,964,515 shares of common stock, 5,492,071 of which were held by affiliates, outstanding on
that date.

As of February 16, 2021, the aggregate number of shares of the registrant’s common stock outstanding was 37,995,877.

Portions of the registrant’s definitive proxy statement for the 2021 Annual Meeting of Stockholders are incorporated by reference into Items 10, 11, 12, 13

and 14 of Part III of this Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

MARKETAXESS HOLDINGS INC.
2020 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS

PART I
Item 1: Business
Item 1A: Risk Factors
Item 1B: Unresolved Staff Comments
Item 2: Properties
Item 3: Legal Proceedings
Item 4: Mine Safety Disclosures

PART II
Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6: Selected Financial Data
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A: Quantitative and Qualitative Disclosures about Market Risk
Item 8: Financial Statements and Supplementary Data
Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A: Controls and Procedures
Item 9B: Other Information

PART III
Item 10: Directors, Executive Officers and Corporate Governance
Item 11: Executive Compensation
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13: Certain Relationships and Related Transactions and Director Independence
Item 14: Principal Accounting Fees and Services

PART IV
Item 15: Exhibits and Financial Statement Schedules
Item 16: Form 10-K Summary

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Cautionary Note Regarding Forward-Looking Statements

PART I

This report contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,”
“estimates,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the outlook for our future
business and financial performance. Forward-looking statements are based on management’s current expectations and assumptions,
which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. It is routine for our internal
projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood
that the internal projections and beliefs upon which we base our expectations may change prior to the end of each quarter or the year.
Although these expectations may change, we are under no obligation to revise or update any forward-looking statements contained in
this report. Actual future events or results may differ, perhaps materially, from those contained in the projections or forward-looking
statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this report,
particularly in Item 1A. “Risk Factors.”

Item 1. Business.

Overview

MarketAxess Holdings Inc. (the “Company” or “MarketAxess”) operates leading electronic trading platforms delivering
expanded liquidity opportunities, improved execution quality and significant cost savings across global fixed-income markets. Over
1,800 institutional investor and broker-dealer firms are active users of our patented trading technology, accessing global liquidity on our
platforms in U.S. investment-grade bonds, U.S. high-yield bonds, U.S. Treasuries, municipal bonds, emerging market debt, Eurobonds
and other fixed income securities. Through our Open Trading™ protocols, we execute bond trades between and among institutional
investor and broker-dealer clients in our leading all-to-all anonymous trading environment. We also offer a number of trading-related
products and services, including: Composite+™ pricing and other market data products to assist clients with trading decisions; auto-
execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-
through processing; and technology services to optimize trading environments. In addition, we provide a range of pre- and post-trade
services, including trade matching, trade publication, regulatory transaction reporting and market and reference data across a range of
fixed-income and other products.

Our platforms’ innovative technology solutions are designed to increase the number of potential trading counterparties and create
a menu of solutions to address different trade sizes and bond liquidity characteristics. Our traditional Request-For-Quote (“RFQ”) model
allows our institutional investor clients to simultaneously request competing, executable bids or offers from our broker-dealer clients
and execute trades with the broker-dealer of their choice from among those that choose to respond. Our anonymous trading protocols
(referred to throughout as “Open Trading”) complement our RFQ model by increasing the number of potential counterparties and
improving liquidity by allowing all participants to interact anonymously in an all-to-all trading environment. Clients can use our auto-
execution technology with both our traditional RFQ and Open Trading protocols, thereby using rules-based execution to connect to
diverse sources of liquidity while reducing trading inefficiencies and human errors. Live Markets, an order book that provides a single
view of two-way, actionable prices for the most active corporate bonds, including newly issued debt, benchmark issues and news-driven
securities, leverages the benefits of our Open Trading marketplace and allows participants to efficiently trade liquid names in larger
size.

Our services relating to trade execution range from providing a suite of trading protocols designed to fit the trading needs of our
clients to innovative new trading technologies, such as auto-execution and the use of artificial intelligence, to assist our clients’ trading
decisions. Trading protocols include single and multiple-dealer inquiries; list trading, which is the ability to request bids and offers on
up to 200 bonds at the same time; portfolio trading, which allows clients to competitively trade baskets of up to 1,500 securities; and
swap trading, which is the ability to request an offer to purchase one bond and a bid to sell another bond. Auto-execution allows clients
to set eligibility criteria for their orders that our system will use to determine whether or not to execute a trade in accordance with the
pre-defined parameters. Once a trade is completed, clients will settle the trade with the assistance of our automated post-trade messaging,
which facilitates the communication of trade acknowledgment and allocation information between our institutional investor and broker-
dealer clients.

We are not a party to any of the disclosed trades that occur on our platforms between institutional investor clients and broker-
dealer clients; rather, we serve as an intermediary between broker-dealers and institutional investors, enabling them to meet, agree on a
price and then transact directly with each other. However, in connection with our Open Trading and other anonymous protocols, we
execute bond transactions between and among institutional investor and broker-dealer clients on a matched principal basis by serving
as counterparty to both the buyer and the seller in matching back-to-back trades. In 2020, 32.7% of all credit volume on the MarketAxess
platform was executed via Open Trading protocols, up from 26.3% in 2019.

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Our broker-dealer clients accounted for approximately 98.5% of the underwriting of newly-issued U.S. corporate bonds and
approximately 86.4% of the underwriting of newly issued European corporate bonds in 2020. Although institutional investors, specialist
market-making firms, proprietary trading firms and other non-traditional liquidity providers have increasingly provided liquidity on our
platforms through Open Trading, we believe these broker-dealers still represent the principal source of secondary market liquidity in
the markets in which we operate. Secondary market liquidity refers to the ability of market participants to buy or sell a security quickly
and in large volume following the original issuance of the security, without substantially affecting the price of the security.

In 2020, our volume in U.S. high-grade and high yield corporate bonds represented approximately 21.6% and 14.6%, respectively,
of the total estimated U.S. high-grade and high yield corporate bond volumes, as reported by the Financial Industry Regulatory Authority
(“FINRA”) Trade Reporting and Compliance Engine (“TRACE”). TRACE facilitates the mandatory reporting of over-the-counter
(“OTC”) secondary market transactions in eligible fixed-income securities in the U.S., including trading between institutional investors
and broker-dealers, as well as inter-dealer and retail trading. All broker-dealers that are FINRA member firms have an obligation to
report transactions in corporate bonds to TRACE under a set of rules approved by the Securities and Exchange Commission (“SEC”).

We provide trade matching and regulatory reporting services for European investment firms and market and reference data across
a range of fixed-income products. In response to the pre-and post-trade transparency mandates from the recast Markets in Financial
Instruments Directive (“MiFID II”) in Europe, we have been authorized by each of the United Kingdom (“U.K.”) Financial Conduct
Authority (“FCA”) and the Netherlands Authority for the Financial Markets (“AFM”) as an Approved Publication Arrangement
(“APA”) and an Approved Reporting Mechanism (“ARM”). In addition to our APA and ARM reporting services, we have developed a
comprehensive suite of value-add solutions for MiFID II, including pre-trade transparency services, systematic internaliser (“SI”)
determination and monitoring, best execution reporting, commodity position reporting, data quality analysis and peer benchmarking.

In 2020, 92.1% of our revenues were derived from commissions for transactions executed on our platforms. We also derive
revenues from information services, post-trade services and other income. Our revenue can be impacted by seasonal effects caused by
increased levels of new bond issuance, which often occurs in the first quarter of a year, or slow-downs in trading activity, particularly
during the customary holiday periods in August and December. Our expenses consist of employee compensation and benefits,
depreciation and amortization, technology and communication expenses, professional and consulting fees, occupancy, marketing and
advertising, clearing costs and other general and administrative expenses.

Industry Background

Fixed-income securities are issued by corporations, governments and other entities, and pay a pre-set absolute or relative rate of
return. As of September 30, 2020, the most recent date available, there were approximately $50.1 trillion principal amount of fixed-
income securities outstanding in the U.S. market, including $10.4 trillion principal amount of U.S. corporate bonds and $20.4 trillion
principal amount of U.S. government bonds, according to the Securities Industry and Financial Markets Association (“SIFMA”). The
estimated average daily trading volume of U.S. corporate bonds, as measured by TRACE, was $35.8 billion in 2020. Primary dealer
holdings of U.S. corporate bonds (investment-grade and high-yield) as reported by the Federal Reserve Bank of New York were $8.9
billion as of December 31, 2020. This represents less than one day of trading volume as measured by TRACE.

Traditionally, bond trading has been a manual process, with product and price discovery conducted over the telephone between
two or more parties. This traditional process has a number of shortcomings resulting primarily from the lack of a central trading facility
for fixed-income securities, which makes it difficult to match buyers and sellers for particular issues. Many market participants also use
e-mail and instant messaging for trading these securities. While these electronic communication methods have addressed some of the
limitations associated with telephonic trading, these methods are still hindered by limited liquidity, limited price transparency, significant
transaction costs, compliance and regulatory challenges, and difficulty in executing numerous trades at one time. Our platforms’
functionality address many of the remaining shortcomings that result from trading bonds over the telephone, e-mail or instant message.

Demand for our trading platforms has grown as the need for greater execution efficiency and changing regulations have continued
to shift trading from voice markets to electronic markets across our product areas. We and other trading platforms have responded to
this demand with technological advances which have further automated many of the manual processes required by traditional methods
of trading. Although our market share has increased significantly in recent years, large components of the fixed income markets in which
we operate have not yet migrated to electronic trading because of the diverse and heterogeneous nature of those instruments and because
participants in these markets have traditionally operated in a more relationship-driven environment.

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Regulatory changes have also driven demand for the electronification of fixed-income trading processes. The policy objectives of
a number of post-2008 crisis reforms, such as the Dodd-Frank Wall Street Reform and Customer Protection Act (the “Dodd-Frank Act”),
Basel III and MiFID II, are to increase transparency and reduce systemic risk. These objectives have generally led to increased adoption
of electronic trading on regulated markets where price transparency, all-to-all trading and reporting tools are essential components. The
Volcker Rule, which limits proprietary trading by banks, has also had an impact on dealer inventories and the ability of dealers to act as
market-makers. Our Open Trading protocols, which are designed to allow our broker-dealer and institutional investor clients to interact
in an all-to-all trading environment, have helped market participants improve their liquidity and turnover in response to these trends.
During 2020, over 1,200 participating client firms provided liquidity via our Open Trading solutions and we completed approximately
1.9 million Open Trading trades, an increase of 42.7% compared to 2019.

Our Competitive Strengths

We believe that we are well positioned to strengthen our market position in electronic trading in our existing products and to

extend our presence into new products and services by capitalizing on our competitive strengths, including:

Significant Trading Volumes with Participation by Leading Broker-Dealers and Institutional Investors

Our electronic trading platforms provide access to the liquidity generated by the participation of over 1,800 active institutional
investor and broker-dealer clients, including substantially all of the leading broker-dealers in global fixed-income trading. We believe
these broker-dealers represent the principal source of secondary market liquidity for U.S. high-grade corporate bonds, emerging markets
and high-yield bonds, European high-grade corporate bonds and the other markets in which we operate. Our broker-dealer clients are
motivated to continue to utilize our platforms due to the presence on the platforms of our large network of institutional investor clients
and their ability to use our Open Trading protocols to help manage their risk, source liquidity, and facilitate transactions on behalf of
their clients.

As shown in the chart below, our total credit trading volume increased from approximately $1.4 trillion in 2016 to $2.6 trillion

in 2020.

Total Credit Bond Trading Volume
(in billions)

$2,630.4

$1,391.5

$1,404.9

$2,032.3

$1,660.1

2016

2017

2018

2019

2020

5

Our estimated share of U.S. high-grade and high-yield corporate bond volume from 2016 to 2020 is shown in the chart below:

MarketAxess Estimated Percent of FINRA U.S.
High-Grade and High-Yield TRACE Volume

High-Grade

High-Yield

16.0%

16.9%

18.1%

19.0%

7.0%

6.8%

8.9%

10.4%

21.6%

14.6%

2016

2017

2018

2019

2020

Open Trading is a Differentiator that Expands the Liquidity Pool and Further Increases Cost-Savings for Clients

In the post-financial crisis years, liquidity has remained a persistent concern for market participants as regulators raised banks’
capital requirements and adopted other measures that prompted many dealers to reduce market-making activities even as the buy side’s
bond holdings have grown rapidly. In this environment, Open Trading, our fully electronic, all-to-all trading environment, has emerged
as one solution to the post-crisis liquidity problem. As a result, the liquidity options for Open Trading participants are broader and more
diverse compared to the traditional model of bilateral trading with a limited set of dealer counterparties. The expanded pool of liquidity
providers includes investment managers, global dealers, regional dealers and specialist market-making and proprietary trading firms.
During 2020, over 1,200 unique liquidity providers participated in Open Trading, which improved the ability of both dealers and
institutional investors to find natural and opportunistic matches, move orders more efficiently, and achieve significant increases in
execution quality and price improvement.

We believe our Open Trading protocols enhance our institutional investor clients’ ability to obtain a competitive price by allowing
all of our Open Trading participants to interact with each other, thereby increasing the potential sources of liquidity for each participant,
as well as the likelihood of receiving a competitive price response. We estimate that liquidity takers saved an estimated $673.7 million
in transaction costs through Open Trading during 2020, while liquidity providers saved an estimated $398.8 million during the year.
These Open Trading cost savings are in addition to the potential cost savings institutional investors can achieve by simultaneously
requesting bids or offers from our broker-dealer clients via our traditional RFQ protocol. Estimated liquidity taker cost savings is defined
as the difference between the winning price and the best disclosed dealer cover price. Estimated liquidity provider cost savings is defined
as the difference between the winning price and then current Composite+ bid or offer level (offer if the provider if buying, bid if provider
is selling) at the time of the inquiry.

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Growing, Comprehensive International Offering and Client Base

Our platforms provide global fixed-income market participants with trading functionality across global hard currency and local
currency markets, connecting clients in over 50 countries to local and global dealers. MarketAxess has over 850 active client firms
located outside the U.S. that access our platforms through our regulated venues in Europe, Asia and Latin America. Our Open Trading
functionality allows international clients to access cross-border liquidity with minimal ramp-up time or regulatory hurdles.

The MarketAxess emerging markets trading platform also offers the most comprehensive offering for local currency bond trading
across the Latin America, Central & Eastern Europe, Middle East and Africa (“CEEMEA”), and Asia-Pacific (“APAC”) regions. Our
platforms provide clients with the ability to trade local currency debt denominated in 27 local currencies with over 125 emerging market
dealers.

Robust, Scalable Technology Throughout the Full Trading Cycle

We have developed proprietary technology that is highly secure, fault-tolerant and provides adequate capacity for our current
operations, as well as for substantial growth. Our highly scalable systems are designed to accommodate additional volume, products and
clients with relatively little modification and low incremental costs. We have consistently used our proprietary technology to find new
ways for our clients to trade more effectively and efficiently. Our core software solutions span multiple components of the trading
lifecycle and include pre-trade data and analytics, trade execution and post-trade data, analytics and reporting, connectivity and straight-
through processing. Our systems are built to be scalable, flexible and resilient. We have also created new trading protocols and developed
additional solutions for our clients that are translated and built by our highly experienced technology and business personnel. Going
forward, we expect that our agile software development processes will help us continue to be a market leader in developing the
technology solutions for our clients’ trading needs.

In addition to services directly related to the execution of trades, we offer our clients several other services throughout the trading
cycle. In the pre-trade period, our platforms assist our participants by providing them with value-added services, such as real-time and
historical trade price information, liquidity and turnover analytics, bond reference data and trade order matching alerts. Following the
execution of a trade, our platforms support all of the essential tools and functionalities to enable our participants to realize the full
benefits of electronic trading and demonstrate best execution, including real-time trade details, straight-through processing (“STP”),
account allocations, automated audit trails, regulatory trade reporting, trade detail matching, and transaction cost analysis.

Next Generation Data and Analytical Tools Supporting the Increasing Automation of Trading Workflows

Our data and analytical tools enhance the value proposition of our trading platforms and improve the trading experience of our
clients. We support our clients’ trading functions by offering value-added analytics that rely on machine-learning, automation and
algorithms that are designed to improve the trading decisions and workflows of our clients. Our data and analytical tools are designed
to help clients make better trading decisions, benefitting our current clients and attracting new market participants to our network. For
example, our Composite+ pricing algorithm powers many of our automated trading solutions, which allows traders to automatically
execute trades according to pre-determined parameters and automatically send completed or rejected order details to internal order
management systems. By allowing traders to automate and execute their smaller, low touch trades more efficiently, our auto-execution
solutions allow traders to focus their attention on higher value-added trades, with a goal of reducing trading inefficiencies and human
errors.

Proven Innovator with an Experienced Management Team

Since our inception, we have been an innovator in the fixed-income securities markets. The members of our management team
average more than 20 years of experience in the securities industry. We have consistently sought to benefit participants in the markets
we serve by attempting to replicate the essential features of fixed-income trading, including the existing relationships between broker-
dealers and their institutional investor clients, while applying technology to eliminate weaknesses in traditional trading methods and
improve liquidity. In recent years, MarketAxess has received industry recognition from key independent publications for its innovations
and contributions to the fixed-income market. For example, in 2020, MarketAxess won the Waters Technology “Sell-Side Technology
Award” for the Best Sell-Side Trading Network and the Global Capital “Bond Award” for the Best Emerging Markets Bond Trading
Platform. In addition, Composite+ won the Waters Technology “Buy-Side Technology Award” for the Best Buy-Side AI Tool. Several
awards have recognized our successful use of the agile software development methodology in the development of our Live Markets
order book, while a number of our female employees have been honored with leadership awards across the globe.

7

Independent Ownership Structure

We believe our ownership structure has been an advantage relative to certain of our competitors that are owned by exchange or
dealer groups as we have been free to make balanced business and trading protocol decisions with the best interests of both our
institutional investor and broker-dealer clients in mind. We are also able to attract industry leaders with valuable skills and insights to
our independent Board of Directors.

Our Strategy

Our objective is to provide the leading global electronic trading platforms for fixed-income securities, connecting broker-dealers
and institutional investors more easily and efficiently, while offering a broad array of information, trading and technology services to
market participants across the trading cycle. The key elements of our strategy are:

Broaden Our Client Base in Our Existing Markets and Increase Penetration with Existing Clients

We intend to use our broad network of over 1,800 active institutional investor and broker-dealer participants to drive more clients
to our leading electronic fixed-income trading platforms. The number of active participants on our platforms has increased by
approximately 80% since 2016. We believe that the continued expansion of our client base will lead to even further increases in the
liquidity available on our platforms. We expect that the increased liquidity on our platforms and our ability to innovate and efficiently
add new functionality and product offerings will also help us deepen our market share with our existing clients across our product suite.
The number of clients trading three or more products on our platforms has increased by 38.7% from 718 in 2016 to 996 in 2020. Last,
we plan to increase our international presence by increasing the number of firms located outside the U.S. that access our platforms
through our venues in Europe, Asia and Latin America, increasing the number of local currencies available for trading on our platforms;
and, subject to regulatory requirements, increasing the number of countries in which we can offer our platforms.

Enhance the Liquidity of Securities Traded on Our Platforms by Leveraging our Client Network and Open Trading Protocols

We aim to increase the secondary market liquidity on our trading platforms by deploying innovative technology solutions designed
to increase the number of potential trading counterparties on our platforms and to address different trade sizes, bond liquidity
characteristics and trading preferences. Our Open Trading protocols exponentially increase the potential trading counterparties by
allowing broker-dealers and institutional investors to interact in an all-to-all trading environment. During 2020, our clients executed
approximately 1.9 million trades using our Open Trading solutions, representing 32.7% of the total credit trading volume on our
corporate bond platform. In recent years, we have also significantly increased the number of participants that provide bond prices to our
corporate bond platform via an algorithm, which has helped increase the number of algorithmic price responses from 0.9 million in 2016
to 14.2 million in 2020. We intend to continue to improve the liquidity of bonds on our platforms by increasing the number of connections
we have with algorithmic trading firms. We also believe that the combination of Open Trading and our vast client network provides the
basis for MarketAxess to deliver meaningful cross-border liquidity or enter into new markets where liquidity is scarcer, such as
municipal bonds.

Continue to Develop Innovative Next-Generation Technologies that will Allow Our Clients to Further Automate and Improve

the Performance of their Trading Desks

We believe that the increased adoption of next-generation trading technologies by both dealer and investor clients will create
improved liquidity, enhanced trading efficiencies and the ability to identify trends within the bond market. In recent years, we have
launched a number of innovative technologies that rely on machine-learning, automation and algorithms that are designed to improve
the trading decisions and workflows of our clients, while reducing trading inefficiencies and human errors. For example, clients can use
our rules-based auto-execution technology with both our traditional RFQ protocol and Open Trading to automatically execute trades
meeting defined parameters with diverse sources of liquidity. Our Composite+ pricing algorithm uses machine-learning to generate near
real-time prices for approximately 30,000 corporate and sovereign bonds based on a variety of data inputs, and our Like Bonds product
uses a data-driven methodology to help clients find liquid, tradable alternatives to illiquid bonds. We intend to continue to invest in and
develop advanced technologies such as these that will make MarketAxess an increasingly valuable part of our clients’ trading decisions
and workflows.

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Expand and Strengthen our Trade-Related Service, Data and Analytical Offerings Throughout the Trading Cycle

We plan to expand and strengthen our existing service, data and analytical offerings throughout the trading cycle so that
MarketAxess is more fully integrated into the workflow of our broker-dealer and institutional investor clients. In the pre-trade period,
we intend to continue to enhance the value of our information and analytical offerings, including the content and capabilities of
BondTicker®, Axess All® and Composite+. We plan to enhance and expand the usage of LiquidityBridge®, our execution management
system (“EMS”) service for dealers that allows users to manage and facilitate complex liquidity flows across multiple trading platforms,
and Axess IQTM, our order and execution workflow solution for the wealth management and private banking community. We also intend
to augment our European post-trade matching and regulatory reporting services that enable our clients to comply with their heightened
obligations pursuant to MiFID II. The recent acquisition of Deutsche Börse’s regulatory reporting business is expected to help us expand
and improve our services across a broader European client base, predominantly in Germany, France and the Nordics regions. As the use
of our pre- and post-trade services and products grow, we believe that MarketAxess will become further entrenched as a value-added
resource to our clients at each stage of the trading cycle, which we believe will further increase the attractiveness and use of our trading
platforms.

Pursue Select Acquisitions and Strategic Alliances

We continually evaluate opportunities to supplement our internal growth by entering into strategic alliances, or acquiring
businesses or technologies, that will enable us to enter new markets, provide new products or services, or otherwise enhance the value
of our platforms and existing trade-related services to our clients. In 2017, we expanded our strategic alliance with BlackRock, Inc.
(“BlackRock”) to combine BlackRock’s order flow with our Open Trading solution to improve the range of trading connections available
to global credit market participants. The acquisition of LiquidityEdge® LLC (“LiquidityEdge”) in 2019 provided our clients with access
to one of the leading platforms for U.S. Treasury trading, and it supports the further expansion of our U.S. Treasury hedging capabilities
for our corporate bond platform. In 2020, we acquired the regulatory reporting business of Deutsche Börse in order to bolster our post-
trade and market data services in Europe and entered into an agreement to acquire MuniBrokers, a central electronic venue serving
municipal bond inter-dealer brokers and dealers, in order to expand our existing municipal bond trading solution for global institutional
investor and dealer clients.

Our Key Trading Markets and Services

U.S. High-Grade Corporate Bond Market

The U.S. corporate bond market consists of three broad categories of securities: investment-grade debt (so-called “high-grade”),
which typically refers to debt rated BBB- or better by Standard & Poor’s or Baa3 or better by Moody’s Investor Service; debt rated
below investment-grade (so-called “high-yield”), which typically refers to debt rated lower than BBB- by Standard & Poor’s or Baa3
by Moody’s Investor Service; and debt convertible into equity (so-called “convertible debt”). According to SIFMA, U.S. corporate bond
debt outstanding has increased approximately 26% from $8.3 trillion at year-end 2015 to $10.4 trillion at September 30, 2020. We use
the terms high-grade and investment-grade interchangeably in this Annual Report on Form 10-K.

The U.S. high-grade corporate bond market represents the largest subset of the U.S. corporate bond market. Over the last five
years, high-grade corporate bond issuance was over $1 trillion each year. The total annual amount of U.S. high-grade corporate bond
issuance as reported by SIFMA increased by 60% to $1.8 trillion in 2020 from $1.1 trillion in 2019. Notwithstanding the growth in the
total amount of debt outstanding and new issuance, turnover (which is the total amount traded as a percentage of the amount outstanding
for the bonds that traded) is still below pre-credit crisis levels. The average daily trading volume of U.S. high-grade corporate bonds as
reported by TRACE for the year ended December 31, 2020 was approximately $25.3 billion compared to $22.2 billion and $20.7 billion
for the years ended December 31, 2019 and 2018, respectively.

Our U.S. high-grade corporate bond business consists of U.S. dollar-denominated investment-grade debt issued by corporations
for distribution in the U.S. Over 100 broker-dealers utilize our platforms to trade U.S. high-grade corporate bonds, including all of the
top 20 broker-dealers as ranked by underwriting volume of newly-issued U.S. high-grade corporate bonds in 2020. Our broker-dealer
clients accounted for approximately 98.5% of the underwriting of newly-issued U.S. high-grade corporate bonds in 2020. More than
1,200 active domestic and foreign institutional investor firms use our platforms to trade U.S. high-grade corporate bonds. Our 2020
trading volume in the U.S. high-grade corporate bond market was $1.4 trillion.

U.S. Crossover and High-Yield Bond Market

We define the high-yield bond market generally to include all debt rated lower than BBB- by Standard & Poor’s or Baa3 by
Moody’s Investor Service. We define the crossover market to include any debt issue rated below investment-grade by one agency but
investment-grade by the other. The total annual amount of high-yield corporate bond issuance as reported by SIFMA increased by 62.7%
to $444.9 billion in 2020 from $273.5 billion in 2019. The average daily trading volume of high-yield bonds as measured by TRACE
for the year ended December 31, 2020 was approximately $10.5 billion compared to $8.8 billion and $8.0 billion for the years ended
December 31, 2019 and 2018, respectively.

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Over 100 of our broker-dealer clients and more than 1,000 active institutional investor firms use our platforms to trade crossover
and high-yield bonds. Trading in crossover and high-yield bonds uses many of the same features available in our U.S. high-grade
corporate bond offering. We also offer leveraged loan trading for our clients that trade high-yield bonds. Our 2020 trading volume in
the high-yield bond market was $384.8 billion.

Emerging Markets Bond Market

We define the emerging markets bond market generally to include U.S. dollar, Euro or local currency denominated bonds issued
by sovereign entities or corporations domiciled in a developing country. These issuers are typically located in Latin America, Asia, or
Central and Eastern Europe. Examples of countries we classify as emerging markets include: Argentina, Brazil, Colombia, Mexico,
Peru, the Philippines, Russia, Turkey and Venezuela.

The institutional investor base for emerging markets bonds includes many crossover investors from the high-yield and high-grade
investment areas. Institutional investors have been drawn to emerging markets bonds by their high returns and high growth potential.
The average daily trading volume of emerging markets debt, as reported by the Emerging Markets Trade Association for the nine months
ended September 30, 2020, the most recent date available, was $17.7 billion compared to $21.3 billion and $19.6 billion for the years
ended December 31, 2019 and 2018, respectively.

Over 125 of our broker-dealer clients and more than 1,200 active institutional investor firms use our platforms to trade emerging
markets bonds. The emerging markets countries whose bonds were most frequently traded on our platforms in 2020 were Mexico,
Brazil, China and Indonesia. In 2020, our clients were able to trade corporate and sovereign debt denominated in 27 local market
currencies on our platform. Our 2020 trading volume in the emerging market bond market was $561.8 billion.

European Corporate Bond Market

The European corporate bond market consists of a broad range of products, issuers and currencies. We define the European
corporate bond market generally to consist of bonds intended to be distributed to European investors, primarily bonds issued by European
corporations, excluding bonds that are issued by corporations domiciled in an emerging markets country and excluding most government
bonds that trade in Europe. Examples include:

•

•

•

•

bonds issued by European corporations, denominated in any currency;

bonds generally denominated in Euros, U.S. dollars or British Pounds Sterling intended to be distributed to European
investors, excluding bonds that are issued by corporations domiciled in an emerging market;

bonds issued by supra-national organizations (entities that include a number of central banks or government financial
authorities, such as the World Bank), agencies and governments located in Europe, generally denominated in Euros, U.S.
dollars or British Pounds Sterling, provided that such currency is not the currency of the country where the bond was
issued; and

floating-rate notes issued by European corporations.

We believe that the European corporate bond market is impacted by many of the same factors as the U.S. high-grade corporate
bond market. The total amount of Euro denominated high-grade and high-yield bonds yearly issuance as reported by the International
Capital Markets Association increased 9.7% to $564.3 billion in 2020 from $514.4 billion in 2019. The estimated average daily trading
volume of European corporate bonds for the year ended December 31, 2020 was approximately $10.8 billion compared to $10.5 billion
and $9.2 billion for the years ended December 31, 2019 and 2018, respectively.

We offer secondary trading functionality in U.S. dollar- and Euro-denominated European corporate bonds to our broker-dealer
and institutional investor clients. We also offer our clients the ability to trade in other European corporate bonds, including bonds issued
in British Pounds Sterling, floating rate notes, European government bonds and bonds denominated in non-core currencies. We offered
the first platform in Europe with a multi-dealer disclosed counterparty trading capability for corporate bonds.

In the Eurobond credit market, defined as including European high-grade, high-yield and government bonds, over 50 broker-
dealers utilize our platform, including each of the top 20 broker-dealers as ranked by 2020 European corporate new-issue underwriting
volume. Approximately 650 active institutional investor firms use our platforms to trade European bonds. Our 2020 trading volume in
the Eurobond bond market was $299.9 billion.

U.S. Treasury Market

U.S. Treasury securities are government instruments issued by the U.S. Department of the Treasury. The average daily trading
volume of U.S. Treasuries as measured by SIFMA was $607.1 billion for the year ended December 31, 2020 compared to $593.6 billion
and $547.8 billion for the years ended December 31, 2019 and 2018, respectively.

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We entered the U.S. Treasury market in 2019 through our acquisition of LiquidityEdge. LiquidityEdge’s custom liquidity pools,
as well as direct dealer streaming capabilities, for on- and off-the-run U.S. Treasuries offer a bespoke trading ecosystem to connect a
community of dealers, market-makers and institutional investors. In addition to providing MarketAxess clients with an enhanced ability
to trade U.S. Treasuries, the acquisition supported the expansion of our treasury hedging services for clients desiring to hedge duration
risk of certain credit trades.

Over 75 firms use our LiquidityEdge platform to trade U.S. Treasuries. The Treasury products traded on the LiquidityEdge
platform include On the Runs, Off the Runs and guaranteed spreads. Our 2020 trading volume in the U.S. Treasury market was $3.9
trillion.

U.S. Municipal Bond Market

Municipal bonds are debt securities issued by states, cities, counties and other governmental entities in the U.S. to fund day-to-
day obligations and to finance a wide variety of public projects, such as highways or water systems. Depending on the type of financing,
payments of the principal and interest on a municipal bond may come from general revenues of the municipal issuer, specific tax receipts,
revenues generated from a public project, payments from private entities or from a combination of sources. In addition to being issued
for many different purposes, municipal securities are also issued in many different forms, such as fixed rate, zero coupon or variable
rate bonds. The interest paid on municipal securities is typically exempt from federal income taxation and may be exempt from state
income and other taxes as well. As of December 31, 2020, there were over 1.0 million different municipal bonds outstanding, in the
total aggregate principal amount of more than $3.9 trillion. The average daily trading volume of municipal bonds, excluding variable
rate demand notes, as measured by the Municipal Securities Rulemaking Board (“MSRB”) was $5.7 billion for the year ended December
31, 2020 compared to $5.3 billion and $6.0 billion for the years ended December 31, 2019 and 2018, respectively.

Over 75 broker-dealer clients and over 300 institutional investor clients use our platforms to trade municipal bonds. We offer
trading for both taxable and non-taxable municipal bonds. Our 2020 trading volume in the U.S. municipal bond market was $14.0 billion.

U.S. Agency Bond Market

We define the U.S. agency bond market to include debt issued by a U.S. government-sponsored enterprise. Some prominent
issuers of agency bonds are the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. The total amount
of U.S. agency bonds outstanding was approximately $1.8 trillion as of September 30, 2020 as reported by SIFMA. The average daily
trading volume of U.S. agency bonds (excluding mortgage-backed securities) as measured by TRACE was $5.4 billion for the year
ended December 31, 2020 compared to $4.3 billion and $3.6 billion for the years ended December 31, 2019 and 2018, respectively.

Over 35 of our broker-dealer clients and more than 300 active institutional investor firms use our platforms to trade U.S. agency
bonds. Trading in U.S. agency bonds uses many of the same features available in our U.S. high-grade corporate bond offering. Our 2020
trading volume in the U.S. agency bond market was $49.4 billion.

Credit Derivative Market

Credit derivatives are contracts that allow market participants to obtain credit protection or assume credit exposure associated
with a broad range of issuers of fixed-income securities and other debt obligations without ownership of the underlying security. Among
the most significant requirements of the derivatives section of the Dodd-Frank Act are mandatory clearing of certain derivatives
transactions (“swaps”) through regulated central clearing organizations and mandatory trading of those swaps through either regulated
exchanges or swap execution facilities (“SEFs”), in each case, subject to certain key exceptions. We operate a SEF pursuant to the U.S.
Commodity Futures Trading Commission’s (“CFTC”) rules and we list certain credit derivatives for trading by U.S. persons and other
participants on our SEF.

We offer a range of functionality for electronic trading of CFTC-regulated credit derivative instruments on our SEF in compliance
with the CFTC’s requirements. This includes an RFQ system that allows participants to send anonymous or disclosed RFQs, as well as
an order book, which enables market participants to trade anonymously with all other market participants. Approximately 30 active
market participants use our SEF to trade credit derivative indices. Our 2020 credit derivatives trading volume was $45.1 billion.

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Execution Benefits for Clients

In addition to our platforms’ strengths described above, we believe our platforms provide numerous additional benefits to our

clients over both traditional fixed-income trading methods and competing electronic trading systems, including:

Open Trading Functionality

We offer Open Trading protocols for all of our key trading products, including corporate, municipal and emerging market bonds.
Our Market List functionality provides our Open Trading participants with the ability to display requests for bids and offers anonymously
to the entire MarketAxess trading community, thereby creating broad visibility of their inquiry among market participants and increasing
the likelihood that the request results in a completed trade. Public Axes™ is an order book-style price discovery process that gives
clients the ability to view anonymous or disclosed indications of interest from the inventory on our platform. For block-sized trades,
clients may use our Private Axes® functionality, a protocol that allows participants to anonymously negotiate round lots (greater than
$1.0 million) and block trades to minimize information leakage. In 2019, we launched Live Markets, an order book that creates a single
view of two-way, actionable prices for the most active corporate bonds, including newly issued debt, benchmark issues and news-driven
securities.

