CME Group and IHS Markit to form post-trade services joint venture for OTC markets

CME Group, the most diverse derivatives marketplace, and IHS Markit, a world leader in critical information, analytics and solutions, announced that they have made a deal to combine their post-trade services into a new joint venture for OTC markets.

The new company will carry out trade processing and risk mitigation business. It will integrate CME Group’s optimization businesses – Traiana, TriOptima and Reset – and IHS Markit’s MarkitSERV.

This combination will offer clients enhanced platforms and services for global OTC markets across interest rate, FX, equity and credit asset classes. Market participants will profit by a more efficient front-to-back workflow with enhanced connectivity and improved trading certainty. In result, OTC market participants will be able to improve risk management and streamline post-trade operations.

“As OTC derivatives markets become increasingly fragmented, market participants are seeking to more effectively manage their risk and optimize their balance sheets,” said Terry Duffy, CME Group Chairman and Chief Executive Officer. “By combining the strengths of these diverse businesses into one organization, the joint venture will be better positioned to serve clients worldwide by driving innovation, developing valuable products and providing operational efficiencies.”

“As the trade processing ecosystem continues to evolve, we believe there is an opportunity to reduce operational complexity and deliver additional value to customers,” said Lance Uggla, IHS Markit Chairman and Chief Executive Officer. 

Traiana, TriOptima and Reset offer all kinds of pre- and post-trade services with capital efficiencies across markets, delivering trade processing connectivity, credit controls, optimization and risk mitigation solutions.

MarkitSERV provides end-to-end trade processing and workflow solutions that support all participants across the derivatives and FX markets, from post-trade notices of execution, trade confirmation and allocations to clearing and reporting.

The transaction is expected to close in summer 2021 subject to customary antitrust and regulatory approvals and other customary closing conditions. IHS Markit will make an equalization payment of $113 million to CME Group to achieve 50/50 ownership and shared control in the joint venture.