Fintech initiatives see British interdealer broker ICAP go from strength to strength as share prices at highest since August 2015

British interdealer broker ICAP plc (LON:IAP) has been experiencing strong corporate performance of late, with share prices having increased solidly and steadily this week. Today, ICAP stock, which is listed on London Stock Exchange’s main market, stands at £4.72 per share, up 60 pence (13%) from yesterday’s close. ICAP, whose core business is centered around […]

British interdealer broker ICAP go from strength to strength

British interdealer broker ICAP plc (LON:IAP) has been experiencing strong corporate performance of late, with share prices having increased solidly and steadily this week.

Today, ICAP stock, which is listed on London Stock Exchange’s main market, stands at £4.72 per share, up 60 pence (13%) from yesterday’s close.

ICAP, whose core business is centered around financial markets operations and the provision of post trade risk mitigation and information services is the parent company of institutional electronic brokerage EBS, which continually goes head to head with Thomson Reuters’ FXall platform in the battle for supremacy among institutional ECNs.

This month, however, the increase in share prices at ICAP could perhaps be attributable to other, somewhat more innovative factors.

ICAP has joined the blockchain development fraternity, alongside many major financial institutions, the firm’s Post Trade Risk and Information (“PTRI”) division in London working with a specialist blockchain technology firm in North America having successfully completed a proof of technology test case for a distributed ledger using blockchain technology.

The proof of technology successfully completed on 26 February 2016 and has the potential to significantly transform post trade operations, while complying with new market practices within the post-crisis regulatory environment.

The PTRI distributed ledger proof of technology leveraged the multi asset messaging and matching Harmony network, and blockchain infrastructure provided by Axoni, a New York-based technology firm, to create a private, peer-to-peer, distributed ledger network using smart contracts

At that time, Jenny Knott, CEO of ICAP’s Post Trade Risk and Information Services division, stated:

“In successfully completing a proof of technology test, ICAP has demonstrated one of the first real world applications of distributed ledger technology that has the ability to significantly transform the post trade landscape. Realising the value of ICAP’s unique portfolio of PTRI businesses and investee companies, we have combined our expertise, networks and technology with Axoni’s distributed ledger technology to push the boundaries of post trade innovation.”

On March 15, the PRTI division of ICAP completed a series of enhancements that significantly expand its existing suite of regulatory services to offer customers an end-to-end menu of products which meet MiFIR/MiFID II cross-asset reporting and processing obligations.

On particular example was the announcement by ICAP PTRI of the the creation of its own Approved Publication Arrangement (APA) service. PTRI’s solutions will also include Abide Financial (a regulatory reporting service provider that ICAP invested in last year), which will provide ICAP access to a MiFID II/MiFIR Approved Reporting Mechanism (ARM) service to complement the overall group reporting strategy.

The enhanced solutions leverage connectivity and build on functionality previously delivered by Traiana, an ICAP PTRI company, for similar requirements under the US Dodd-Frank Act (DFA), European Market Infrastructure Regulation (EMIR) and other global regulatory regimes. The new services suite includes the provision of trade certainty for venue executed trades, trade and transaction report submission to APAs and ARMs respectively, and global CCP connectivity for OTC executed trades.

Just one day prior to this announcement, ICAP’s triReduce system which is a risk-constrained, multilateral compression service for OTC derivatives had reported that market participants have eliminated more than $750 trillion in notional principal outstanding.

By building on these inititatives, it is clear that investor confidence in the company has echoed the developments, proving that staying ahead in terms of technology is vital for the sustainability of these institutional giants.

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Chart courtesy of Google Finance

Featured photograph: London’s Square Mile – a world center for institutional fintech. Copyright FinanceFeeds

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