The Depository Trust & Clearing Corporation (DTCC) has entered into a binding agreement to acquire full ownership of Omgeo, combining Thomson Reuters’ 50 percent stake in the company with DTCC’s existing 50 percent ownership.
The transaction will facilitate increased collaboration among investment managers, broker-dealers and custodian banks, to further reduce industry risk and cost as the post-trade processing and regulatory environment continues to evolve. Upon the closing of the transaction, Omgeo will become a fully-owned subsidiary of DTCC. Marianne Brown will continue to serve as President and Chief Executive Officer for Omgeo.
“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.”
DTCC and Thomson Reuters served as equal owners and strategic partners in Omgeo since its formation in 2001 and throughout its growth and expansion over the years, which included the introduction of the fully integrated straight-through-processing (STP) solution for institutional post-trade processing, integrating an electronic allocation engine, a central matching solution and the leading account and standing settlement instruction (SSI) database. Thomson Reuters will continue as a key service provider to and partner with Omgeo.
“Over the past 12 years, Thomson Reuters has built a strong relationship with DTCC through our strategic partnership and we are pleased to see Omgeo enter the next phase of its development. We look forward to continuing our relationship with DTCC as this part of the marketplace continues to evolve,” said David Craig, president of Financial & Risk, Thomson Reuters.
The transaction will enable DTCC and Omgeo to drive 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 (DTC), and the adoption of shorter settlement cycles in various markets. These initiatives, along with Omgeo’s existing capabilities, will continue to provide significant value to investment managers, broker-dealers, custodian banks and other market participants.
“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,” added Marianne Brown, Omgeo’s president and chief executive officer. “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. The closing of this transaction will occur following mandatory regulatory filings in countries where required.
About DTCC
DTCC has operating facilities and data centers around the world and, through its subsidiaries, automates, centralizes, and standardizes the post-trade processing of financial transactions for thousands of institutions worldwide. With 40 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2012, DTCC’s subsidiaries processed securities transactions valued at approximately US$1.6 quadrillion. Its depository provides custody and asset servicing for securities issues from 131 countries and territories valued at US$37.2 trillion. DTCC’s global trade repositories record more than US$500 trillion in gross notional value of transactions made worldwide.
About OmgeoSM
Formed in 2001, Omgeo automates trade lifecycle events between investment managers, broker/dealers and custodian banks, enabling 6,500 clients and 80 technology partners in 52 countries around the world to seamlessly connect and interoperate. By automating and streamlining post-trade operations, Omgeo enables clients to accelerate the clearing and settlement of trades, and better manage and reduce their counterparty and credit risk. Omgeo’s strength lies within its global community and its ability to create solutions to enable clients to realize clear returns on their investment strategies, while responding to changing market and regulatory conditions. Across borders, asset classes, and trade lifecycles, Omgeo is the global standard for operational efficiency across the investment industry. For more information, please visit www.omgeo.com.
