
Icap signs BrokerTec purchase agreement
A number of leading banks, which developed BrokerTec as a consortium, will guarantee revenues to the system for a minimum of three years, under a complex agreement that should ensure banks do not pull liquidity from the trading platform.
BrokerTec currencty handles more than $160 million worth of transactions per day, principally US Treasuries and agencies, and European sovereign debt. The Icap deal does not include BrokerTec Futures Exchange or BrokerTec Clearing Company, although these companies are set to license technology from Icap in return for undisclosed fees.
Icap chief executive Michael Spencer – a firm believer in the hybrid world of voice-and-electronic broking – said Icap expects to see an upswing in voice-broking revenues at the company due to its increased access to liquidity in benchmark bonds.
The BrokerTec businesses Icap is close to acquiring had revenues of £73 million, generating profits of $14.9 million, for the nine months ending September 30 last year.
The Department of Justice launched an antitrust investigation into BrokerTec last year due to fears that the consortium-backed broker was anti-competitive. This is believed to have prompted its bank backers to seek a buyer for the platform.
Icap said the majority of BrokerTec’s shareholders – which include ABN Amro, Banco Santander Central, Barclays Capital, Citigroup Salomon Smith Barney, Credit Suisse First Boston, Deutsche Bank, Dresdner Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter and UBS Warburg – will provide a minimum commitment of $61.3 million in revenues per year for the next three years.
The BrokerTec system was created using technology developed by Swedish company, OM.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact [email protected] to find out more.
You are currently unable to copy this content. Please contact [email protected] to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email [email protected]
More on Structured products
7 days in 60 seconds
Forex code cold shouldered; Volcker fires up FRTB; Tradeweb trends
The week on Risk.net, December 1–6, 2019
Receive this by email