JPX invests $1 million in risk analytics firm OpenGamma

Maria Nikolova

Through this investment, JPX seeks to get more insight and advanced technological capability in the fields of risk management and fintech.

The push by Japan Exchange Group Inc (TYO:8697), or JPX, into the world of fintech continues, as today it announces that it has made a minority investment of $1 million in London-based OpenGamma, Inc.

OpenGamma is a provider of risk analytics for the derivatives markets. The company is a pioneer in open source and cloud based financial software, and is involved in initiatives investigating the potential of blockchain technologies for derivatives. OpenGamma’s range of clients include financial institutions, such as global CCPs and banks.

This is not the first time that OpenGamma attracts investments. Some of you may recall that in August 2012, it completed a $15 million Series C round of equity financing led by ICAP plc.

Commenting on the rationale for the investment, JPX said it “aims to deepen its relationship with OpenGamma, as well as to gain more insight and advanced technological capability in the fields of risk management and fintech”.

Although JPX does not get into more details about the reasons for the investment, it could be that the recent activities of OpenGamma in the field of distributed ledger technologies (DLT) have caught the attention of the Japanese group. For instance, in April last year, OpenGamma and Clearmatics demonstrated a proof-of-concept showing how two counterparts can collectively value in real-time a portfolio of FX swaps using blockchain technology adapted from the Ethereum codebase.

In February 2016, JPX and IBM Japan agreed to start proof of concept (PoC) tests for blockchain technology. That co-operation was announced as JPX conceded the distributed ledger technology was gaining attention worldwide as a promising aspect of fintech.

In the end of November 2016, Tokyo Stock Exchange, Inc. (TSE) announced that TSE, Osaka Exchange, Inc. (OSE) and Japan Securities Clearing Corporation (JSCC) were forming a consortium of Japanese financial institutions to keep conducting proof of concept (PoC) testing and explore the possibility of applying DLT to capital market infrastructure.

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