LSEG Acquires Minority Stake In Acadiasoft
- LSEG completes acquisition of circa 16% minority stake in AcadiaSoft
- LCH SwapAgent and AcadiaSoft sign heads of terms for an agreement to further streamline margin calculations and processing in the non-cleared derivatives market
- Combines LCH’s global reach and track record in risk management with AcadiaSoft’s expertise in non-cleared market infrastructure
- Improved operational efficiency for customers of both LCH SwapAgent and AcadiaSoft
London Stock Exchange Group (LSEG) today announced that it has acquired a minority circa 16% stake in AcadiaSoft. The terms of the transaction have not been disclosed.
Alongside LSEG’s investment, LCH SwapAgent and AcadiaSoft have signed a heads of terms for an agreement to deepen collaboration on new products aimed at automating and standardising the margin process for non-cleared derivatives. The proposed collaboration provides the opportunity for the two firms to work together to provide market participants with a simplified operational process for margin calculation. As part of the collaboration, LCH SwapAgent would provide its independently calculated collateral information to the AcadiaSoft Hub (“The Hub”) which would help customers using The Hub to improve processing efficiency and reduce margin disputes.
Daniel Maguire, Chief Executive Officer, LCH Group and Member of the Executive Committee, LSEG:
“The acquisition of a stake in AcadiaSoft underlines our strategy to expand into the non-cleared space, an area in which AcadiaSoft has considerable experience. The non-cleared margin rules continue to impact the dealer and buy-side community, and it is crucial that integrated services are available to support market participants in reducing risk while maximising their capital and operational efficiencies. LCH SwapAgent brings our expertise in managing risk, and operational resilience to the bilateral market and we are delighted to be collaborating with AcadiaSoft to foster further innovation in this market.”
Chris Walsh, Chief Executive Officer, AcadiaSoft:
“We welcome this investment and we’re excited to embark on this new opportunity to collaborate so we can bring more products to LCH SwapAgent and AcadiaSoft’s mutual customer base. We see our services as extremely complementary and look forward to continuing to bring standardisation and simplicity to the non-cleared market.”
LCH SwapAgent is a service for the non-cleared derivatives market. It is designed to simplify the processing, margining and settlement of trades without requiring novation to a central counterparty or a change to the underlying trade terms. The service went live processing cross-currency swaps in November 2017, and most recently handled its first Settled-To-Market trade. 15 dealers have signed up to LCH SwapAgent, including: Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, Nomura and RBS.
Virginies O’Shea, Aite Group research director, said:
Post-trade infrastructure investment continues. Another day, another deal. https://t.co/JUyQONKhmo
— Virginie O'Shea (@virginieoshea) June 27, 2018
Centrally cleared and settled transactions have been in continuously increasing demand.
LCH SwapAgent registered over 10,000 trades in 2021, a five fold increase.
Overall trading volumes across all products fell 8% from 2020.
Klimpel won Excellence in Human Clearing at Markets Media Group’s 2021 Women in Finance (U.S.) Awards.
Expansion to buy side increases multilateral netting opportunities for members.