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Cinnober Pledges No Change in Boat Trade Reporting Service After Acquisition From Markit

New owner looks to expand the European trade-reporting service beyond the 40 investment firms and MTFs currently reporting trades to Boat.

Cinnober Financial Technology has acquired Markit Trade Reporting, a European trading reporting service previously known as Boat, from Markit.

Cinnober has taken control of Boat's European trade reporting as of July 1. The new owner pledged a seamless transition for clients.

Boat will remain independent from exchanges and marketplaces, so all over-the-counter (OTC) trading activity will stay free of conflicts of interest, the company said. The MiFID-compliant trade-reporting platform enables multilateral trade facilities (MTFs) and investment firms to meet pre-trade quoting and post-trade reporting obligations for all European OTC cash equity trades. It collects, validates, and publishes to the market in real-time.

"This acquisition reflects our long-term strategy to increase our footprint in providing services to banks and brokers," Cinnober CEO Veronica Augustsson said in a press release. "The BOAT platform has huge potential for further development and the demand for a continued service and a broader offering is very high according to discussions we've had with customers. More than 40 leading investment firms and MTFs currently report trades and quotes to BOAT, which is more than any other platform. We fully expect that number to increase as we build on the service offerings."

Project Boat's origins: MiFID
A consortium of nine investment banks founded the Boat initiative in October 2006 as they braced for the pre-trade data and post-trade reporting requirements of the Markets in Financial Instruments Directive (MiFID) and other regulations. The consortium -- ABN Amro, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Merrill Lynch, Morgan Stanley, and UBS -- agreed to pool trade transparency information across Europe and to create a trade-capture and market-data dissemination platform.

[For more information on the origins of Project Boat and MiFID trade reporting requirements, read: MiFID Rules Break the Exchange Monopoly on Trade Reporting.]

Project Boat was going to enable the banks to reduce the cost of market data. Under MiFID, they would be selling their own data. In the past, all UK stock trades were reported to the London Stock Exchange, which charged all investment banks a trade-reporting fee, aggregated the data, and sold it back to the banks. In the rest of Europe, all domestic trades are reported to each relevant exchange. However, MiFID changed the rules and brought about the potential for an independent trade-reporting service.

The technical solution is based on Cinnober TRADExpress, which has been in operation since 2007. Boat was sold to Markit in 2007 and was subsequently rebranded as Markit Trade Reporting.

Markit had planned to discontinue the trade reporting service this year. Cinnober cited significant demand for an independent reporting service, and an extensive client base, as reasons for the acquisition.

In the press release, Cinnober assured the market that an independent European trade reporting service is here to stay. "The transition in ownership will have no effect on current operations for customers and we will offer cost-effective and independent services," said Jamie Khurshid, CEO of Cinnober's Boat Services.

In the future, Cinnober could seek to expand the service's capabilities. The company's product portfolio covers the entire trade lifecycle, from price discovery, real-time risk management, compliance, and surveillance through clearing capabilities. In the release, Kurshid said all these services "can be added to the Boat platform to increase value to customers."

Cinnober says that the reporting service is the only trade data monitor (TDM) that has been recognized by both the Financial Conduct Authority (FCA) and SIX Swiss Exchange.

"We welcome the seamless transition and a continuity of service offering this transaction offers, which enables our mutual members to continue to meet their reporting obligations," SIX Swiss Exchange CEO Christian Katz said in the release.

Other companies operate TDMs, including Thomson Reuters and BATS Giobal Exchange. BATS earned TDM status from the FCA in August 2013.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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