The interdealer broker will be bolstering Traiana and other key wares of ICAP’s Post Trade Risk and Information (PTRI) division.
ICAP, an interdealer broker and post-trade IT vendor, is acquiring a regulatory reporting specialist, Abide Financial, in order to integrate Abide’s wares into ICAP’s Post Trade Risk and Information (PTRI) offerings, targeting the growing demand among trading firms for solutions to help them comply with multiple regulatory authorities, officials say.
ICAP’s investment arm for emerging FinTech companies, Euclid Opportunities let the transaction, following “a strategic investment in Abide in July 2015,” officials say. No amount was given for the transaction.
“The acquisition targets all firms caught by regulatory reporting regimes globally,” says Jenny Knott, CEO for ICAP’s PTRI division, in response to questions from FTF News. “The acquisition will be of benefit for both ICAP and Abide’s client base. By integrating Abide into ICAP’s PTRI business, clients will benefit from integrated regulatory reporting services to meet the needs of multiple regulatory regimes and jurisdictions,” Knott says.
Abide is known for serving as a reporting hub for European Market Infrastructure Regulation (EMIR) requirements, an Approved Reporting Mechanism (ARM) for MiFID and a Regulatory Reporting Mechanism for Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT), officials say. Abide is waiting for approval by the European Securities and Markets Authority (ESMA) to become a trade repository and is developing its MiFiD II offering. The five-year-old company has offices in London and Bristol.
ICAP, which brokers in the wholesale markets for interest rates, credit, commodities, FX, emerging markets and equity derivatives, also offers post-trade risk mitigation and information services. In addition, last year ICAP announced that is selling its global hybrid voice broking and associated information business to Tullett Prebon. The sale includes ICAP’s associated technology and broking platforms such as iSwap and Fusion and some of ICAP’s joint ventures and associate companies.
For the new acquisition, ICAP officials say they will integrating Abide’s regulatory reporting hub and venues with ICAP Traiana’s connectivity and ICAP’s PTRI Approved Publication Arrangement (APA) reporting service, officials say. The goal is to offer PTRI’s client base “a full spectrum of integrated reporting solutions for entities subject to regulatory regimes in Australia, Canada, Europe, Hong Kong, Singapore, U.K. and the U.S.,” officials add.
“Abide Financial’s product and technology development teams are already working closely with Traiana to ensure the clients receive a seamless, end-to-end regulatory reporting solution,” Knott tells FTF News. “The teams will be targeting appropriate clients to deliver the combined value in conjunction with the deployment of the MiFID II reporting solution. Clients are now in testing with Abide for the MiFID II service, and will be exposed to the combined architecture in due course.”
Abide will become a subsidiary of ICAP’s PTRI division, and Collin Coleman, Abide’s CEO, will report to Knott, officials say.
The acquisition is not likely to result in a decrease in staffing, says Collin Coleman, CEO and founder of Abide Financial.
“Abide Financial’s growth plan requires the business to target and acquire more of the very best people and Abide Financial has doubled its team over the past 11 months,” Coleman says. “The combination of capabilities across companies within the PTRI group does not lead to duplication, but the marriage of services to deliver more than the sum of the parts. Therefore, a decrease in staffing is not expected.”
In fact, the need for global regulatory reporting services “continues to grow as clients look to market structure providers such as ICAP and Abide to help them solve the demands that have been put on them by the tsunami of global regulation,” Coleman adds.
Abide is “one of a very small number of companies” that offers holistic regulatory reporting services, “which will become ever more critical as financial markets evolve,” says Michael Spencer, Group CEO at ICAP, in a statement. “This acquisition demonstrates how the team at Euclid works and how it will continue to operate as we transition to become NEX.”
Once ICAP completes its transaction with Tullett Prebon, the ICAP brand will be transferred to Tullett Prebon and “the remaining ‘NewCo’ business comprising of post-trade risk and information services and electronic markets will be renamed NEX Group plc,” ICAP officials say. “NEX Group plc will be headquartered in London and will employ 1,600 people in offices worldwide.”
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