Barclays First to Tap SunGard's OTC Post-Trade Utility

The new utility will enable derivatives brokers, including futures commission merchants (FCMs), to achieve greater efficiency, reduce operational risk and lower total cost of ownership by leveraging economies of scale in middle- and back-office processing and technology.

The utility's technology will be underpinned globally by current and future SunGard solutions — such as its global back-office processing system for listed and cleared OTC derivatives, covering more than 160 cleared derivatives markets in 38 countries — and the new solution will cover trade clearing, trade lifecycle management, margin processing, brokerage, reconciliation, data management and regulatory reporting.

Barclays will become the utility’s first customer. The British bank will migrate specific futures and OTC derivative clearing operations and technology processes to the utility, and a number of Barclays employees will transfer to SunGard.

“Barclays has always taken a proactive approach to managing its business and adapting to regulation," Tim Stack, head of agency derivatives services at Barclays, said in a statement. "By taking this leadership position with SunGard, we are able to provide our clients with a practical solution that keeps our products and services at the forefront of the industry. We are confident that this utility is a transformational change for the industry, and that it will help provide clear benefits to our clients, to Barclays and to the industry as a whole.”

The move comes as a Tabb Group study found challenging market conditions have reduced the number of CFTC-registered FCMs by 49 percent. The study also found that these ongoing structural changes and regulatory pressures are driving remaining FCMs to look to more efficient and cost-effective ways to manage their back office operations.