Cinnober Expands Investment in Real-Time Clearing for Banks
Cinnober – The Board of Cinnober has decided to further develop its business area for sales of real-time clearing technology and services to large international banks, so-called client clearing. To focus fully on this venture, Cinnober will transfer the rights to this technology to a subsidiary, which will further commercialize the offering.
Based on Cinnober’s existing technology for exchanges and clearinghouses, the new subsidiary will provide banks and their customers with an immediate and complete view of risk exposure across different markets. Since the technology can handle all traded asset classes, as well as trades that take place both on and off an exchange, it enables more efficient use of capital and brings operational efficiencies. For the second consecutive year, the underlying technology was recently named as Post-Trade Initiative of the Year by the well-renowned Financial News.
“After analyzing the need for our solutions in real-time clearing, we are confident that the demand for improved post-trade technology among banks is substantial. For several reasons, focus in particular, now is the right time to form a separate company for this,” says Veronica Augustsson, CEO of Cinnober. “We introduced real-time clearing to the exchange world and have been the predominant supplier to the largest trading and clearinghouses over the past five years. This technology arouses great interest since it can also streamline many sluggish processes that exist at major international banks and brokerages.”
The board of the new subsidiary will consist of Veronica Augustsson and Thomas Bendixen, who are the CEO and General Counsel of the parent company respectively, and Board Member of the parent company Patrik Enblad, who is appointed Chairman of the new subsidiary.
“The new subsidiary will operate as a separate entity with its own employees and its first mission is to develop and refine the business plan,” says Patrik Enblad. “I look forward to contributing actively to the task of taking a world-leading technology – one that has already proven itself in the exchange technology business – to the banking industry. Much of the groundwork has been done, although some further development and customization may be needed. An important task now is to recruit a CEO with the ability to capture this opportunity and take this offering to the market.”
The European Commission decided in early 2015 to include Cinnober’s initial venture for real-time clearing for banks in a financing program with the ambition of promoting European innovation. Cinnober has received partial funding of the development of this technology and now assesses the potential for the offering as so great that the operations should be run by a separate company.
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IRS trading volumes have fragmented without an equivalence agreement.