This Week: Cboe, Google Cloud/SEB, Trading Technologies, BrokerTec, Tora/BondCliq, Tradeweb

Cboe acquires Chi-X Asia Pacific

Cboe Global Markets has entered into a definitive agreement to acquire Chi-X Asia Pacific Holdings, an alternative market operator and provider of market solutions, from J.C. Flowers & Co. This acquisition will provide Cboe with a single point of entry into two key capital markets, Australia and Japan, to help expand its global equities business into Asia-Pacific and bring other products and services to the region.

Cboe plans to leverage Chi-X Asia Pacific’s presence in Asia-Pacific and bring to the region Bids Trading’s block-trading capabilities. With Bids’ current network covering major North American and European equities markets, the addition of Asia-Pacific equities is expected to create a global block trading platform to serve a broader base of customers.

Chi-X Australia (CXA), the country’s second largest securities exchange achieving an 18.4% total market share, offers trading in all Australian-listed securities, as well as the exclusive trading of CXA quoted warrants and exchange-traded funds (ETFs). Chi-X Japan (CXJ), a proprietary trading system for Japanese equities and third largest equities venue in the country with a 2.7% lit market share, offers four trading books including both displayed and non-displayed mechanisms.

The transaction is expected to close in the second or third quarter of 2021, subject to regulatory review and other customary closing conditions.

SEB and Google Cloud unite for long-term digitization project

Nordic financial services group SEB and Google Cloud have entered into a strategic, long-term partnership to accelerate digitization at the bank. SEB will use Google Cloud’s cloud technologies, and collaborate with the tech giant to create new banking services for its customers.

SEB will use Google Cloud across the company to create new services in retail and corporate banking for customers based on data, analytics, and processing technologies; refine risk analysis through Google Cloud’s computational scalability; augment financial reporting capabilities by using data management tools; explore digital assistants to increase customer service levels and allow SEB employees to provide more qualified personal service to customers; and collaborate on new products and services to provide a better user experience for customers, like providing customers with improved sustainability transparency and savings offerings based on new datasets.

SEB’s innovation studio as well as its banking platform, SEBx, are already benefiting from Google’s infrastructure and data cloud technologies, such as Kubernetes Engine and Cloud SQL, helping the bank achieve greater cost efficiency, flexibility, and network scalability.

BrokerTec launches US treasury benchmark spread trading capability

BrokerTec, a provider of electronic trading platforms and technology services in fixed-income markets and part of CME Group, this week launched Relative Value Curve spread trading, allowing clients to trade cash US treasury benchmark spreads in a single order for the first time. The company says that as a result, market participants are able to trade spreads across the yield curve more efficiently and without legging risk.

Through BrokerTec RV Curve, market participants can trade pre-defined ratio spreads between cash benchmark US treasuries as a yield differential. All spreads tradable will be available at 1/8th of a basis point (0.00125), regardless of the minimum price increment of the underlying instruments, providing greater matching and liquidity opportunities. RV Curve offers 21 spreads, providing a full view of the relationships between two-year, three-year, five-year, seven-year and 10-year treasury notes and 20-year and 30-year treasury bonds.

Cboe promotes Catherine Clay to EVP, leading new data and access solutions division

Cboe Global Markets has promoted Catherine Clay to executive vice president, from senior vice president of information solutions. She is tasked with leading the newly minted data and access solutions division within the company. She has also been appointed to Cboe’s executive leadership team.

The new business unit integrates the company’s suite of data solutions, analytics and indices, with its market data services offerings, to create a comprehensive global offering. Cboe’s market data services—real-time, historical and derived datasets, along with equities, options, futures and foreign exchange (FX) data—are expected to be made available through this new division, providing customers more efficient access to Cboe’s full suite of data services. The new division also unifies the sales teams, providing customers with a single point of contact for all of these services.    

The company believes the new division will create an opportunity to further grow its base of proprietary non-transactional revenue, which was approximately $350 million in 2020. In 2021, the company is targeting organic revenue growth in this category of 6% to 7%.

Tora announces integration of BondCliQ’s US corporate bond consolidated quote and trade data

Tora has integrated its order and execution management system (OEMS) with BondCliQ’s US corporate bond consolidated quote and trade data. The integration aims to improve the contextual pricing data available to Tora customers evaluating corporate bond trading opportunities via the Tora OEMS.

Traders using the Tora OEMS can now access real-time, centralized corporate bond quote data sourced from more than 50,000 quotes, which BondCliQ receives daily from more than 40 dealers. This quote data, in combination with real-time pricing data, allows traders to better analyze the market and evaluate the quality of counterparty liquidity provision. With BondCliQ’s data now integrated into their workflow, Tora’s customers can now incorporate this additional market color into their decision-making process before sourcing trades within the Tora OEMS.

TT launches connectivity to Athex for derivatives trading

Trading Technologies (TT), a global provider of trading software, infrastructure, and data solutions, and the Athens Stock Exchange (Athex) announced that all derivative products listed on the Athex Derivatives Market are now available for trading through the TT platform and accessible to TT’s global user base.

Clients can leverage TT’s full suite of tools, including functionality for spread and algo trading, charting and analytics, mobile trading, options, FIX services and API development, to trade the full suite of derivatives products listed on the Athex Derivatives Market. These include stock and index futures as well as stock and index options.

Tradeweb announces first fully electronic iBoxx total return swap trade

Tradeweb Markets announced it has completed the first ever fully electronic standardized total return swap trade based on IHS Markit’s iBoxx USD Liquid High Grade Index. JP Morgan was a counterparty to the trade, which was executed on the Tradeweb swap execution facility.

Total return swaps allow corporate bond portfolio managers and traders to express an immediate macro opinion on the direction of an index. In exchange for receiving exposure to an index over a set duration, clients (the index receivers) pay a counterparty (the index payer) a financing rate. This makes total return swaps a capital-efficient tool for adding risk or hedging exposure.

While total return swaps can be executed on custom baskets of bonds, liquidity is generally concentrated around major indices. This environment is conducive to electronic trading, which helps to make price discovery more efficient, and streamlines the end-to-end trade lifecycle. While credit default swap (CDS) indices remain the most liquid credit derivatives, use of total return swaps is growing because they mirror an index precisely, without tracking error or deviation. In 2020, approximately $100 billion in iBoxx standardized total return swaps were traded.

At Tradeweb, clients globally are now able to trade total return swaps on every iBoxx index.