CME Group and IHS Markit have agreed to combine their post-trade services for the OTC markets into a new 50/50 joint venture.
The new company will will incorporate CME Group's Traiana, TriOptima, and Reset, and IHS Markit's MarkitSERV, with the aim of providing OTC market participants with improved risk management capabilities across interest rate, FX, equity and credit asset classes.
Market participants will benefit from a more efficient front-to-back workflow with enhanced connectivity and improved trading certainty, says Terry Duffy, CME chairman and CEO.
"As OTC derivatives markets become increasingly fragmented, market participants are seeking to more effectively manage their risk and optimise their balance sheets," he says. "By combining the strengths of these diverse businesses into one organization, the joint venture will be better positioned to serve clients worldwide by driving innovation, developing valuable products and providing operational efficiencies."
Slated to close in Summer 2021, the transaction will require IHS Markit to pay $133 million to achieve 50/50 ownership and shared control in the joint venture.
Further financial terms were not disclosed.