Transparent Pricing on a Broad Range of Securities

The price discovery process includes the ability to view indicative prices from our broker-dealer clients’ inventory available on
our platform, access to real-time pricing information and analytical tools available on our BondTicker® service (including Composite+
predictive pricing, spread-to-Treasury data, search capabilities and independent third-party credit research), and the ability to request
executable bids and offers simultaneously from all of our participating broker-dealer clients during the trading process on any debt
security in our bond reference database. Institutional investors and broker-dealer clients can search bonds in inventory based on
combinations of issuer, issue, rating, maturity, spread-to-Treasury, size and dealer providing the listing, in a fraction of the time it takes
to do so manually. We believe that broad participation in client inquiries results in more trade matches and lower transaction costs.

Highly Automated Trading Processes that Create Greater Trading Accuracy and Cost-Efficiency

We believe that we provide improved efficiency by reducing the time and labor required to conduct broad product and price
discovery. Single-security, multi-security (bid or offer lists) inquiries and portfolio trading (baskets of up to 1,500 securities) can be
efficiently conducted with multiple broker-dealers or via Open Trading. Our auto-execution technology uses rules-based execution logic
to reduce trading inefficiencies and human errors while allowing traders to focus on higher-value trades. In addition, our BondTicker®
service eliminates the need for manually-intensive phone calls or e-mail communications to gather, sort and analyze information
concerning historical transaction prices.

Our electronic trading platforms also include verification mechanisms at various stages of the execution process which result in
greater accuracy in the processing, confirming and clearing of trades between institutional investor and broker-dealer clients, including
real-time trade details, STP, account allocations, automated audit trails and trade detail matching. These verification mechanisms are
designed to ensure that our institutional investor and broker-dealer clients are sending accurate trade messages by providing multiple
opportunities to verify they are trading the correct bond, at the agreed-upon price and size. Our platforms are designed to assist our
institutional investor clients in automating the transmittal of order tickets from the portfolio manager to the trader, and from the trader
to back-office personnel. This automation provides more timely execution and a reduction in the likelihood of errors that can result from
manual entry of information into different systems.

Efficient Risk Monitoring and Compliance

Institutional investors, broker-dealers and their regulators are increasingly focused on ensuring that best execution is achieved for
fixed-income trades. Our electronic trading platforms offer both institutional investors and broker-dealers an automated audit trail for
each stage in the trading cycle. This enables compliance personnel to review information relating to trades more easily and with greater
reliability. Trade information, including all price responses, execution time, trade price and, if applicable, spread-to-Treasury, is stored
securely and automatically on our electronic trading platform and is provided to clients as part of our automated post-trade messaging.
This data represents a valuable source of information for our clients’ compliance personnel. Importantly, we believe the automated audit
trail, together with the competitive pricing and transaction cost analysis that is a feature of our electronic trading platforms, gives
fiduciaries the ability to demonstrate that they have achieved best execution on behalf of their clients.

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Limited Information Leakage

Our Open Trading protocols allow our institutional investor clients to maintain their anonymity from trade initiation through to
settlement without limiting their number of potential trading counterparties. In addition, our Private Axes® protocol allows participants
to negotiate bilaterally on an anonymous basis to minimize information leakage when transacting in larger trade sizes.

Greater Sales Efficiency and More Efficient Inventory Management

We offer our broker-dealer clients broad connectivity with our institutional investor clients. Through this connectivity, our broker-
dealer clients are able to efficiently display their indications of interest to buy and sell various securities. We also enable broker-dealers
to broaden their distribution by participating in transactions to which they otherwise may not have had access. In addition, the ability to
post prices and electronically execute on straightforward trades enables bond sales professionals at broker-dealer firms to focus their
efforts on higher value-added trades and more complex transactions.

The posting of inventory to, and the ability to respond to inquiries from, a broad pool of institutional investors, creates an increased
opportunity for broker-dealers to identify demand for their inventory, particularly in less liquid securities. Broker-dealers also use Open
Trading as a source of liquidity as they manage their risk exposure. As a result, we believe they can achieve enhanced bond inventory
turnover by using our platforms, which may limit their credit exposure.

Post-Trade Reporting, Publishing and Matching Services

In the European Union (“E.U.”) and the U.K., all firms regulated as “investment firms” under MiFID II are required to submit
complete and accurate details of qualifying transactions to their national regulator no later than the close of the working day following
the date of the transaction. This process is known as transaction reporting. Pursuant to the associated Markets in Financial Instruments
Regulation (“MiFIR”), the number of fields and the complexity of the information that must be reported to regulators was significantly
enhanced. Firms may either report directly to the regulator or use an entity that is licensed as an ARM, such as our subsidiaries in the
U.K. and the Netherlands, to validate and submit such reports. Our multi-asset class ARM reporting solution allows our clients to report
to 15 different European regulators. We have also collaborated with Equilend on a full front-to-back Securities Financing Transactions
Regulation (“SFTR”) solution to support mutual clients with their SFTR reporting requirements.

In addition, under MiFIR, all regulated investment firms in the U.K. and the E.U. are required to comply with pre- and post-trade
transparency requirements pursuant to which quotes and trades must be made public subject to a system of waivers and deferrals. Firms
are required to utilize an APA, such as our APAs in the U.K. and the Netherlands, to comply with the post trade transparency requirement
and, although optional, many firms also utilize a third-party provider to satisfy the pre trade transparency requirement. The MarketAxess
transparency and APA trade reporting solutions are available through our Insight™ platform, offering our clients a pre- and post-trade
transparency solution, including APA trade reporting, quote publication, SI determination and instrument liquidity classification. We
also offer a commodity position reporting service to assist firms in compliance with the commodity derivative position limit reporting
requirements of MiFID II.

Trade matching enables counterparties to agree on the terms of a trade shortly after execution, reducing the risk of trade errors
and fails during settlement. We provide a near real-time post-trade matching and exception management tool which covers a broad
range of securities, including fixed-income and equities. By confirming all economic details within minutes of trade execution, we help
our clients to mitigate their operational risk, improve STP and efficiency and address the complexities of MiFID II and the Central
Securities Depositories Regulation.

MarketAxess has approximately 900 post-trade reporting and transparency clients, including broker-dealers, hedge funds and
investment banks. We expect that our recent acquisition of Deutsche Börse’s regulatory reporting business will help us expand and
improve our services across a broader European client base, predominantly in Germany, France and the Nordics regions.

Information and Execution Management Services

Traders are increasingly using data and machine-learning for pre-trade analytics, automated execution, transaction cost analysis
and post-trade solutions. Our real-time pre-trade data and analytics are an additional value-added resource to our participants at each
stage of the trading cycle, which further increases the attractiveness and use of our trading platforms. In the pre-trade period, our
platforms assist our participants by providing them with real time and historical trade price information, intelligent Composite+ pricing,
BondTicker®, liquidity and turnover analytics, bond reference data and trade order matching alerts. The information and analytical tools
we provide to our clients help them make investment and trading decisions. Our electronic trading platforms allow institutional investors
to compile, sort and use information to discover investment opportunities that might have been difficult or impossible to identify using
a manual information-gathering process or other electronic services.
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Our Composite+ pricing algorithm generates near real-time prices for approximately 30,000 corporate and sovereign bonds based
on a variety of data inputs, including feeds from our trading platform, our post-trade service and TRACE. Composite+ is used by clients
as a pre-trade reference price to enhance trading outcomes and transaction cost analysis. Composite+ can be combined with our auto-
execution service, providing clients with an alert if a response is “off market”.

Axess All®, the first intra-day trade tape for the European fixed-income market, is sourced from over 39,000 bond transactions
processed daily by our post-trade services business and includes aggregated volume and pricing for the most actively traded European
fixed-income instruments. We also provide market participants with access to pricing, liquidity and volume data on over 60,000 unique
fixed-income securities and securities reference data for approximately 71,000 fixed-income securities.

BondTicker® provides real-time TRACE data and enhances it with MarketAxess trade data and analytical tools in order to provide
professional market participants with a comprehensive set of corporate bond price information with associated analytical tools that are
not otherwise available. The data includes trade time and sales information, including execution prices, as well as MarketAxess-
estimated spread-to-Treasuries, for trades disseminated by the TRACE system. The data also includes actual execution prices and
spread-to-Treasury levels for U.S. high-grade corporate bond trades executed on the MarketAxess platform. BondTicker® is currently
the source of corporate bond trading information for The Wall Street Journal in the U.S.

BondTicker® allows institutional investors to search for and sort bonds based upon specific criteria, such as volume, time/date of
transaction, spread change, issuer or security. This search function allows institutional investors to compile information relating to
potential securities trades in a fraction of the time that it takes to manually compile this information from disparate sources or other
electronic databases, including direct TRACE feeds and European pricing information provided by our end-of-day pricing feed.

BondTicker® is integrated directly into the MarketAxess electronic trading platform and can be seamlessly accessed, either when
viewing securities inventory or when launching an inquiry. BondTicker® is also available through the internet for non-trading
professional market participants, including, among others, research analysts and rating agencies, who can log in and access the
information via a browser-based interface.

We provide order and execution workflow solutions designed to meet the specific needs of the customer. LiquidityBridge® is our
EMS service for dealers that allows users to manage and facilitate the complex liquidity flows across multiple trading platforms,
including the MarketAxess system. LiquidityBridge® brings together real-time comparison and execution of bond prices across multiple
sectors, allowing users to rapidly react to trading opportunities. Axess IQ is our order and execution workflow solution designed to meet
the needs of wealth management and private banking community by improving liquidity discovery, execution efficiency and alpha
generation for firms with large numbers of individual client orders.

Straight-Through Processing and APIs

Straight-through processing refers to the integration of systems and processes to automate the trade process from end-to-end —
trade execution, confirmation and settlement — without the need for manual intervention. We provide our broker-dealer and institutional
investor clients with a range of tools that facilitate straight-through processing, including order upload, easy-to-use online allocation
tools and pre- and post-trade messaging features that enable our clients to communicate electronically between their front- and back-
office systems. Our straight-through processing tools can be customized to meet specific needs of our clients and allow them to integrate
their order, portfolio management and accounting systems in real time. We maintained over 1,700 STP connections as of December 31,
2020. In addition, many of our clients use our Application Programming Interface (“API”) services for pre-trade, trade negotiation and
post-trade services to improve efficiency and reduce errors in processing.

Sales and Marketing

We promote our products and services using a variety of direct and indirect sales and marketing strategies. Our sales force, which
works closely with our product management and technology teams, is responsible for client acquisition activity and the management of
ongoing client relationships to increase clients’ awareness, knowledge and usage of our trading platforms and post-trade solutions, new
product launches, information and data services and pre- and post-trade services. Our sales team is also responsible for training and
supporting new and existing clients on their use of our platforms and post-trade solutions, including how to optimize their trading
performance and efficiency through our various trading protocols. We employ various strategies, including advertising, direct marketing,
digital and social media, promotional mailings, and participation in industry conferences and media engagement, to increase awareness
of our brand, our trading platforms and our other solutions. For example, we work with The Wall Street Journal to leverage BondTicker®
data as the source of information for its weekly distressed debt tables.

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Competition

The global fixed-income securities industry generally, and the electronic financial services markets in which we engage in
particular, are highly competitive, and we expect competition to intensify in the future. We compete with a broad range of market
participants globally. Some of these market participants compete with us in a particular market, while select others compete against the
entire spectrum of our platforms and solutions. We face five main areas of competition:

•

•

•

•

•

Telephone and Direct Electronic Communications — We compete with bond trading business conducted over the
telephone, e-mail or instant messaging directly between broker-dealers and their institutional
investor clients.
Institutional investors have historically purchased fixed-income securities by telephoning or otherwise communicating
via e-mail or instant messaging with bond sales professionals at one or more broker-dealers and inquiring about the price
and availability of individual bonds. This remains the manner in which the majority of corporate bond volumes are still
traded between institutional investors and broker-dealers.

Other electronic trading platforms — There are numerous other electronic trading platforms currently in existence,
including several that have only commenced operations in the last few years. We compete with Tradeweb, Bloomberg,
Intercontinental Exchange, Trumid and others in the credit and municipal markets; and Tradeweb, Bloomberg, Nasdaq
(Nasdaq Fixed Income), CME Group (NEX Group), BGC Partners (Fenics UST) and others in the rates markets. In
addition, some broker-dealers and institutional investors operate, or have invested in, proprietary electronic trading
systems or information networks that enable institutional investors to trade directly with a broker-dealer, and/or with
other institutional investors over an electronic medium. As we expand our business into new products, we will likely
come into more direct competition with other electronic trading platforms or firms offering traditional services.

Exchanges — In recent years, exchanges have pursued acquisitions that have put them in competition with us. For
example, London Stock Exchange Group has recently acquired a significant stake in Tradeweb and Intercontinental
Exchange acquired BondPoint and TMC Bonds, retail-focused platforms, and IDC, a provider of fixed income data, in
an effort to expand its portfolio of fixed income products and services. CME Group and Nasdaq also operate platforms
that compete with us. Exchanges also have data and analytics businesses, which increasingly put their offerings in direct
competition with us.

Market data and information vendors — Several large market data and information providers, such as Bloomberg,
Refinitiv, Intercontinental Exchange, and IHS Markit currently have a data and analytics relationship with virtually every
institutional firm. Some of these entities currently offer varying forms of electronic trading of fixed-income securities.
Some of these entities have announced their intention to expand their electronic trading platforms or to develop new
platforms. These entities are currently direct competitors to our information services business and already are or may in
the future become direct competitors to our electronic trading platforms.

Other approved regulatory mechanisms — We compete with other approved regulatory mechanisms in Europe that have
ARM and APA designations, such as the London Stock Exchange’s UnaVista and Tradeweb, to provide post-trade
matching and regulatory transaction reporting and transparency services to European clients.

Competitors, including companies in which some of our clients have invested, have developed electronic trading platforms or
have announced their intention to explore the development of electronic trading platforms that compete or will compete with us.
Furthermore, some of our clients have made, and may in the future continue to make, investments in or enter into agreements with other
businesses that directly or indirectly compete with us.

In general, we compete on the basis of a number of key factors, including:

•

•

•

•

•

•

•

•

broad network of broker-dealer and institutional investor clients using our electronic trading platforms;

liquidity provided by the participating broker-dealers and, to a growing extent, by other institutional investors;

magnitude and frequency of price improvement;

enhancing the quality and speed of execution;

compliance benefits;

total transaction costs;

technology capabilities, including the reliability, security, and ease of use of our electronic trading platforms; and

range of products, protocols and services offered.

We believe that our ability to grow volumes and revenues will largely depend on our performance with respect to these factors.

15

Our competitive position is also enhanced by the familiarity and integration of our clients with our electronic trading platforms
and other systems. We have focused on the unique aspects of the markets we serve in the development of our platforms, working closely
with our clients to provide a system that is suited to their needs.

Our broker-dealer clients have invested in building APIs with us for inventory contributions, electronic trading, government bond
benchmark pricing and post-trade messaging. We believe that we have successfully built deep roots with our broker-dealer clients,
increasing our level of service to them while at the same time increasing their commitment to use our services; however, the contractual
obligations of such clients are non-exclusive. See the Risk Factor captioned “We are dependent on our broker-dealer clients, who are
not restricted from using their own proprietary or third-party platforms to transact with our institutional investor clients.”

Furthermore, a significant number of our institutional investor clients have built interfaces to enable them to communicate
electronically between our platforms and their order, portfolio management and accounting systems. We believe that this increases the
reliance of these institutional investor clients on our services and creates significant competitive barriers to entry.

Technology

The design and quality of our technology products are critical to our growth and our ability to execute our business strategy. Our
electronic trading platforms have been designed with secure, scalable client-server architecture that makes broad use of distributed
computing to achieve speed, reliability and fault tolerance. The platforms are built on industry-standard technologies and have been
designed to handle many multiples of our current trading volume.

All critical server-side components, primarily our networks, application servers and databases, have backup equipment running
in the event that the main equipment fails. This offers redundant system capacity designed to maximize uptime and minimize the
potential for loss of transaction data in the event of an internal failure. We also seek to minimize the impact of external failures by
automatically recovering connections in the event of a communications failure. The majority of our broker-dealer clients and a significant
number of our institutional investor clients have redundant dedicated high-speed communication paths to our network in order to provide
fast data transfer. Our security measures include industry-standard communications encryption.

We have designed our primary application with an easy-to-use, Windows-based interface. Our clients are able to access our
electronic trading platforms through a secure, single sign-on. Clients are also able to execute transactions over our platforms directly
from their order management systems. We provide users an automatic software update feature that does not require manual intervention.

We prioritize security throughout our platforms, operations and software development. We make architectural, design and
implementation choices to structurally address security risks, such as logical and physical access controls, perimeter firewall protection
and embedded security processes in our systems development lifecycle. Our cybersecurity program is based on the National Institute of
Standards and Technology Cyber Security Framework (the “Framework”). The Framework consists of standards, guidelines and best
practices to manage cybersecurity-related risks and promote the protection and resilience of critical infrastructure. Our Global Chief
Information Security Officer leads a cybersecurity team in assessing, managing and reducing the relevant risks with a goal to assure
critical operations and continuous delivery of service. We constantly monitor connectivity and suspect events are escalated to our global
risk and management teams.

Intellectual Property

We rely upon a combination of copyright, patent, trade secret and trademark laws, written agreements and common law to protect
our proprietary technology, processes and other intellectual property. Our software code, elements of our electronic trading platforms,
website and other proprietary materials are protected by copyright laws. We have been issued 13 patents covering significant trading
protocols and other aspects of our trading system technology.

The written agreements upon which we rely to protect our proprietary technology, processes and intellectual property include
agreements designed to protect our trade secrets. Examples of these written agreements include third party nondisclosure agreements,
employee nondisclosure and inventions assignment agreements, and agreements with customers, contractors and strategic partners.
Other written agreements upon which we rely to protect our proprietary technology, processes and intellectual property take many forms
and contain provisions related to patent, copyright, trademark and trade secret rights.

We have registered the MarketAxess® name and logo for trademark in the U.S., Europe and in other parts of the world. We also
have a number of other registered or pending trademarks and service marks globally, including Open Trading™, BondTicker®, and
Now You’re In The Market™, among others. In addition, we own, or have filed applications for, the rights to trade names, copyrights,
domain names and service marks that we use in the marketing of products and services to clients.

16

In addition to our efforts to register our intellectual property, we believe that factors such as the technological and creative skills
of our personnel, new product and service developments, frequent enhancements and reliability with respect to our services are essential
to establishing and maintaining a technology and market leadership position.

Government Regulation

The securities industry and financial markets in the U.S. and elsewhere are subject to extensive regulation. In these jurisdictions,
government regulators and self-regulatory organizations oversee the conduct of our business, and have broad powers to promulgate and
interpret laws, rules and regulations that may serve to restrict or limit our business. As a matter of public policy, these regulators are
charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of investors
participating in those markets. Our active broker-dealer and regulated venue subsidiaries fall within the scope of their regulations.
Rulemaking by regulators, including resulting market structure changes, has had an impact on our business by directly affecting our
method of operation and, at times, our profitability.

As registered broker-dealers, trading venues and other types of regulated entities as described below, certain of our subsidiaries
are subject to laws, rules and regulations (including the rules of self-regulatory organizations) that cover all aspects of their business,
including manner of operation, system integrity, anti-money laundering and financial crimes, handling of material non-public
information, safeguarding data, capital requirements, reporting, record retention, market access, licensing of employees and the conduct
of officers, employees and other associated persons.

Regulation can impose, and has imposed, obligations on our regulated subsidiaries, including our broker-dealer subsidiaries. These
increased obligations require the implementation and maintenance of internal practices, procedures and controls, which have increased
our costs. Many of our regulators, as well as other governmental authorities, are empowered to bring enforcement actions and to conduct
administrative proceedings, examinations, inspections and investigations, which may result in increased compliance costs, penalties,
fines, enhanced oversight, increased financial and capital requirements, additional restrictions or limitations, censure, suspension or
disqualification of the entity and/or its officers, employees or other associated persons, or other sanctions, such as disgorgement,
restitution or the revocation or limitation of regulatory approvals. Whether or not resulting in adverse findings, regulatory proceedings,
examinations, inspections and investigations can require substantial expenditures of time and money and can have an adverse impact on
a firm’s reputation, client relationships and profitability. From time to time, we and our associated persons have been and are subject to
routine reviews, none of which to date have had a material adverse effect on our businesses, financial condition, results of operations or
prospects. As a result of such reviews, and any future actions or reviews, we may be required to, among other things, amend certain
internal structures and frameworks such as our operating procedures, systems and controls.

The regulatory environment in which we operate is subject to constant change. We are unable to predict how certain new laws
and proposed rules and regulations will be implemented or in what form, or whether any changes to existing laws, rules and regulations,
including the interpretation, implementation or enforcement thereof or a relaxation or amendment thereof, will occur in the future. We
believe that uncertainty and potential delays around the final form of certain new rules and regulations may negatively impact our clients
and trading volumes in certain markets in which we transact, although a relaxation of or the amendment of existing rules and
requirements could potentially have a positive impact in certain markets. While we generally believe the net impact of the laws, rules
and regulations may be positive for our business, it is possible that unintended consequences may materially adversely affect us in ways
yet to be determined. See the Risk Factor captioned “Our business and the trading businesses of many of our clients are subject to
increasingly extensive government and other regulation, which may affect our trading volumes and increase our cost of doing business.”

U.S. Regulation

In the U.S., the SEC is the federal governmental agency primarily responsible for the administration of the federal securities laws,
including adopting and enforcing rules and regulations applicable to broker-dealers. One of our broker-dealers operates an alternative
trading system (“ATS”) subject to the SEC’s Regulation ATS, which includes certain specific requirements and compliance
responsibilities in addition to those faced by broker-dealers generally. Another of our broker-dealers operates an exempt ATS for U.S.
Treasuries. Broker-dealers are also subject to regulation by state securities administrators in those states in which they conduct business
or have registered to do business. We are also subject to the various anti-fraud provisions of the Securities Act of 1933 as amended (the
“Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Commodity Exchange Act, certain state
securities laws and the rules and regulations promulgated thereunder. We also may be subject to vicarious and controlling person liability
for the activities of our subsidiaries and our officers, employees and affiliated persons.

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The CFTC is the federal agency primarily responsible for the administration of federal laws governing activities relating to futures,
swaps and other derivatives, including the rules applicable to our SEF. Our SEF is subject to regulations that relate to trading and product
requirements, governance and disciplinary requirements, operational capabilities, surveillance obligations and financial information and
resource requirements, including the requirement that they maintain sufficient financial resources to cover operating costs for at least
one year. Our SEF is subject to both scheduled and unscheduled examinations by the CFTC.

Much of the regulation of broker-dealers’ operations in the United States has been delegated to self-regulatory organizations.
These self-regulatory organizations adopt rules (which are generally subject to approval by the SEC) that govern the operations of
broker-dealers and conduct periodic inspections and examinations of their operations. In the case of our U.S. broker-dealer subsidiaries,
the principal self-regulatory organization is FINRA. Our U.S. broker-dealer subsidiaries are subject to both scheduled and unscheduled
examinations by the SEC and FINRA. In addition, our broker-dealers’ municipal securities-related activities are subject to the rules of
the MSRB.

Title VII of the Dodd-Frank Act (“Title VII”) amended the Commodity Exchange Act and the Exchange Act to establish a
regulatory framework for swaps, subject to regulation by the CFTC, and security-based swaps, subject to regulation by the SEC. The
CFTC has implemented the majority of its regulations in this area, most of which are in effect. The SEC has also finalized many of its
security-based swap regulations, although a significant number are not yet in effect. Among other things, Title VII rules require certain
standardized swaps to be cleared through a central clearinghouse and/or traded on a designated contract market or SEF, subject to various
exceptions. Title VII also requires the registration and regulation of certain market participants, including SEFs.

The SEC is currently conducting a review of the regulatory framework for fixed income electronic trading platforms for the
purpose of evaluating the potential regulatory gaps that may exist among such platforms, including ours, with respect to access to
markets, system integrity, surveillance, and transparency, among other things. It is unknown at this time to what extent new legislation
will be passed into law or whether pending or new regulatory proposals will be adopted or modified, or what effect such passage,
adoption or modification will have, whether positive or negative, on our industry, our clients or us.

Non-U.S. Regulation

Outside of the United States, we are currently regulated by: the FCA in the U.K., De Nederlandsche Bank (“DNB”) and the AFM
in the Netherlands, the Securities & Futures Commission (the “SFC”) of Hong Kong, the Monetary Authority of Singapore (the “MAS”),
the Australian Securities and Investment Commission in Australia (the “ASIC”), the Investment Industry Regulatory Organization of
Canada (the “IIROC”) and provincial regulators in Canada, and the Securities and Exchange Commission and Central Bank in Brazil.

The FCA’s strategic objective is to ensure that the relevant markets function well and its operational objectives are to protect
consumers, to protect and enhance the integrity of the U.K. financial system and to promote effective competition in the interests of
consumers. It has investigative and enforcement powers derived from the Financial Services and Markets Act 2000 (“FSMA”) and
subsequent legislation and regulations. Subject to the FSMA, individuals or companies that seek to acquire or increase their control in
a firm that the FCA regulates is required to obtain prior approval from the FCA.

The legal framework in the Netherlands for financial undertakings is predominantly included in the Dutch Financial Supervision
Act (“FSA”). The AFM, like DNB, is an autonomous administrative authority with independent responsibility for fulfilling its
supervisory function. Pursuant to the FSA, the AFM authorizes investment firms. The AFM is legally responsible for business
supervision. DNB is responsible for prudential supervision. The purpose of prudential supervision is to ensure the solidity of financial
undertakings and to contribute to the stability of the financial sector. Holders of a qualifying holding (in short, shareholdings or voting
rights of 10% or more) must apply to the DNB for a declaration of no objection and satisfy the applicable requirements of the FSA.

In January 2018, the E.U. implemented enhanced rules and regulations targeted at the financial services industry, including MiFID
II and MiFIR. MiFID II and MiFIR introduced significant changes to the E.U. financial markets that were designed to facilitate more
efficient markets and greater transparency for participants by: (i) enhancing pre- and post-trade transparency for fixed-income
instruments, (ii) increasing and enhancing post-trade reporting obligations with a requirement to submit post-trade data to ARMs, (iii)
improving technology synchronization and best execution and (iv) establishing a consolidated tape for trade data. Although MiFID II
and MiFIR were intended to help improve the functioning of the E.U. single market by achieving a greater consistency of regulatory
standards, MiFID II and MiFIR have caused us to expend significantly more compliance, business and technology resources, to incur
additional operational costs and has created additional regulatory exposure for our trading and post-trade businesses. While we generally
believe the net impact of the rules and regulations have been positive for our businesses, unintended consequences of the rules and
regulations may adversely affect us in ways yet to be determined. In particular, the possible divergence of the U.K. from the E.U. in
relation to the future development of MIFID II and MiFIR and other rules and regulations within the financial markets (such as the
Central Securities Depository Regulation) may further increase the complexity, operational costs and compliance requirements of our
business in the U.K. and E.U.

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The securities industry and financial markets in the 27 member states of the E.U. is regulated by agencies in each member state.
E.U. regulations provide for a cross-border “passporting regime”, which allows us to provide our services throughout the E.U. in reliance
upon our authorization from any E.U. member state. Historically, we have utilized the FCA authorizations held by our U.K. regulated
subsidiaries in order to provide regulated services to our European clients outside of the U.K. in reliance on this passport. However, the
U.K. ceased to be a member of the E.U. on January 31, 2020, triggering a transition period in which the U.K. continued to observe
applicable E.U. regulations through December 31, 2020 (commonly referred to as “Brexit”). In preparation for Brexit, we obtained
AFM authorizations for our subsidiaries in the Netherlands in 2019 and we are able to provide regulated services to our clients within
the E.U. in reliance on the cross-border services passport held by our Dutch subsidiaries. See the Risk Factor captioned “The U.K. exit
from the European Union could materially adversely impact our business, clients, financial condition, results of operations and
prospects.”

Capital Requirements

Certain of our subsidiaries are subject to jurisdictional specific regulatory capital requirements, designed to maintain the general
financial integrity and liquidity of a regulated entity. In general, they require that at least a minimum amount of a regulated entity’s
assets be kept in relatively liquid form. Failure to maintain required minimum capital may subject a regulated subsidiary to a fine,
requirement to cease conducting business, suspension, revocation of registration or expulsion by the applicable regulatory authorities,
and ultimately could require the relevant entity’s liquidation.

In addition, as a result of our self-clearing activities, MarketAxess Corporation is required to finance certain transactions, maintain
deposits with various clearing organizations and clearing broker-dealers and maintain a special reserve bank account for the benefit of
customers pursuant to SEC Rule 15c3-3. These requirements can fluctuate based on trading activity, market volatility or other factors
which may impact our liquidity or require us to use our capital resources.

Regulatory Status of MarketAxess Entities

Our operations span jurisdictions across the Americas, Europe and Asia, and we operate through various regulated entities. The
current regulatory status of many of our business entities is described below. We also provide our platforms in other countries pursuant
to exemptions from registration under the laws of such countries.

Americas

MarketAxess Corporation is a SEC registered broker-dealer, a member of FINRA, the MSRB, and the Securities Investor

Protection Corporation (“SIPC”). MarketAxess Corporation is registered as a clearing broker with FINRA.

LiquidityEdge is a SEC registered broker-dealer, a member of FINRA, the SIPC and is recognized as a Financial Market

Supervisory Authority (“FINMA”) in Switzerland as a foreign trading venue.

MarketAxess SEF Corporation is a CFTC registered SEF.

MarketAxess Canada Company is registered as an Alternative Trading System with the Ontario Securities Commission (“OSC”),
the Autorité des Marchés Financiers (“AMF”), the British Columbia Securities Commission (“BCSC”) and the Alberta Securities
Commission (“ASC”) and is a member of IIROC.

MarketAxess Plataforma de Negociacao Ltda. is authorized through its parent (MarketAxess Holdings Inc.) by Comissão de
Valores Mobiliários (“CVM”) and BACEN (Central Bank of Brazil) to provide a system in Brazil for the trading of fixed income
securities by sophisticated institutional investors.

MarketAxess Colombia Corporation is registered with the Superintendence of Finance of Colombia (“SOFC”) as an Information

System.

U.K. and Europe

MarketAxess Capital Limited is authorized and regulated by the FCA as a MiFID investment firm and acts as a matched principal

counterparty for Open Trading transactions.

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MarketAxess Europe Limited is authorized and regulated by the FCA to operate a multilateral trading facility (“MTF”), licensed
by the Australian Securities and Investments Commission to have an Australian Markets License, recognized by FINMA as a foreign
trading venue, licensed by BAFIN under the German Securities Trading Act, licensed by the Securities & Futures Commission of Hong
Kong as an Automated Trading Service and licensed by the Monetary Authority of Singapore as a Recognized Market Operator. In
addition, MarketAxess Europe Limited is recognized or licensed to provide its services in each of Italy, Denmark and Finland following
Brexit.

MarketAxess NL B.V. is authorized and regulated by the AFM in the Netherlands as an MTF. MarketAxess NL B.V. may provide
services throughout the E.U. 27 and EEA countries under the MiFID passport and is approved by FINMA to provide cross-border
services into Switzerland as a foreign trading venue.

Trax NL B.V. is licensed in the Netherlands by the AFM as a Data Reporting Services Provider (“DRSP”), specifically to act as

an ARM and APA. Trax NL B.V. may provide services throughout the E.U. 27 and EEA countries under the MiFID passport.

Xtrakter Limited is authorized and regulated by the FCA as a DRSP for ARM and APA services and as a service company.

Asia and Pacific

MarketAxess Singapore Pte. Limited is approved by the Monetary Authority of Singapore as a Recognized Market Operator.
Additionally, MarketAxess Singapore Pte. Limited is approved by FINMA in Switzerland as a foreign trading venue, by Hong Kong as
an ATS, by Germany as a foreign market operator, and holds an Australian Markets License from ASIC.

Human Capital Resources

As of December 31, 2020, we had 606 employees, 378 of whom were based in the U.S. and 228 of whom were based outside of
the U.S., principally in the U.K. During fiscal year 2020, despite the COVID-19 pandemic (the “Pandemic”), we increased our number
of employees by 79, or 15.0%, compared to an increase of 73, or 16.1%, in 2019. We did not discontinue any compensation or benefits
programs in fiscal year 2020. None of our employees are represented by a labor union. We consider our relationships with our employees
to be good and have not experienced any interruptions of operations due to labor disagreements.

Health and Safety

In fiscal year 2020, the Pandemic had a significant impact on how we manage human capital. Nearly all of our workforce has
worked remotely since March 2020, and we instituted safety protocols and procedures for those employees who chose to work on site
on a part-time basis. Our experienced teams of employees adapted to the changes in our work environment and have managed our
business successfully during this challenging time.

Diversity, Equity and Inclusion

The diverse backgrounds, experiences and perspectives of our employees are one of our biggest strengths. We strive to make our
workforce more diverse, inclusive and supportive of all. We embrace a culture and vision that supports and enhances our ability to
recruit, develop and retain diverse talent at every level. In 2020, based on the results of an employee survey to further our diversity and
inclusion efforts, our employees participated in an educational and developmental program designed to educate our employees about
the Company’s diversity and inclusion initiatives and their importance to our success. As of December 31, 2020, our U.S. workforce
was approximately 72% men and 28% women, and of our U.S. employees, our workforce was approximately 59% White, 28% Asian,
6% Hispanic or Latinx, 5% Black or African American, and 2% identified with another race or ethnicity.

To broaden our candidate pools, we use diverse hiring sources, including employee referrals, recruitment vendors, postings on
diversity job boards and with diversity interest groups, and we attend various recruiting events. We have been able to further diversify
our workforce through our summer intern and graduate hire programs, which represent a spectrum of schools, fields of study, interests
and socio-economic backgrounds. In 2020, we expanded our partnerships with universities with larger racially diverse student bodies in
both New York and London, and we specifically targeted affinity groups on campus in order to diversify our applicant pool.

Talent and Development

Our talent management strategy is focused on attracting, developing and retaining top talent within the Company. In 2020, we
conducted a global talent review to identify high-potential talent at all levels of seniority within the Company. This review is helping us
build short- and long-term succession plans for our executive leadership team and other critical roles within the Company.

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The Company also intends to use the talent review process to inform our increasing levels of investment in learning and
development for our employees. Currently, we offer a customized management training program for new managers and an accelerated
leadership program for our more seasoned leaders who we believe may assume broader or more complex roles within the Company in
the future. We also offer a range of technical, markets-related, and soft-skills training courses on an ongoing basis to enable our
employees to develop a broad spectrum of skills. We conduct regular engagement surveys of our employee base to better understand
what is working well for our employees and identify areas that we can improve. In our latest survey focused on Diversity and Inclusion,
87% of our global employees participated.

