European settlement provider Euroclear is to buy 100% of Xtrakter, a provider of trade matching and market data services, from the International Capital Market Association (ICMA) for an undisclosed sum. Xtrakter owns TRAX, a trade matching and regulatory reporting system that also provides market and reference data.
The acquisition will allow Euroclear to offer pre-settlement services. According to the firm, one of the key client benefits will be the ability to automate the flow of trade information from matching through to settlement. By the end of 2009, trade data already input into the TRAX system will be processed straight through to settlement at Euroclear, which the firm said will eliminate trade matching duplication, thereby reducing settlement fails, costs and risks.
“By looking upstream to trade matching, we are continuing to increase efficiency and lower back-office costs for clients by streamlining processes and eliminating fragmentation,” said Ignace Combes, deputy CEO of Euroclear SA/NV, in a statement.
Euroclear also expects the addition of Xtrakter’s services to improve clients’ ability to meet their transaction reporting obligations. Regulatory authorities in key markets such as Belgium, France, the Netherlands and the United Kingdom have awarded MiFID-compliant approved reporting mechanism (ARM) status to one or both entities.
Kevin Milne, CEO of Xtrakter, added, “Being part of Euroclear will enable us to drive our matching, reporting and information services products into new areas, thereby helping to support our customers reduce further their operational cost of trading.”