In recent years, FICC loomed large as perhaps the premiere market for big broker dealers. You pretty much had to be a player  because that's where the revenue was--and of course the bragging rights.

The most critical market under the FICC umbrella remains the fixed income market. When Morgan Stanley decided it had to reassert itself as a sales and trading powerhouse, it made clear to the world that it was aiming to boost market share in fixed income by 2 percentage points. This will not be easy because a host of other broker dealers have been investing heavily to carve out more market share, which has proven to be good news for institutions.

The sell-side field is now loaded. And, as Greenwich Associates reports, these firms "are now competing aggressively for institutional trading business." With more dealers in the hunt for buy-side clients, "institutions have added new sell-side trading relationships and are spreading their trading volume among a broader group of dealers, all equipped with robust capabilities and all working hard to win business."

For institutions, these are no doubt "the best of times." Smaller dealers have been able to make a move. In 2010, the top five U.S. fixed-income dealers as a group saw their market share in institutional trading decline by about 2.8 percent. Meanwhile, dealers below the top five increased their collective market share by 3.3 percent. But the big boys still dominate--Barclays Capital, Deutsche Bank and J.P. Morgan each own 11.5 percent market share, while Goldman Sachs and Citi each own 10 percent of the market. Greenwich Associates suggests, however, that if the volume surge that drew in so many players continues to evaporate, some broker dealers may retrench. In addition, regulatory issues remain a wildcard.

For more:
- here's the release

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