LSEG Acquires Minority Share in AcadiaSoft

Additionally, LSE’S clearing-and-settlement arm LCH SwapAgent, which deals with the non-cleared derivatives market, have settled an agreement to forge closer ties with the vendor to develop technologies for margin calculation. The agreement will enable deeper collaboration on projects aimed at simplifying, automating and standardizing the margin process for non-cleared derivatives. Chris Walsh, CEO of AcadiaSoft, explains that the reason for this partnership emerged due to increasing client interest in the non-cleared space and the need for improved efficiency between markets.

“From our standpoint, our goal is to bridge these two [markets] together so the clients have an integrated solution where they can move to LCH’s SwapAgent very easily and the market gains a lot of efficiencies because they have a single cross-market margining process,” he says.

Once individual systems are integrated, clients will have the opportunity to access LCH’s SwapAgent through AcadiaSoft’s MarginSphere offering, used for managing margin calls. The objective is to eliminate the problem of disputes between parties by providing a single calculation model for margins and values.

“So what you have is a process that is dispute free and because of that it is a lot less costly, it has less risk and requires less capital,” adds Walsh.

Through this partnership, LCH SwapAgent will also provide collateral information to the AcadiaSoft Hub, the company’s straight through margin processing solution, to enhance their services for the platform’s participants—in areas such as ensuring margin compliance, improving operational efficiencies and managing disputes. Nathan Ondyak, global head of LCH SwapAgent, says that the recent focus on margin rules and the complexity of existing cleared markets means that “non-cleared markets are not going away”.

“We believe very strongly that the market needs a much more efficient infrastructure to solve its challenges and the combination of SwapAgent as an independent calculation source in partnership with the industry leading hub, we think is the way to get there,” he explains.

Down the line, LCH SwapAgent aims to expand their product coverage of the interest rate and FX derivative space.