Company Information

MarketAxess was incorporated in Delaware in April 2000. Our internet website address is www.marketaxess.com. Through our
internet website, we will make available, free of charge, the following reports as soon as reasonably practicable after electronically filing
them with, or furnishing them to, the SEC: our annual report on Form 10-K; our quarterly reports on Form 10-Q; our current reports on
Form 8-K; and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as
amended. Our Proxy Statements for our Annual Meetings are also available through our internet website. Our internet website and the
information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. You may
also obtain copies of our reports without charge by writing to:

MarketAxess Holdings Inc.
55 Hudson Yards
New York, NY 10001
Attn: Investor Relations

Our Board of Directors has standing Audit, Compensation and Talent, Nominating and Corporate Governance, Risk and
Investment Committees. Each of these committees has a written charter approved by our Board of Directors and our Board of Directors
has also adopted a set of Corporate Governance Guidelines. Copies of the committee charters and the Corporate Governance Guidelines
are also posted on our website.

The SEC maintains an internet website that contains annual, quarterly and current reports, proxy and information statements and

other information that issuers (including the Company) file electronically with the SEC. The SEC’s internet website is www.sec.gov.

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Item 1A. Risk Factors.

Risks Related to Global Economic and Market Conditions

Global economic, political and market factors beyond our control could reduce demand for our services, and our profitability

and business could suffer.

The global financial services business is, by its nature, risky and volatile and is directly affected by many national and international
factors that are beyond our control. Any one of these factors may cause a substantial decline in the U.S. and/or global financial services
markets, resulting in reduced trading volume. These events could have a material adverse effect on our business, financial condition and
results of operations. These factors include:

•
•
•
•
•
•

•
•
•

•

•
•
•

economic and political conditions in the United States, Europe and elsewhere;
adverse market conditions, including unforeseen market closures or other disruptions in trading;
broad trends in business and finance;
consolidation or contraction in the number of market participants;
actual or threatened acts of war or terrorism or other armed hostilities;
actual or threatened trade war, including between the United States and China, or other governmental action related to
tariffs, international trade agreements or trade policies;
concerns over inflation and weakening consumer confidence levels;
the availability of cash for investment by mutual funds, exchange traded funds and other wholesale and retail investors;
the level and volatility of interest rates, the difference between the yields on corporate securities being traded and those
on related benchmark securities and foreign currency exchange rates;
the effect of monetary policy adopted by the Federal Reserve Board or foreign banking authorities, increased capital
requirements for banks and other financial institutions, and other regulatory requirements and political impasses;
credit availability and other liquidity concerns;
concerns over credit default or bankruptcy of one or more sovereign nations or corporate entities; and
legislative and regulatory changes, including changes to financial industry regulations and tax laws.

There have been significant declines in trading volumes in the financial markets generally in the past and there may be similar
declines in trading volumes generally or across our platforms in particular in the future. Any one or more of the above factors may
contribute to reduced trading volumes. Our revenues and profitability are likely to decline significantly during periods of stagnant
economic conditions or low trading volume in the U.S. and global financial markets.

While we are expanding our businesses to new geographic areas, our business operations have historically been substantially
located in the U.S. and the U.K. Due to the concentration of our operations in the U.S. and U.K. we are subject to greater regional risks
than those of some of our competitors.

Our business has been, and our results of operations and financial condition may be, impacted by the outbreak of, and

global response to, the Pandemic and such impact could be materially adverse.

The global spread of the novel coronavirus disease 2019 (COVID-19) has created significant volatility in the markets we serve
and has increased uncertainty and economic disruption. The extent to which the Pandemic impacts our business, operations, and financial
results is uncertain and will depend on numerous evolving factors that we may not be able to accurately predict, including:

•
•

•

•

•

•

the duration and scope of the Pandemic;
governmental and business actions taken in response to the Pandemic, and in response to economic disruption, and the
impact of those actions on global economic activity;
the impact of the economic and business disruptions on the trading needs of our clients and the resulting impact on their
demand for our electronic trading platforms and solutions;
adverse market conditions, including unforeseen market closures, disruptions in trading, significant declines in market
and trading volumes, credit availability and other liquidity concerns;
the increase in business failures, liquidations or bankruptcies among market participants that use our electronic trading
platforms or to whom we are a trading counterparty; and
our ability to provide our electronic trading platforms and other solutions, including as a result of our employees or our
clients’ employees working remotely and/or closures of offices and facilities.

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In addition, the increase in our employees working remotely has amplified certain risks related to, among other things, the
increased demand on our information technology resources and systems, the increased risk of phishing and other cybersecurity attacks
as cybercriminals try to exploit the uncertainty surrounding the Pandemic, and the increased number of points of possible attack, such
as laptops and mobile devices (both of which are now being used in increased numbers), to be secured. Any failure to effectively manage
these increased demands and risks, including to timely identify and appropriately respond to cyberattacks, may adversely affect our
business.

As a result of the Pandemic, the global economy is currently experiencing a period of significant turmoil and we have
experienced significant changes in our daily operations. See “Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations—Critical Factors Affecting our Industry and our Company—Economic, Political and Market Factors.” Due
to the uncertainty of the duration, scope and severity of the Pandemic, the uncertainty as to what governmental measures may yet be
taken in response to the Pandemic and the unpredictable effect on our business, our employees and our clients, we are not able to
reasonably estimate the extent of any potential future impact of the Pandemic on our financial condition or results of operations, but the
impact could be material. Even after the Pandemic has subsided, we may continue to experience impacts to our business as a result of
the Pandemic’s global economic impact. Further, our operating and financial results may be affected in a manner that is not presently
known to us or in a manner that we currently do not consider to present significant risks to our operations given the unprecedented and
continuously evolving nature of the Pandemic.

The U.K. exit from the European Union could materially adversely impact our business, clients, financial condition, results

of operations and prospects.

Brexit has significantly affected the fiscal, monetary and regulatory landscape in both the U.K. and E.U., and could have a
material impact on their economies and the growth of various industries in the future. In particular, the ecosystem of the E.U. financial
services industry in which we operate, which prior to Brexit has been heavily centered in London, has become more decentralized. The
exit of the U.K. has significantly impacted the business environment in which we and our clients operate, increased the complexity and
cost of conducting business in both the E.U. and the U.K., and introduces significant new barriers to cross-border trading, including
uncertainties with respect to the legal and regulatory requirements to which we and our clients are subject. We historically conducted
business in Europe primarily through the “passporting rights” of our U.K. subsidiaries, which have been eliminated as a result of Brexit.
Following Brexit, we now have new regulatory and operational costs and challenges associated with the operation of our regulated
subsidiaries in the Netherlands, which we use to provide our trading platforms and certain post-trade services to our clients in the E.U.
We could also be adversely affected by having to manage a less centralized customer and employee base.

Brexit is expected to lead to legal uncertainty and divergence between the U.K. and E.U. financial regulations, which may
impact our ability to comply with the extensive government regulation to which we are subject. In addition, the cost and complexity of
operating across increasingly divergent regulatory regimes could increase following Brexit. Brexit has also required us to make changes
to the technology underlying our trading platforms and regulatory reporting systems in the U.K. and E.U., which has resulted in new
regulatory and operational costs and challenges. Changes to U.K. immigration policy will also occur as a result of Brexit and our access
to, and our ability to compete for and hire, skilled employees in both the U.K. and the E.U. is expected to become more constrained.

Although it is not possible at this point in time to predict fully the effects of the exit of the U.K. from the E.U., any of the

foregoing factors could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Operating in the Electronic Fixed-Income Trading Markets

Decreases in trading volumes in the fixed-income markets generally or on our platforms would harm our business and

profitability.

We have experienced significant decreases in overall market volumes in the past and may experience similar decreases in market
volumes in the future. Declines in the overall volume of fixed-income securities trading and in market liquidity generally, as well as
declines in interest rate volatility, could result in lower revenues from commissions for trades executed on our electronic trading
platforms and fees generated from related activities.

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Likewise, decreases in our share of the segments of the fixed-income trading markets in which we operate, or shifts in trading
volume to segments of clients which we have not penetrated, could result in lower trading volume on our platforms and, consequently,
lower commissions and revenue. During periods of increased volatility in credit markets, the use of electronic trading platforms by
market participants may decrease dramatically as institutional investors may seek to obtain additional information during the trade
process through conversations with broker-dealers. In addition, during rapidly moving markets, broker-dealers are less likely to post
prices electronically. Our market share of the fixed-income trading markets is also impacted by a variety of other factors, including the
amount of new issuances of corporate debt, the level of bond fund inflows or outflows, the percentage of volumes comprised of Rule
144A transactions, the percentage of volumes comprised of larger trades known as “block trades”, the level of credit spreads and credit
volatility and whether the prevalent market environment is an “offer wanted” or “bid wanted” environment.

A decline in overall market volumes, trading volumes on our platforms or our platforms’ market share for any reason would
negatively affect our commission revenue and may have a material adverse effect on our business, financial condition and results of
operations.

The industry in which we operate is rapidly evolving. If we are unable to adapt our business effectively to keep pace with
industry changes, we may not be able to compete effectively, which could have a material adverse effect on our business, financial
condition and results of operations.

The electronic financial services industry is characterized by rapidly changing and increasingly complex technologies and systems,
changing and increasingly sophisticated client demands (including access to new technologies and markets), frequent technology and
service introductions, evolving industry standards, changing regulatory requirements and new business models. If we are not able to
keep pace with changing market conditions or client demands and if our competitors release new functionality or technology before we
do, our existing platforms, solutions and technologies may become obsolete or our competitive position may be materially harmed, each
of which could have a material adverse effect on our business, financial condition and results of operations. Operating in a rapidly
evolving industry involves a high degree of risk and our future success depends in part on our ability to:

•
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•
•
•

•
•
•

attract and retain market participants on our platforms on a cost-effective basis;
expand and enhance reliable and cost-effective product and service offerings for our clients;
develop and introduce new features to, and new versions of, our electronic trading platforms;
respond effectively to competitive pressures;
respond effectively to the loss of any of our significant broker-dealer or institutional investor clients, including due to
merger, consolidation, bankruptcy, liquidation or other cause (including, among other things, the collection of any
amounts due from such clients);
operate, support, expand and develop our operations, technology, website, software, communications and other systems;
defend our trading platforms and other systems from cybersecurity threats; and
respond to regulatory changes or demands.

If we are unsuccessful in addressing these risks or in executing our business strategy, our business, financial condition and results

of operations may suffer.

We face substantial competition that could reduce our market share and harm our financial performance.

The fixed-income securities industry generally, and the electronic financial services markets in which we operate in particular,
are highly competitive, and we expect competition to intensify in the future. Within our markets, we compete based on our ability to
provide our clients with deep liquidity, a broad network of market participants, a wide range of products and protocols, and
comprehensive pre-trade, trade and post-trade functionality, as well as the reliability, security and ease of use of our electronic platforms
and solutions, among other factors. We primarily compete with other electronic trading platforms and trading businesses conducted
directly between broker-dealers and their institutional investor clients over the telephone, email or instant messaging. Our current and
prospective competitors are numerous and include:

•
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•

•

other multi-party electronic trading platforms;
market data and information vendors;
securities and futures exchanges;
inter-dealer brokerage firms;
technology, software, and information services or other companies that have existing commercial relationships with
broker-dealers or institutional investors; and
other approved regulatory reporting businesses.

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Many of our current and potential competitors are more established and substantially larger than we are and have substantially
greater market presence, as well as greater financial, technical, marketing and other resources. These competitors may aggressively
reduce their pricing to enter into, or otherwise compete in, market segments in which we provide services, potentially subsidizing any
losses with profits from trading in other fixed-income or equity securities or other business operations. In addition, many of our
competitors offer a wider range of services, have broader name recognition and have larger customer bases than we do. Some of them
may be able to respond more quickly to new or evolving opportunities, technologies and client requirements than we can and may be
able to undertake more extensive promotional activities.

Competition in the markets in which we operate has intensified due to consolidation, which has resulted in increasingly large and
sophisticated competitors. In recent years, our competitors have made acquisitions and/or entered into joint ventures and consortia to
improve the competitiveness of their electronic trading offerings. If, as a result of industry consolidation, our competitors are able to
offer lower cost and/or a wider range of trading venues and solutions, obtain more favorable terms from third-party providers or
otherwise take actions that could increase their market share, our competitive position and therefore our business, financial condition
and results of operations may be materially adversely affected.

Our operations also include the sale of pre- and post-trade services, analytics and market data. There is a high degree of competition
among market data and information vendors in solutions for pre- and post-trade data, analytics and reporting, and such businesses may
become more competitive in the future as new competitors emerge. Some of these companies are already in or may enter the electronic
trading business. Accordingly, some of our competitors may be able to combine use of their electronic trading platforms with
complementary access to market data and analytical tools and/or leverage relationships with existing clients to obtain additional business
from such clients, which could preempt use of our platforms or solutions. For example, Bloomberg, Refinitiv and ICE own trading
platforms that compete with ours and also have a data and analytics relationships with the vast majority of institutional, wholesale and
retail market participants. If we are not able to compete successfully in this area in the future, our revenues could be adversely impacted
and, as a result, our business, financial condition and results of operations would be materially adversely affected.

Risks Related to our Future Levels of Business, Profitability and Growth

Neither the sustainability of our current level of business nor any future growth can be assured. Even if we do experience

growth, we cannot assure you that we will grow profitably.

The success of our business strategy depends, in part, on our ability to maintain and expand the network of market participants
that use our electronic trading platforms. Our business strategy also depends on increasing the use of our platforms by these participants
for a wide range of fixed-income products and trade sizes. Individuals at broker-dealers or institutional investors may have conflicting
interests, which may discourage their use of our platforms. We cannot assure you that the growth of electronic means of trading securities
that we have experienced in recent years will continue.

Our growth may also be dependent on our ability to diversify our revenue base. We currently derive approximately 48.7% of our
revenues from secondary trading in U.S. high-grade corporate bonds. Our long-term business strategy includes expanding our service
offerings and increasing our revenues from other fixed-income products and other sources. We cannot assure you that our efforts will
be successful or result in increased revenues or continued profitability. We have experienced significant growth in trading volumes,
revenues and profitability in recent years. We cannot assure you that our business will continue to grow at a similar rate, if at all.

We may enter into new fee plans, the impact of which may be difficult to evaluate; past trends in commissions are not

necessarily indicative of future commissions.

From time to time, we may introduce new fee plans for the market segments in which we operate. Any new fee plan may include
different fee structures or provide volume incentives. We cannot assure you that any new fee plans will result in an increase in the
volume of transactions executed over our platforms or that our revenues will increase as a result of the implementation of any such fee
plans. It is possible that our broker-dealer or institutional investor clients could respond to a new fee plan by either reducing the amount
of their business conducted on our platforms or terminating their contractual relationship with us, which could have an adverse impact
on our fees and otherwise have a material adverse effect on our business, financial condition and results of operations.

In addition, under certain of our fee plans, our fees are designated in basis points in yield (and, as a result, are subject to fluctuation
depending on the duration of the bond traded) or our fees vary based on trade size or maturity. We anticipate that our average fees per
million may vary in the future due to changes in yield, years-to-maturity and nominal size of bonds traded on our platform. Consequently,
past trends in commissions are not necessarily indicative of future commissions.

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As we enter new markets, we may not be able to successfully attract clients and adapt our technology and marketing strategy

for use in those markets.

Our strategy includes leveraging our electronic trading platforms to enter new markets, including new asset classes, products and
geographies, including markets where we have little or no operating experience. We may have difficulties identifying and entering into
new markets due to established competitors, lack of recognition of our brand and lack of acceptance of our platforms and solutions, as
has occurred with certain of our initiatives in the past.

Expansion, particularly in new geographic markets, may require substantial expenditures and take considerable time. In particular,
we may need to make additional investments in management and new personnel, infrastructure and compliance systems. Furthermore,
our expansion efforts may divert management’s attention or inefficiently utilize our resources. If we are not able to manage our expansion
effectively, our expansion costs could increase at a faster rate than our revenues from these new markets. If we cannot successfully
implement the necessary processes to support and manage our expansion, our business, financial condition and results of operations
may suffer.

We cannot assure you that we will be able to successfully adapt our proprietary software and technology for use in any new
markets. Even if we do adapt our products, services and technologies, we cannot assure you that we will be able to attract clients to our
platforms and compete successfully in any such new markets. We cannot assure you that our marketing efforts or our pursuit of any of
these opportunities will be successful. If these efforts are not successful, we may realize less than expected earnings, which in turn could
result in a decrease in the market value of our common stock.

We may face increasing economic and regulatory challenges in our growing international operations that we may not be

able to meet in the future.

We operate electronic trading platforms in Europe, Latin America and Asia and we may further expand our operations throughout
these and other regions. We have invested significant resources in our foreign operations and the increasing globalization of our
platforms and services. However, there are certain risks inherent in doing business in international markets, particularly in the financial
services industry, which is heavily regulated in many jurisdictions. These risks include:

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difficulty in obtaining the necessary regulatory approvals for planned expansion, if at all, and the possibility that any
approvals that are obtained may impose restrictions on the operation of our business;
the inability to manage and coordinate the various regulatory requirements of multiple jurisdictions that are constantly
evolving and subject to unexpected change;
difficulties in staffing and managing foreign operations;
less developed technological infrastructures and generally higher costs, which could result in lower client acceptance of
our services or clients having difficulty accessing our trading platforms;
fluctuations in exchange rates;
reduced or no protection for intellectual property rights;
seasonal reductions in business activity; and
potentially adverse tax consequences.

Our international operations are also subject to the legal, economic and market risks associated with geopolitical uncertainties in
other regions of the world, including but not limited to the risk of war, inter and intra national conflict, economic crises and terrorism.

In addition, we must comply with the laws, regulations and registration rules of foreign governments and regulatory bodies for
each country in which we conduct business. For example, MiFID II was implemented by regulatory bodies in Europe in January 2018.
We cannot predict the full extent to which any of these new regulations or future regulatory changes may impact our European business
and operations, but they may cause us to expend significantly more compliance, business and technology resources, incur additional
operational costs and create additional regulatory exposure.

Brexit could lead to further legal uncertainty and potentially divergent national laws and regulations as the U.K. determines which
E.U. laws to replace or replicate. Our compliance with these changing laws and regulations may be costly and time-consuming and may
have a material adverse effect on our clients’ trading activities on our platforms. We cannot predict what future actions the regulatory
bodies that supervise our business might take, or the impact that any such actions may have on our business.

Further, we may face unexpected challenges in our international operations due to global competitors, established local markets,
and economic and political instability. Our inability to manage these risks effectively could adversely affect our business and limit our
ability to expand our international operations, which could have a material adverse effect on our business, financial condition and results
of operations.

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Risks Related to our Customer Concentration

We are dependent on our broker-dealer clients, who are not restricted from using their own proprietary or third-party

platforms to transact with our institutional investor clients.

We rely on our broker-dealer clients to provide liquidity on our electronic trading platforms by posting prices for bonds in their
inventory and responding to institutional investor client inquiries. The contractual obligations of our broker-dealer clients to us are
minimal, non-exclusive and terminable by such clients. Our broker-dealer clients buy and sell fixed-income securities through traditional
methods, including by telephone and e-mail messaging, and through other electronic trading platforms. Some of our broker-dealer clients
have developed electronic trading networks that compete with us or have announced their intention to explore the development of such
electronic trading networks, and many of our broker-dealer and institutional investor clients are involved in other ventures, including
other electronic trading platforms or other distribution channels, as trading participants and/or as investors. These competing trading
platforms may offer some features that we do not currently offer. Accordingly, there can be no assurance that such broker-dealers’
primary commitments will not be to one of our competitors.

If bank-affiliated entities reduce their trading activity and that activity is not replaced by other market participants, the level of
liquidity and pricing available on our trading platform would be negatively impacted, which could adversely affect our operating results.
In the U.S., the Volcker Rule section of the Dodd-Frank Act bans proprietary trading by banks and their affiliates, which could adversely
affect our bank-affiliated broker-dealer clients’ ability to make markets in a variety of fixed-income securities. In addition, over the past
several years, there has been significant consolidation among firms in the banking and financial services industries and several of our
large broker-dealer clients have reduced their sales and trading businesses in fixed-income products. Further consolidation, instability,
and layoffs in the financial services industry could result in a smaller client base and heightened competition, which may lower volumes.

Any reduction in the use of our electronic trading platforms by our broker-dealer clients could reduce the volume of trading on
our platform, which could, in turn, reduce the use of our platforms by our institutional investor clients. The occurrence of any of the
foregoing may have a material adverse effect on our business, financial condition and results of operations.

We could lose significant sources of revenue and trading volume if we lose any of our significant institutional investor clients.

We rely on our institutional investor clients to launch inquiries over our trading platforms and, increasingly, to provide liquidity
through our Open Trading protocols. A limited number of such clients can account for a significant portion of our trading volume. The
obligations of our institutional investor clients to us under our standard contractual agreements are minimal, non-exclusive and
terminable by such clients. Our institutional investor clients also buy and sell fixed-income securities through traditional methods,
including by telephone, e-mail and instant messaging, and through other electronic trading platforms.

There can be no assurance that we will be able to retain our major institutional investor clients or that such clients will continue
to use our trading platform. The loss of a major institutional investor client or any reduction in the use of our electronic trading platforms
by such clients could have a material adverse effect on our business, financial condition and results of operations.

Credit and Operational Risks

We are exposed to risks in connection with certain transactions in which we act as a matched principal intermediary.

In connection with our anonymous trading protocols, we execute certain bond transactions between and among institutional
investor and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades which
are then settled by us or through a third-party clearing broker. Settlement typically occurs within one to two trading days after the trade
date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded.

We are exposed to credit and performance risks in our role as matched principal trading counterparty to the clients on our
platforms, including the risk that counterparties that owe us money or securities will not perform their obligations. These parties may
default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Adverse movements in the
prices of securities that are the subject of these transactions can increase our risk. In connection with Open Trading or other anonymous
protocols, we expect that the number of transactions in which we act as a matched principal will increase.

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In the process of executing matched principal transactions, miscommunications and other errors by our clients or us can arise that
involve substantial risks of liability. These risks include, among others, potential liability from disputes over the terms of a trade, the
settlement of the trade, or claims that we resolved an error trade dispute incorrectly or that a system malfunction or delay caused
monetary loss to a client. In addition, because of the ease and speed with which trades can be executed on our electronic platforms,
clients can lose substantial amounts by inadvertently entering trade instructions or by entering trade orders inaccurately. A significant
error trade or a large number of error trades could result in participant dissatisfaction and a decline in participant willingness to trade on
our platforms. Although we maintain error trade policies designed to protect our anonymous trading participants and enable us to manage
the risks attendant in acting as a matched principal counterparty, depending on the cause, number and value of the trades that are the
subject of an alleged error or dispute, such trades have the potential to have a material adverse effect on our financial condition and
results of operations. In addition, if we are required to hold a securities position as a result of an error, there may also be financing costs
or regulatory capital charges required to be taken by us.

We have policies, procedures and automated controls in place to identify and manage our credit risk, though there can be no
assurance that they will effectively mitigate our credit risk exposure. Some of our risk management procedures are reliant upon the
evaluation of information regarding the fixed-income markets, our clients or other relevant matters that are publicly available or
otherwise acquired from third party sources. Such information may not be accurate, complete, up-to-date or properly assessed and
interpreted by us. If our risk management procedures fail, our business, financial condition and results of operations may be adversely
affected. Furthermore, our insurance policies are unlikely to provide coverage for such risks.

Self-clearing exposes us to significant operational, liquidity, financing and regulatory risks.

We began self-clearing substantially all of our bond transactions for our U.S. operations in the third quarter of 2020 and we may
expand self-clearing to our foreign operations in the future. Self-clearing requires us to finance transactions and maintain margin deposits
at clearing organizations. Self-clearing exposes our business to operational risks, including business and technology disruption;
operational inefficiencies; liquidity, financing and regulatory risks; and potentially increased expenses. In connection with our
conversion to self-clearing for our U.S. operations in 2020, we experienced operational inefficiencies and technology issues which, in
combination with the capital and liquidity requirements that are imposed on all new self-clearing members, resulted in increased fail
rates in the immediate period following the conversion. Although the initial conversion issues for our U.S. clearing operations have been
resolved, in the future, we may encounter difficulties with self-clearing that lead to operating inefficiencies, technology issues,
dissatisfaction amongst our client base, disruption in the infrastructure that supports the business, inadequate liquidity, increased margin
requirements with clearing organizations and third-party settlement agents who provide financing with respect to transactions, reductions
in available borrowing capacity and financial loss. Any such delay, disruption, expense or failure could adversely affect our ability to
effect transactions and manage our exposure to risk. Moreover, any of these events could have a material adverse effect on our business,
financial condition and operating results.

Technology, IT Systems and Cybersecurity Risks

Rapid market or technological changes may render our technology obsolete or decrease the attractiveness of our products and

services to our broker-dealer and institutional investor clients.

We must continue to enhance and improve our electronic trading platforms. The electronic financial services industry is
characterized by significant structural changes, increasingly complex systems and infrastructures, changes in clients’ needs and
preferences and new business models. If new industry standards and practices emerge and our competitors release new technology
before us, our existing technology, systems and electronic trading platforms may become obsolete or our existing business may be
harmed. Our future success will depend on our ability to:

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enhance our existing products and services;
develop and/or license new products and technologies that address the increasingly sophisticated and varied needs of our
broker-dealer and institutional investor clients and prospective clients;
continue to attract highly-skilled technology personnel; and
respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis.

Developing our electronic trading platforms and other technology entails significant technical and business risks. We may use
new technologies ineffectively or we may fail to adapt our electronic trading platforms, information databases and network infrastructure
to broker-dealer or institutional investor client requirements or emerging industry standards. If we face material delays in introducing
new services, products and enhancements, our broker-dealer and institutional investor clients may forego the use of our platforms and
use those of our competitors.

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Further, the adoption of new internet, networking, cloud, telecommunications or blockchain technologies may require us to devote
substantial resources to modify and adapt our services. We cannot assure you that we will be able to successfully implement new
technologies or adapt our proprietary technology and transaction-processing systems to client requirements or emerging industry
standards. We cannot assure you that we will be able to respond in a timely manner to changing market conditions or client requirements.

We depend on third-party suppliers for key products and services.

We rely on a number of third parties to supply elements of our trading, information and other systems, as well as computers and
other equipment, and related support and maintenance. We cannot assure you that any of these providers will be willing and able to
continue to provide these services in an efficient, cost-effective manner, if at all, or that they will be able to adequately expand their
services to meet our needs. If we are unable to make alternative arrangements for the supply of critical products or services in the event
of a malfunction of a product or an interruption in or the cessation of service by an existing service provider, our business, financial
condition and results of operations could be materially adversely affected.

In particular, we depend on third-party vendors for our bond reference databases, the clearing and settlement of our Open Trading
transactions and to provide the technology underpinning our U.S. Treasury platform. We obtain essential reference data and information
services from external sources, including data received from certain competitors, clients, self-regulatory organizations and other third-
party data providers. Our reference data sources and information providers could increase the price for or withdraw their data or
information services for a variety of reasons. Further, as has occurred in the past, our competitors could revise the current terms on
which they provide us with data or information services or could cease providing us with data or information services altogether for a
variety of reasons, including competition. Disruptions in the services provided by those third-parties to us, including as a result of their
inability or unwillingness to continue to license products or provide technology services that are critical to the success of our business,
could have a material adverse effect on our business, financial condition and results of operations.

We also rely, and expect in the future to continue to rely, on third parties for various computer and communications systems, such
as telephone companies, online service providers, data processors, cloud computing and software and hardware vendors. Other third
parties provide, for instance, our data center, telecommunications access lines and significant computer systems and software licensing,
support and maintenance services. Any interruption in these or other third-party services or deterioration in their performance could
impair the quality of our service. We cannot be certain of the financial viability of all of the third parties on which we rely.

We license software from third parties, much of which is integral to our electronic trading platform and our business. We also hire
contractors to assist in the development, quality assurance testing and maintenance of our electronic trading platform and other systems.
Continued access to these licensors and contractors on favorable contract terms or access to alternative software and information
technology contractors is important to our operations. Adverse changes in any of these relationships has in the past had, and could in
the future have, a material adverse effect on our business, financial condition and results of operations.

We attempt to negotiate favorable pricing, service, confidentiality and intellectual property ownership or licensing and other terms
in our contracts with our third-party service providers. These contracts usually have multi-year terms. However, there is no guarantee
that these contracts will not terminate and that we will be able to negotiate successor agreements or agreements with alternate service
providers on competitive terms. Further, the existing agreements may bind us for a period of time to terms and technology that become
obsolete as our industry and our competitors advance their own operations and use of technology.

Our success depends on maintaining the integrity and capacity of our electronic trading platforms, systems and

infrastructure.

In order to be successful, we must provide reliable, secure, real-time access to our electronic trading platforms for our clients. If
our trading platforms cannot cope, or expand to cope, with demand, or otherwise fail to perform, we could experience disruptions in
service, slow delivery times and insufficient capacity. These consequences could result in our clients deciding to stop using or reduce
their use of our platforms, which would have a material adverse effect on our business, financial condition and results of operations.

As our operations grow in both size and scope, we will need to continually improve and upgrade our electronic trading platforms
and infrastructure to accommodate potential increases in order message volume and trading volume, the trading practices of new and
existing clients, regulatory changes and the development of new and enhanced trading platform features, functionalities and ancillary
products and services. The expansion of our electronic trading platforms and infrastructure has required, and will continue to require,
substantial financial, operational and technical resources. These resources will typically need to be committed well in advance of any
actual increase in trading volumes and order messages. We cannot assure you that our estimates of future trading volumes and order
messages will be accurate or that our systems will always be able to accommodate actual trading volumes and order messages without
failure or degradation of performance. Furthermore, we use new technologies to upgrade our established systems, and the development
of these new technologies also entails technical, financial and business risks. We cannot assure you that we will successfully implement
new technologies or adapt our existing electronic trading platforms, technology and systems to the requirements of our broker-dealer

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and institutional investor clients or to emerging industry standards. The inability of our electronic trading platforms to accommodate
increasing trading volume and order messages would also constrain our ability to expand our business.

Systems failures, interruptions, delays in service, catastrophic events and resulting interruptions in the availability of our

trading platforms could materially harm our business and reputation.

Our business depends on the efficient and uninterrupted operation of our trading platforms, systems, networks and infrastructure.
We cannot assure you that we, or our third-party providers, will not experience systems failures or business interruptions, as has occurred
in the past. Our systems, networks, infrastructure and other operations, in particular our trading platforms, are vulnerable to impact or
interruption from a wide variety of causes, including: irregular or heavy use of our trading platforms during peak trading times or at
times of increased market volatility; power, internet or telecommunications failures; hardware failures or software errors; human error,
acts of vandalism or sabotage; catastrophic events, such as natural disasters, extreme weather events or acts of war or terrorism; malicious
cyberattacks or cyber incidents, such as unauthorized access, ransomware, loss or destruction of data, computer viruses or other
malicious code; and the loss or failure of systems over which we have no control, such as loss of support services from critical third-
party providers. In addition, we may also face significant increases in our use of power and data storage and may experience a shortage
of capacity and/or increased costs associated with such usage.

Any failure of, or significant interruption, delay or disruption to, or security breaches affecting, our systems, networks or
infrastructure has in the past, and could in the future, result in: disruption to our operations, including disruptions in service to our clients;
slower response times; distribution of untimely or inaccurate market data to clients who rely on this data for their trades; delays in trade
execution; incomplete or inaccurate accounting, recording or processing of trades; significant expense to repair, replace or remediate
systems, networks or infrastructure; financial losses and liabilities to clients; loss of clients; legal or regulatory claims, proceedings,
penalties or fines. Any system failure or significant interruption, delay or disruption in our operations, or decreases in the responsiveness
of our platforms, could materially harm our reputation and business and lead our clients to decrease or cease their use of our platforms.
We internally support and maintain many of our systems and networks, including those underlying our trading platforms; however, we
may not have sufficient personnel to properly respond to all systems, networks or infrastructure problems. Our failure to monitor or
maintain our systems, networks and infrastructure, including those maintained or supported by our third-party providers, or to find a
replacement for defective or obsolete components within our systems, networks and infrastructure in a timely and cost-effective manner
when necessary, would have a material adverse effect on our business, financial condition and results of operations. While we generally
have disaster recovery and business continuity plans that utilize industry standards and best practices for much of our business, including
redundant systems, networks, computer software and hardware and data centers to address interruption to our normal course of business,
our systems, networks and infrastructure may not always be fully redundant and our disaster recovery and business continuity plans may
not always be sufficient or effective. Similarly, although some contracts with our third-party providers, such as our hosting facility
providers, require adequate disaster recovery or business continuity capabilities, we cannot be certain that these will be adequate or
implemented properly. Our disaster recovery and business continuity plans are heavily reliant on the availability of the internet and
mobile phone technology, so any disruption of those systems would likely affect our ability to recover promptly from a crisis situation.
If we are unable to execute our disaster recovery and business continuity plans, or if our plans prove insufficient for a particular situation
or take longer than expected to implement in a crisis situation, it could have a material adverse effect on our business, financial condition
and results of operations, and our business interruption insurance may not adequately compensate us for losses that may occur.

If we experience design defects, errors, failures or delays with our platforms, products or services, including our auto-

execution technology and pricing algorithms, our business could suffer serious harm.

Our platforms, products and services, including our auto-execution technology and pricing algorithms, may and have from time
to time contained design defects and errors when first introduced or when new updates or enhancements are released. In our development
of new protocols, platform features and updates and enhancements to our existing platforms, products and services, including our auto-
execution technology and pricing algorithms, we may make a design error that causes the platform, protocol or feature to operate
incorrectly or less effectively. Many of our protocols also rely on data and services provided by third-party providers over which we
have limited or no control and may be provided to us with defects, errors or failures. Our clients may also use our platforms, products
or services together with their own software, data or products from other companies. As a result, when problems occur, it might be
difficult to identify the source of the problem.

If design defects, errors or failures are discovered in our current or future platforms or protocols, we may not be able to correct or
work around them in a cost-effective or timely manner or at all. The existence of design defects, errors, failures or delays that are
significant, or are perceived to be significant, could also result in rejection or delay in market acceptance of our platforms or protocols,
damage to our reputation, loss of clients and related revenues, diversion of resources, product liability claims, regulatory actions or
increases in costs, any of which could materially adversely affect our business, financial condition or results of operations.

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Malicious cyber-attacks and other adverse events affecting our operational systems or infrastructure, or those of third
parties, could disrupt our businesses, result in the disclosure of confidential information, damage our reputation and cause losses
or regulatory penalties.

