Mergers dominated financial technology news in the US this year with some major pairings. State Street bought Charles River, SS&C acquired Eze Software and then toyed with the idea of buying Fidessa, and NEX was sold to CME—all of these happening within months of each other. But it wasn’t all M&A. Here are the top US stories we covered in 2018.
Questions Raised on State Street and Charles River’s Boston Wedding: State Street offered $2.6 billion for Charles River Development in one of the biggest surprise acquisitions of the year. The deal was shocking many not just because State Street was buying one of the few remaining independent OMS providers, but because the valuation was so high.
The Next Domino: SS&C Buys Eze Software: Not even two weeks after the State Street/Charles River acquisition, SS&C said it was buying OMS provider Eze Software for $1.45 billion, further consolidating the market. SS&C seemed to be in a buying spree after its Eze purchase announcement. The company made an offer for Fidessa before deciding the price was too high.
Thomson Reuters, Blackstone Agree $20B Financial & Risk Unit Spin-Off: Thomson Reuters sold its Financial & Risk business to a consortium led by the Blackstone Group early in 2018. The deal created a new corporation called Refinitiv, offering financial content and technologies.
NEX CEO Sees Opportunity for Opportunities after CME Deal: The Chicago Mercantile Exchange (CME) made a $5.4 billion deal for London-based NEX Group. CME was looking to leverage NEX’s electronic-trading platforms, which include BrokerTec, a leader in US Treasurys trading and the foreign-exchange platform EBS.
Traders Urge Caution on Potential Bitcoin ETFs: Mergers were not the only big story in 2018. Increasing interest in crypto assets coming from institutional investors gave rise to the bitcoin exchange-traded fund. But traders are urging the market to slow down the pace as concerns around security, anti-money laundering and know-your-customer processes have not yet been solved.
Established Exchanges Eye Crypto Swaps, Futures: As interest in investing in crypto assets grows, even established exchanges are starting to offer new crypto products. ErisX, the digital arm of Eris Exchange, plans to launch a derivatives exchange and a clearing organization for crypto assets, while TruEx affiliate trueDigital said it will start its own crypto derivatives marketplace.
Custody Seen as Crypto’s Next Major Battleground: Institutional investors who want to play in the crypto world are demanding more features from it. One of the biggest concerns is the lack of institutional-grade custody services. Crypto exchanges have begun offering their own custody services and even major financial institutions—including banks that are already custodians for more traditional assets—are considering entering the space.
CAT Got Your Tongue?: An Inside Look at the Consolidated Audit Trail’s Sluggish Rollout: 2018 also saw the long-delayed start of the consolidated audit trail (CAT), a database conceived after the financial crisis to track financial transactions. The CAT had gone through years of fits and starts, notably in 2017 when it was originally supposed to launch, but finally found life this past November.
The founder and CEO of Imperative Execution looks at how trade execution is changing and what that means for the buy side.Subscribe to Weekly Wrap emails