The London Stock Exchange has acquired a 16% stake in AcadiaSoft in a bid to further streamline margin calculations and processing in the non-cleared derivatives market.
Boston-based AcadiaSoft's technology suite currently serves over 700+ firms automating the margin process of 200,000+ agreements and moving $400bn+ collateral daily. The company is owned by a consortium of 13 banks and three major industry infrastructure providers.
Alongside LSEG’s investment, LCH SwapAgent and AcadiaSoft have signed a heads of terms for an agreement to deepen collaboration on new products aimed at further simplifying the operational process for margin calculation.
LCH SwapAgent went live in November 2017 with the support of 15 dealers, processing, margining and settling trades without requiring novation to a central counterparty or a change to the underlying trade terms.
As part of the collaboration agreement, LCH SwapAgent will provide its independently calculated collateral information to the AcadiaSoft Hub to help counterparties to improve processing efficiency and reduce margin disputes.
LSE chief Daniel Maguire, says: “The acquisition of a stake in AcadiaSoft underlines our strategy to expand into the non-cleared space, an area in which AcadiaSoft has considerable experience. The non-cleared margin rules continue to impact the dealer and buy-side community, and it is crucial that integrated services are available to support market participants in reducing risk while maximising their capital and operational efficiencies. LCH SwapAgent brings our expertise in managing risk, and operational resilience to the bilateral market and we are delighted to be collaborating with AcadiaSoft to foster further innovation in this market.”
Terms of the transaction were not disclosed.