The operation of our electronic trading platforms relies on the secure processing, storage and transmission of a large amount of
transactional data and other confidential sensitive data (including confidential client and personal information). Our computer systems,
software and networks may be vulnerable to unauthorized access, loss or destruction of data (including confidential and personal
customer information), unavailability or disruption of service, computer viruses, acts of vandalism, or other malicious code, cyber-attack
and other adverse events that could have an adverse security impact. Despite the defensive measures we have taken, we are, and will
continue to be, subject to attacks, which may come from external factors such as governments, organized crime, hackers, and other third
parties such as infrastructure-support providers and application developers, or may originate internally from an employee or service
provider to whom we have granted access to our computer systems. If our security measures are breached as a result of third-party
action, employee error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to trading or other confidential
or personal information, our reputation could be damaged, our business would suffer and we could incur material liability. Any such
breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Because
techniques used to obtain unauthorized access or to sabotage computer systems change frequently and generally are not recognized until
launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures.

Our business also depends on the efficient and uninterrupted operation of our platforms, systems, networks and infrastructure.
Any failure of, or significant interruption, delay or disruption to, our systems, networks or infrastructure due to a cyber-attack could
result in: disruption to our operations, including disruptions in service to our clients; slower response times; distribution of untimely or
inaccurate market data to clients who rely on this data for their trades; delays in trade execution; incomplete or inaccurate accounting,
recording or processing of trades; significant expense to repair, replace or remediate systems, networks or infrastructure; financial losses
and liabilities to clients; loss of clients; legal or regulatory claims, proceedings, penalties or fines. We also face the risk of operational
disruption, failure or capacity constraints of any of the third-party service providers that facilitate our business activities, including
clients, clearing agents and trading system software, network or data providers. Such parties could also be the source of a cyber-attack
on or breach of our operational systems, data or infrastructure. Any system failure or significant interruption, delay or disruption in our
operations, or decreases in the responsiveness of our platforms, could materially harm our reputation and business and lead our clients
to decrease or cease their use of our trading platform.

There have been an increasing number of cyber-attacks in recent years in various industries, including ours, and cybersecurity risk
management has been the subject of increasing focus by our regulators. Our regulators in recent years have increased their examination
and enforcement focus on matters relating to cybersecurity threats, including the assessment of firms’ vulnerability to cyber-attacks. In
particular, regulatory concerns have been raised about firms establishing effective cybersecurity governance and risk management
policies, practices and procedures; protecting firm networks and information; identifying and addressing risks associated with clients,
vendors, and other third parties; preventing and detecting unauthorized activities; adopting effective mitigation and business continuity
plans to address the impact of cybersecurity breaches; and establishing protocols for reporting cybersecurity incidents. Any insurance
that we may have that covers a specific cybersecurity incident would not protect us from the effects of adverse regulatory actions that
may result from the incident or a finding that we had inadequate cybersecurity controls, including the reputational harm that could result
from such regulatory actions.

Our remediation costs and lost revenues could be significant if we fall victim to a cyber-attack. If an actual, threatened or perceived
breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed and could cause our
clients to reduce or stop their use of our electronic trading platforms. We may be required to expend significant resources to repair
system damage, protect against the threat of future security breaches or to alleviate problems, including reputational harm, loss of clients
and revenues and litigation, caused by any breaches. We may be found liable to our clients for any misappropriated confidential or
personal information. Although we intend to continue to implement industry-standard security measures, we cannot assure you that
those measures will be sufficient.

Our actual or perceived failure to comply with privacy, data protection and information security laws, regulations, and

obligations could harm our business.

Data privacy is subject to frequently changing rules and regulations in countries where we do business. For example, the E.U.
adopted the General Data Protection Regulations (“GDPR”), which as of May 2018 requires entities both in the European Economic
Area and outside to comply with new regulations regarding the handling of personal data. Brexit has created additional uncertainty with
regard to the regulation of data protection as the U.K now has its own data protection laws which are separate from the E.U. GDPR. We
are also subject to certain U.S. federal and state laws governing the protection of personal data. These laws and regulations are increasing
in complexity and number. In addition to the increased cost of compliance, our failure to successfully implement or comply with
appropriate processes to adhere to the GDPR and other laws and regulations relating to personal data could result in substantial financial
penalties for non-compliance, expose us to litigation risk and could result in significant liability, increased costs or cause our clients to
lose trust in us, which could have an adverse effect on our reputation and business.

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Intellectual Property Risks

We may not be able to protect our intellectual property rights or technology effectively, which would allow competitors to

duplicate or replicate our electronic trading platforms or any of our other current or future functionalities, products or services.
This could adversely affect our ability to compete.

Intellectual property is critical to our success and ability to compete, and if we fail to protect our intellectual property rights
adequately, our competitors might gain access to our technology. We rely primarily on a combination of patent, copyright, trademark
and trade secret laws in the United States and other jurisdictions, as well as license agreements, third-party non-disclosure and other
agreements and other contractual provisions and technical measures to protect our intellectual property rights. We attempt to negotiate
beneficial intellectual property ownership provisions in our contracts and also require employees, consultants, advisors and collaborators
to enter into confidentiality agreements in order to protect the confidentiality of our proprietary information. We have been issued 13
patents covering aspects of our technology and/or business, but can give no assurances that any such patents will protect our business
and processes from competition or that any patents applied for in the future will be issued. Additionally, laws and our contractual terms
may not be sufficient to protect our technology from use or theft by third parties. Furthermore, we cannot assure you that these protections
will be adequate to prevent our competitors from independently developing technologies that are substantially equivalent or superior to
our technology.

We may have legal or contractual rights that we could assert against illegal use of our intellectual property rights, but lawsuits
claiming infringement or misappropriation are complex and expensive, and the outcome would not be certain. In addition, the laws of
some countries in which we now or in the future provide our services may not protect software and intellectual property rights to the
same extent as the laws of the United States. If our efforts to secure, protect and enforce our intellectual property rights are inadequate,
or if any third party misappropriates, dilutes or infringes on our intellectual property, the value of our brand may be harmed, which could
have a material adverse effect on our business.

Defending against intellectual property infringement or other claims could be expensive and disruptive to our business. If we

are found to infringe the proprietary rights of others, we could be required to redesign our technology, pay royalties or enter into
license agreements with third parties.

In the technology industry, there is frequent litigation based on allegations of infringement or other violations of intellectual
property rights. As the number of participants in our market increases and the number of patents and other intellectual property
registrations increases, the possibility of an intellectual property claim against us grows. Although we have never been the subject of a
material intellectual property dispute, we cannot assure you that a third party will not assert in the future that our technology or the
manner in which we operate our business violates its intellectual property rights. From time to time, in the ordinary course of our
business, we may become subject to legal proceedings and claims relating to the intellectual property rights of others, and we expect
that third parties may assert intellectual property claims against us, particularly as we expand the complexity and scope of our business,
the number of electronic trading platforms increases and the functionality of these platforms further overlaps. Any claims, whether with
or without merit, could be expensive and time-consuming to defend, make it more difficult to operate or prevent us from operating our
business, or portions of our business, and result in significant monetary liability.

We cannot assure you that third parties will not assert infringement claims against us, as they have done in the past, with respect
to our electronic trading platforms or any of our other current or future products or services or that any such assertion will not require
us to cease providing such services or products, try to redesign our products or services, enter into royalty arrangements, if available, or
engage in litigation that could be costly to us. Any of these events could have a material adverse effect on our business, financial
condition and results of operations.

Risks Related to Possible Transactions or Investments

If we acquire or invest in other businesses, products or technologies, and are unable to integrate them with our business, our

financial performance may be impaired or we may not realize the anticipated financial and strategic goals for any such
transactions or any strategic alliances, partnerships or joint ventures, which we may enter into.

From time to time, we may pursue acquisitions, which may not be completed or, if completed, may not be as beneficial to us as
expected. We have made acquisitions in the past, including the purchases of LiquidityEdge in 2019 and the regulatory reporting business
of Deutsche Borse in 2020. We also may consider potential divestitures of businesses from time to time. We routinely evaluate potential
acquisition and divestiture candidates and engage in discussions and negotiations regarding potential acquisitions and divestitures on an
ongoing basis; however, even if we execute a definitive agreement, there can be no assurance that we will consummate the transaction
within the anticipated closing timeframe, or at all. Moreover, there is significant competition for acquisition and expansion opportunities
in the electronic financial services industry.

32

If we do succeed in acquiring or investing in a business, product or technology, such acquisitions and investments may involve a

number of risks, including:

•

•

•

•

•

•
•

•

we may find that the acquired company or assets do not further our business strategy, or that we overpaid for the company
or assets, or the economic conditions underlying our acquisition decision may change;
we may have difficulty integrating the acquired technologies or products with our existing electronic trading platform,
products and services;
we may have difficulty integrating the operations and personnel of the acquired business, or retaining the key personnel
of the acquired business;
there may be client confusion if our services overlap with those of the acquired company and we may have difficulty
retaining key customers, vendors and other business partners of the acquired business;
our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and
the complexity of managing geographically or culturally diverse enterprises;
we may enter into markets in which we have limited experience and where competitors hold stronger market positions;
potential failure of the due diligence processes to identify significant problems, liabilities or other challenges of an
acquired company or product; and
exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an
acquisition, including but not limited to, claims from terminated employees, customers, former stockholders or other
third parties.

These factors could have a material adverse effect on our business, financial condition, results of operations and cash flows,
particularly in the case of a larger acquisition or multiple acquisitions in a short period of time. From time to time, we may enter into
negotiations for acquisitions or investments that are not ultimately consummated. Such negotiations could result in significant diversion
of management time, as well as out-of-pocket costs.

The consideration paid in connection with an investment or acquisition also affects our financial results. If we were to proceed
with one or more significant acquisitions in which the consideration included cash, we could be required to use a substantial portion of
our available cash to consummate any acquisition. To the extent we issue shares of capital stock or other rights to purchase capital stock,
including options or other rights, existing stockholders may be diluted and earnings per share may decrease. In addition, acquisitions
may result in the incurrence of debt, large one-time write-offs, such as of acquired in-process research and development costs, and
restructuring charges.

We may also enter into strategic alliances, partnerships or joint ventures as a means to accelerate our entry into new markets,
provide new solutions or enhance our existing capabilities. Entering into strategic alliances, partnerships and joint ventures entails risks,
including: (i) difficulties in developing or expanding the business of newly formed alliances, partnerships and joint ventures; (ii)
exercising influence over the activities of joint ventures in which we do not have a controlling interest; (iii) potential conflicts with or
among our partners; (iv) the possibility that our partners could take action without our approval or prevent us from taking action; and
(v) the possibility that our partners become bankrupt or otherwise lack the financial resources to meet their obligations.

Risks Related to Key Personnel and Employees

We are dependent on our management team, and the loss of any key member of this team may prevent us from implementing

our business plan in a timely manner.

Our success depends largely upon the continued services of our executive officers and other key personnel, particularly Richard
M. McVey, Chief Executive Officer and Chairman of our Board of Directors. The terms of Mr. McVey’s employment agreement with
us do not require him to continue to work for us and allow him to terminate his employment at any time, subject to certain notice
requirements and forfeiture of non-vested equity compensation awards. We do not maintain “key person” life insurance on any of our
executive officers and other key personnel. Although we have invested in succession plans and we have short-term contingency plans
in place, any loss or interruption of Mr. McVey’s services or that of one or more of our other executive officers or key personnel for any
reason, as well as any negative market or industry perception arising from such loss or interruption, could result in our inability to
manage our operations effectively and/or pursue our business strategy.

33

Because competition for our employees is intense, we may not be able to attract and retain the highly skilled employees we

need to support our business.

We strive to provide high-quality services that will allow us to establish and maintain long-term relationships with our clients.
Our ability to provide these services and maintain these relationships, as well as our ability to execute our business plan generally,
depends in large part upon our employees. We must attract and retain highly qualified personnel. Competition for these personnel is
intense, especially for software engineers with extensive experience in designing and developing software and internet-related services,
product managers and senior sales executives.

The market for qualified personnel has become increasingly competitive as an increasing number of existing and new competitors
focus on the electronic trading of fixed income products. Many of these competitive ventures are interested in hiring our experienced
technology personnel and our qualified sales staff. Additionally, highly innovative technology firms may offer attractive employment
opportunities to our technology personnel. Many of these firms have greater resources than we have and are able to offer more lucrative
compensation packages. We cannot assure you that we will be successful in our efforts to recruit and retain the required personnel. The
failure to attract new personnel or to retain and motivate our current personnel may have a material adverse effect on our business,
financial condition and results of operations.

Regulatory and Legal Risks

We operate in a highly regulated industry and we may face restrictions with respect to the way we conduct certain of our

operations.

Our business is subject to increasingly extensive governmental and other regulations. These regulations are designed to protect
public interests generally rather than the interests of our stockholders. The SEC, FINRA, the CFTC and other agencies extensively
regulate the United States financial services industry, including most of our operations in the United States. Much of our international
operations are subject to similar regulations in their respective jurisdictions, including regulations overseen by the FCA in the U.K., the
AFM in the Netherlands, the Swiss Financial Market Supervisory Authority in Switzerland, ASIC in Australia, the Monetary Authority
of Singapore, the Hong Kong Securities and Futures Commission, the Investment Industry Regulatory Organization of Canada and
provincial regulators in Canada, and the Securities and Exchange Commission and Central Bank in Brazil. In addition, our regulatory
reporting business is registered as an ARM and APA with the FCA and the AFM.

As a matter of public policy, these regulatory bodies are responsible for safeguarding the integrity of the securities and other

financial markets and protecting the interests of investors in those markets. These regulatory bodies have broad powers to promulgate
and interpret, investigate and sanction non-compliance with their laws, rules and regulations. Most aspects of our broker-dealer and
other licensed subsidiaries are highly regulated, including the way we deal with our clients; our capital requirements; our financial and
regulatory reporting practices; required record-keeping and record retention procedures; the licensing of our employees; and the
conduct of our directors, officers, employees and affiliates.

We cannot assure you that we and/or our directors, officers and employees will be able to fully comply with these laws, rules and
regulations. If we fail to comply with any of these laws, rules or regulations, we may be subject to censure, fines, cease-and-desist
orders, suspension of our business, suspensions of personnel or other sanctions, including revocation of our membership in FINRA and
registration as a broker-dealer.

Certain of our regulated subsidiaries, including our registered broker-dealers and MTF, are subject to U.S. or foreign regulations
which prohibit repayment of borrowings from us or our affiliates, paying cash dividends, making loans to us or our affiliates or otherwise
entering into transactions that result in a significant reduction in regulatory net capital or financial resources, without prior notification
to or approval from such subsidiary’s principal regulator. MarketAxess SEF Corporation is registered with the CFTC as a SEF and is
required, among other things, to maintain sufficient financial resources to cover operating costs for at least one year.

Our ability to operate our platforms in a jurisdiction is dependent on continued registration or authorization in that jurisdiction or
the maintenance of a proper exemption from such registration or authorization. Our ability to comply with all applicable laws and rules is
largely dependent on our compliance, credit approval, audit and reporting systems and procedures, as well as our ability to attract and
retain qualified compliance, credit approval, audit and risk management personnel. Our systems and procedures may not be sufficiently
effective to prevent a violation of all applicable rules and regulations. In addition, the growth and expansion of our business may create
additional strain on our compliance systems, procedures and personnel and has resulted, and we expect will continue to result, in
increased costs to maintain and improve these systems.

In addition, because our industry is heavily regulated, regulatory approval may be required in order to continue or expand our
business activities and we may not be able to obtain the necessary regulatory approvals on a timely or cost-effective basis, or at all. Even
if approvals are obtained, they may impose restrictions on our business or we may not be able to continue to comply with the terms of
34

the approvals or applicable regulations. The implementation of unfavorable regulations or unfavorable interpretations of existing
regulations by courts or regulatory bodies could require us to incur significant compliance costs or cause the development or continuation
of business activities in affected markets to become impractical. For a further description of the regulations which may limit our
activities, see “Item 1. Business—Government Regulation.”

Some of our subsidiaries are subject to regulations regarding changes in control of their ownership. These regulations generally
provide that regulatory approval must be obtained in connection with any transaction resulting in a change in control of the subsidiary,
which may include changes in control of MarketAxess. As a result of these regulations, our future efforts to sell shares or raise additional
capital may be delayed or prohibited in circumstances in which such a transaction would give rise to a change in control as defined by
the applicable regulatory body.

Our business and the trading businesses of many of our clients are subject to increasingly extensive government and other

regulation, which may affect our trading volumes and increase our cost of doing business.

Our business, and the business of many of our clients, is subject to extensive regulation. Governmental and regulatory authorities
periodically review legislative and regulatory initiatives, and may promulgate new or revised, or adopt changes in the interpretation and
enforcement of existing, rules and regulations at any time. The new administration elected in the 2020 U.S. presidential election may
enact regulatory changes that may affect our business. Any such changes in laws, rules or regulations or in governmental policies could
create additional regulatory exposure for our business, cause us to incur significant additional costs, require us to change or cease aspects
of our business or restrict or limit our ability to grow our business, any of which could have a material adverse effect on our business,
financial condition or results of operations. There have been in the past, and could be in the future, significant technological, operational
and compliance costs associated with the obligations that derive from compliance with evolving laws, rules and regulations.

We cannot predict whether additional changes to the laws, rules and regulations that govern our business and operations, including
changes to their interpretation, implementation or enforcement, will occur in the future or the extent to which any such changes will
impact our business and operations. For example, the divergence of the U.K. from the E.U. in relation to the future development of
MiFID II and other rules and regulations governing the financial markets (such as the Central Securities Depository Regulation) may
adversely affect us in ways yet to be determined. In addition, we cannot predict how current proposals that have not yet been finalized
and/or that remain subject to ongoing debate will be implemented or in what form. We believe that uncertainty and potential delays
around the final form of such new laws, rules and regulations may negatively impact our clients and trading volumes in certain markets
in which we transact. Additionally, unintended consequences of such new laws, rules and regulations may adversely affect our industry,
our clients and us in ways yet to be determined. Any such legal and regulatory changes could affect us in substantial and unpredictable
ways, and could have a material adverse effect on our business, financial condition and results of operations.

The extensive regulation of our business means we have ongoing exposure to potentially significant costs and penalties.

Our businesses are subject to regulation by governmental and self-regulatory organizations in the jurisdictions in which we operate
around the world. Many of these regulators, including U.S. and non-U.S. government agencies and self-regulatory organizations, as well
as state securities commissions in the U.S., are empowered to bring enforcement actions and to conduct administrative proceedings and
examinations, inspections, and investigations, which may result in costs, penalties, fines, enhanced oversight, additional requirements,
restrictions, or limitations, and censure, suspension, or expulsion. Self-regulatory organizations such as FINRA and the National Futures
Association (“NFA”), along with statutory bodies such as the SEC, the CFTC, and the FCA, and other international regulators, require
strict compliance with their rules and regulations.

Firms in the financial services industry have experienced increased scrutiny in recent years, and penalties, fines and other sanctions
sought by regulatory authorities, including the SEC, the CFTC, FINRA, the NFA, state securities commissions and state attorney
generals in the U.S., and the FCA in the U.K. and other international regulators, have increased accordingly. Accordingly, we face the
risk of regulatory intervention, investigations and proceedings, any of which could involve extensive scrutiny of our activities and result
in significant fines and liability. Any of these developments would require significant time and financial resources and could adversely
affect our reputation, financial condition and operating results.

We are subject to the risks of litigation and securities laws liability.

Many aspects of our business, and the businesses of our clients, involve substantial risks of liability. Dissatisfied clients have in
the past, and may in the future, make claims against us regarding quality of trade execution, improperly settled trades, resolution of trade
error claims, system failures, failure to protect their confidential or personal information, mismanagement or even fraud. We may
become subject to these claims as the result of delays, failures or malfunctions of our electronic trading platform and the services
provided by us. We could incur significant legal expenses defending claims, even those without merit. An adverse resolution of any
lawsuits or claims against us could have a material adverse effect on our business, financial condition and results of operations.

35

Liquidity and Funding Risks

We cannot predict our future capital needs or our ability to obtain additional financing if we need it.

Our business is dependent upon the availability of adequate funding and regulatory capital under applicable regulatory
requirements. The growth of our Open Trading protocols, in particular, is dependent on the willingness of our customers and
counterparties to engage in transactions with us and any perceived issues with our capital levels or access to funding could have a
material adverse effect on business. As a result of our self-clearing activities, we are also required to finance certain transactions,
maintain deposits with various clearing organizations and clearing broker-dealers and maintain a special reserve bank account for the
benefit of customers pursuant to SEC Rule 15c3-3. Although we believe that our available cash resources and borrowing capacity under
our credit agreements are sufficient to meet our presently anticipated liquidity needs and capital expenditure requirements for at least
the next 12 months, we may in the future need to raise additional funds to, among other things:

•
•
•
•
•

support more rapid growth of our business;
finance transactions and maintain margin deposits at clearing organizations;
acquire complementary companies or technologies;
increase the regulatory net capital necessary to support our operations; or
respond to unanticipated or changing capital requirements.

In addition, our liquidity could be impaired due to circumstances that we may be unable to control, such as a general market

disruption or an operational problem that affects our trading customers or counterparties, other third parties or us.

All or part of any debt financing could be pursuant to the terms of our credit agreements with third party lenders, which include
restrictive covenants with respect to dividends, issuances of additional capital and other financial and operational matters related to our
business.

In the future, we may not be able to obtain additional financing, if needed, in amounts or on terms acceptable to us, if at all. If
sufficient funds are not available or are not available on terms acceptable to us, our ability to fund our expansion, finance transactions
and maintain margin deposits at clearing organizations, take advantage of acquisition opportunities, develop or enhance our services or
products, or otherwise respond to competitive pressures would be significantly limited. These limitations could have a material adverse
effect on our business, financial condition and results of operations.

Our credit agreement contains restrictive and financial covenants that could limit our operating flexibility, and we may incur

additional debt in the future that may include similar or additional restrictions.

We are party to a credit agreement that provides for revolving loans and letters of credit up to an aggregate of $500.0 million.
Subject to the satisfaction of certain specified conditions, we are permitted to upsize the borrowing capacity of the credit agreement by
an additional $250.0 million. Our credit agreement contains certain covenants that, among other things, may restrict our ability to take
certain actions, even if we believe them to be in our best interests. These covenants may restrict or prohibit, among other things, our
ability to:

•
•
•
•
•
•
•
•
•
•

incur or guarantee additional debt;
create or incur liens;
change our line of business;
sell or transfer assets;
make certain investments or acquisitions;
pay dividends or distributions, redeem or repurchase our equity or make certain other restricted payments;
consummate a merger or consolidation;
enter into certain swap, derivative or similar transactions;
enter into certain transactions with affiliates; and
incur restrictions on our ability to grant liens or, in the case of subsidiaries, pay dividends or other distributions.

We are also required by our credit agreement to maintain a maximum consolidated total net leverage ratio, a minimum regulatory
net capital balance for certain subsidiaries and a minimum consolidated adjusted earnings before interest, taxes, depreciation, and
amortization (“EBITDA”) level. We cannot assure you that we will be able to meet these requirements or satisfy these covenants in the
future. A breach of any of these covenants or the inability to comply with the required financial covenants could result in an event of
default under the credit agreement. If any such event of default occurs, the lenders under the credit agreement could elect to declare all
amounts outstanding and accrued and unpaid interest under the credit agreement to be immediately due and payable, and could foreclose
on the assets securing the credit agreement. The lenders would also have the right in these circumstances to terminate any commitments
they have to provide further credit extensions. We may incur other indebtedness in the future that may contain financial or other
covenants more restrictive than those applicable to the credit agreement.

36

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our corporate headquarters and principal U.S. office is located at 55 Hudson Yards in New York, New York, where we lease
approximately 83,000 square feet under a lease expiring in August 2034. We also collectively lease approximately 39,000 square feet
for our other office locations in the U.S., United Kingdom, Brazil, the Netherlands, Hong Kong and Singapore under various leases
expiring between January 2021 and January 2027.

Item 3. Legal Proceedings.

In the normal course of business, we and our subsidiaries included in the consolidated financial statements may be involved in
various lawsuits, proceedings and regulatory examinations. We assess liabilities and contingencies in connection with outstanding legal
proceedings, if any, utilizing the latest information available. Based on currently available information, the outcome of our outstanding
matters is not expected to have a material adverse impact on our financial position. It is not presently possible to determine our ultimate
exposure to these matters and there is no assurance that the resolution of the outstanding matters will not significantly exceed any
reserves accrued by us. See Note 15 to the Consolidated Financial Statements for a discussion of our commitments and contingencies.

Item 4. Mine Safety Disclosures.

Not applicable.

37

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock trades on the NASDAQ Global Select Market under the symbol “MKTX”.

On February 16, 2021, the last reported closing price of our common stock on the NASDAQ Global Select Market was $537.52.

Holders

There were 15 holders of record of our common stock as of February 16, 2021.

Recent Sales of Unregistered Securities

None.

Securities Authorized for Issuance Under Equity Compensation Plans

Please see the section entitled “Equity Compensation Plan Information” in Item 12.

Issuer Purchases of Equity Securities

During the three months ended December 31, 2020, we repurchased the following shares of common stock:

Period

October 1, 2020 - October 31, 2020
November 1, 2020 - November 30, 2020
December 1, 2020 - December 31, 2020

Total Number
of Shares
Purchased

Average Price
Paid per Share

2,289
204
14,182
16,675

$

$

485.60
538.85
555.52
545.71

Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs

1,400
—
—
1,400

Approximate
Dollar Value of
Shares That
May Yet Be
Purchased
Under the
Plans and
Programs
(In thousands)
71,794
$
71,794
71,794

During the three months ended December 31, 2020, we repurchased 16,675 shares of common stock. The repurchases included
1,400 shares repurchased in connection with our share repurchase program and 15,275 shares surrendered by employees to us to satisfy
the withholding tax obligations upon the exercise of stock options and vesting of restricted shares or stock units.

In January 2019, our Board of Directors authorized a new two-year share repurchase program for up to $100.0 million of our
common stock that commenced in April 2019 and expires in March 2021. In January 2021, our Board of Directors authorized a new
share repurchase program for up to $100.0 million. We expect repurchases under the new program to commence in April 2021 following
the expiration of the current plan. Shares repurchased under each program will be held in treasury for future use.

38

STOCK PERFORMANCE GRAPH

The following graph shows a comparison of the cumulative total return for (i) our common stock, (ii) the NASDAQ Composite
Index and (iii) the S&P 500 Index for the past five years. The performance graph and related information shall not be deemed “soliciting
material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities
Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

The figures in this graph assume an initial investment of $100 in our common stock and in each index on December 31, 2015, and
that all dividends were reinvested. The returns illustrated below are based on historical results during the period indicated and should
not be considered indicative of future stockholder returns.

Total Return Performance

MarketAxess Holdings Inc.

NASDAQ Composite Index

S&P 500 Index

600

500

400

300

200

100

e
u
l
a
V
x
e
d
n

I

0

12/31/15

12/31/16

12/31/17

12/31/18

12/31/19

12/31/20

39

Item 6. Selected Financial Data.

The selected statements of operations data for each of the years ended December 31, 2020, 2019 and 2018 and the selected balance
sheet data as of December 31, 2020 and 2019 have been derived from our audited financial statements included elsewhere in this Annual
Report on Form 10-K. The selected statements of operations data for the years ended December 31, 2017 and 2016, and the balance
sheet data as of December 31, 2018, 2017 and 2016 have been derived from our audited financial statements not included in this Annual
Report on Form 10-K.

2020

Year Ended December 31,
2018
(In thousands, except per share amounts)

2017

2019

2016

Statements of Operations Data:
Revenues

Commissions (1)
Information services (2)
Post-trade services (3)
Other (4)

Total revenues

Expenses

Employee compensation and benefits
Depreciation and amortization
Technology and communications
Professional and consulting fees
Occupancy
Marketing and advertising
Clearing costs
General and administrative

Total expenses

Operating income
Other income (expense)
Investment income
Interest expense
Other, net

Total other income (expense)

Income before income taxes
Provision for income taxes

Net income

Net income per common share

Basic
Diluted

Cash dividends declared per common share

$ 634,445
34,341
19,460
879
689,125

$ 463,856
30,730
15,763
1,003
511,352

$ 390,834
28,227
15,346
1,158
435,565

$ 355,282
25,806
11,090
1,244
393,422

$ 332,307
23,269
10,812
1,342
367,730

156,885
35,996
34,092
32,304
13,425
7,940
21,058
12,697
314,397
374,728

131,079
26,857
26,792
25,534
11,639
11,559
11,314
15,696
260,470
250,882

109,117
23,080
23,866
21,521
14,176
12,114
7,754
11,353
222,981
212,584

102,313
19,274
20,048
19,367
6,125
9,762
5,797
11,121
193,807
199,615

96,625
17,838
17,275
17,175
4,681
8,934
6,060
9,157
177,745
189,985

2,446
(1,142)
(1,673)
(369)
374,359
74,982
$ 299,377

8,063
—
(1,521)
6,542
257,424
52,522
$ 204,902

6,112
—
(610)
5,502
218,086
45,234
$ 172,852

3,619
—
(1,466)
2,153
201,768
53,679
$ 148,089

2,137
—
(520)
1,617
191,602
65,430
$ 126,172

$
$

$

8.01
7.85

2.40

$
$

$

5.53
5.40

2.04

$
$

$

4.68
4.57

1.68

$
$

$

4.02
3.89

1.32

$
$

$

3.42
3.34

1.04

Weighted average number of shares of common stock outstanding:

Basic
Diluted

37,359
38,144

37,083
37,956

36,958
37,855

36,864
38,038

36,844
37,738

Balance Sheet Data:

Cash, cash equivalents and investments
Deposits with clearing organizations and broker-dealers
Securities failed-to-deliver
Total assets
Securities failed-to-receive
Total equity

$ 488,969
97,043
180,979
1,331,429
131,701
955,061

40

2020

2019

2017

2016

As of December 31,
2018
(In thousands)
$ 486,427
1,137
—
695,539
—
607,878

$ 500,601
4,130
—
954,930
—
770,091

$ 406,535
1,176
—
581,232
—
514,768

$ 362,647
1,117
—
528,042
—
468,013

(1) Commissions include monthly distribution fees and trading commissions.
(2) Information services revenues include data licensed to our broker-dealer clients, institutional investor clients and data-only

subscribers, as well as professional consulting services, technology software licenses and maintenance and support services.

(3) Post-trade services revenues include revenue from regulatory transaction reporting, trade publication and trade matching

services.

(4) Other revenues consist primarily of telecommunications line charges to broker-dealer clients.

41

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with
“Selected Financial Data” and our consolidated financial statements and related notes included elsewhere in this Annual Report on
Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements relating to future
events and the future performance of MarketAxess that are based on our current expectations, assumptions, estimates and projections
about us and our industry. These forward-looking statements involve risks and uncertainties. Our actual results and timing of various
events could differ materially from those anticipated in such forward-looking statements as a result of a variety of factors, as more fully
described in this section, in “Item 1A. Risk Factors”, in “Cautionary Note Regarding Forward Looking Statements” and elsewhere in
this Annual Report on Form 10-K. Except as may be required by applicable law, we undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

The following discussion includes a comparison of our Financial Results, Cash Flow Comparisons and Liquidity and Capital
Resources for the years ended December 31, 2020 and 2019, respectively. A discussion of changes in our Financial Results and Cash
Flow Comparisons from the year ended December 31, 2018 to December 31, 2019 may be found in Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” of Part II of our Annual Report on Form 10-K for the year ended
December 31, 2019.

Executive Overview

MarketAxess operates leading electronic trading platforms delivering expanded liquidity opportunities, improved execution
quality and significant cost savings across global fixed-income markets. Over 1,800 institutional investor and broker-dealer firms are
active users of our patented trading technology, accessing global liquidity on our platforms in U.S. investment-grade bonds, U.S. high-
yield bonds, U.S. Treasuries, emerging market debt, Eurobonds and other fixed income securities. Through our Open Trading™
protocols, we execute bond trades between and among institutional investor and broker-dealer clients in the leading all-to-all anonymous
trading environment for corporate bonds. We also offer a number of trading-related products and services, including: Composite+ TM
pricing and other market data products to assist clients with trading decisions; auto-execution and other execution services for clients
requiring specialized workflow solutions; connectivity solutions that facilitate straight-through processing; and technology services to
optimize trading environments. In addition, we provide a range of pre- and post-trade services, including trade matching, trade
publication, regulatory transaction reporting and market and reference data across a range of fixed-income and other products.

Our platforms’ innovative technology solutions are designed to increase the number of potential trading counterparties and create
a menu of solutions to address different trade sizes and bond liquidity characteristics. Our traditional request-for-quote (“RFQ”) model
allows our institutional investor clients to simultaneously request competing, executable bids or offers from our broker-dealer clients
and execute trades with the broker-dealer of their choice from among those that choose to respond. Our Open Trading protocols
complement our RFQ model by increasing the number of potential counterparties and improving liquidity by allowing all participants
to interact anonymously in an all-to-all trading environment. Clients can use our auto-execution technology with both our traditional
RFQ and Open Trading protocols, thereby using rules-based execution to connect to diverse sources of liquidity while reducing trading
inefficiencies and human errors. Leveraging the benefits of our Open Trading marketplace, we launched Live Markets, an order book
that will create a single view of two-way, actionable prices for the most active bonds, including newly issued debt, benchmark issues
and news-driven securities. We expect that Open Trading participants will improve their trading capacity through the Live Markets
order book, by more efficiently trading liquid names in larger size and accessing integrated real-time market data, such as Composite+.

We derive revenue from commissions for trades executed on our platform, information services, post-trade services and other
revenues. Our expenses consist of employee compensation and benefits, depreciation and amortization, technology and communication
expenses, professional and consulting fees, occupancy, marketing and advertising, clearing costs and other general and administrative
expenses.

Our objective is to provide the leading global electronic trading platforms for fixed-income securities, connecting broker-dealers
and institutional investors more easily and efficiently, while offering a broad array of trading information and technology services to
market participants across the trading cycle. The key elements of our strategy are:

•

•

•

•

to use our broad network of over 1,800 active institutional investor and broker-dealer participants to drive more clients to
our platforms;

to increase the secondary market liquidity on our trading platform by deploying innovative technology solutions, such as
our Open Trading protocols, to increase the number of potential trading counterparties on our platforms and to address
different trade sizes, bond liquidity characteristics and trading preferences;

to continue to develop innovative next-generation technologies that will allow our clients to further automate and improve
the performance of their trading desks through increased liquidity, enhanced trading efficiencies and the ability to identify
trends within the bond market;

to expand and strengthen our existing service, data and analytical offerings throughout the trading cycle so that we are more
fully integrated into the workflow of our broker-dealer and institutional investor clients; and

42

•

to increase and supplement our internal growth by entering into strategic alliances, or acquiring businesses or technologies
that will enable us to enter new markets, provide new products or services, or otherwise enhance the value of our platform
to our clients. We acquired Regulatory Services GmbH, the pan-European regulatory reporting business of Deutsche Börse
Group in the fourth quarter of 2020.

