Markets operator and provider of post trade risk mitigation and information services ICAP plc (LON:IAP) has announced that it has acquired Abide Financial, a global regulatory reporting specialist.
The acquisition shouldn’t come as too much of a surprise. ICAP had made a major investment in Abide Financial last fall, via Euclid Opportunities, its early stage funding program.
Abide will become a subsidiary of ICAP’s Post Trade Risk and Information (PTRI) division. Collin Coleman, Abide’s CEO, will report to Jenny Knott, CEO of PTRI. Following the acquisition, Abide will integrate its regulatory reporting hub and venues with Traiana’s connectivity and ICAP’s PTRI Approved Publication Arrangement (APA) reporting service providing PTRI’s client base with a full spectrum of integrated reporting solutions for entities subject to regulatory regimes in Australia, Canada, Europe, Hong Kong, Singapore, UK and the US.
Abide Financial acts as a reporting hub for EMIR, Approved Reporting Mechanism for MiFID and a Regulatory Reporting Mechanism for REMIT. Abide is currently awaiting ESMA’s approval to become a Trade Repository and is developing its MiFiD II offering.
Founded in the UK in 2011, Abide was created as a result of the founders’ desire for a better quality of transaction reporting service than was available. The company has offices in London and Bristol, from where the company will continue to operate.
Michael Spencer, Group Chief Executive Officer, ICAP said:
Since Abide first came to our attention, we knew it was a unique business which fitted perfectly with our strategy to serve our clients’ changing needs. They are one of a very small number of companies who offer holistic regulatory reporting services, which will become ever more critical as financial markets evolve. Abide is a company with big potential and ambitions, and by capitalising on ICAP’s relationships, knowledge and resources, it can be propelled to the next level in its growth.This acquisition demonstrates how the team at Euclid works and how it will continue to operate as we transition to become NEX.”
Jenny Knott, CEO of PTRI, added:
The acquisition agreement with Abide is very exciting and enhances our PTRI offering to provide full global coverage of Dodd Frank, EMIR and MiFID II reporting. Increased scrutiny and regulation of the financial services industry has created significant opportunities for us at ICAP to help companies meet new regulatory demands that many do not want to carry out inhouse, primarily because of the cost and manpower involved. For many of our clients it is preferable to outsource their trade and transaction reporting requirements to ICAP and increasing numbers are doing exactly that. Traiana and IIS already offer routing of trades and will launch an APA, and so our acquiring Abide is a natural extension of this to ensure a comprehensive seamless service. I am delighted that Abide is now part of the PTRI stable of businesses and I’m excited about what they can and will achieve for our clients.”
The transaction has been led by Euclid Opportunities, ICAP’s investment arm focused on emerging fintech companies. Euclid made a strategic investment in Abide in July 2015. Through Euclid, ICAP has made a number of financial technology investments identifying companies with platforms, business models and technologies that have the potential to drive efficiency, transparency and scale across the post trade lifecycle.
The portfolio includes: Duco, a data control platform; OpenGamma, a risk analytics firm; AcadiaSoft, an industry collaboration to automate collateral management; Cloud9 Technologies, a cloud-based communication provider; and Digital Asset Holdings, a developer of Distributed Ledger Technology.
In April 2016, ICAP acquired ENSO Financial Analytics, a provider of a data analytics platform for hedge funds and prime brokers, following previous investments by Euclid.