A new 50/50 joint venture seeks to simplify life for OTC market participants by gathering trade processing and risk mitigation operations. Chicago’s derivatives market operator CME puts in its three optimization businesses – Traiana, TriOptima and Reset – while London-based information firm IHS Markit brings its MarkitSERV unit.
A press release Tuesday describes the three CME parts as providers of “a wide range of pre- and post-trade services with capital efficiencies across markets, delivering trade processing connectivity, credit controls, optimization and risk mitigation solutions”. Meanwhile, MarkitSERV is said to provide “end-to-end trade processing and workflow solutions that support all participants across the derivatives and FX markets, from post-trade notices of execution, trade confirmation and allocations to clearing and reporting”.
“As OTC derivatives markets become increasingly fragmented, market participants are seeking to more effectively manage their risk and optimize their balance sheets,” says CME Group’s CEO Terry Duffy in the release.
The deal should close in the summer, with IHS Markit paying equalisation of 113 million USD to CME, to enjoy an equal ownership stake in the new entity.