Critical Factors Affecting Our Industry and Our Company

Economic, Political and Market Factors

The global fixed-income securities industry is risky and volatile and is directly affected by a number of economic, political and
market factors that may result in declining trading volume. These factors could have a material adverse effect on our business, financial
condition and results of operations. These factors include, among others, credit market conditions, the current interest rate environment,
including the volatility of interest rates and investors’ forecasts of future interest rates, economic and political conditions in the United
States, Europe and elsewhere, and the consolidation or contraction of our broker-dealer and institutional investor clients.

During the first half of 2020, the global economy experienced a period of significant turmoil due to the outbreak of COVID-19
(the “Pandemic”). The Pandemic triggered a steep drop in economic activity that had an immediate and substantial impact on global
credit markets. Credit yield spreads in U.S. corporate bonds, as measured by the Credit Suisse Liquid U.S. Corporate Index (“LUCI
Index”), increased from 1.1% over U.S Treasuries in December 2019 to 1.5% in March 2020 and credit spread volatility in U.S. corporate
bonds, as measured by the LUCI Index, increased from 1.1% in December 2019 to 11.6% in March 2020. Drastic measures taken by
central banks and governments helped restore confidence in the credit markets in the second half of 2020, which led to a tightening in
credit spreads that helped stimulate record new issuance in U.S. investment-grade and high-yield corporate bonds. During the second
half of 2020, the credit markets continued to improve as credit yield spreads and credit spread volatility tightened to pre-Pandemic
levels. The volatile market conditions in 2020 led to an active credit trading environment as the average daily trading volume of U.S.
high-grade and high-yield corporate bonds for the year ended December 31, 2020, as measured by Trade Reporting and Compliance
Engine (“TRACE”), increased by 13.7% and 19.7%, respectively, compared to the year ended December 31, 2019.

As a result of the Pandemic, we have experienced significant changes in our daily operations. In mid-March 2020, we successfully
implemented a global work from home mandate for all our employees and we were able to continue to provide our trading platforms
and other services to our clients without interruption. In particular, we believe that Open Trading liquidity has been increasingly essential
to the functioning of credit markets during the Pandemic, and MarketAxess has played a valuable role keeping our clients connected to
the market as traders moved from their centralized trading floors to home offices. During the first several months of the Pandemic, we
helped over 10,000 individual users connect to our trading platforms from their homes. Although we have reprioritized certain
technology projects due to the changing needs of our clients in the current market environment, we have largely continued with our
hiring plans, capital expenditures and the expansion of our trading platforms and services into new jurisdictions.

The global spread of the Pandemic is complex and rapidly-evolving, with authorities around the world implementing numerous
measures to try to contain the coronavirus, such as travel bans and restrictions, social distancing, quarantines, stay at home orders,
business limitations and, beginning in the fourth quarter of 2020, vaccinations. While we remain confident that we can continue to
maintain business continuity, serve our clients and provide efficient execution in a virtual environment as necessary, we have re-opened
our offices and have allowed our employees to return to work, on a voluntary basis, where local regulations permit. The re-opening of
offices has created additional risks and operational challenges relating to maintaining the health and safety of our employees. We also
anticipate that the full re-opening of our offices may require investments in the design, implementation and enforcement of new
workplace safety protocols. These efforts may divert management attention, and the protocols may create logistical challenges for our
employees which could adversely impact employee productivity and morale.

We believe that we have sufficient liquidity and flexibility to operate during any future disruptions caused by the Pandemic. While
we have experienced increased market volumes and market share since the outbreak, we are cautious of the damaging impact the
Pandemic may have on the global economy in the longer-term and the adverse impact that a global recession could have on liquidity
and market volumes in the global credit markets.

We expect that current cash and investment balances, in combination with cash flows that are generated from operations and the
ability to borrow under our Credit Agreement (as defined below), will be sufficient to meet our liquidity needs and planned capital
expenditure requirements for at least the next twelve months. We have not altered our capital management programs and we have
increased our dividend for the 12th consecutive year. We ended the quarter with a strong balance sheet, no borrowings under our Credit
Agreement and with capital significantly in excess of our regulatory requirements.

In response to the current economic conditions, the Federal Reserve Bank of New York (the “FRBNY”) established a Secondary
Market Corporate Credit Facility (the “Facility”) that lent money, on a recourse basis, to a special purpose vehicle (“SPV”) that

43

purchased corporate debt issued by eligible issuers in the secondary market. The SPV purchased eligible individual corporate bonds in
the secondary market, as well as eligible corporate bond portfolios in the form of exchange-traded funds (“ETFs”). In September 2020,
we were designated by the FRBNY as an Eligible Seller for the Facility, which allowed us to provide end investors and broker-dealers
the opportunity to use Open Trading to respond directly and anonymously to the FRBNY’s requests to purchase bonds.

Competitive Landscape

The global fixed-income securities industry generally, and the electronic financial services markets in which we engage in
particular, are highly competitive, and we expect competition to intensify in the future. Sources of competition for us will continue to
include, among others, bond trading conducted directly between broker-dealers and their institutional investor clients over the telephone
or electronically and other multi-dealer or all-to-all trading platforms. Competitors, including companies in which some of our broker-
dealer clients have invested, have developed or acquired electronic trading platforms or have announced their intention to explore the
development of electronic platforms or information networks that may compete with us.

In general, we compete on the basis of a number of key factors, including, among others, the liquidity provided on our platform,
the magnitude and frequency of price improvement enabled by our platform, total transaction costs and the quality and speed of
execution. We believe that our ability to grow volumes and revenues will largely depend on our performance with respect to these
factors.

Our competitive position is also enhanced by the familiarity and integration of our broker-dealer and institutional investor clients
with our electronic trading platform and other systems. We have focused on the unique aspects of the credit markets we serve in the
development of our platform, working closely with our clients to provide a system that is suited to their needs.

Regulatory Environment

Our business is subject to extensive regulations in the United States and internationally, which may expose us to significant
regulatory risk and cause additional legal costs to ensure compliance. The existing legal framework that governs the financial markets
is periodically reviewed and amended, resulting in the enactment and enforcement of new laws and regulations that apply to our business.
For example, the new administration elected in the 2020 U.S. presidential election may enact regulatory changes that may affect our
business. In 2017, the SEC established a Fixed Income Market Structure Advisory Committee in order to provide the SEC with diverse
perspectives on the structure and operations of the U.S. fixed-income markets, as well as advice and recommendations on matters related
to fixed-income market structure. The impact of any reform efforts on us and our operations remains uncertain.

In addition, the U.K. ceased to be a member of the E.U. on January 31, 2020, triggering a transition period in which the U.K.
continued to observe applicable E.U. regulations through December 31, 2020 (commonly referred to as “Brexit”). In preparation for
Brexit, we obtained authorizations from the Netherlands Authority for the Financial Markets for our subsidiaries in the Netherlands in
2019. Following Brexit, we now provide regulated services to our clients within the E.U. in reliance on the cross-border services passport
held by our Dutch subsidiaries. Brexit has led to legal uncertainty and potentially divergent national laws and regulations as the U.K.
determines which E.U. laws to replace or replicate, which may impact our ability to comply with the extensive government regulation
to which we are subject. In addition, the cost and complexity of operating across increasingly divergent regulatory regimes is likely to
increase following Brexit.

Compliance with regulations may require us to dedicate additional financial and operational resources, which may adversely affect
our profitability. However, we believe new regulations may also increase demand for our platforms and we believe we are well
positioned to benefit from those regulatory changes that cause market participants to seek electronic platforms that meet the various
regulatory requirements and help them comply with their regulatory obligations.

On August 10, 2020, MarketAxess Corporation, our broker-dealer subsidiary, converted to self-clearing for the U.S bond trades
to which MarketAxess Corporation is a counterparty via its Open Trading functionality. Previously, these bond transactions were settled
through a third-party clearing broker. As a result of this conversion, MarketAxess Corporation is required to segregate funds in a special
reserve bank account for the benefit of customers pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934.

44

Technology Environment

We must continue to enhance and improve our electronic trading platform. The electronic financial services industry is
characterized by increasingly complex systems and infrastructures and new business models. Our future success will depend on our
ability to enhance our existing products and services, develop and/or license new products and technologies that address the increasingly
sophisticated and varied needs of our existing and prospective broker-dealer and institutional investor clients and respond to
technological advances and emerging industry standards and practices on a cost-effective and timely basis. We plan to continue to focus
on technology infrastructure initiatives and continually improve our platforms to further enhance our leading market position. We expect
that our transition to agile software development processes will help us continue to be a market leader in developing the technology
solutions for our clients’ trading needs.

We experience cyber-attacks and attempted security breaches. Cybersecurity incidents could impact revenue and operating income
and increase costs. We therefore continue to make investments, which may result in increased costs, to strengthen our cybersecurity
measures. See also Item 1A. Risk Factors, “Technology, IT Systems and Cybersecurity Risks - Our actual or perceived failure to comply
with privacy, data protection and information security laws, regulations, and obligations could harm our business.”

Trends in Our Business

The majority of our revenue is derived from commissions for transactions executed on our platforms between and among our
institutional investor and broker-dealer clients and monthly distribution fees. We believe that there are five key variables that impact the
notional value of such transactions on our platforms and the amount of commissions and distribution fees earned by us:

•

•

•

•

•

the number of participants on our platforms and their willingness to originate transactions through the platforms;

the frequency and competitiveness of the price responses by participants on our platforms;

the number of markets that are available for our clients to trade on our platforms;

the overall level of activity in these markets; and

the level of commissions that we collect for trades executed through the platforms.

We believe that overall corporate bond market trading volume is affected by various factors including the absolute levels of
interest rates, the direction of interest rate movements, the level of new issues of corporate bonds and the volatility of corporate bond
spreads versus U.S. Treasury securities. Because a significant percentage of our revenue is tied directly to the volume of securities traded
on our platforms, it is likely that a general decline in trading volumes, regardless of the cause of such decline, would reduce our revenues
and have a significant negative impact on profitability.

Commission Revenue

Commissions are recognized on a trade date basis and generally calculated as a percentage of the notional dollar volume of bonds
traded on our platforms and vary based on the type, size, yield and maturity of the bond traded and individual client incentives. Bonds
that are more actively traded or that have shorter maturities are generally charged lower commissions, while bonds that are less actively
traded or that have longer maturities generally command higher commissions.

For Open Trading trades that we execute between and among institutional investor and broker-dealer clients on a matched principal
basis by serving as counterparty to both the buyer and the seller, we earn our commission through the difference in price between the
two trades. For U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly basis.

U.S. High-Grade Corporate Bond Commissions. Our U.S. high-grade corporate bond fee plans generally incorporate variable
transaction fees and fixed distribution fees billed to our broker-dealer clients on a monthly basis. Certain dealers participate in fee
programs that do not contain monthly distribution fees and instead incorporate additional per transaction execution fees and minimum
monthly fee commitments. Under these fee plans, we electronically add the transaction fee to the spread quoted by the broker-dealer
client. The U.S. high-grade transaction fee is generally designated in basis points in yield and, as a result, is subject to fluctuation
depending on the duration of the bond traded. The average U.S. high-grade fees per million may vary in the future due to changes in
yield, years-to-maturity and nominal size of bonds traded on our platforms. Distribution fees include any unused monthly fee
commitments under our variable fee plans.

45

Other Credit Commissions. Other credit includes Eurobonds, emerging markets bonds, high-yield bonds, municipal bonds and
leveraged loans. Commissions for other credit products generally vary based on the type of the instrument traded using standard fee
schedules. Our high-yield fee plan structure is similar to our U.S. high-grade fee plans. Certain dealers participate in a high-yield fee
plan that incorporates a variable transaction fee and fixed distribution fee, while other dealers participate in a plan that does not contain
monthly distribution fees and instead incorporates additional per transaction execution fees and minimum monthly fee commitments.
The average other credit fees per million may vary in the future due to changes in product mix or trading protocols.

Rates Commissions. Rates includes U.S. Treasury, U.S. agency, European government bonds and credit derivatives. Commissions
for rates products generally vary based on the type of the instrument traded. U.S. Treasury fee plans are typically volume tiered and can
vary based on the trading protocol. The average rates fee per million may vary in the future due to changes in product mix or trading
protocols.

We anticipate that average fees per million may change in the future. Consequently, past trends in commissions are not necessarily

indicative of future commissions.

Information Services

We generate revenue from data licensed to our broker-dealer clients, institutional investor clients and data-only subscribers;
professional and consulting services; technology software licenses; and maintenance and support services. These revenues are either for
subscription-based services transferred over time, and may be net of volume-based discounts, or one-time services. Revenues for services
transferred over time are recognized ratably over the contract period while revenues for services transferred at a point in time are
recognized in the period the services are provided. Customers are generally billed monthly, quarterly, or annually; revenues billed in
advance are deferred and recognized ratably over the contract period.

Post-trade Services

We generate revenue from regulatory transaction reporting, trade publication and trade matching services. Customers are generally
billed monthly in arrears and revenue is recognized in the period that the transactions are processed. Revenues billed in advance are
deferred and recognized ratably over the contract period. We also generate one-time implementation fees for onboarding clients which
are invoiced and recognized in the period the implementation is complete.

Other Revenue

Other revenue includes revenue generated from telecommunications line charges to broker-dealer clients.

Expenses

In the normal course of business, we incur the following expenses:

Employee Compensation and Benefits. Employee compensation and benefits is our most significant expense and includes

employee salaries, stock-based compensation costs, other incentive compensation, employee benefits and payroll taxes.

Depreciation and Amortization. We depreciate our computer hardware and related software, office hardware and furniture and
fixtures and amortize our capitalized software development costs on a straight-line basis over three to seven years. We amortize leasehold
improvements on a straight-line basis over the lesser of the life of the improvement or the remaining term of the lease. Intangible assets
with definite lives, including purchased technologies, customer relationships and other intangible assets, are amortized over their
estimated useful lives, which range from one to 15 years, using either a straight-line or accelerated amortization method based on the
pattern of economic benefit that we expect to realize from such assets. Intangible assets are assessed for impairment when events or
circumstances indicate a possible impairment.

Technology and Communications. Technology and communications expense consists primarily of costs relating to maintenance
on software and hardware, our internal network connections, data center hosting costs, data feeds provided by outside vendors or service
providers and US treasuries licensing fees. The majority of our broker-dealer clients have dedicated high-speed communication lines to
our network in order to provide fast data transfer. We charge our broker-dealer clients a monthly fee for these connections, which is
recovered against the relevant expenses we incur.

Professional and Consulting Fees. Professional and consulting fees consist primarily of accounting fees, legal fees and fees paid
to information technology and other consultants for services provided for the maintenance of our trading platforms, information and
post-trade services products and other services.

46

Occupancy. Occupancy costs consist primarily of office and equipment rent, utilities and commercial rent tax.

Marketing and Advertising. Marketing and advertising expense consists primarily of print and other advertising expenses we incur
to promote our products and services. This expense also includes costs associated with attending or exhibiting at industry-sponsored
seminars, conferences and conventions, and travel and entertainment expenses incurred by our sales force to promote our trading
platforms, information services and post-trade services.

Clearing Costs. Clearing costs consist of fees that we are charged by third-party clearing brokers and depositories for the clearing
and settlement of matched principal trades, regulatory reporting fees and variable transaction fees assessed by the provider of our third-
party middle office system.

General and Administrative. General and administrative expense consists primarily of general travel and entertainment, board of

directors’ expenses, charitable contributions, provision for doubtful accounts and various state franchise and U.K. value-added taxes.

Expenses may grow in the future, notably in employee compensation and benefits, as we increase headcount to support investment
in new products, operational support and geographic expansion, depreciation and amortization due to increased investment in new
products and enhancements to our trading platforms, and technology and communication costs. Expenses may also grow due to
acquisitions.

Other Income (Expense)

Investment Income. Investment income consists of income earned on our investments.

Interest Expense. Interest expense consists of financing charges incurred on short-term borrowings.

Other, Net. Other, net consists of unrealized gains or losses on trading security investments, realized gains or losses on
investments, foreign currency transaction gains or losses, investment advisory fees, credit facility administrative fees and other
miscellaneous revenues and expenses.

Critical Accounting Policies and Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our Consolidated
Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States, also
referred to as U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods. We
base our estimates and judgments on historical experience and on various other factors that we believe are reasonable under the
circumstances. Actual results may differ from these estimates under varying assumptions or conditions. See Note 2 to the Consolidated
Financial Statements, for a summary of the significant accounting policies and methods used in the preparation of our Consolidated
Financial Statements.

Recent Accounting Pronouncements

See Note 2 to the Consolidated Financial Statements for a discussion of recent accounting pronouncements.

47

Segment Results

We operate electronic platforms for the trading of fixed-income securities and provide related data, analytics, compliance tools
and post-trade services. We consider our operations to constitute a single business segment because of the highly integrated nature of
these product and services, the financial markets in which we compete and our worldwide business activities. We believe that results by
geographic region or client sector are not necessarily meaningful in understanding our business. See Note 16 to the Consolidated
Financial Statements for certain geographic information about our business required by U.S. GAAP.

Results of Operations

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

The comparability of our results of operations is impacted by our acquisition of LiquidityEdge in November 2019 which enabled
us to expand our trading capabilities to include U.S. Treasuries. For additional information regarding this acquisition, see Note 6 to the
Consolidated Financial Statements. The following table summarizes our financial results, which includes LiquidityEdge related revenue
and expenses of $13.1 million and $14.5 million, respectively, recognized during 2020 and $2.5 million and $3.8 million, respectively,
recognized during 2019:

Revenues
Expenses
Operating income
Other income (expense)
Income before income taxes
Provision for income taxes
Net income

Net income per common share - Diluted

Revenues

Year Ended December 31,

2020

2019

$ Change % Change

($ in thousands, except per share amounts)

$

$

$

689,125
314,397
374,728
(369)
374,359
74,982
299,377

7.85

$

$

$

511,352
260,470
250,882
6,542
257,424
52,522
204,902

$ 177,773
53,927
123,846
(6,911)
116,935
22,460
94,475

$

34.8 %
20.7
49.4
(105.6)
45.4
42.8
46.1 %

5.40

$

2.45

45.4%

Our revenues for the years ended December 31, 2020 and 2019, and the resulting dollar and percentage changes, were as follows:

Year Ended December 31,

2020

2019

Commissions
Information services
Post-trade services
Other

Total revenues

$
$ 634,445
34,341
19,460
879
$ 689,125

% of
Revenues

($ in thousands)
% of
Revenues

$

$
Change
90.7 % $ 170,589
3,611
3,697
(124)
100.0 % $ 177,773

6.0
3.1
0.2

%
Change

36.8 %
11.8
23.5
(12.4)
34.8 %

92.1 % $ 463,856
30,730
15,763
1,003
100.0 % $ 511,352

5.0
2.8
0.1

48

Commissions

Our commission revenues for the years ended December 31, 2020 and 2019, and the resulting dollar and percentage changes,

were as follows:

Variable transaction fees
U.S. high-grade
Other credit

Total credit

Rates

Total variable transaction fees

Distribution fees

U.S. high-grade
Other credit

Total credit

Rates

Total distribution fees
Total commissions

Year Ended December 31,

2020

2019

$
Change

%
Change

($ in thousands)

$ 253,684
256,763
510,447
15,890
526,337

81,893
25,834
107,727
381
108,108
$ 634,445

$ 173,944
188,514
362,458
4,722
367,180

71,885
24,347
96,232
444
96,676
$ 463,856

$

79,740
68,249
147,989
11,168
159,157

10,008
1,487
11,495
(63)
11,432
$ 170,589

45.8 %
36.2
40.8
236.5
43.3

13.9
6.1
11.9
(14.2)
11.8
36.8 %

U.S. high-grade variable transaction fees increased $79.7 million due to a 29.4% increase in trading volume and a 12.7% increase
in the variable transaction fee per million. Other credit variable transaction fees increased $68.2 million due to a 29.5% increase in
trading volume and a 5.2% increase in the variable transaction fee per million. Open Trading credit volume increased by 60.8% and
represented 33.2% and 27.0% of credit variable transaction fees for the years ended December 31, 2020 and 2019, respectively. The
236.5% increase in variable transaction fees for rates was attributable to the inclusion of U.S. Treasuries trading volume and
commissions following the November 1, 2019 acquisition of LiquidityEdge.

Our trading volume for each of the years presented was as follows:

Trading Volume Data

U.S. high-grade - fixed rate
U.S. high-grade - floating rate
Total U.S. high-grade

Other credit

Total credit

Rates

Year Ended December 31,

2020

2019

$
Change

%
Change

($ in millions)

$1,311,512
56,786
1,368,298
1,262,074
2,630,372

$ 992,844
64,980
1,057,824
974,494
2,032,318

$ 318,668
(8,194)
310,474
287,580
598,054

32.1 %
(12.6)
29.4
29.5
29.4

3,987,424

659,548

3,327,876

N/M

Number of U.S. Trading Days
Number of U.K. Trading Days

251
254

250
253

For volume reporting purposes, transactions in foreign currencies are converted to U.S. dollars at average monthly rates. The 29.4%

increase in our U.S. high-grade volume was principally due to an increase in estimated overall market volume coupled with growth in
our estimated market share. Our estimated market share of total U.S. high-grade corporate bond volume increased to 21.6% for the year
ended December 31, 2020 from 19.0% for the year ended December 31, 2019. Estimated U.S. high-grade TRACE volume increased by
14.2% to $6.3 trillion for the year ended December 31, 2020 from $5.6 trillion for the year ended December 31, 2019.

49

Other credit volumes increased by 29.5% for the year ended December 31, 2020 compared to the year ended December 31, 2019,
primarily due to increases of 68.4% in U.S. high-yield bond volume, 21.3% in Eurobond volume and 14.8% in emerging markets bond
volume on a combination of higher estimated U.S. high-yield market volume and higher U.S. high-yield, emerging markets and
Eurobond estimated market share. Our estimated market share of U.S. high-yield TRACE volume increased to 14.6% for the year ended
December 31, 2020 from 10.4% for the year ended December 31, 2019.

The significant increase in rates volume was attributable to the inclusion of U.S. Treasuries trading volumes following the

November 1, 2019 acquisition of LiquidityEdge.

Our average variable transaction fee per million for the years ended December 31, 2020 and 2019 was as follows:

Average Variable Transaction fee per million

U.S. high-grade - fixed rate
U.S. high-grade - floating rate
Total U.S. high-grade

Other credit

Total credit

Rates

Year Ended December 31,

2020

2019

$

$

191.34
48.21
185.40
203.45
194.06

3.99

171.06
63.15
164.44
193.45
178.35

7.16

The increase in U.S. high-grade average variable transaction fee per million was mainly due to an increase in the duration of
bonds traded on the platforms. The increase in Other credit average variable transaction fee per million was mainly due to a larger
percentage of trading volume in high-yield bonds that command higher fees per million. The significant decrease in the average variable
transaction fee per million for rates products was primarily attributable to the inclusion of U.S. Treasuries trading volumes that command
lower fees per million.

Information Services. Information services revenue increased $3.6 million for the year ended December 31, 2020 mainly due to

revenue from new data contracts.

Post-Trade Services. Post-trade services revenue increased $3.7 million for the year ended December 31, 2020 principally due to
additional regulatory transaction reporting revenue of $1.3 million generated by Regulatory Reporting Hub since the November 30,
2020 acquisition date and the introduction of new SFTR reporting services of $0.9 million.

Other. Other revenue was $0.9 million and $1.0 million for the years ended December 31, 2020 and 2019, respectively.

50

Expenses

The following table summarizes our expenses for the years ended December 31, 2020 and 2019. Expenses for the year ended
December 31, 2020 and 2019 include $14.5 million and $3.8 million, respectively, of expenses related to LiquidityEdge, including
amortization of acquired intangibles expense of $2.8 million and $0.4 million, respectively.

2020

Year Ended December 31,

2019

($ in thousands)

% of
Revenues

$

% of
Revenues

$
Change

%
Change

$

Expenses
Employee compensation and benefits
Depreciation and amortization
Technology and communications
Professional and consulting fees
Occupancy
Marketing and advertising
Clearing costs
General and administrative
Total expenses

$ 156,885
35,996
34,092
32,304
13,425
7,940
21,058
12,697
$ 314,397

22.8 % $ 131,079
26,857
5.2
26,792
4.9
25,534
4.7
11,639
1.9
11,559
1.2
3.1
11,314
15,696
1.8
45.6 % $ 260,470

25.6 % $ 25,806
9,139
5.3
7,300
5.2
6,770
5.0
2.3
1,786
(3,619)
2.3
2.2
9,744
(2,999)
3.1
50.9 % $ 53,927

19.7 %
34.0
27.2
26.5
15.3
(31.3)
86.1
(19.1)
20.7 %

Employee compensation and benefits increased by $25.8 million primarily due increases in salaries, taxes and benefits on higher
employee headcount of $16.0 million and employee incentive compensation of $9.1 million, which is tied to operating performance.
The total number of employees increased to 606 as of December 31, 2020 from 527 as of December 31, 2019.

Depreciation and amortization increased by $9.1 million primarily due to higher amortization of software development costs of
$5.0 million and amortization of acquired intangibles of $3.1 million. For the years ended December 31, 2020 and 2019, $15.0 million
and $12.3 million, respectively, of equipment purchases and leasehold improvements and $30.6 million and $22.4 million, respectively,
of software development costs were capitalized.

Technology and communications expenses increased by $7.3 million primarily due to higher IT license and support costs of $3.2

million, U.S. Treasury platform licensing costs of $2.6 million and cloud hosting costs of $1.8 million.

Professional and consulting fees increased by $6.8 million primarily due to higher consulting fees related to our self-clearing and
settlements initiatives of $2.5 million, audit and tax fees of $1.2 million, recruiting fees of $1.1 million and acquisition-related expenses
of $1.1 million.

Occupancy costs increased by $1.8 million primarily due to rent expense associated with additional leased office space in London.

Marketing and advertising expense decreased $3.6 million due to reduced sales-related travel and entertainment activities as a

result of the Pandemic.

Clearing costs increased by $9.7 million primarily due to a $6.0 million increase in clearing costs associated with Open Trading
matched principal credit transactions and a $3.7 million increase in clearing costs associated with U.S. Treasuries matched principal
transactions. Clearing costs as a percentage of Open Trading matched principal credit trading revenue decreased to 9.8% for the year
ended December 31, 2020 from 11.0% for the year ended December 31, 2019 principally due to higher Open Trading variable transaction
fee per million and transaction cost savings resulting from our conversion to self-clearing U.S. bonds, offset by certain non-recurring
self-clearing conversion costs.

General and administrative expenses decreased by $3.0 million primarily due to lower general travel and entertainment expense

as a result of the Pandemic.

51

Other Income (Expense)

Our other income (expense) for the years ended December 31, 2020 and 2019, and the resulting dollar and percentage changes,

were as follows:

2020

Year Ended December 31,

2019

($ in thousands)

Investment income
Interest expense
Other, net

Total other income (expense)

$
$ 2,446
(1,142)
(1,673)
$ (369)

% of
Revenues

0.4 % $
(0.2)
(0.2)
(0.1)% $

% of
Revenues

$
Change
1.6 % $ (5,617)
(1,142)
—
(0.3)
(152)
1.3 % $ (6,911)

$
8,063
—
(1,521)
6,542

%
Change

(69.7)%
—
10.0
(105.6)%

Investment income decreased by $5.6 million primarily due to lower investment balances, due in part to the cash paid for the

acquisition of LiquidityEdge in November 2019 of $104.4 million and new self-clearing related deposit, reserve and liquidity
requirements, and a decrease in interest rates.

Interest expense increased by $1.1 million due to short-term borrowing activity in 2020 to support self-clearing activity.

Other, net decreased by $0.2 million primarily due to an increase in credit facility administration costs of $0.8 million, offset by

net realized gains on investments of $0.5 million in 2020.

Provision for Income Taxes.

The provision for income taxes and effective tax rate for the years ended December 31, 2020 and 2019 were as follows:

Year Ended December 31,

2020

2019

$
Change

%
Change

Provision for income taxes

$

74,982

$

($ in thousands)
52,522

$

22,460

42.8 %

Effective tax rate

20.0%

20.4%

The provision for income taxes reflected $24.1 million and $10.6 million of excess tax benefits related to share-based
compensation awards that vested or were exercised during the years ended December 31, 2020 and 2019, respectively. During the years
ended December 31, 2020 and 2019, we recorded an additional provision for unrecognized tax benefits of $9.5 million and $2.1 million,
respectively. Our consolidated effective tax rate can vary from period to period depending on the geographic mix of our earnings,
changes in tax legislation and tax rates and the amount and timing of excess tax benefits related to share-based payments, among other
factors.

52

Quarterly Results of Operations

Our quarterly results have varied significantly as a result of:

"

"

"

"

changes in trading volume due to market conditions, changes in the number of trading days in certain quarters, and
seasonality effects caused by slow-downs in trading activity during certain periods;

changes in the number of broker-dealers and institutional investors using our trading platform, as well as variation in usage
by existing clients;

acquisitions or the Company’s expansion into new products; or

variance in our expenses, particularly employee compensation and benefits.

The following table sets forth certain unaudited consolidated quarterly income statement data for the eight quarters ended
December 31, 2020. In our opinion, this unaudited information has been prepared on a basis consistent with our annual financial
statements and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the unaudited
quarterly data. This information should be read in conjunction with our Consolidated Financial Statements and related Notes included
in this Annual Report on Form 10-K. The results of operations for any quarter are not necessarily indicative of results that we may
achieve for any subsequent periods.

Dec 31,
2020

Sep 30,
2020

Jun 30,
2020

Three Months Ended
Dec 31,
2019

Sep 30,
2019
(In thousands, except per share amounts)
(unaudited)

Mar 31,
2020

Jun 30,
2019

Mar 31,
2019

Revenues

Commissions
Information services
Post-trade services
Other

Total revenues

Expenses

Employee compensation and
benefits
Depreciation and amortization
Technology and communications
Professional and consulting fees
Occupancy
Marketing and advertising
Clearing costs
General and administrative

Total expenses

Operating income
Other income (expense)
Investment income
Interest expense
Other, net

Total other income (expense)

Income before income taxes
Provision for income taxes
Net income

Net income per common share

$155,813 $ 150,586 $172,092 $155,954 $ 117,103 $119,869 $114,124 $ 112,760
7,366
4,100
265
124,491

7,693
3,784
251
131,597

8,642
4,153
229
168,978

7,156
3,956
254
125,490

8,427
4,054
222
184,795

8,515
3,923
233
129,774

8,771
6,564
198
171,346

8,501
4,689
230
164,006

36,472
10,592
8,922
10,295
3,220
2,307
4,997
2,844
79,649
91,697

37,583
9,032
8,417
8,269
3,445
1,148
4,838
3,467
76,199
87,807

41,636
8,305
8,592
8,065
3,286
1,810
5,713
3,253
80,660
104,135

41,194
8,067
8,161
5,675
3,474
2,675
5,510
3,133
77,889
91,089

33,117
7,730
7,155
6,389
3,090
3,087
3,345
5,010
68,923
60,851

32,681
6,700
7,381
7,018
2,802
2,506
2,782
3,762
65,632
65,965

32,623
6,345
6,474
6,296
2,798
3,667
2,610
3,800
64,613
60,877

32,658
6,082
5,782
5,831
2,949
2,299
2,577
3,124
61,302
63,189

119
(96)
(1,431)
(1,408)
90,289
17,358
$ 72,931 $

1,989
1,767
344
—
—
(1,046)
42
(661)
860
2,031
1,106
158
65,220
61,957
87,965
20,189
12,698
11,684
67,776 $ 83,854 $ 74,816 $ 50,273 $ 54,002 $ 48,105 $ 52,522

714
—
(446)
268
104,403
20,549

2,211
—
(838)
1,373
67,338
13,336

1,269
—
(656)
613
91,702
16,886

2,096
—
(64)
2,032
62,909
14,804

Basic
Diluted

$
$

1.95 $
1.91 $

1.81 $
1.78 $

2.25 $
2.20 $

2.01 $
1.96 $

1.35 $
1.32 $

1.46 $
1.42 $

1.30 $
1.27 $

1.42
1.39

53

The following tables set forth trading volume and average variable transaction fee per million for the eight quarters ended

December 31, 2020.

Trading Volume Data

U.S. high-grade - fixed rate
U.S. high-grade - floating rate
Total U.S. high-grade

Other credit

Total credit

Three Months Ended

Dec 31,
2020

Sep 30,
2020

Jun 30,
2020

$ 305,537 $ 295,781 $

12,956
318,493
321,135
639,628

9,450
305,231
283,920
589,151

398,006 $
16,574
414,580
327,266
741,846

Mar 31,
2020
(In millions)
312,188 $
17,806
329,994
329,753
659,747

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

238,959
14,150
253,109
236,403
489,512

$ 245,027
16,918
261,945
255,097
517,042

$ 249,025 $
16,335
265,360
248,503
513,863

259,833
17,577
277,410
234,491
511,901

Rates (1)

826,276

760,676

955,594

1,444,878

620,437

11,661

13,174

14,276

(1) Rates includes U.S. Treasury volume traded through LiquidityEdge LLC, which we acquired on November 1, 2019.

Dec 31,
2020

Sep 30,
2020

Jun 30,
2020

Three Months Ended
Dec 31,
2019

Mar 31,
2020

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Average Variable Transaction Fee Per Million

U.S. high-grade - fixed rate
U.S. high-grade - floating rate
Total U.S. high-grade

Other credit

Total credit

Rates (1)

$ 193.51 $ 204.24 $ 186.67
55.06
181.41
204.66
191.66

47.75
199.39
208.27
203.67

40.14
187.27
202.55
194.94

$ 182.95 $ 177.27 $ 181.45 $ 168.05 $ 158.45
75.70
153.21
196.32
172.95

65.22
161.72
190.07
175.43

47.96
175.67
198.97
187.31

53.64
170.36
191.36
180.50

56.08
173.35
196.04
184.55

3.95

4.19

4.02

3.87

4.81

48.62

46.69

38.99

Number of U.S. trading days
Number of U.K. trading days

62
64

64
65

63
61

62
64

62
64

64
65

63
61

61
63

(1) The decrease in the average variable transaction fee per million for rates during the three months ended December 31, 2019
was attributable to the inclusion of U.S. Treasury trading volumes traded through LiquidityEdge which command lower fees
per million.

Liquidity and Capital Resources

During the past two years, we have met our funding requirements through cash on hand, internally generated funds and short-term
borrowings. Cash and cash equivalents and investments totaled $489.0 million at December 31, 2020. Our investments are generally
invested in investment-grade securities. We limit the amounts that can be invested in any single issuer and invest in short- to
intermediate-term instruments whose fair values are less sensitive to interest rate changes. We believe our investments as of December
31, 2020 that were in an unrealized loss position were not other-than-temporarily impaired. In addition, we believe there has not been
any event after such date, including the recent developments related to the Pandemic, that would indicate any other-than-temporary
impairment.

