Instinet Incorporated, an agency-only broker, today announced that it has agreed to acquire substantially all the business and assets of TORC Financial, LLC, a provider of derivatives trading technologies.
The acquisition will provide Instinet’s clients with immediate access to TORC’s suite of options-focused, broker-agnostic solutions for institutional derivatives trading. These solutions – which include execution, analytics and risk management capabilities – will significantly enhance Instinet’s electronic cross-asset trading offering.
“Instinet has long been recognized for its sophisticated electronic equities trading tools. Trading in derivatives is evolving in a manner very similar to the cash equity markets over the last decade. This acquisition allows us to leverage the capabilities of the two organizations and move Instinet to the forefront of electronic derivatives trading,” said Anthony Abenante and Fumiki Kondo, co-Chief Executive Officers of Instinet Incorporated, in a company release.
U.S. options volumes have seen a nearly 20 percent CAGR (compound annual growth rate) since 1995, according to the Options Clearing Corporation. A February 2009 survey by the TABB Group found that 63 percent of options traders expected to increase their options volume in 2009.
“We see the options space as one of the fastest growing asset classes in the U.S. The TORC acquisition is a strategically integral move for Instinet and greatly enhances our ability to serve our customers,” added Abenante and Kondo.
Led by trading technology and options industry veteran John Duffell, TORC offers a full suite of derivatives trading technologies, including TOP (TradeSpeed Options Professional), a multi-asset class application that offers integrated options analytics and execution capabilities and is integrated with most major US-based prime brokers; and RiskPro, which allows for the real-time tracking of risk metrics across positions, accounts, groups, asset classes and trading desks.
“We’re excited to join forces with Instinet, given the clear synergies between our offerings and the similarities in our approach to technology development. The combination of our extensive options industry experience with Instinet’s global distribution footprint and superior technology infrastructure bode well for a successful integration and a rich cross-asset offering for our combined client base,” commented Duffell in the release.
Terms of the transaction will not be disclosed. Financial Technology Partners served as Instinet's financial and strategic advisors in connection with the transaction. Freeman & Co. LLC served as TORC’s advisor.