In other FinTech news, Deutsche Börse & RegTek.Solutions are collaborating, Cinnober gets a patent, and Broadridge forms a partnership with UBS.
CME to Keep BrokerTec, EBS, Traiana & TriOptima Brands
The CME Group as expected has completed all the steps for the acquisition of NEX Group, first announced in March, but will discontinue the NEX branding while keeping the names for the mark1ets and “Optimisation” businesses such as BrokerTec, EBS, Traiana and TriOptima.
“The combined company will enable clients worldwide to trade futures, cash and over-the-counter (OTC) markets, optimize portfolios and analyze data to efficiently manage risk and capture opportunities,” according to a prepared statement from CME. “In addition, the combined company’s post-trade services expertise will strengthen its compression, reconciliation and processing businesses.”
The corporate headquarters will be in Chicago and London will serve as CME Group’s European headquarters, officials say.
Michael Spencer, the found and CEO of NEX, “has joined the CME Group Board of Directors and will remain with the combined company as a special adviser, working with key clients, regulators and officials in EMEA and Asia,” according to an official statement. “The acquisition is expected to be immediately accretive to adjusted cash earnings per share and creates a company with pro forma 2017 annual revenue of $4.3 billion. CME Group will begin integrating NEX business operations and anticipates run-rate cost synergies of $200 million annually by the end of 2021.”
CME Group will “strengthen and scale NEX businesses, while preserving their existing market structures,” officials say.
Deutsche Börse & RegTek.Solutions Launch Service
Deutsche Börse Group and RegTek.Solutions, a provider of regulatory reporting solutions, report the launch of a partnership meant to deliver a certified testing and pre-validation service for clients of Deutsche Börse’s regulatory reporting hub.
The new service addresses feedback from clients and regulators regarding “challenges with the quality and transparency of transaction reporting under the Markets in Financial Instruments [MiFID II] regulation,” the partners say in a statement, which notes that the new pre-validation platform will be available to over 2,300 executing entities that are using Deutsche Börse’s approved reporting service.
The partners expect that the platform, which will feature “enhanced testing and data quality remediation capabilities, as well as pre-submission validations,” will be available from the fourth quarter of this year.
Cinnober Secures U.S. Patent for Risk Assessment
Cinnober, a Stockholm, Sweden-based provider of exchange and clearing technology, reports that the U.S. Patent and Trademark Office has granted the company a key risk assessment patent. The patent application was originally filed in June 2011.
The patent describes “real-time risk assessments in a clearing system, including the calculation of margin requirements on accounts or groups of accounts triggered by events that affect the accounts as they occur, such as new trades or changes to market data,” the vendor says.
The patent also includes “netting of positions held in a group of accounts when calculating risk and carrying out several risk calculations in parallel using multiple risk algorithms,” per Cinnober.
The patent provides a method for clearinghouses to “minimize the discrepancy between the value of the collateral provided by a member as security and the highest probable loss that the portfolio may experience,” Cinnober says. “With real-time risk calculations, margin requests can be issued immediately when needed rather than waiting until the end of the day or for a scheduled run of calculations.”
Cinnober was “first to provide a real-time clearing system, a solution that today powers some of the world’s most important clearinghouses,” Cinnober CEO Peter K. Lenardos says in the statement.
Broadridge & UBS Americas Launch Partnership
Broadridge Financial Solutions, Inc., a fintech specialist vendor, and UBS, a Swiss multinational investment bank and financial services company founded and based in Switzerland, will form a “wealth management partnership” employing Broadridge’s wealth management industry platform.
UBS Wealth Management USA will be the partnership’s “anchor client” on the platform, the partners say in a statement.
The platform will “solve a key financial services challenge by creating a modern, industry-level wealth management best-in-class technology solution,” according to the partners, who add that, with the Broadridge platform, UBS Wealth Management USA will be able to “deploy an integrated and modern front-to-back office solution.”
Among its other qualities, the platform “digitizes enterprise-wide operations,” while “sharing the cost of adapting to ongoing technology innovation, regulatory and industry change, and cybersecurity requirements.”
The UBS Group maintains offices in 52 countries and employs approximately 61,000 people, with “about 34 percent of its employees working in the Americas, 34 percent in Switzerland, 18 percent in the rest of Europe, the Middle East and Africa and 14 percent in Asia Pacific,” according to the group’s statement.
Broadridge Financial Solutions, which employs more than “10,000 full-time associates in 18 countries,” provides an infrastructure that “underpins proxy voting services for over 50 percent of public companies and mutual funds globally, and processes on average more than US $5 trillion in fixed income and equity trades per day.”