On August 19, 2020, we amended our Amended and Restated Credit Agreement (the “Prior Credit Agreement”) with JPMorgan
Chase Bank, N.A. (“JPMorgan”) to, among other things, (i) permit investments of up to $500.0 million in MarketAxess Corporation
and (ii) increase the aggregate commitments of the lender under the Prior Credit Agreement from $100.0 million to $450.0 million,
which we intend to use from time to time to make advances to our broker-dealer subsidiaries to assist with certain capital or liquidity
requirements related to our self-clearing and trade settlement activities and for other general corporate purposes. The Prior Credit
Agreement matured on November 13, 2020, when we entered into a new credit agreement (the “Credit Agreement”) with a syndicate of
lenders and JPMorgan, as administrative agent, that provides aggregate commitments totaling $500.0 million, consisting of a revolving
credit facility and a $5.0 million letter of credit sub-limit for standby letters of credit. The Credit Agreement will mature on November
12, 2021, with our option to request up to two additional 364-day extensions at the discretion of each lender and subject to customary
conditions. As of December 31, 2020, we had $1.0 million in letters of credit outstanding and $499.0 million in available borrowing
capacity under the Credit Agreement. See Note 13 to the Consolidated Financial Statements for a discussion of the Credit Agreement
and the Prior Credit Agreement.

54

In connection with its self-clearing operations, MarketAxess Corporation, our broker-dealer subsidiary, entered into an agreement
(the “Collateralized Agreement”) with its settlement bank to provide loans up to an aggregate of $200.0 million on an uncommitted
basis. Borrowings under the Collateralized Agreement are collateralized by securities pledged by MarketAxess Corporation to the
settlement bank, subject to applicable haircuts and concentration limits. As of December 31, 2020, MarketAxess Corporation had no
borrowings outstanding and $200.0 million in available borrowing capacity under the Collateralized Agreement. See Note 13 to the
Consolidated Financial Statements for a discussion of the Collateralized Agreement.

As a result of our self-clearing activities, we are required to finance certain transactions, maintain deposits with various clearing
organizations and clearing broker-dealers and maintain a special reserve bank account for the benefit of customers pursuant to SEC Rule
15c3-3. As of December 31, 2020, the aggregate amount of the positions financed, deposits and customer reserve balances associated
with our self-clearing activities was $138.2 million. These requirements can fluctuate based on trading activity, market volatility or other
factors which may impact our liquidity or require us to use our capital resources.

During the past two years, our cash flows were as follows:

Year Ended December 31,

Net cash provided by operating activities
Net cash provided by (used in) investing activities
Net cash (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase for the period

2020

$ 404,489
68,867
(145,112)
5,553
$ 333,797

2019
($ in thousands)
$ 265,935
(122,051)
(118,100)
1,011
26,795

$

$
Change

%
Change

$ 138,554
190,918
(27,012)
4,542
$ 307,002

52.1 %

(156.4)
22.9
449.3
1,145.7 %

Cash Flows for the Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

The $138.6 million increase in net cash provided by operating activities was primarily due to increases in net income of $94.5
million, net sales and maturities of trading investments of $63.9 million, income and other tax liabilities of $16.0 million, depreciation
and amortization of $9.1 million and accounts payable, accrued expenses and other liabilities of $6.8 million. These increases in cash
provided were offset by an increase of $49.5 million in net receivables from broker-dealers, clearing organizations and customers
associated with our self-clearing conversion.

The $190.9 million net increase in net cash provided by investing activities was primarily attributable to an increase in net proceeds
from sales and maturities of securities available-for-sale of $127.7 million and lower cash used for acquisitions of $74.1 million, offset
by an increase in capital expenditures of $10.9 million.

The $27.0 million increase in net cash (used in) financing activities was principally due to increases in withholding tax payments
on restricted stock vesting and stock option exercises of $16.6 million and cash dividends paid on common stock of $14.3 million, offset
by an increase in exercises of stock options of $2.8 million and a decrease in repurchases of our common stock of $1.1 million.

Past trends of cash flows are not necessarily indicative of future cash flow levels. A decrease in cash flows may have a material

adverse effect on our liquidity, business and financial condition.

Other Factors Influencing Liquidity and Capital Resources

We believe that our current resources are adequate to meet our liquidity needs and capital expenditure requirements for at least
the next 12 months. However, our future liquidity and capital requirements will depend on a number of factors, including liquidity
requirements associated with our self-clearing operations and expenses associated with product development and expansion and new
business opportunities that are intended to further diversify our revenue stream. We may also acquire or invest in technologies, business
ventures or products that are complementary to our business. In the event we require any additional financing, it will take the form of
equity or debt financing. Any additional equity offerings may result in dilution to our stockholders. Any debt financings, if available at
all, may involve restrictive covenants with respect to dividends, issuances of additional capital and other financial and operational
matters related to our business.

55

Certain of our U.S. subsidiaries are registered as a broker-dealer or a SEF and therefore are subject to the applicable rules and
regulations of the SEC, FINRA and the CFTC. These rules contain minimum net capital requirements, as defined in the applicable
regulations, and also may require that a significant part of the registrants’ assets be kept in relatively liquid form. Certain of our foreign
subsidiaries are regulated by the FCA in the U.K. or other foreign regulators and must maintain financial resources, as defined in the
applicable regulations, in excess of the applicable financial resources requirement. As of December 31, 2020, each of our subsidiaries
that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of December 31,
2020, our subsidiaries maintained aggregate net capital and financial resources that were $435.4 million in excess of the required levels
of $21.6 million.

Each of our U.S. and foreign regulated subsidiaries are subject to local regulations which generally prohibit repayment of
borrowings from our affiliates, paying cash dividends, making loans to our affiliates or otherwise entering into transactions that result
in a significant reduction in regulatory net capital or financial resources without prior notification to or approval from such regulated
entity’s principal regulator. As of December 31, 2020, the amount of unrestricted cash held by our non-U.S. subsidiaries was $144.4
million.

We execute bond transactions between our institutional investor and broker-dealer clients on a matched principal basis by serving
as counterparty to both the buyer and the seller in trades. In August 2020, one of our U.S. broker-dealer subsidiaries converted to a self-
clearing model for the settlement of such transactions. Our other U.S. and U.K subsidiaries continue to settle their transactions through
third-party clearing brokers. Settlement typically occurs within one to two trading days after the trade date. Cash settlement of the
transaction occurs upon receipt or delivery of the underlying instrument that was traded. Under both the self-clearing and the third-party
clearing broker models, we are exposed to credit risk in the event a counterparty does not fulfill its obligation to complete a transaction
or if there is a miscommunication or other error in executing a matched principal transaction. Pursuant to the terms of the securities
clearing agreements, each third-party clearing broker has the right to charge us for any losses they suffer resulting from a counterparty’s
failure on any of our trades. We did not record any liabilities or losses with regard to counterparty failures for the years ended December
31, 2020 and 2019.

In the normal course of business, we enter into contracts that contain a variety of representations, warranties and general
indemnifications. Our maximum exposure from any claims under these arrangements is unknown, as this would involve claims that
have not yet occurred. However, based on past experience, we expect the risk of material loss to be remote.

On November 30, 2020 we acquired Regulatory Services GmbH, the pan-European regulatory reporting business of Deutsche
Börse Group. The purchase price was approximately $22.5 million in cash paid at closing and up to $24.6 million in contingent
consideration payable within 18 months of the closing. In September 2020, we entered into an agreement to acquire MuniBrokers LLC,
a central electronic venue serving municipal bond inter-dealer brokers and dealers. The acquisition is expected to close in the first half
of 2021, subject to the satisfaction of customary closing conditions. The purchase price is approximately $45.0 million in cash, plus
transaction costs, with $20.0 million paid at closing and up to $25.0 million in contingent consideration payable within three years of
the closing.

See Item 5 of this Annual Report on Form 10-K for a discussion of our repurchases of our common stock and our dividend policy.

Non-GAAP Financial Measures

In addition to reporting financial results in accordance with GAAP, we use certain non-GAAP financial measures called earnings
before interest, taxes, depreciation and amortization (“EBITDA”) and free cash flow (“FCF”). As a result of our conversion to self-
clearing, we redefined FCF as cash flow from operating activities excluding the net change in trading investments and net change in
securities failed-to-deliver and securities failed-to-receive from broker-dealers, clearing organizations and customers, less expenditures
for furniture, equipment and leasehold improvements and capitalized software development costs. We believe these non-GAAP financial
measures, when taken into consideration with the corresponding GAAP financial measures, are important in understanding our operating
results. EBITDA and FCF are not measures of financial performance or liquidity under GAAP and therefore should not be considered
an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. We believe that
EBITDA and FCF provide useful additional information concerning profitability of our operations and business trends and the cash flow
available to pay dividends, repurchase stock and meet working capital requirements.

56

The table set forth below presents a reconciliation of our net income to EBITDA, as defined, for the years ended December 31,

2020 and 2019:

Net income
Add back:
Interest expense
Provision for income taxes
Depreciation and amortization
Earnings before interest, taxes, depreciation and amortization

Year Ended December 31,

2020

2019

(In thousands)

$

299,377

$

204,902

1,142
74,982
35,996
411,497

$

—
52,522
26,857
284,281

$

The table set forth below presents a reconciliation of our net cash provided by operating activities to FCF, as defined, for the years

ended December 31, 2020 and 2019:

Net cash provided by operating activities
Exclude: Net change in trading investments
Exclude: Net change in fail-to-deliver/receive from broker-dealers, clearing
organizations and customers
Less: Purchases of furniture, equipment and leasehold improvements
Less: Capitalization of software development costs
Free cash flow

Year Ended December 31,

2020

2019

(In thousands)

$

$

404,489
(67,952)

49,278
(15,010)
(30,618)
340,187

$

$

265,935
(4,045)

—
(12,292)
(22,408)
227,190

Effects of Inflation

Because the majority of our assets are short-term in nature, they are not significantly affected by inflation. However, the rate of
inflation may affect our expenses, such as employee compensation, office leasing costs and communications expenses, which may not
be readily recoverable in the prices of our services. To the extent inflation results in rising interest rates and has other adverse effects on
the securities markets, it may adversely affect our financial position and results of operations.

Contractual Obligations and Commitments

As of December 31, 2020, we had the following contractual obligations and commitments:

Operating leases
Foreign currency forward contract
Total

Payments due by period

Less
than 1
year

Total

$ 133,794
157,862
$ 291,656

$ 12,131
157,862
$ 169,993

1 - 3
years
(In thousands)
$ 20,786
—
$ 20,786

3 - 5
years

More
than 5
years

$ 21,874
—
$ 21,874

$ 79,003
—
$ 79,003

We enter into foreign currency forward contracts to hedge the net investment in our U.K. subsidiaries. As of December 31, 2020,
the notional value of the foreign currency forward contract outstanding was $157.1 million and the fair value of the liability was $0.8
million.

57

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

Market risk is the risk of the loss resulting from adverse changes in market rates and prices, such as interest rates and foreign

currency exchange rates.

The global financial services business is, by its nature, risky and volatile and is directly affected by many national and international
factors that are beyond our control. Any one of these factors may cause a substantial decline in the U.S. and global financial services
markets, resulting in reduced trading volume and revenues. These events could have a material adverse effect on our business, financial
condition and results of operations.

As of December 31, 2020, we had $19.2 million of investments in corporate bonds that were classified as trading securities.
Adverse movements, such as a 10% decrease in the value of these securities or a downturn or disruption in the markets for these
securities, could result in a substantial loss. In addition, principal gains and losses resulting from these securities could on occasion have
a disproportionate effect, positive or negative, on our financial condition and results of operations for any particular reporting period.

See also Item 1A. Risk Factors, “Risks Related to Global Economic and Market Conditions – Global economic, political and

market factors beyond our control could reduce demand for our services, and our profitability and business could suffer.”

Interest Rate Risk

Interest rate risk represents our exposure to interest rate changes with respect to our cash, cash equivalents and investments. As
of December 31, 2020, our cash and cash equivalents and investments amounted to $489.0 million. A hypothetical 100 basis point
decrease in interest rates would decrease our annual investment income by approximately $4.8 million, assuming no change in the
amount or composition of our cash and cash equivalents.

A similar hypothetical 100 basis point increase or decrease in interest rates would decrease or increase the fair value of the trading
securities portfolio by approximately $0.2 million. The hypothetical unrealized gain (loss) of $0.2 million would be recognized in other,
net in the Consolidated Statements of Operations.

We do not maintain an inventory of bonds that are traded on our platform.

Foreign Currency Exchange Rate Risk

We conduct operations in several different countries outside of the U.S., most notably the U.K., and substantial portions of our
revenues, expenses, assets and liabilities are generated and denominated in non-U.S. dollar currencies. Since our consolidated financial
statements are presented in U.S. dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S.
dollars at exchange rates in effect during or at the end of each reporting period. Accordingly, increases or decreases in the value of the
U.S. dollar against the other currencies will affect our net operating revenues, operating income and the value of balance sheet items
denominated in foreign currencies.

During the year ended December 31, 2020, approximately 10.8% of our revenue and 26.2% of our expenses were denominated in
currencies other than the U.S. dollar, most notably the British Pound Sterling. Based on actual results over the past year, a hypothetical
10% increase or decrease in the U.S. dollar against all other currencies would have increased or decreased revenue by approximately
$7.5 million and operating expenses by approximately $7.6 million.

Derivative Risk

Our limited derivative risk stems from our activities in the foreign currency forward contract market. We use this market to
mitigate our U.S. dollar versus British Pound Sterling exposure that arises from the activities of our U.K. subsidiaries. As of December
31, 2020, the fair value of the notional amount of our foreign currency forward contract was $157.9 million. We do not speculate in any
derivative instruments.

58

Credit Risk

Through certain of our subsidiaries, we execute bond transactions between our institutional investor and broker-dealer clients on
a matched principal basis by serving as counterparty to both the buyer and the seller in trades. In August 2020, one of our U.S. broker-
dealer subsidiaries converted to a self-clearing model for the settlement of such transactions. Our other U.S. and U.K subsidiaries
continue to settle their transactions through third-party clearing brokers. Settlement typically occurs within one to two trading days after
the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying instrument that was traded.

We are exposed to credit and performance risks in our role as matched principal trading counterparty to our clients executing bond
trades on our platform, including the risk that counterparties that owe us money or securities will not perform their obligations. These
parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. Adverse
movements in the prices of securities that are the subject of these transactions can increase our risk. In connection with Open Trading
or other anonymous protocols, we expect that the number of transactions in which we act as a matched principal will increase.

We have policies, procedures and automated controls in place to identify and manage our credit risk. There can be no assurance
that these policies, procedures and automated controls will effectively mitigate our credit risk exposure. Some of our risk management
procedures are reliant upon the evaluation of information regarding the fixed-income markets, our clients or other relevant matters that
are publicly available or otherwise acquired from third party sources. Such information may not be accurate, complete, up-to-date or
properly assessed and interpreted by us. If our risk management procedures fail, our business, financial condition and results of
operations may be adversely affected. Furthermore, our insurance policies are unlikely to provide coverage for such risks.

Cash and cash equivalents includes cash and money market instruments that are primarily maintained at three major global banks.

Given this concentration, we are exposed to certain credit risk in relation to our deposits at these banks.

59

Item 8. Financial Statements and Supplementary Data.

MARKETAXESS HOLDINGS INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Management’s Report on Internal Control Over Financial Reporting
Audited Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm ...........................................................................................................
Consolidated Statements of Financial Condition — As of December 31, 2020 and 2019 .............................................................
Consolidated Statements of Operations — For the years ended December 31, 2020, 2019 and 2018 ...........................................
Consolidated Statements of Comprehensive Income — For the years ended December 31, 2020, 2019 and 2018 ......................
Consolidated Statements of Changes in Stockholders’ Equity — For the years ended December 31, 2020, 2019 and 2018........
Consolidated Statements of Cash Flows — For the years ended December 31, 2020, 2019 and 2018..........................................
Notes to Consolidated Financial Statements ...................................................................................................................................

61

62
64
65
66
67
68
69

The unaudited supplementary data regarding consolidated quarterly income statement data are incorporated by reference to the
information set forth in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the
section captioned “Quarterly Results of Operations.”

60

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of MarketAxess Holdings Inc. is responsible for establishing and maintaining adequate internal control over financial
reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over
financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally accepted accounting principles. The Company’s internal
control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions

of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of

the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In
making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control — Integrated Framework (2013).

Based on our assessment and those criteria, management concluded that the Company maintained effective internal control over

financial reporting as of December 31, 2020.

The effectiveness of our

financial
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

reporting as of December 31, 2020 has been audited by

internal control over

61

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of MarketAxess Holdings Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial condition of MarketAxess Holdings Inc. and its subsidiaries
(the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income,
of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the
related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control
over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the
period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

62

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.

Revenue Recognition - Open Trading Commissions

As described in Note 2 to the consolidated financial statements, the Company executes trades between and among institutional investor
and broker-dealer clients on a matched principal basis by serving as counterparty to both the buyer and the seller (“Open Trading”).
Open Trading variable transaction fees, which represent commissions for matched principal trades, were $170.5 million for the year
ended December 31, 2020. Variable transaction fees are generally calculated as a percentage of the notional dollar volume of bonds
traded on the platform and vary based on the type, size, yield, maturity of the bond traded, and individual client incentives. For Open
Trading trades, the Company earns its commission through the difference in price between the two trades. As disclosed by management,
commissions are determined based on the fee schedule associated with the instrument being traded.

The principal considerations for our determination that performing procedures relating to revenue recognition for Open Trading
commissions is a critical audit matter are the significant audit effort in performing procedures and evaluating evidence related to this
revenue type, which is calculated based on the instrument being traded, volume of the instrument being traded, and individual client
incentives.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the completeness
and accuracy of Open Trading commission. These procedures also included, among others, testing a sample of Open Trading transactions
by (i) agreeing the details of the trade to underlying documentation, (ii) agreeing fees charged to the fee schedule based on the trade
details, and as applicable, any individual client incentives, and (iii) recalculating the Open Trading commission variable transaction fee.

/s/ PricewaterhouseCoopers LLP
New York, New York
February 19, 2021

We have served as the Company’s auditor since 2000.

63

MARKETAXESS HOLDINGS INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

As of

December 31, 2020

December 31, 2019

(In thousands, except share
and per share amounts)

ASSETS

Cash and cash equivalents
Cash segregated under federal regulations
Investments, at fair value
Accounts receivable, net of allowance of $163 and $57 as of

December 31, 2020 and 2019, respectively

Receivables from broker-dealers, clearing organizations and customers
Goodwill
Intangible assets, net of accumulated amortization
Furniture, equipment, leasehold improvements and capitalized
software, net of accumulated depreciation and amortization

Operating lease right-of-use assets
Prepaid expenses and other assets

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Accrued employee compensation
Payables to broker-dealers, clearing organizations and customers
Income and other tax liabilities
Accounts payable, accrued expenses and other liabilities
Operating lease liabilities

Total liabilities

Commitments and Contingencies (Note 15)

Stockholders' equity
Preferred stock, $0.001 par value, 4,855,000 shares authorized,

no shares issued and outstanding as of December 31, 2020 and 2019
Series A Preferred Stock, $0.001 par value, 110,000 shares authorized,
no shares issued and outstanding as of December 31, 2020 and 2019

Common stock voting, $0.003 par value, 110,000,000 shares
authorized, 40,851,100 shares and 40,746,593 shares issued
and 38,005,330 shares and 37,935,984 shares outstanding as of
December 31, 2020 and 2019, respectively

Common stock non-voting, $0.003 par value, 10,000,000 shares

authorized, no shares issued and outstanding as of
December 31, 2020 and 2019

Additional paid-in capital
Treasury stock - Common stock voting, at cost, 2,845,770 and

2,810,609 shares as of December 31, 2020 and 2019, respectively

Retained earnings
Accumulated other comprehensive loss
Total stockholders' equity
Total liabilities and stockholders' equity

$

$

$

$

460,858
50,059
28,111

79,577
279,915
147,388
95,354

85,204
75,924
29,039
1,331,429

62,326
133,326
42,750
44,354
93,612
376,368

—

—

123

—
329,742

(169,523)
799,369
(4,650)
955,061
1,331,429

$

$

$

$

270,124
—
230,477

62,017
—
146,861
60,986

71,795
81,399
31,271
954,930

47,365
—
16,690
22,793
97,991
184,839

—

—

122

—
342,541

(153,388)
591,086
(10,270)
770,091
954,930

The accompanying notes are an integral part of these consolidated financial statements.

64

MARKETAXESS HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

2020

Year Ended December 31,
2019
(In thousands, except per share amounts)

2018

Revenues

Commissions
Information services
Post-trade services
Other

Total revenues

Expenses

Employee compensation and benefits
Depreciation and amortization
Technology and communications
Professional and consulting fees
Occupancy
Marketing and advertising
Clearing costs
General and administrative

Total expenses

Operating income
Other income (expense)
Investment income
Interest expense
Other, net

Total other income (expense)

Income before income taxes
Provision for income taxes
Net income

Net income per common share

Basic
Diluted

Cash dividends declared per common share

Weighted average shares outstanding

Basic
Diluted

$

$

$
$

$

$

$

$
$

$

634,445
34,341
19,460
879
689,125

156,885
35,996
34,092
32,304
13,425
7,940
21,058
12,697
314,397
374,728

2,446
(1,142)
(1,673)
(369)
374,359
74,982
299,377

8.01
7.85

2.40

37,359
38,144

$

$

$
$

$

463,856
30,730
15,763
1,003
511,352

131,079
26,857
26,792
25,534
11,639
11,559
11,314
15,696
260,470
250,882

8,063
—
(1,521)
6,542
257,424
52,522
204,902

5.53
5.40

2.04

37,083
37,956

390,834
28,227
15,346
1,158
435,565

109,117
23,080
23,866
21,521
14,176
12,114
7,754
11,353
222,981
212,584

6,112
—
(610)
5,502
218,086
45,234
172,852

4.68
4.57

1.68

36,958
37,855

The accompanying notes are an integral part of these consolidated financial statements.

65

MARKETAXESS HOLDINGS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income
Net cumulative translation adjustment and foreign
currency exchange hedge, net of tax of $(1,468),
$(1,218) and $1,290, respectively

Net unrealized gain (loss) on securities available-for-sale,

net of tax of $(172), $312, and $(23), respectively

Comprehensive income

$

$

2020

Year Ended December 31,
2019
(In thousands)
204,902
$

$

299,377

6,164

1,128

(544)
304,997

$

996
207,026

$

2018

172,852

(2,078)

(90)
170,684

The accompanying notes are an integral part of these consolidated financial statements.

66

MARKETAXESS HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Common
Stock
Voting

Additional
Paid-In
Capital

Treasury
Stock -
Common
Stock
Voting

Retained
Earnings
(In thousands)

Accumulated
Other
Comprehensive
Loss

Total
Stockholders'
Equity

Balance at December 31, 2017
Net income
Cumulative translation adjustment and foreign

currency exchange hedge, net of tax

$

Unrealized net (loss) on securities available-for-sale,

net of tax

Stock-based compensation
Exercise of stock options
Withholding tax payments on restricted stock

vesting and stock option exercises

Repurchases of common stock
Cash dividend on common stock ($1.68 per share)
Balance at December 31, 2018
Net income
Cumulative translation adjustment and foreign

currency exchange hedge, net of tax

Unrealized net gain on securities available-for-sale,

net of tax

Stock-based compensation
Exercise of stock options
Withholding tax payments on restricted stock

vesting and stock option exercises
Treasury shares used for acquisition
Repurchases of common stock
Cash dividend on common stock ($2.04 per share)
Balance at December 31, 2019
Net income
Cumulative translation adjustment and foreign

currency exchange hedge, net of tax

Unrealized net (loss) on securities available-for-sale,

net of tax

Stock-based compensation
Exercise of stock options
Withholding tax payments on restricted stock

vesting and stock option exercises

Repurchases of common stock
Cash dividend on common stock ($2.40 per share)
Balance at December 31, 2020

$

121 $ 331,081 $(159,791) $ 353,583 $
—

— 172,852

—

—

—
—
1

—
—
—
122
—

—

—
—
—

—

—
15,850
2,972

—

—
—
—

—

—
—
—

(8,043)

—
— (25,171)
—
341,860
—

—
—
— (63,183)
(184,962) 463,252
— 204,902

—

—
25,294
1,207

—

—
—
—

—

—
—
—

—
— (25,820)
—
—
48,830
— (17,256)
—
—
—
342,541
122
—
—

—
—
—
— (77,068)
(153,388) 591,086
— 299,377

—

—
—
1

—

—
25,613
4,006

—

—
—
—

—

—
—
—

— (42,418)
—
—
123 $ 329,742 $(169,523) $ 799,369 $

—
— (16,135)
—

—
—
— (91,094)

(10,226) $
—

514,768
172,852

(2,078)

(2,078)

(90)
—
—

—
—
—
(12,394)
—

(90)
15,850
2,973

(8,043)
(25,171)
(63,183)
607,878
204,902

1,128

1,128

996
—
—

—
—
—
—
(10,270)
—

996
25,294
1,207

(25,820)
48,830
(17,256)
(77,068)
770,091
299,377

6,164

6,164

(544)
—
—

—
—
—
(4,650) $

(544)
25,613
4,007

(42,418)
(16,135)
(91,094)
955,061

The accompanying notes are an integral part of these consolidated financial statements.

67

MARKETAXESS HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

2020

Year Ended December 31,
2019
(In thousands)

2018

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

$ 299,377

$ 204,902

$ 172,852

Depreciation and amortization
Amortization of operating lease right-of-use assets
Stock-based compensation expense
Deferred taxes
Other
Changes in operating assets and liabilities:

(Increase) in accounts receivable
(Increase) in receivables from broker-dealers, clearing organizations and customers
(Increase) in prepaid expenses and other assets
Decrease in trading investments
(Increase) in mutual funds held in rabbi trust
Increase in accrued employee compensation
Increase in payables to broker-dealers, clearing organizations and customers
Increase in income and other tax liabilities
Increase (decrease) in accounts payable, accrued expenses and other liabilities
(Decrease) in operating lease liabilities

Net cash provided by operating activities
Cash flows from investing activities

Acquisitions, net of cash and cash equivalents acquired
Available-for-sale investments

Proceeds from maturities and sales
Purchases

Purchases of furniture, equipment and leasehold improvements
Capitalization of software development costs
Other

Net cash provided by (used in) investing activities
Cash flows from financing activities
Cash dividend on common stock
Exercise of stock options
Withholding tax payments on restricted stock vesting and stock option exercises
Repurchases of common stock
Proceeds from short-term borrowings
Repayments of short-term borrowings

Net cash (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents including restricted cash

Net increase for the period
Beginning of period

End of period
Supplemental cash flow information:

Cash paid for income taxes
Cash paid for interest
Right-of-use assets obtained in exchange for operating lease liabilities

Non-cash investing and financing activity:
Exercise of stock options - cashless
Intangible assets acquired in exchange for contingent consideration payable
Liabilities assumed in connection with acquisition:

Fair value of assets acquired
Cash paid for acquisition of business, net of cash and cash equivalents acquired
Treasury stock used for acquisition of business
Liabilities assumed

35,996
6,842
25,613
10,099
(550)

(18,015)
(182,871)
(1,977)
67,952
(2,671)
14,961
133,326
16,189
6,006
(5,788)
404,489

26,857
5,795
25,294
2,674
(778)

(2,962)
—
(4,624)
4,045
(2,118)
8,312
—
187
(820)
(829)
265,935

23,080
—
15,850
(1,173)
2,253

(5,117)
—
(3,791)
856
(933)
2,551
—
2,965
14,524
—
223,917

(23,297)

(97,430)

—

170,657
(32,865)
(15,010)
(30,618)
—
68,867

(90,566)
4,007
(42,418)
(16,135)
578,356
(578,356)
(145,112)
5,553

170,936
(160,827)
(12,292)
(22,408)
(30)
(122,051)

(76,231)
1,207
(25,820)
(17,256)
—
—
(118,100)
1,011

333,791
(336,533)
(35,888)
(11,705)
39
(50,296)

(62,432)
2,973
(8,043)
(25,171)
—
—
(92,673)
(1,640)

333,797
274,253
$ 608,050

26,795
247,458
$ 274,253

79,308
168,150
$ 247,458

$

$

$

45,046
1,142
727

10,866
14,665

$

$

51,766
—
7,464

1,811
—

—
—
—
— $

148,425
(97,430)
(48,830)
2,165

$

$

$

47,208
—
—

—
—

—
—
—
—

The accompanying notes are an integral part of these consolidated financial statements.

68

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Principal Business Activity

MarketAxess Holdings Inc. (the “Company” or “MarketAxess”) was incorporated in the State of Delaware on April 11, 2000.
Through its subsidiaries, MarketAxess operates leading electronic trading platforms delivering expanded liquidity opportunities,
improved execution quality and significant cost savings across global fixed-income markets. Over 1,800 institutional investor and
broker-dealer firms are active users of MarketAxess’ patented trading technology, accessing global liquidity on its platforms in U.S.
investment-grade bonds, U.S. high-yield bonds, U.S. Treasuries, emerging market debt, Eurobonds and other fixed income securities.
Through its Open TradingTM protocols, MarketAxess executes bond trades between and among institutional investor and broker-dealer
clients in the leading all-to-all anonymous trading environment for corporate bonds. MarketAxess also offers a number of trading-related
products and services, including: Composite+TM pricing and other market data products to assist clients with trading decisions; auto-
execution and other execution services for clients requiring specialized workflow solutions; connectivity solutions that facilitate straight-
through processing; and technology services to optimize trading environments. The Company also provides a range of pre- and post-
trade services, including trade matching, trade publication, regulatory transaction reporting and market and reference data across a range
of fixed-income and other products.

2. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions
and balances have been eliminated. Certain reclassifications have been made to the prior periods’ consolidated financial statements in
order to conform to the current period presentation. Such reclassifications are immaterial, individually and in the aggregate, to both
current and all previously issued financial statements taken as a whole and have no effect on previously reported net income.

Accounting Pronouncements, Recently Adopted

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15,
“Intangibles—Goodwill and Other—Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud
Computing Arrangement That Is a Service Contract” (“ASU 2018-15”). The standard requires the capitalization of implementation costs
incurred in a cloud computing arrangement to be aligned with the requirements for capitalizing costs incurred to develop or obtain
internal-use software. The Company adopted ASU 2018-15 effective July 1, 2019 on a prospective basis. Adoption of this guidance did
not have a material impact on the Company’s Consolidated Financial Statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other” (“ASU 2017-04”). ASU 2017-04 simplifies
the testing for goodwill impairment, which eliminates the requirement to determine the fair value of individual assets and liabilities of
a reporting unit to measure goodwill impairment. Instead, goodwill impairment testing will be performed by comparing the fair value
of the reporting unit with its carrying amount and recognizing impairment by which the carrying amount exceeds the reporting unit’s
fair value. The Company adopted ASU 2017-04 effective January 1, 2020 on a prospective basis. Adoption of this guidance did not
have a material impact on the Company’s Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) -Measurement of Credit Losses
on Financial Instruments”. This ASU amends several aspects of the measurement of credit losses on financial instruments, including
replacing the existing incurred credit loss model and other models with the Current Expected Credit Losses model (“CECL”). Under
CECL, the allowance for losses for financial assets that are measured at amortized cost reflects management’s estimate of credit losses
over the remaining expected life of the financial assets. Expected credit losses for newly recognized financial assets, as well as changes
to expected credit losses during the period, would be recognized in earnings. Expected credit losses will be measured based on historical
experience, current conditions and forecasts that affect the collectability of the reported amount. The Company adopted this ASU on
January 1, 2020 using the modified retrospective method of adoption. Adoption of this ASU did not have a material impact on the
Company's Consolidated Financial Statements.

69

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Accounting Pronouncements, Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting”, which is designed to ease the potential burden in accounting for the transition away from LIBOR.
The ASU applies to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to
be discontinued and replaced with alternative reference rates as a result of reference rate reform. The ASU provides optional expedients
and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if
certain criteria are met. The ASU was effective for all entities as of March 12, 2020 and can be adopted from this date through December
31, 2022. The Company does not expect adoption of this ASU to have a material impact on its Consolidated Financial Statements.

Cash and Cash Equivalents

The Company defines cash equivalents as short-term interest-bearing investments with maturities at the time of purchase of three

months or less.

Investments

The Company determines the appropriate classification of securities at the time of purchase which are recorded in the Consolidated
Statements of Financial Condition on the trade date. Securities are classified as available-for-sale or trading. The Company’s available-
for-sale investments are comprised of investment-grade corporate debt securities. Available-for-sale investments are carried at fair value
with the unrealized gains or losses reported in accumulated other comprehensive loss in the Consolidated Statements of Financial
Condition. Trading investments include investment-grade corporate debt securities and U.S. Treasuries and are carried at fair value,
with realized and unrealized gains or losses included in other, net in the Consolidated Statements of Operations.

The Company assesses whether an other-than-temporary impairment loss on the available-for-sale investments has occurred due
to declines in fair value or other market conditions. The portion of an other-than-temporary impairment related to credit loss is recorded
as a charge in the Consolidated Statements of Operations. The remainder is recognized in accumulated other comprehensive loss if the
Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security
prior to recovery. No charges for other-than-temporary losses were recorded during the years ended December 31, 2020, 2019 and 2018.

Fair Value Financial Instruments

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.” A three-tiered hierarchy for determining fair value has been established that
prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as Level 1 (unadjusted
quoted prices for identical assets or liabilities in active markets), Level 2 (inputs that are observable in the marketplace other than those
inputs classified in Level 1) and Level 3 (inputs that are unobservable in the marketplace). The Company’s financial assets and liabilities
measured at fair value on a recurring basis consist of its money market funds, securities available-for-sale, trading securities and foreign
currency forward contracts. All other financial instruments are short-term in nature and the carrying amount is reported on the
Consolidated Statements of Financial Condition at approximate fair value.

Receivables from and Payables to Broker-dealers, Clearing Organizations and Customers

Receivables from broker-dealers, clearing organizations and customers include amounts receivable for securities not delivered by
the Company to the purchaser by the settlement date (‘‘securities failed-to-deliver’’) and cash deposits held at clearing organizations
and clearing brokers to facilitate the settlement and clearance of matched principal transactions. Payables to broker-dealers, clearing
organizations and customers include amounts payable for securities not received by the Company from a seller by the settlement date
(‘‘securities failed-to-receive’’). Securities failed-to-deliver and securities failed-to-receive for transactions executed between and
among institutional investor and broker-dealer clients on a matched principal basis where the Company’s U.S. broker-dealer subsidiary
serves as a counterparty to both the buyer and the seller are recorded on a settlement date basis. The Company presents its securities
failed-to-deliver and securities failed-to-receive balances on a net-by-counterparty basis within receivables from and payables to broker-
dealers, clearing organizations and customers. The difference between the Company’s trade-date receivables and payables for unsettled
matched principal transactions reflects commissions earned and is recorded within accounts receivable, net on a trade-date basis.

