TMX Bids for Risk Management Software Vendor Amid Troubles

Canadian exchange operator TMX Group has entered into a takeover agreement with Sydney-based risk management software provider Razor Risk Technologies and will acquire all of the vendor’s issued shares. The offer is for CAD$.0349 ($.0343) per share, equivalent to a purchase price multiple of one times annual sales as of June 2011. Razor’s board has indicated that it will accept the offer, subject to its terms and conditions.
"The acquisition of Razor is exciting because it supports several areas of TMX Group's strategy and it provides a point of entry into the attractive risk management sector," says Brenda Hoffman, senior vice president, group head of information technology at TMX. "We are very pleased to be joining forces with the Razor employee team to offer our customers enhanced risk management services and products."
TMX's bid is indicative of how exchanges are expanding their clearing capabilities, particularly driven by incoming regulation regarding the over-the-counter (OTC) derivatives market. Under proposed rules in the Dodd–Frank Act in the US and Europe's review of the Markets in Financial Instruments Directive (Mifid II), standardized derivatives will need to be traded on-exchange, and centrally cleared. Razor specializes in clearing risk management, and counts large European clearinghouses on its client books.
The offer also comes at a time when the Canadian Commissioner of Competition has expressed serious concerns about threats to competition over the Maple Group's proposed takeover of TMX. These concerns rest primarily with equities trading, and clearing and settlement services, and TMX already owns a clearinghouse in the form of the Canadian Derivatives Clearing Corp. Maple has been the frontrunner since a proposed takeover bid for the group by the London Stock Exchange Group soured earlier this year.
In addition to TMX's problems, a technical fault on the Toronto Stock Exchange caused difficulties in trading yesterday, due to errors with stock symbols beginning with the letters M–Z.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Waters Wavelength Ep. 307: The shrinking OMS landscape
This week, Tony and Nyela discuss FactSet’s recent acquisition of LiquidityBook and what it could signal for trading technology.
Banks urged to track vendor AI use, before it’s too late
Veteran third-party risk manager says contract terms and exit plans are crucial safeguards.
Market data woes, new and improved partnerships, acquisitions, and more
The Waters Cooler: BNY and OpenAI hold hands, FactSet partners with Interop.io, and trading technology gets more complicated in this week’s news round-up.
Waters Wavelength Ep. 306: Reykjavik and market data
Reb is back on the podcast to talk about her trip to Reykjavik, as well as two market data reports released this month.
BlackRock tests ‘quantum cognition’ AI for high-yield bond picks
The proof of concept uses the Qognitive machine learning model to find liquid substitutes for hard-to-trade securities.
JP Morgan, Eurex push for DLT-driven collateral management
The high-stakes project could be a litmus test for the use of blockchain technology in the capital markets.
For AI’s magic hammer, every problem becomes a nail
A survey by Risk.net finds that banks are embracing a twin-track approach to AI in the front office: productivity tools today; transformation tomorrow.
On GenAI, Citi moves from firm-wide ban to internal roll-out
The bank adopted three specific inward-facing use cases with a unified framework behind them.