DTCC promises Omgeo acquisition will “open up new opportunities”
The DTCC says its acuisition of Omgeo will open up new possibilities for market participants
US post-trade utility the DTCC has agreed to acquire post-trade specialist firm Omgeo, in a deal that it says will help improve collaboration between investment managers, broker-dealers and custodian banks and reduce risk for market participants.
Based in the US, Omgeo operates an integrated straight-through-processing service for institutional post-trade processing. It includes an electronic allocation engine, a central matching solution and an account and standing settlement instruction database.
According to the DTCC, the transaction is meant to help the two firms develop a single, global strategy for post-trade processing and settlement. It will also facilitate a unified strategy around key industry initiatives including the move to trade date affirmation, settlement matching in the Depository Trust Company, and the adoption of shorter settlement cycles in various markets, especially France, the Netherlands and Belgium, where settlement firm Euroclear recently announced it is moving to T+2 settlement.
Under the DTCC acquisition deal, Marianne Brown will continue to serve as president and chief executive officer for Omgeo, which will henceforth be 100% owned by the DTCC. Omgeo was previously 50% owned by Thomson Reuters and 50% by the DTCC.
“Full industry ownership enables market participants to play a larger role in shaping decisions related to Omgeo’s technology platforms and processes, that in turn help support their own firms’ strategies,” said Andrew Gray, DTCC managing director, core business management and chairman of the board of managers for Omgeo. “This transaction is aligned with our strategy to build and grow our core businesses globally as Omgeo’s international community and multi-asset class capabilities will open the door to new opportunities for DTCC as we look to expand more broadly in the global post-trade processing sector.”
The DTCC and Thomson Reuters served as equal owners and strategic partners in Omgeo since its formation in 2001. Thomson Reuters has said it will continue as a key service provider to and partner with Omgeo.
“DTCC and Thomson Reuters have played a critical role in helping build Omgeo into a world-class post-trade processing organization and we are excited about the new opportunities that lie ahead of us as a result of this transaction,” said Brown at Omgeo. “With tighter synergy with DTCC, we have the ability to leverage best practices from both firms and foster a single, integrated strategy for global post-trade processing.”
The terms of the deal were not disclosed, and it remains subject to regulatory approval.