70

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Allowance for Credit Losses

All accounts receivable have contractual maturities of less than one year and are derived from trading-related fees and
commissions and revenues from products and services. The Company continually monitors collections and payments from its customers
and maintains an allowance for doubtful accounts. The allowance for credit losses is based on an estimate of the amount of potential
credit losses in existing accounts receivable, as determined from a review of aging schedules, past due balances, historical collection
experience and other specific collection issues that have been identified. Account balances are grouped for evaluation based on various
risk characteristics, including billing type, legal entity, and geographic region. Additions to the allowance for credit losses are charged
to bad debt expense, which is included in general and administrative expense in the Company’s Consolidated Statements of Operations.
Balances that are determined to be uncollectable are written off against the allowance for credit losses.

The allowance for credit losses was $0.2 million, $0.1 million and $0.1 million as of December 31, 2020, 2019 and 2018,
respectively. The provision for bad debts was $0.5 million, $0.3 million and $0.2 million for the years ended December 31, 2020, 2019
and 2018, respectively. Write-offs and other charges against the allowance for credit losses were $0.1 million, $0.1 million and $0.2
million for the years ended December 31, 2020, 2019 and 2018, respectively.

Depreciation and Amortization

Fixed assets are carried at cost less accumulated depreciation. The Company uses the straight-line method of depreciation over
three to seven years. The Company amortizes leasehold improvements on a straight-line basis over the lesser of the life of the
improvement or the remaining term of the lease.

Software Development Costs

The Company capitalizes certain costs associated with the development of internal use software, including among other items,
employee compensation and related benefits and third-party consulting costs at the point at which the conceptual formulation, design
and testing of possible software project alternatives have been completed. Once the product is ready for its intended use, such costs are
amortized on a straight-line basis over three years. The Company reviews the amounts capitalized for impairment whenever events or
changes in circumstances indicate that the carrying amounts of the assets may not be recoverable.

Cloud Computing Costs

The Company capitalizes certain costs associated with cloud computing arrangements, including, among other items, employee
compensation and related benefits and third-party consulting costs that are part of the application development stage. These costs are
setup as a prepaid asset on the balance sheet and are amortized over the period of the hosting service contract. The Company reviews
the amounts capitalized for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets
may not be recoverable.

Foreign Currency Translation and Forward Contracts

Assets and liabilities denominated in foreign currencies are translated using exchange rates at the end of the period; revenues and
expenses are translated at average monthly rates. Gains and losses on foreign currency translation are a component of accumulated other
comprehensive loss in the Consolidated Statements of Financial Condition. Transaction gains and losses are recorded in other, net in
the Consolidated Statements of Operations.

The Company enters into foreign currency forward contracts to hedge its net investment in its U.K. subsidiaries. Gains and losses

on these transactions are included in accumulated other comprehensive loss in the Consolidated Statements of Financial Condition.

Revenue Recognition

The Company’s classification of revenues in the Consolidated Statements of Operations represents revenues from contracts with

customers disaggregated by type of revenue. The Company has four revenue streams as described below.

Commission Revenue. The Company charges its broker-dealer clients variable transaction fees for trades executed on its platform
and, under certain plans, distribution fees or monthly minimum fees to use the platform for a particular product area. Variable transaction
fees are recognized on a trade date basis and generally calculated as a percentage of the notional dollar volume of bonds traded on the
platforms and vary based on the type, size, yield and maturity of the bond traded and individual client incentives. Bonds that are more
actively traded or that have shorter maturities generally generate lower commissions, while bonds that are less actively traded or that
have longer maturities generally command higher commissions. Under the Company’s disclosed trading transaction fee plans, variable
transaction fees, distribution fees and unused monthly fee commitments are invoiced and recorded on a monthly basis.

71

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

For Open Trading trades that the Company executes between and among institutional investor and broker-dealer clients on a
matched principal basis by serving as counterparty to both the buyer and the seller, the Company earns its commission through the
difference in price between the two trades. The commission is collected upon settlement of the trade, which typically occurs within one
to two trading days after the trade date. For U.S. Treasury matched principal trades, commissions are invoiced and recorded on a monthly
basis. The following table presents commission revenue by fee type:

Commission revenue by fee type
Variable transaction fees
Disclosed trading
Open Trading - matched principal trading
U.S. Treasuries - matched principal trading

Total variable transaction fees
Distribution fees and unused minimum fees

Total commissions

2020

Year Ended December 31,
2019
(In thousands)

2018

$

$

343,427
170,537
12,372
526,337
108,108
634,445

$

$

266,916
98,080
2,184
367,180
96,676
463,856

$

$

228,004
65,932
—
293,936
96,898
390,834

Information services – Information services includes data licensed to the Company’s broker-dealer clients, institutional investor
clients and data-only subscribers; professional and consulting services; technology software licenses; and maintenance and support
services. The nature and timing of each performance obligation may vary as these contracts are either subscription-based services
transferred over time, and may be net of volume-based discounts, or one-time services that are transferred at a point in time. Revenues
for services transferred over time are recognized ratably over the contract period as the Company’s performance obligation is met
whereas revenues for services transferred at a point in time are recognized in the period the services are provided. Customers are
generally billed monthly, quarterly, or annually; revenues billed in advance are deferred and recognized ratably over the contract period.
The following table presents information services revenue by timing of recognition:

2020

Year Ended December 31,
2019
(In thousands)

2018

Information services revenue by timing of recognition

Services transferred over time
Services transferred at a point in time

Total information services revenues

$

$

32,425
1,916
34,341

$

$

29,619
1,111
30,730

$

$

27,475
752
28,227

Post-trade services – Post-trade services revenue is generated from regulatory transaction reporting, trade publication and trade
matching services. Customers are generally billed monthly in arrears and revenue is recognized in the period transactions are processed.
Revenues billed in advance are deferred and recognized ratably over the contract period. The Company also generates one-time
implementation fees for onboarding clients which are invoiced and recognized in the period the implementation is completed. The
following table presents post-trade services revenue by timing of recognition:

Post-trade services revenue by timing of recognition

Services transferred over time
Services transferred at a point in time

Total post-trade services revenues

2020

Year Ended December 31,
2019
(In thousands)

2018

$

$

19,158
302
19,460

$

$

15,669
94
15,763

$

$

15,013
333
15,346

72

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Other revenues – Other revenues primarily includes revenue from telecommunications line charges to broker-dealer clients.

Contract liabilities consist of deferred revenues that the Company records when cash payments are received or due in advance of

services to be performed. The revenue recognized from contract liabilities and the remaining balance is shown below:

Payments
received in
advance of
services to be
performed

Revenue
recognized
for services
performed
during the
period
(In thousands)

December 31, 2019

Foreign
Currency
Translation

December 31, 2020

Information services
Post-trade services

Total deferred revenue

$

$

2,138
1,361
3,499

$

$

9,593
15,496
25,089

$

$

(8,528) $
(15,862)
(24,390) $

— $
50
50

$

3,203
1,045
4,248

The majority of the Company’s contracts are short-term in nature with durations of less than one-year. For contracts with original
durations extending beyond one year, the aggregate amount of the transaction price allocated to remaining performance obligations
was $21.1 million as of December 31, 2020. The Company expects to recognize revenue associated with the remaining performance
obligations over the next 33 months.

Stock-Based Compensation

The Company measures and recognizes compensation expense for all share-based payment awards based on their estimated fair
values measured as of the grant date. These costs are recognized as an expense in the Consolidated Statements of Operations over the
requisite service period, which is typically the vesting period, with an offsetting increase to additional paid-in capital. Forfeitures are
recognized as they occur.

Income Taxes

Income taxes are accounted for using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary
differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws
that will be in effect when such differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized against deferred tax
assets if it is more likely than not that such assets will not be realized in future years. The Company recognizes interest and penalties
related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Operations. All tax effects
related to share-based payments are recorded in the provision for income taxes in the periods during which the awards are exercised or
vest.

Business Combinations, Goodwill and Intangible Assets

Business combinations are accounted for under the purchase method of accounting. The total cost of an acquisition is allocated to
the underlying net assets based on their respective estimated fair values. The excess of the purchase price over the estimated fair values
of the net assets acquired is recorded as goodwill. Determining the fair value of certain assets acquired and liabilities assumed is
judgmental in nature and often involves the use of significant estimates and assumptions, including assumptions with respect to future
cash flows, discount rates, growth rates, customer attrition rates and asset lives.

The Company operates as a single reporting unit. Following an acquisition, goodwill no longer retains its identification with a
particular acquisition, but instead becomes identifiable with the entire reporting unit. As a result, all of the fair value of the Company is
available to support the value of goodwill. An impairment review of goodwill is performed on an annual basis, at year-end, or more
frequently if circumstances change. Intangible assets with definite lives, including purchased technologies, customer relationships and
other intangible assets, are amortized over their estimated useful lives which range from one to 15 years using either a straight-line or
accelerated amortization method based on the pattern of economic benefit the Company expects to realize from such assets. Intangible
assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment.

73

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Earnings Per Share

Basic earnings per share is computed by dividing the net income attributable to common stock by the weighted-average number
of shares of common stock outstanding during the period. For purposes of computing diluted earnings per share, the weighted-average
shares outstanding of common stock reflects the dilutive effect that could occur if convertible securities or other contracts to issue
common stock were converted into or exercised for common stock.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

3. Regulatory Capital Requirements

Certain U.S. subsidiaries of the Company are registered as a broker-dealer or swap execution facility and therefore are subject to
the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and the Commodity Futures Trading
Commission. These rules contain minimum net capital requirements, as defined in the applicable regulations, and also may require a
significant part of the registrants’ assets be kept in relatively liquid form. Certain of the Company’s foreign subsidiaries are regulated
by the Financial Conduct Authority in the U.K. or other foreign regulators and must maintain financial resources, as defined in the
applicable regulations, in excess of the applicable financial resources requirement. As of December 31, 2020, each of the Company’s
subsidiaries that are subject to these regulations had net capital or financial resources in excess of their minimum requirements. As of
December 31, 2020, the Company’s subsidiaries maintained aggregate net capital and financial resources that were $435.4 million in
excess of the required levels of $21.6 million.

In August 2020, one of the Company’s U.S. broker-dealer subsidiaries converted to a self-clearing model for the U.S. bond trades
to which it is a counterparty via its Open Trading functionality. Previously, these bond transactions were settled through a third-party
clearing broker. As a result of this conversion, the broker-dealer subsidiary is required to segregate funds in a special reserve bank
account for the benefit of customers pursuant to Rule 15c3-3 of the Securities Exchange Act of 1934. As of December 31, 2020, the
broker-dealer subsidiary had a balance of $50.1 million in its special reserve bank account.

Each of the Company’s U.S. and foreign regulated subsidiaries are subject to local regulations which generally prohibit repayment
of borrowings from the Company or affiliates, paying cash dividends, making loans to the Company or affiliates or otherwise entering
into transactions that result in a significant reduction in regulatory net capital or financial resources without prior notification to or
approval from such regulated entity’s principal regulator.

4. Fair Value Measurements

The following table summarizes the valuation of the Company’s assets and liabilities measured at fair value as categorized based

on the hierarchy described in Note 2:

74

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of December 31, 2020
Money market funds
Trading securities
Corporate debt
Mutual funds held in rabbi trust
Foreign currency forward position

Total

As of December 31, 2019
Money market funds
Securities available-for-sale

Corporate debt
Trading securities
Corporate debt
U.S. Treasuries
Mutual funds held in rabbi trust
Foreign currency forward position

Total

Level 1

Level 2

Level 3

Total

(In thousands)

$

20,856

$

— $

— $

20,856

—
—
—
20,856

$

$

99,755

$

$

19,222
8,889
(805)
27,306

$

—
—
—
— $

19,222
8,889
(805)
48,162

— $

— $

99,755

—

137,835

—

137,835

—
—
—
—
99,755

31,120
55,305
6,217
(2,772)
$ 227,705

$

$

31,120
—
55,305
—
6,217
—
—
(2,772)
— $ 327,460

Securities classified within Level 2 were valued using a market approach utilizing prices and other relevant information generated
by market transactions involving comparable assets. The foreign currency forward contracts are classified within Level 2 as the valuation
inputs are based on quoted market prices. The mutual funds held in a rabbi trust represent investments associated with the Company’s
deferred cash incentive plan. There were no financial assets classified within Level 3 during the years ended December 31, 2020 and
2019.

The table below presents the carrying value, fair value and fair value hierarchy category of the Company’s financial assets and
liabilities that are not measured at fair value on the Consolidated Statement of Financial Condition. The carrying values of the Company’s
financial assets and liabilities not measured at fair value categorized in the fair value hierarchy as Level 1 and Level 2 approximate fair
value due to the short-term nature of the underlying assets and liabilities.

Carrying Value

Fair Value

Level 1
(In thousands)

Level 2

Level 3

Total

As of December 31, 2020
Financial assets not measured at fair value:

Cash and cash equivalents
Cash segregated under federal regulations
Accounts receivable, net of allowance
Receivables from broker-dealers, clearing
organizations and customers

Total

Financial liabilities not measured at fair value:

Payables to broker-dealers, clearing
organizations and customers

As of December 31, 2019
Financial assets not measured at fair value:

Cash and cash equivalents
Accounts receivable, net of allowance

Total

$

$

$

$

$

460,858 $
50,059
79,577

460,858 $ 460,858 $
50,059
79,577

50,059
—

— $
—
79,577

— $ 460,858
50,059
—
79,577
—

279,915
870,409 $

279,915
870,409 $ 607,960 $ 262,449 $

182,872

97,043

—
279,915
— $ 870,409

133,326 $

133,326 $

— $ 133,326 $

— $ 133,326

270,124 $
62,017
332,141 $

270,124 $ 270,124 $
62,017
332,141 $ 270,124 $

—

— $

62,017
62,017 $

— $ 270,124
—
62,017
— $ 332,141

75

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Company enters into foreign currency forward contracts to hedge the net investment in the Company’s U.K. subsidiaries. The
Company designates each foreign currency forward contract as a hedge and assesses the risk management objective and strategy,
including identification of the hedging instrument, the hedged item and the risk exposure and how effectiveness is to be assessed
prospectively and retrospectively. These hedges are for a one-month period and are used to limit exposure to foreign currency exchange
rate fluctuations. The fair value of the asset is included in prepaid expenses and other assets and the fair value of the liability is included
in accounts payable, accrued expenses and other liabilities in the Consolidated Statements of Financial Condition. Gains or losses on
foreign currency forward contracts designated as hedges are included in accumulated other comprehensive loss in the Consolidated
Statements of Financial Condition. A summary of the foreign currency forward position is as follows:

Notional value
Fair value of notional
Fair value of the (liability)

The following is a summary of the Company’s investments:

As of December 31,

2020

2019

(In thousands)

157,057
157,862
(805)

$

$

155,885
158,657
(2,772)

$

$

As of December 31, 2020
Trading securities
Corporate debt
Mutual funds held in rabbi trust
Total investments

As of December 31, 2019
Securities available-for-sale

Corporate debt
Trading securities
Corporate debt
U.S. Treasuries
Mutual funds held in rabbi trust
Total trading securities
Total investments

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Estimated
fair
value

(In thousands)

$

$

19,081
7,680
26,761

$

$

141
1,209
1,350

$

$

— $
—
— $

19,222
8,889
28,111

$

137,119

$

721

$

(5)

$

137,835

31,120
54,738
5,173
91,031
228,150

$

$

14
567
1,044
1,625
2,346

$

(14)
—
—
(14)
(19)

$

31,120
55,305
6,217
92,642
230,477

The following table summarizes the fair value of the investments based upon the contractual maturities:

Less than one year
Due in 1 - 5 years

Total

As of December 31,

2020

2019

(In thousands)

18,290
9,821
28,111

$

$

120,850
109,627
230,477

$

$

Proceeds from the sales and maturities of investments during the years ended December 31, 2020, 2019 and 2018 were $261.6
million, $262.1 million and $409.3 million, respectively. Net unrealized losses and gains on trading securities were $0.4 million and
$0.8 million for the year ended December 31, 2020 and 2019 and were immaterial for the years ended December 31, 2018. Net realized
gains were $1.7 million for the year ended December 31, 2020, and were immaterial for the years ended December 31, 2019 and 2018.

76

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table provides fair values and unrealized losses on corporate debt investments and by the aging of the securities'

continuous unrealized loss position as of December 31, 2020 and 2019 respectively:

Less than Twelve Months

Twelve Months or More

Total

Fair
value

Gross
unrealized
losses

Fair
value

Gross
unrealized
losses

(In thousands)

Fair
value

Gross
unrealized
losses

As of December 31, 2020
Corporate debt

As of December 31, 2019
Corporate debt

$

$

1,369 $

— $

— $

— $

— $

—

27,999 $

(18)

$

4,406 $

(1)

$

32,405 $

(19)

5. Receivables from and Payables to Broker-dealers, Clearing Organizations and Customers

As of December 31, 2020, receivables from and payables to broker-dealers, clearing organizations and customers consisted of the

following:

Receivables from broker-dealers, clearing organizations and customers:

Securities failed-to-deliver - broker-dealers
Securities failed-to-deliver - customers
Deposits with clearing organizations and broker-dealers
Other

Total

Payables to broker-dealers, clearing organizations and customers:

Securities failed-to-receive - broker-dealers
Securities failed-to-receive - customers
Other

Total

$

$

$

December 31, 2020
(In thousands)

93,294
87,685
97,043
1,893
279,915

70,917
60,784
1,625
133,326

6. Acquisitions

On November 1, 2019, the Company and one of its subsidiaries completed their acquisition of all of the outstanding equity interests
of LiquidityEdge LLC (“LiquidityEdge” and such acquisition the “LiquidityEdge Acquisition”) pursuant to the terms and conditions of
a Unit Purchase Agreement entered into among the Company, LiquidityEdge, the holders of all the outstanding equity interests in
LiquidityEdge and certain other persons named therein on August 12, 2019 (as amended, the “Agreement”). The aggregate consideration
for the LiquidityEdge Acquisition was $153.2 million, comprised of approximately $104.4 million in cash and 146,450 shares of
common stock of the Company (valued at approximately $48.8 million as of the closing date of the LiquidityEdge Acquisition, as
described below). A portion of the stock consideration, amounting to 43,937 shares of common stock, was placed in escrow for up to
18 months to secure the sellers’ indemnification obligations under the Agreement. In addition, under the Agreement, the sellers were
prohibited from transferring any of the Company common stock received in the LiquidityEdge Acquisition for a period of six months
following the November 1, 2019 closing date. The value ascribed to the shares by the Company was discounted from the market value
on the date of closing to reflect the non-marketability of such shares during the restriction period.

LiquidityEdge is a limited liability company organized in the state of Delaware and is a broker-dealer registered with the SEC and

the Financial Industry Regulatory Authority. LiquidityEdge offers an electronic trading platform for U.S. Treasuries.

The Company has completed an allocation of the purchase price to the fair value of assets acquired and liabilities assumed at the
date of acquisition. The Company utilized an independent third-party to determine the fair value of the acquired intangible assets. The
purchase price allocation is as follows (in thousands):

77

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Purchase price
Less: acquired cash

Purchase price, net of acquired cash

Accounts receivable
Intangible assets
Prepaid expenses and other assets
Accounts payable, accrued expenses and other liabilities

Goodwill

$

$

153,210
(2,935)
150,275
(1,811)
(58,780)
(4,168)
2,165
87,681

The acquired intangible assets and useful lives are as follows ($ in thousands):

Customer relationships
Tradename - finite life

Total

Costs

58,690
90
58,780

$

$

Useful Lives
15 years
1 year

On November 30, 2020 the Company acquired Regulatory Services GmbH, the pan-European regulatory reporting business of
Deutsche Börse Group. The purchase price consists of $22.5 million in cash paid at closing and up to $24.6 million in contingent
consideration payable in cash within 18 months of the closing. The Company is accounting for the transaction as a purchase of assets
and recorded $37.4 million in amortizable intangible assets as of the acquisition date. In September 2020, the Company entered into an
agreement to acquire MuniBrokers LLC, a central electronic venue serving municipal bond inter-dealer brokers and dealers. The
acquisition is expected to close in the first half of 2021, subject to the satisfaction of customary closing conditions. The purchase price
is approximately $45.0 million in cash, plus transaction costs, with $20.0 million paid at closing and up to $25.0 million in contingent
consideration payable within three years of the closing.

7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite lives was $147.4 and $146.9 million as of December 31, 2020 and December 31,
2019. Intangible assets that are subject to amortization, including the related accumulated amortization, are comprised of the following:

December 31, 2020
Accumulated
amortization

Net carrying
amount

December 31, 2019
Accumulated
amortization

Net carrying
amount

Cost

Cost

Technology
Customer relationships
Non-competition agreements
Tradenames and patents

Total

$

$

5,770
102,696
380
400
109,246

$

$

(5,770) $
(7,369)
(380)
(373)
(13,892) $

(In thousands)
— $

95,327
—
27
95,354 $

5,770
64,332
380
490
70,972

$

$

(5,770) $
(3,451)
(380)
(385)
(9,986) $

—
60,881
—
105
60,986

Amortization expense associated with identifiable intangible assets was $3.9 million, $0.8 million and $0.4 million for the years
ended December 31, 2020, 2019 and 2018, respectively. Annual estimated total amortization expense is $5.7 million, $6.9 million, $7.9
million, $6.7 million and $5.7 million for 2021 through 2025.

78

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

8. Capitalized Software, Furniture, Equipment and Leasehold Improvements

Capitalized software development costs, furniture, equipment and leasehold improvements, net of accumulated depreciation and

amortization, are comprised of the following:

Software development costs
Computer hardware and related software
Office hardware
Furniture and fixtures
Leasehold improvements

Accumulated depreciation and amortization

Total

As of December 31,

2020

2019

(In thousands)

$

$

151,139
52,696
8,782
7,078
29,064
248,759
(163,555)
85,204

$

$

119,911
48,379
5,725
5,000
27,966
206,981
(135,186)
71,795

During the years ended December 31, 2020 and 2019, software development costs totaling $30.6 million and $22.4 million,
respectively, were capitalized. Non-capitalized software costs and routine maintenance costs are expensed as incurred and are included
in employee compensation and benefits and professional and consulting fees in the Consolidated Statements of Operations.

9. Income Taxes

The provision for income taxes consists of the following:

Current:

Federal
State and local
Foreign

Total current provision

Deferred:

Federal
State and local
Foreign

Total deferred provision

Provision for income taxes

2020

Year Ended December 31,
2019
(In thousands)

2018

$

$

30,215
19,130
15,538
64,883

7,474
1,439
1,186
10,099
74,982

$

$

28,928
7,686
13,234
49,848

2,579
403
(308)
2,674
52,522

$

$

31,617
5,928
8,862
46,407

(1,416)
(272)
515
(1,173)
45,234

Pre-tax income from U.S. operations was $288.3 million, $190.4 million and $168.5 million for the years ended December 31,
2020, 2019 and 2018, respectively. Pre-tax income from foreign operations was $86.1 million, $67.0 million and $49.6 million for the
years ended December 31, 2020, 2019 and 2018, respectively.

79

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The difference between the Company’s reported provision for income taxes and the U.S. federal statutory rate of 21% is as follows:

2020

Year Ended December 31,
2019

2018

U.S. federal tax at statutory rate
State and local taxes - net of federal benefit
Credits and deductions related to research activities
Foreign rate differential benefit
Excess tax benefit from stock-based compensation
Other, net

Provision for income taxes

21.0 %
4.4
(0.3)
(0.4)
(5.4)
0.7
20.0 %

21.0 %
2.5
(0.3)
(0.5)
(3.5)
1.2
20.4 %

The following is a summary of the Company’s net deferred tax assets:

Deferred tax assets:

Stock compensation expense
Operating lease liabilities
Other

Total deferred tax assets

Valuation allowance

Net deferred tax assets

Deferred tax liabilities:

Depreciation and amortization
Capitalized software development costs
Goodwill and intangible assets
Operating lease right-of-use assets

Deferred tax (liability) asset, net

As of December 31,

2020

2019

(In thousands)

$

$

3,682
19,339
1,968
24,989
—
24,989

(9,729)
(7,828)
(2,852)
(15,600)
(11,020)

$

$

21.0 %
2.0
(0.3)
(0.5)
(2.1)
0.6
20.7 %

4,926
20,227
892
26,045
—
26,045

(4,085)
(5,306)
(1,120)
(16,515)
(981)

The Company or one of its subsidiaries files U.S. federal, state and foreign income tax returns. The Company is currently under
a New York State income tax examination for tax years 2010 through 2017 and a New York City income tax examination for the tax
years 2016 through 2018. At this time, the Company cannot estimate when the examinations will conclude or the impact such
examinations will have on the Company’s Consolidated Financial Statements, if any. Generally, other than New York City and State,
the Company is no longer subject to tax examinations by tax authorities for years prior to 2017.

80

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

A reconciliation of the unrecognized tax benefits is as follows:

Balance at beginning of year

Additions attributable to state and local tax apportionment

Balance at end of year

$

$

2020

Year Ended December 31,
2019
(In thousands)
4,718
$
2,113
6,831

$

$

$

6,831
9,486
16,317

2018

2,650
2,068
4,718

As of December 31, 2020, the Company recorded $16.3 million of unrecognized tax benefits which, if recognized, would affect
the Company’s effective tax rate. Due to the uncertainty related to the timing and potential outcome of audits, the Company cannot
reasonably estimate the amount of the unrecognized tax benefit that could be adjusted in the next 12 months. During the years ended
December 31, 2020, 2019 and 2018, the Company recognized $3.7 million, $0.6 million and $0.4 million, respectively, in penalties and
interest. The Company had $4.9 million and $1.2 million accrued for the payment of interest and penalties at December 31, 2020 and
2019, respectively.

10. Stockholders’ Equity

Common Stock

As of December 31, 2020 and 2019, the Company had 110,000,000 authorized shares of voting common stock and 10,000,000
authorized shares of non-voting common stock. Voting common stock entitles the holder to one vote per share of common stock held.

The following is a summary of the change in the Company’s outstanding shares of voting common stock:

2020

Year Ended December 31,
2019
(In thousands)

2018

Outstanding shares of voting common stock at the beginning of year

Exercise of stock options
Issuance of restricted stock, net of cancellations
Shares withheld for withholding tax payments
Treasury shares used for acquisition
Repurchases

Outstanding shares of voting common stock at the end of year

37,936
177
56
(125)
—
(39)
38,005

37,640
147
161
(98)
146
(60)
37,936

37,621
121
67
(45)
—
(124)
37,640

In September 2017, the Board of Directors authorized a fifteen-month share repurchase program for up to $100.0 million that
commenced in October 2017. The expiration date of this program was subsequently extended to March 31, 2019. In January 2019, the
Board of Directors authorized a new two-year share repurchase program for up to $100.0 million, which commenced in April 2019 and
expires in March 2021. In January 2021, the Board of Directors authorized a new share repurchase program for up to $100 million. The
Company expects repurchases under the new program to commence in April 2021 following the expiration of the current plan. Shares
repurchased under each program will be held in treasury for future use.

Dividends

During 2020, 2019 and 2018, the Company paid quarterly cash dividends of $0.60 per share, $0.51 per share and $0.42 per share,
respectively. Any future declaration and payment of dividends will be at the sole discretion of the Company’s Board of Directors. The
Board of Directors may take into account such matters as general business conditions, the Company’s financial results, capital
requirements, contractual obligations, legal, and regulatory restrictions on the payment of dividends to the Company’s stockholders or
by the Company’s subsidiaries to their respective parent entities, and any such other factors as the Board of Directors may deem relevant.

81

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

11. Stock-Based Compensation Plans

The Company maintains stock incentive plans which provide for the grant of stock options, stock appreciation rights, restricted
stock, restricted stock units, performance shares, performance units, or other stock-based awards as incentives and rewards to encourage
employees, consultants and non-employee directors to participate in the long-term success of the Company. As of December 31, 2020,
there were 2,531,199 shares available for grant under the stock incentive plans.

Total stock-based compensation expense was as follows:

Employees:

Restricted stock and performance shares
Stock options

Non-employee directors:
Restricted stock

Total stock-based compensation

2020

Year Ended December 31,
2019
(In thousands)

2018

$

$

21,310
3,100
24,410

1,203
25,613

$

$

20,182
4,032
24,214

1,080
25,294

$

$

12,559
2,193
14,752

1,098
15,850

The Company records stock-based compensation expense for employees in employee compensation and benefits and for non-

employee directors in general and administrative expenses in the Consolidated Statements of Operations.

Stock Options

The exercise price of each option granted is equal to the market price of the Company’s common stock on the date of grant.
Generally, option grants have provided for vesting over a three or five-year period. Options generally expire in six or ten years from the
date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The
determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the
Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables, including the expected
stock price volatility over the term of the awards, the risk-free interest rate, the expected dividend yield rate and the expected term.
Expected volatilities are based on historical volatility of the Company’s stock. The risk-free interest rate is based on U.S. Treasury
securities with a maturity value approximating the expected term of the option. The dividend yield rate is based on the expected annual
dividends to be paid divided by the expected stock price. The expected term represents the period of time that options granted are
expected to be outstanding based on actual and projected employee stock option exercise behavior.

The weighted-average fair value for options granted during 2020, 2019 and 2018 was $91.43, $58.37 and $56.11, respectively.
The following table represents the assumptions used for the Black-Scholes option-pricing model to determine the per share weighted-
average fair value for options granted, excluding the two awards discussed below:

Expected life (years)
Risk-free interest rate
Expected volatility
Expected dividend yield

2020

Year Ended December 31,
2019

2018

5.0
1.6%
26.8%
0.6%

5.0
2.6%
25.9%
0.8%

5.0
2.2%
26.9%
0.8%

82

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In addition to the option grants above, 76,868 stock options were granted to the Company’s President and Chief Operating Officer
in January 2019 with an aggregate grant date fair value of $2.9 million as determined by an independent third party using a Monte Carlo
simulation model. The exercise price is $272.88 for 35,679 of the stock options and $294.71 for the remaining 41,189 stock options,
which is equal to 125% and 135%, respectively, of the fair market value of the Company’s common stock on the grant date. Subject to
the grantee’s continued service with the Company, the options will vest and become exercisable on January 22, 2024. The options expire
on July 22, 2024. Key assumptions used for the Monte Carlo model included a risk-free interest rate of 2.6%, volatility of 25.8% and a
dividend yield of 0.8%.

In November 2018, 148,524 stock options were granted to the Company’s Chief Executive Officer with a grant date fair value of
$5.5 million as determined by an independent third party using a Monte Carlo simulation model. The exercise price is $257.78 for
69,113 of the stock options and $278.40 for the remaining 79,411 stock options, which is equal to 125% and 135%, respectively, of the
fair market value of the Company’s stock on the grant date. Subject to the grantee’s continued service with the Company, the options
will vest and become exercisable on November 8, 2023. The options expire on May 8, 2024. Key assumptions used for the Monte Carlo
model included a risk-free interest rate of 3.1%, volatility of 25.9% and a dividend yield of 0.8%.

The following table reports stock option activity during the three years ended December 31, 2020 and the intrinsic value as of

December 31, 2020:

Number of
Shares

Weighted-
Average
Exercise
Price ($)

Remaining
Contractual
Term

Intrinsic Value
($)
(In thousands)

Outstanding at December 31, 2017
Granted
Canceled
Exercised
Outstanding at December 31, 2018
Granted
Canceled
Exercised
Outstanding at December 31, 2019
Granted
Canceled
Exercised
Outstanding at December 31, 2020

Exercisable at December 31, 2020

529,611
168,217
(1,676)
(120,588)
575,564
82,474
(548)
(106,899)
550,591
13,900
(218)
(176,901)
387,372

99,415

67.60
261.19
142.69
24.66
132.93
279.57
198.67
28.24
175.16
368.10
307.52
84.07
223.60

137.78

2.8

1.7

76,709
134,401

43,025

The intrinsic value is the amount by which the closing price of the Company’s common stock on December 31, 2020 of $570.56
or the price on the day of exercise exceeds the exercise price of the stock options multiplied by the number of shares. As of December 31,
2020, there was $5.9 million of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be
recognized over a weighted-average period of 2.4 years.

83

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Restricted Stock and Performance Shares

Restricted stock generally vests over a three or five-year period. Compensation expense is measured at the grant date and

recognized ratably over the vesting period.

Prior to 2020, performance shares were generally granted with a performance period of one year, whereby each performance share
award was earned or forfeited based on the level of achievement by the Company of pre-tax operating income, as defined in the year
following the grant. The pay-out ranged from zero to 150% of the performance share award. For each performance share earned, a
participant was awarded an equal number of shares of restricted stock. Subject to the grantee’s continued service, any restricted stock
awarded to a participant vested in two equal installments on each of the second and third anniversaries of the date of grant of the
applicable performance share award. Compensation expense for one-year performance shares was measured at the grant date and
recognized on a graded basis over the vesting period.

The following table reports performance share activity for the one-year performance awards for the two years ended December 31,

2019:

Performance year:
Target share pay-out
Actual share pay-out (paid in following year)
Weighted average fair value per share on grant date

2019

2018

16,716
19,401
223.81

$

10,479
10,479
202.04

$

Beginning in 2020, performance shares were granted with a three-year performance period, whereby each performance share
award will be earned or forfeited based on the level of achievement by the Company of certain operating metrics over the three-year
period following the grant. The pay-out will range from zero to 150% of the performance share award. For each performance share
earned, a participant is awarded an equal number of shares of restricted stock. Subject to the grantee’s continued service, any restricted
stock awarded to a participant will vest on the three year anniversary of the grant date. Compensation expense for the three-year
performance shares is measured at the grant date with performance target achievement assessed at the end of each reporting period. The
grant date value of the number of shares deemed probable to vest is recognized ratably over the vesting period. A total of 13,295
performance shares were awarded in January 2020 under the three-year program with a grant date fair value of $368.10. As of December
31, 2020, 15,319 shares have been deemed probable to vest.

In addition to the grants above, 18,914 performance shares were granted to the Company’s President and Chief Operating Officer
in January 2019 with an aggregate fair value of $2.9 million as determined by an independent third party using a Monte Carlo simulation
model. The performance share award provides that the number of shares earned will be based on the Company’s achievement of certain
share price levels during the five-year performance period. The performance level is $272.88 for 8,969 of the performance shares and
$294.71 for the remaining 9,945 performance shares, which is equal to 125% and 135%, respectively, of the fair market value of the
Company’s common stock on the grant date. Each of the performance levels have been achieved. Subject to the grantee’s continued
service with the Company, earned shares will vest on January 22, 2024. Key assumptions used for the Monte Carlo simulation included
a risk-free interest rate of 2.6%, volatility of 25.9% and a dividend yield of 0.8%.

