AMSTERDAM & BRUSSELS & LISBON, Portugal & LONDON & PARIS--(BUSINESS WIRE)--Regulatory News:
Euronext (Paris:ENX) (Amsterdam:ENX) (Brussels:ENX) today announces the global expansion of its Joint Venture and a $10 million investment in a minority stake in leading fixed income technology provider, Algomi. This strategic investment, which follows the agreement of a Joint Venture between both companies1, will enable corporate bond traders to access Algomi’s innovative bond information network on a global basis and exchange risk more efficiently by identifying the most appropriate counterparty.
The global Joint Venture also involves working closely with regional exchanges and other partners to deliver holistic market access. As part of this, Euronext is working to establish an Automated Trading System (“ATS”) in North America, while discussions are already under way in APAC.
The bilateral nature of the bond market means the majority of trades, by value, are still completed away from e-platforms. Accordingly, the market is characterized by opaque and fragmented information with fragile liquidity. This initiative is designed to create a network of centralised information venues, turning disparate data into trade opportunities between counterparties yet maintaining the current client-to-dealer market structure.
Dealers will be able to access this network of venues either directly through their Algomi technology or through existing systems. Investor firms will benefit from the improved liquidity and best execution that the participating dealers will be able to provide on demand. The system is designed to maximise the range of eligible trades by minimising the potential leakage of crucial information.
This acquisition of a minority stake with governance rights reinforces the close links between the two companies and confirms Euronext’s ambitions in the fixed income space. As part of the partnership, Paul Humphrey, Head of Fixed Income, Rates & FX at Euronext, will join the Board of Directors of Algomi.
Stéphane Boujnah, CEO of Euronext: “Algomi’s cutting edge technology, combined with Euronext’s established position in the market place, will enable us to further diversify our revenues and capture selected opportunities arising outside of Europe, whilst tackling the symptomatic illiquidity of global corporate bond markets in partnership with our clients. This partnership with Algomi is central to our Fixed-income ambitions and our wider FICC diversification plans as part of our ‘Agility for Growth’ plan. As a strategic investor taking a board seat, we will be in a strong position to oversee the successful growth of the business, and consolidate future trading activity globally.”
Stu Taylor, Co-Founder and CEO of Algomi: “This long term commitment to Algomi by Euronext cements our position in the market. We are particularly excited by the access to the Euronext network of global regulated exchanges and the liquidity opportunities this will provide our clients. Liquidity challenges in fixed income markets are global by nature. Partnering with an established exchange to provide fixed income traders with a single resource for price discovery, trade execution and settlement on illiquid bonds is a major part of our mission to unlock liquidity. The initiative will allow us to bring Algomi’s unique bond information network to new parts of the credit market, something which has been very positively received by our existing bank clients.”
Algomi connects fixed income professionals, empowering them to make better trading relationships, in the ever-changing landscape of capital, leverage and liquidity requirements. By harnessing the relationships between salespeople, traders and their clients, Algomi software greatly increases the opportunities and velocity in large and illiquid voice trades.
Algomi was founded in 2012 by Stu Taylor (Former Global Head of Matched Principal Trading and creator of PIN-FI at UBS), Usman Khan and Robert Howes (Founders of CAPXD), and Michael Schmidt (Former Head of European Credit Trading and IB Board Member at UBS). Algomi is backed by investment from Lakestar, and an exceptional panel of Strategic Advisors. Algomi has 140 employees with offices in New York, London and Hong Kong.
Euronext is the leading pan-European exchange in the Eurozone with nearly 1,300 listed issuers worth close to €3.3 trillion in market capitalisation as of end December 2016, an unmatched blue chip franchise consisting of 25 issuers in the EURO STOXX 50® benchmark and a strong diverse domestic and international client base.
Euronext operates regulated and transparent equity and derivatives markets. Its total product offering includes Equities, Exchange Traded Funds, Warrants & Certificates, Bonds, Derivatives, Commodities and Indices. Euronext also leverages its expertise in running markets by providing technology and managed services to third parties. Euronext operates regulated markets, Alternext and the Free Market; in addition it offers EnterNext, which facilitates SMEs’ access to capital markets.
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This press release is for information purposes only and is not a recommendation to engage in investment activities. This press release is provided “as is” without representation or warranty of any kind. While all reasonable care has been taken to ensure the accuracy of the content, Euronext does not guarantee its accuracy or completeness. Euronext will not be held liable for any loss or damages of any nature ensuing from using, trusting or acting on information provided. No information set out or referred to in this publication may be regarded as creating any right or obligation. The creation of rights and obligations in respect of financial products that are traded on the exchanges operated by Euronext’s subsidiaries shall depend solely on the applicable rules of the market operator. All proprietary rights and interest in or connected with this publication shall vest in Euronext.
This press release speaks only as of this date. Euronext refers to Euronext N.V. and its affiliates. Information regarding trademarks and intellectual property rights of Euronext is located at www.euronext.com/terms-use.
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1 The development follows the agreement of a Joint Venture between the two companies in November 2016 aimed at launching a new MTF designed to improve liquidity in corporate bond trading across Europe, an initiative which is on target to launch by Q3 2017. In addition to the investment, Euronext is entering into a global extension of its current 10 year European licence for Algomi’s data and technology. Read more: https://www.euronext.com/en/news/euronext-and-algomi-launch-new-trading-facility-improve-liquidity-pan-european-corporate-bond