In November 2018, 37,742 performance shares were granted to the Company’s Chief Executive Officer with a grant date fair
value of $5.5 million as determined by an independent third party using a Monte Carlo simulation model. The performance share award
provides that the number of shares earned will be based on the Company’s achievement of certain share price levels during the five-year
performance period. The performance level is $257.78 for 17,942 of the performance shares and $278.40 for the remaining 19,800
performance shares, which is equal to 125% and 135%, respectively, of the fair market value of the Company’s stock on the grant date.
Each of the performance levels have been achieved. Subject to the grantee’s continued service with the Company, earned shares will
vest on November 8, 2023. Key assumptions used for the Monte Carlo model included a risk-free interest rate of 3.1%, volatility of
26.1% and a dividend yield of 0.8%.

84

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following table reports restricted stock and performance share activity during the three years ended December 31, 2020:

Outstanding at December 31, 2017
Granted
Performance share pay-out
Canceled
Vested

Outstanding at December 31, 2018

Granted
Performance share pay-out
Canceled
Vested
Outstanding at December 31, 2019
Granted
Performance share pay-out
Canceled
Vested

Outstanding at December 31, 2020

Number of
Restricted Shares

Weighted-Average
Grant Date Fair
Value

319,599
59,179
8,094
(4,046)
(110,956)
271,870
118,632
87,163
(2,321)
(129,312)
346,032
38,907
19,401
(3,480)
(170,213)
230,647

$

$

$

$

88.77

112.47

154.27

224.63

As of December 31, 2020, there was $27.0 million of total unrecognized compensation expense related to non-vested restricted

stock and performance shares. That cost is expected to be recognized over a weighted-average period of 1.5 years.

Employee Stock Purchase Plan

The Company offers a non-qualified employee stock purchase plan for non-executive employees. Under the plan, participants are
granted the right to purchase shares of common stock based on the fair market value on the last day of the six-month offering period.
On the purchase date, the Company grants to the participants a number of shares of common stock equal to 20% of the aggregate shares
purchased by the participant. These matching shares vest over a one-year period. The Company issued 729, 617 and 989 matching shares
in connection with the plan for the years ended December 31, 2020, 2019, and 2018, respectively.

12. Earnings Per Share

The following table sets forth basic and diluted weighted average shares outstanding used to compute earnings per share:

Year Ended December 31,
2020
2018
2019
(In thousands, except per share amounts)

Basic weighted average shares outstanding
Dilutive effect of stock options and restricted stock
Diluted weighted average shares outstanding

37,359
785
38,144

37,083
873
37,956

Basic earnings per share
Diluted earnings per share

$
$

8.01
7.85

$
$

5.53
5.40

$
$

36,958
897
37,855

4.68
4.57

85

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Stock options and restricted stock totaling 21,127 shares, 146,822 shares and 83,718 shares for the years ended December 31,
2020, 2019 and 2018, respectively, were excluded from the computation of diluted earnings per share because their effect would have
been antidilutive. The computation of diluted shares can vary among periods due, in part, to the change in the average price of the
Company’s common stock.

13. Credit Agreements

Revolving Credit Agreement

In October 2015, the Company entered into a two-year amended and restated credit agreement (the “Prior Credit Agreement”)
that provided for revolving loans and letters of credit up to an aggregate of $100.0 million. The maturity date of the Prior Credit
Agreement was subsequently extended to November 2020. On August 19, 2020, the Company amended the Prior Credit Agreement to,
among other things, (i) permit investments of up to $500 million in MarketAxess Corporation and (ii) increase the aggregate
commitments of the lender under the Credit Agreement from $100 million to $450 million. The Prior Credit Agreement matured on
November 13, 2020, when the Company entered into a new one-year credit agreement. Borrowings under the Prior Credit Agreement
bore interest at a rate per annum equal to the base rate or adjusted LIBOR plus an applicable margin that varied with the Company’s
consolidated total leverage ratio.

In November 2020, the Company entered into a credit agreement (the “Credit Agreement”) with a syndicate of lenders and
JPMorgan Chase Bank, N.A., as administrative agent, that provides aggregate commitments totaling $500 million, consisting of a
revolving credit facility and a $5 million letter of credit sub-limit for standby letters of credit. The Credit Agreement replaced the Prior
Credit Agreement and will mature on November 12, 2021, with the Company’s option to request up to two additional 364-day extensions
at the discretion of each lender and subject to customary conditions. Subject to satisfaction of certain specified conditions, the Company
is permitted to upsize the Credit Agreement by up to $250 million in total. As of December 31, 2020, the Company had $1.0 million in
letters of credit outstanding and $499.0 million in available borrowing capacity under the Credit Agreement.

Borrowings under the Credit Agreement will bear interest at a rate per annum equal to the base rate or adjusted LIBOR plus an
applicable margin that varies with the Company’s consolidated total leverage ratio. The Credit Agreement requires that the Company
satisfy certain covenants, which include leverage ratios and minimum earnings before interest, tax, and depreciation and amortization
(“EBITDA”) requirements. The Company was in compliance with all applicable covenants at December 31, 2020. The Company
incurred an aggregate of $0.8 million of interest expense on borrowings under the Credit Agreement and the Prior Credit Agreement for
the year ended December 31, 2020.

Collateralized Agreement

In connection with its self-clearing operations, one of the Company’s broker-dealer subsidiaries entered into an agreement (the
“Collateralized Agreement”) with its settlement bank to provide loans to the subsidiary in amounts up to an aggregate of $200.0 million
on an uncommitted basis. Borrowings under the Collateralized Agreement are collateralized by securities pledged by the Company’s
broker-dealer subsidiary to the settlement bank, subject to applicable haircuts and concentration limits. Borrowings under the
Collateralized Agreement will bear interest at a rate per annum equal to the Federal Funds Rate plus 1.00%. The Company incurred $0.1
million of interest expense on borrowings under the Collateralized Agreement during the year ended December 31, 2020. As of
December 31, 2020, the Company had no borrowings outstanding and $200.0 million in available borrowing capacity under the
Collateralized Agreement.

86

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

14. Leases

The Company has operating leases for corporate offices with initial lease terms ranging from one-year to 15 years. Certain leases
contain options to extend the initial term at the Company’s discretion. The Company accounts for the option to extend when it is
reasonably certain of being exercised. The Company’s lease agreements do not contain any material residual value guarantees,
restrictions or covenants.

The following table presents the components of occupancy expense for the years ended December 31, 2020 and 2019:

Lease cost:

Classification

2020

2019

Operating lease cost
Operating lease cost for subleased/assigned properties
Variable lease costs
Sublease income for subleased/assigned properties
Net lease cost

Occupancy
Other, net
Occupancy
Other, net

$

$

$

(In thousands)
13,455
2,404
26
(2,420)
13,465

$

10,875
2,422
169
(2,422)
11,044

The Company determines whether an arrangement is, or includes, a lease at contract inception. Operating lease right-of-use assets
and liabilities are recognized at commencement date and are initially measured based on the present value of lease payments over the
defined lease term. As the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on
the information available at the adoption date in determining the present value of lease payments.

The weighted average remaining lease term and weighted average discount rate are as follows:

Lease Term and Discount Rate

Weighted average remaining lease term (in years)
Weighted average discount rate

As of December 31,

2020

2019

12.3

5.9 %

13.3

5.9 %

The following table presents the maturity of lease liabilities as of December 31, 2020:

(In thousands)

2021
2022
2023
2024
2025
2026 and thereafter
Total lease payments
Less: interest
Present value of lease liabilities

$

$

12,131
10,516
10,270
10,937
10,937
79,003
133,794
40,182
93,612

The Company has entered into agreements to sublease or assign the Company’s lease obligations on two properties to third parties
and is contingently liable should the third parties default on future lease obligations through the lease termination dates of February
2022 and May 2022. The aggregate amount of the future lease obligations under these arrangements is $2.1 million as of December 31,
2020.

87

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

15. Commitments and Contingencies

Legal

In the normal course of business, the Company and its subsidiaries included in the consolidated financial statements may be
involved in various lawsuits, proceedings and regulatory examinations. The Company assesses its liabilities and contingencies in
connection with outstanding legal proceedings, if any, utilizing the latest information available. For matters where it is probable that the
Company will incur a material loss and the amount can be reasonably estimated, the Company would establish an accrual for the loss.
Once established, the accrual would be adjusted to reflect any relevant developments. When a loss contingency is not both probable and
estimable, the Company does not establish an accrual.

Based on currently available information, the outcome of the Company’s outstanding matters is not expected to have a material
adverse impact on the Company’s financial position. It is not presently possible to determine the ultimate exposure to these matters and
there is no assurance that the resolution of the outstanding matters will not significantly exceed any reserves accrued by the Company.

Other

The Company, through certain of its subsidiaries, executes bond transactions between its institutional investor and broker-dealer
clients on a matched principal basis by serving as counterparty to both the buyer and the seller in trades. In August 2020, one of the
Company’s U.S. broker-dealer subsidiaries converted to a self-clearing model for the settlement of such transactions. The Company’s
other U.S. and U.K subsidiaries continue to settle their transactions through third-party clearing brokers. Settlement typically occurs
within one to two trading days after the trade date. Cash settlement of the transaction occurs upon receipt or delivery of the underlying
instrument that was traded. Under both the self-clearing and the third-party clearing broker models, the Company is exposed to credit
risk in the event a counterparty does not fulfill its obligation to complete a transaction or if there is a miscommunication or other error
in executing a matched principal transaction. Pursuant to the terms of the securities clearing agreements, each third-party clearing broker
has the right to charge the Company for any losses they suffer resulting from a counterparty’s failure on any of the Company’s trades.
The Company did not record any liabilities or losses with regard to counterparty failures for the three years ended December 31, 2020.

In the normal course of business, the Company enters into contracts that contain a variety of representations, warranties and
general indemnifications. The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims
that may be made against the Company that have not yet occurred. However, based on experience, the Company expects the risk of loss
to be remote.

16. Segment and Geographic Information

The Company operates an electronic multi-party platform for the trading of fixed-income securities and provides related data,
analytics, compliance tools and post-trade services. The Company’s operations constitute a single business segment because of the
highly integrated nature of these products and services, of the financial markets in which the Company competes and of the Company’s
worldwide business activities. The Company believes that results by geographic region or client sector are not necessarily meaningful
in understanding its business.

For the years ended December 31, 2020, 2019 and 2018, the U.K. was the only individual foreign country in which the Company
had a subsidiary that accounted for 10% or more of the total revenues or total long-lived assets. Revenues and long-lived assets are
attributed to geographic area based on the location of the particular subsidiary. Long-lived assets are defined as furniture, equipment,
leasehold improvements and capitalized software. Revenues for the three years ended December 31, 2020, 2019 and 2018 and long-
lived assets as of December 31, 2020 and 2019 were as follows:

Revenues

Americas
Europe
Asia

Total

2020

Year Ended December 31,
2019
(In thousands)

2018

583,164
89,751
16,210
689,125

$

$

427,276
74,511
9,565
511,352

$

$

369,324
59,943
6,298
435,565

$

$

88

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Long-lived assets, as defined

Americas
Europe
Asia

Total

As of December 31,

2020

2019

(In thousands)

$

$

68,707
16,491
6
85,204

$

$

62,376
9,410
9
71,795

17. Retirement and Deferred Compensation Plans

The Company, through its U.S. and U.K. subsidiaries, offers its employees the opportunity to invest in defined contribution plans.
For the years ended December 31, 2020, 2019 and 2018, the Company contributed $4.0 million, $3.3 million and $2.6 million,
respectively, to the plans.

The Company offers a non-qualified deferred cash incentive plan to certain officers and other employees. Under the plan, eligible
employees may defer up to 100% of their annual cash incentive pay. The Company has elected to fund its deferred compensation
obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of insolvency but such assets are not available
for general corporate purposes. Assets held in the rabbi trust are invested in mutual funds, as selected by the participants, which are
designated as trading securities and carried at fair value. As of December 31, 2020 and 2019, the fair value of the mutual fund investments
and deferred compensation obligations were $8.9 million and $6.2 million, respectively. Changes in the fair value of securities held in
the rabbi trust and offsetting increases or decreases in the deferred compensation obligation are recognized in other, net in the Company’s
Consolidated Statements of Operations.

18. Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents together with restricted or segregated cash as reported
within the Consolidated Statements of Financial Condition to the sum of the same such amounts shown in the Consolidated Statements
of Cash Flows:

Statement of Financial Condition Location December 31, 2020 December 31, 2019

Cash and cash equivalents
Cash segregated for regulatory
purposes
Deposits with clearing organizations
and broker-dealers
Other deposits
Total

19. Parent Company Information

Cash and cash equivalents

Cash segregated under federal regulations
Receivables from broker-dealers, clearing
organizations and customers
Prepaid expenses and other assets

$

$

(In thousands)
460,858 $

50,059

97,043
90
608,050 $

270,124

—

—
4,129
274,253

The following tables present Parent Company–only financial information and should be read in conjunction with the consolidated

financial statements of the Company.

89

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

MarketAxess Holdings Inc.
(Parent Company Only)
Condensed Statements of Financial Condition

As of

December 31, 2020

December 31, 2019

(In thousands)

ASSETS

Cash and cash equivalents
Investments, at fair value
Accounts receivable
Receivable from subsidiaries
Intangible assets, net of accumulated amortization
Furniture, equipment, leasehold improvements and capitalized
software, net of accumulated depreciation and amortization

Operating lease right-of-use assets
Investments in subsidiaries
Prepaid expenses and other assets
Income and other tax receivable

Total assets

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Accrued employee compensation
Income and other tax liabilities
Accounts payable, accrued expenses and other liabilities
Operating lease liabilities

Total liabilities

Stockholders' equity
Preferred stock
Series A Preferred Stock
Common stock voting
Common stock non-voting
Additional paid-in capital
Treasury stock
Retained earnings
Accumulated other comprehensive loss
Total stockholders' equity
Total liabilities and stockholders' equity

$

$

$

$

55,747
4,811
178
41,986
27

23,518
64,460
853,626
4,591
9,028
1,057,972

10,241
3,457
9,341
79,872
102,911

—
—
123
—
329,742
(169,523)
799,369
(4,650)
955,061
1,057,972

$

$

$

$

48,241
141,318
63
5,997
30

25,247
68,559
570,145
6,978
3,219
869,797

6,543
—
9,254
83,909
99,706

—
—
122
—
342,541
(153,388)
591,086
(10,270)
770,091
869,797

90

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

MarketAxess Holdings Inc.
(Parent Company Only)
Condensed Statements of Operations and Comprehensive Income

2020

Year Ended December 31,
2019
(In thousands)

2018

Dividends from subsidiary

$

30,000

$

165,000

$

130,000

Expenses

Employee compensation and benefits
Depreciation and amortization
Technology and communications
Professional and consulting fees
Occupancy
General and administrative

Total expenses

Operating (loss) income
Other income (expense)
Investment income
Interest expense
Other, net

Total other income

(Loss) income before income taxes and equity in undistributed
earnings of subsidiaries
Provision for income taxes

Income before equity in undistributed income of subsidiaries

Equity in undistributed income of subsidiaries
Net income
Other comprehensive income (loss), net
Comprehensive income

$

19,710
2,068
10
7,332
162
2,551
31,833
(1,833)

2,799
(805)
(318)
1,676

(157)
(23,444)
23,287
276,090
299,377
5,620
304,997

$

16,100
1,919
13
6,523
850
2,252
27,657
137,343

5,305
—
(1,344)
3,961

141,304
(9,442)
150,746
54,156
204,902
2,124
207,026

$

10,785
1,760
43
4,932
7,381
1,513
26,414
103,586

3,835
—
(711)
3,124

106,710
(7,350)
114,060
58,792
172,852
(2,168)
170,684

91

MARKETAXESS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

MarketAxess Holdings Inc.
(Parent Company Only)
Condensed Statements of Cash Flows

Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization
Amortization of operating lease right-of-use assets
Stock-based compensation expense
Deferred taxes
Equity in undistributed income of subsidiaries
Other
Changes in operating assets and liabilities:
(Increase) in accounts receivable
(Increase) decrease in receivable from subsidiaries
(Increase) decrease in prepaid expenses and other assets
(Increase) in mutual funds held in rabbi trust
Increase in accrued employee compensation
(Increase) in income and other tax receivable
Increase (decrease) in income and other tax liabilities
(Decrease) increase in accounts payable, accrued expenses and other liabilities
(Decrease) increase in operating lease liabilities

Net cash provided by operating activities
Cash flows from investing activities

Acquisition of business, net of cash and cash equivalents acquired
Available-for-sale investments

Proceeds from maturities and sales
Purchases

Purchases of furniture, equipment and leasehold improvements
Purchase of intangible asset

Net cash provided by (used in) investing activities
Cash flows from financing activities
Cash dividend on common stock
Exercise of stock options
Withholding tax payments on restricted stock vesting and stock option exercises
Repurchases of common stock
Proceeds from short-term borrowings
Repayments of short-term borrowings

Net cash (used in) financing activities
Effect of exchange rate changes on investments
Cash and cash equivalents including restricted cash

Net increase (decrease) for the period
Beginning of period

End of period
Supplemental cash flow information:

Cash paid for income taxes
Cash paid for interest

Non-cash investing and financing activity:
Exercise of stock options - cashless
Treasury stock used for acquisition of business

2020

Year Ended December 31,
2019
(In thousands)

2018

$

299,377

$

204,902

$

172,852

2,068
4,117
10,834
3,644
(276,090)
(671)

(115)
(25,049)
(1,085)
(1,328)
3,698
(1,240)
6,676
(442)
(4,055)
20,339

1,919
4,027
10,547
1,255
(54,156)
328

(4)
5,253
933
(1,183)
876
(3,219)
(2,612)
(2,039)
1,191
168,018

1,760
—
5,801
(2,515)
(58,792)
710

(14)
15,985
(782)
(470)
567
—
469
13,619
—
149,190

—

(102,320)

—

170,657
(32,865)
(337)
—
137,455

(90,566)
4,007
(42,418)
(16,135)
348,000
(348,000)
(145,112)
(5,176)

7,506
48,241
55,747

32,674
805

10,866
—

$

$

$

170,936
(160,827)
(1,424)
(30)
(93,665)

(76,231)
1,207
(25,820)
(17,256)
—
—
(118,100)
(3,852)

(47,599)
95,840
48,241

41,025
—

1,811
(48,830)

$

$

$

333,791
(336,533)
(24,786)
—
(27,528)

(62,432)
2,973
(8,043)
(25,171)
—
—
(92,673)
4,129

33,118
62,722
95,840

37,721
—

—
—

$

$

$

92

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Our management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our “disclosure
controls and procedures,” as that term is defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), as of December 31, 2020. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed
by MarketAxess in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission’s rules and forms, and to ensure that information is accumulated
and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.

As a result of the Pandemic, our global workforce rapidly shifted to a work-from-home environment beginning in mid-March
2020. We have concluded that the changes to the working environment as a result of this shift did not have a material effect on our
internal control over financial reporting during the fourth quarter.

There were no other changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f)
under the Exchange Act) during the quarter ended December 31, 2020 identified in connection with the evaluation thereof by our
management, including the Chief Executive Officer and Chief Financial Officer, that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

Management’s annual report on internal control over financial reporting and the report of our independent registered public

accounting firm appears in Part II, Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.

Item 9B. Other Information.

None.

93

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated herein by reference to the sections entitled “Proposal 1 — Election of
Directors,” “Corporate Governance and Board Matters,” and “Executive Officers” in our definitive Proxy Statement (the “Proxy
Statement”) for the Annual Meeting of Stockholders to be held in the second quarter of 2021. We intend to file the Proxy Statement
within 120 days after the end of our fiscal year (i.e., on or before April 30, 2021). Our Code of Conduct applicable to directors and all
employees, including senior financial officers, is available on our website at www.marketaxess.com. If we make any amendments to
our Code of Conduct that are required to be disclosed pursuant to the Exchange Act, we will make such disclosures on our website.

Item 11. Executive Compensation.

The information required by this item is incorporated herein by reference to the sections entitled “Compensation Discussion and
Analysis,” “Report of the Compensation and Talent Committee of the Board of Directors,” “Executive Compensation” and “Corporate
Governance and Board Matters – Directors’ compensation” in our Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this item with respect to the security ownership of certain beneficial owners and management is
incorporated herein by reference to the section entitled “Security Ownership of Certain Beneficial Owners and Management” in our
Proxy Statement.

Equity Compensation Plan Information

The following table provides certain information regarding common stock authorized for issuance under our incentive plans as of

December 31, 2020:

Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
(a)

Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(b)

Number of
Securities
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans (Excluding
Securities Reflected
in Column (a))
(c)

387,372

$

223.60

2,531,199

Plan Category
Equity compensation plans approved by
stockholders

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is incorporated herein by reference to the section entitled “Certain Relationships and Related

Party Transactions” in our Proxy Statement.

Item 14. Principal Accounting Fees and Services.

The information required by this item is incorporated herein by reference to the section entitled “Proposal 2 – Ratification of

Selection of Independent Registered Public Accounting Firm – Audit and other fees” in our Proxy Statement.

94

Item 15. Exhibits and Financial Statement Schedules.

(a) Financial Statements and Schedules

PART IV

The financial statements are set forth under Item 8 of this Annual Report on Form 10-K. Financial statement schedules have been

omitted since they are either not required, not applicable, or the information is otherwise included.

(b) Exhibit Listing

Number

2.1

Description
Unit Purchase Agreement, dated as of August 12, 2019, by and among MarketAxess Holdings Inc., LiquidityEdge LLC,
each of the Sellers identified therein, RF7 LLC (as the Sellers’ Representative) and David Rutter (solely for purposes of
Section 6.7 thereof) (incorporated by reference to Exhibit 2.1 to the registrant’s Quarterly Report on Form 10-Q dated
October 25, 2019)

2.1(a)

3.1(a)

3.1(b)

3.2(a)

3.2(b)

4.1

4.2(a)

4.2(b)

4.3

10.1

10.2(a)

10.2(b)

10.2(c)

Amendment No. 1 to Unit Purchase Agreement, dated as of November 1, 2019, by and between MarketAxess Holdings
Inc. and RF7 LLC (as the Sellers’ Representative) (incorporated by reference to Exhibit 2.1(a) to the registrant’s Annual
Report on Form 10-K for the year ended December 31, 2019)

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to Amendment No.2 to the
registrant’s Registration Statement on Form S-1 dated May 7, 2004 (Registration No. 333-112718))

Form of Certificate of Designation of Series A Preferred Stock of MarketAxess Holdings Inc. (incorporated by reference
to Exhibit 3.1 to the registrant’s Registration Statement on Form 8-A dated June 3, 2008)

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to Amendment No.2 to the registrant’s
Registration Statement on Form S-1 dated May 7, 2004 (Registration No. 333-112718))

Amendment No. 1 to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the registrant’s
Current Report on Form 8-K dated January 25, 2013)

Specimen Common Stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the registrant’s
Registration Statement on Form S-1 dated May 7, 2004 (Registration No. 333-112718))

See Exhibits 3.1 for provisions defining the rights of holders of common stock and non-voting common stock of the
registrant

See Exhibits 3.2 for provisions defining the rights of holders of common stock and non-voting common stock of the
registrant

Description of registrant’s securities (incorporated by reference to Exhibit 4.3 to the registrant’s Annual Report on Form
10-K for the year ended December 31, 2019)

MarketAxess Holdings Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the registrant’s
Registration Statement on Form S-8 filed on June 10, 2020)#

MarketAxess Holdings Inc. 2012 Incentive Plan as Amended and Restated Effective June 7, 2016 (incorporated by
reference to Appendix A to the registrant’s Proxy Statement for its Annual Meeting for Stockholders held on June 7,
2016, filed on April 25, 2016)#

Amendment Number One to the MarketAxess Holdings Inc. 2012 Incentive Plan as Amended and Restated Effective
June 7, 2016 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated April 21,
2017)#

Amendment to the MarketAxess Holdings Inc. 2012 Incentive Plan (Amended and Restated Effective June 7, 2016), as
amended (incorporated by reference to Appendix A to the registrant’s Proxy Statement for its Annual Meeting of
Stockholders held on June 7, 2018, filed April 25, 2018)#

95

Number

10.3

MarketAxess Holdings Inc. 2004 Annual Performance Incentive Plan (incorporated by reference to Exhibit 10.11 to
Amendment No. 2 to the registrant’s Registration Statement on Form S-1 dated May 7, 2004 (Registration No. 333-
112718))#

Description

10.4*

MarketAxess Holdings Inc. Employee Stock Purchase Plan#

10.5

10.6

Form of Indemnification Agreement for Directors (incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2017)#

Form of Restricted Stock Agreement for Employees other than Richard M. McVey pursuant to the MarketAxess
Holdings Inc. 2012 Incentive Plan (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form
8-K dated January 15, 2008)#

10.7(a)

Form of Restricted Stock Unit Agreement for executive officers other than Richard M. McVey pursuant to the
MarketAxess Holdings Inc. 2012 Incentive Plan (incorporated by reference to Exhibit 10.2 to the registrant’s Current
Report on Form 8-K dated January 22, 2016)#

10.7(b)

10.7(c)

Form of Restricted Stock Unit Agreement (annual vesting) for Christopher R. Concannon pursuant to the MarketAxess
Holdings Inc. 2012 Incentive Plan (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form
8-K dated January 4, 2019)#

Form of Restricted Stock Unit Agreement (cliff vesting) for Christopher R. Concannon pursuant to the MarketAxess
Holdings Inc. 2012 Incentive Plan (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form
8-K dated January 4, 2019)#

10.7(d)

Guidelines for Restricted Stock Units granted under the MarketAxess Holdings Inc. 2012 Incentive Plan (incorporated by
reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated January 19, 2011)#

10.8

10.9(a)

10.9(b)

10.9(c)

10.10(a)

10.10(b)

10.10(c)

Form of Performance Share Award Agreement for Christopher R. Concannon pursuant to the MarketAxess Holdings Inc.
2012 Incentive Plan (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K dated
January 4, 2019)#

Form of Incentive Stock Option Agreement for Employees other than Richard M. McVey pursuant to the MarketAxess
Holdings Inc. 2012 Incentive Plan (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form
8-K dated January 15, 2008)#

Form of Incentive Stock Option Agreement pursuant to the MarketAxess Holdings Inc. 2012 Incentive Plan (incorporated
by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K dated January 22, 2016)#

Form of Incentive Stock Option Agreement for Christopher R. Concannon pursuant to the MarketAxess Holdings Inc.
2012 Incentive Plan (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K dated
January 4, 2019)#

Employment Letter Agreement, dated as of January 15, 2015, by and between MarketAxess Holdings Inc. and Richard
M. McVey (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated January 15,
2015)#

Amendment to Richard M. McVey Employment Agreement, dated as of January 12, 2017, by and between MarketAxess
Holdings Inc. and Richard M. McVey (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on
Form 8-K dated January 6, 2017)#

Second Amendment to Richard M. McVey Employment Agreement, dated as of November 6, 2018, by and between
MarketAxess Holdings Inc. and Richard M. McVey (incorporated by reference to Exhibit 10.1 to the registrant’s Current
Report on Form 8-K dated November 6, 2018)#

96

Number
10.10(d)

10.10(e)

10.10(f)

10.10(g)

10.11(a)

10.11(b)

10.11(c)

10.12

10.13*

10.14*

Incentive Stock Option Agreement, dated as of November 8, 2018, by and between MarketAxess Holdings Inc. and
Richard M. McVey (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K dated
November 6, 2018)#

Description

Incentive Stock Option Agreement, dated as of November 8, 2018, by and between MarketAxess Holdings Inc. and
Richard M. McVey (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K dated
November 6, 2018)#

Performance Award Agreement, dated as of November 8, 2018, by and between MarketAxess Holdings Inc. and Richard
M. McVey (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K dated November 6,
2018)#

Performance Award Agreement, dated as of November 8, 2018, by and between MarketAxess Holdings Inc. and Richard
M. McVey (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K November 6,
2018)#

Contract of Employment, dated March 15, 2017, between MarketAxess Europe Limited and Christophe Roupie
(incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2017)#

Restricted Stock Agreement Pursuant to the MarketAxess Holdings Inc. 2012 Incentive Plan, dated as of April 1, 2017,
by and between MarketAxess Holdings, Inc. and Christophe Roupie (incorporated by reference to Exhibit 10.11(b) to the
registrant’s Annual Report on Form 10-K for the year ended December 31, 2019)#

Amendment, dated as of August 14, 2017, to the Restricted Stock Agreement, dated April 1, 2017, between MarketAxess
Holdings Inc. and Christophe Roupie (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2017)#

Employment Letter Agreement, dated as of January 7, 2019, by and between MarketAxess Holdings Inc. and Christopher
R. Concannon (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated January 4,
2019)#

Form of Restricted Stock Unit Agreement (Deferred) for U.S. based Executive Officers pursuant to the MarketAxess
Holdings Inc. 2020 Equity Incentive Plan#

Form of Restricted Stock Unit Agreement (Non-Deferred) for U.S. based Executive Officers pursuant to the MarketAxess
Holdings Inc. 2020 Equity Incentive Plan#

10.15*

Guidelines for Restricted Stock Units granted under the MarketAxess Holdings Inc. 2020 Equity Incentive Plan#

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

Form of Performance Stock Unit Agreement for U.S. based Executive Officers pursuant to the MarketAxess Holdings
Inc. 2020 Equity Incentive Plan#

Form of Incentive Stock Option Agreement U.S. based Executive Officers pursuant to the MarketAxess Holdings Inc.
2012 Incentive Plan#

Form of Restricted Stock Agreement for U.K. based Executive Officers pursuant to the MarketAxess Holdings Inc. 2020
Equity Incentive Plan#

Form of Restricted Stock Agreement (Performance) for U.K. based Executive Officers pursuant to the MarketAxess
Holdings Inc. 2020 Equity Incentive Plan#

Form of Restricted Stock Agreement for Directors pursuant to the MarketAxess Holdings Inc. 2020 Equity Incentive
Plan#

Form of Restricted Stock Unit Agreement for Directors pursuant to the MarketAxess Holdings Inc. 2020 Equity Incentive
Plan#

97

Number

10.22

10.23

10.24

10.25

10.26

Severance Protection Agreement, dated as of July 31, 2020, by and between MarketAxess and Antonio DeLise
(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated July 31, 2020)#

Description

Severance Protection Agreement, dated as of July 31, 2020, by and between MarketAxess and Scott Pintoff (incorporated
by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K dated July 31, 2020)#

Severance Protection Agreement, dated as of July 31, 2020, by and between MarketAxess and Kevin McPherson
(incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K dated July 31, 2020)#

Severance Protection Agreement, dated as of July 31, 2020, by and between MarketAxess and Nick Themelis
(incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K dated July 31, 2020)#

MarketAxess Europe Limited Severance Protection Agreement, dated as of July 31, 2020, by and between MarketAxess
Europe and Christophe Roupie (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K
dated July 31, 2020)#

10.27*

Form of Amendment of Severance Protection Agreement for U.S. based Executive Officers#

10.28*

Form of Amendment of Severance Protection Agreement for U.K. based Executive Officers#

10.29(a)

Amended and Restated Credit Agreement, dated as of October 30, 2015, among MarketAxess Holdings Inc., a Delaware
corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by
reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated November 3, 2015)

10.29(b)

10.29(c)

10.29(d)

10.29(e)

10.29(f)

10.29(g)

Amended and Restated Guarantee Agreement, dated as of October 30, 2015, by and among MarketAxess Technologies
Inc., as initial guarantor, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit
10.2 to the registrant’s Current Report on Form 8-K dated November 3, 2015)

Amended and Restated Pledge and Security Agreement, dated as of October 30, 2015, by and between MarketAxess
Holdings Inc., a Delaware corporation, as borrower, MarketAxess Technologies Inc., as guarantor, and JPMorgan Chase
Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form
8-K dated November 3, 2015)

Omnibus Amendment, dated October 19, 2017, by and among MarketAxess Holdings Inc., the other loan parties party
hereto, the lenders party hereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the
registrant’s Current Report on Form 8-K dated October 18, 2017)

Second Amendment, dated October 14, 2019, to Amended and Restated Credit Agreement by and among MarketAxess
Holdings Inc., the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K dated
October 17, 2019)

Third Amendment, dated as of August 19, 2020, to Amended and Restated Credit Agreement by and among
MarketAxess Holdings., the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A. as
administrative agent (incorporated by reference to Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q dated
October 30, 2020)

Fourth Amendment, dated October 8, 2020, to Amended and Restated Credit Agreement by and among MarketAxess
Holdings Inc., the other loan parties party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A. as
administrative agent (incorporated by reference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q dated
October 30, 2020)

10.30

Credit Agreement, dated as of November 13, 2020, among MarketAxess Holdings Inc., a Delaware corporation, the
lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1
to the registrant’s Current Report on Form 8-K dated November 18, 2020)

21.1*

Subsidiaries of the Registrant

98

Number

Description

23.1*

Consent of PricewaterhouseCoopers LLP

31.1*

31.2*

32.1*

32.2*

Certification by Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

Certification by Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002

Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

104

The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 has been
formatted in Inline XBRL and is included in Exhibits 101.

* Filed herewith.

# Management contract or compensatory plan or arrangement.

99

Item 16. Form 10-K Summary

None.

100

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this

report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

MARKETAXESS HOLDINGS INC.

By:

/s/ RICHARD M. MCVEY
Richard M. McVey
Chief Executive Officer

Date: February 19, 2021

101

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on

behalf of the registrant and in the capacities and on the dates indicated:

Signature

Title(s)

Date

/s/ RICHARD M. MCVEY

Richard M. McVey

/s/ ANTONIO L. DELISE

Antonio L. DeLise

Chief Executive Officer and Chairman of the Board of Directors
(principal executive officer)

February 19, 2021

Chief Financial Officer (principal financial and accounting
officer)

February 19, 2021

/s/ CHRISTOPHER R. CONCANNON

Director, President and Chief Operating Officer

February 19, 2021

Christopher R. Concannon

/s/ NANCY ALTOBELLO

Nancy Altobello

/s/ STEVEN L. BEGLEITER

Steven L. Begleiter

/s/ STEPHEN P. CASPER

Stephen P. Casper

/s/ JANE CHWICK

Jane Chwick

/s/ WILLIAM CRUGER

William Cruger

/s/ KOURTNEY GIBSON

Kourtney Gibson

/s/ JUSTIN GMELICH

Justin Gmelich

/s/ RICHARD G. KETCHUM

Richard G. Ketchum

/s/ EMILY PORTNEY

Emily Portney

/s/ RICHARD PRAGER
Richard Prager

/s/ JOHN STEINHARDT
John Steinhardt

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

February 19, 2021

Director

Director

Director

Director

Director

Director

Director

Director

Director

Director

Director

102

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New York NY 10001 USA

T +1 212 813 6000

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