BNP Paribas has become the latest global bank to take a strategic equity stake in OSTTRA, joining Bank of America, Barclays, Citi, HSBC, Wells Fargo and UBS Investment Bank in the post-trade infrastructure provider’s investor consortium.
The move, announced on 25 August, leaves funds managed by KKR as OSTTRA’s majority owner and expands the group of major banks with a direct stake in the company’s development. OSTTRA said BNP Paribas will work alongside KKR and the existing consortium as it continues to develop its global post-trade ecosystem across asset classes.
OSTTRA’s shareholder base now includes a sizeable group of the institutions that use and depend on post-trade infrastructure every day. BNP Paribas’ participation adds further weight to the company’s strategy and deepens its alignment with some of the largest firms in global markets.
Efficiency, Capital and Data Quality
Post-trade infrastructure is under growing pressure from regulatory change, accelerated settlement and firms’ continuing focus on capital and operational efficiency, says Guy Rowcliffe, Co-CEO of OSTTRA, in conversation with TradingTech Insight.“The fewer breaks you have, the less capital you have to put aside, and the lower your operational costs and burden. In one way or another, OSTTRA is entirely focused on greater levels of efficiency, greater data accuracy and greater timeliness of processes.”
Rowcliffe says capital and regulation remain the main pressures shaping client demand. Data quality runs through both. Better and more timely data can reduce reconciliation breaks, streamline workflows and help firms use capital more efficiently across the post-trade environment.
OSTTRA is also looking beyond individual services towards a more integrated infrastructure layer, says Rowcliffe. “We think of OSTTRA very much as an operating system, providing, evolving and growing an operating system for the post-trade world. That’s really where we see our position in terms of supporting everything post-execution.”Building Across Post-Trade Silos
That ‘operating system’ spans bilateral OTC markets, centrally cleared OTC products and listed markets, reflecting how clients themselves operate across those different environments.
“OSTTRA is, by default, completely cross-asset and completely cross-domain,” says Rowcliffe. “We operate as much in the bilateral OTC world as in the cleared OTC world, as well as in the listed exchange world. Our clients’ activity occurs in all those domains, so we naturally have to support post-trade solutions and workflows that straddle all of them.”
For firms trading across multiple markets, the challenge is increasingly to connect collateral, settlement, risk and operational workflows that have historically sat in separate technology stacks and processing silos.
Accelerated Settlement Raises the Bar
Shorter settlement cycles are making those connections more important. Rowcliffe argues that regulated markets won’t get much closer to truly continuous trading without first improving the speed and quality of settlement.
Faster processing depends on efficient workflows, good data and a consistent source of truth across post-trade processes.
That pressure is already being felt as markets move away from traditional end-of-day operating models. True 24/7 trading is still more developed in digital assets and crypto than in traditional regulated markets, but post-trade systems are increasingly being asked to support faster and more continuous processing.
Tokenisation Meets Existing Infrastructure
Tokenisation adds another dimension, although Rowcliffe expects it to develop alongside established market infrastructure for some time. “The way we view tokenisation is that it is going to grow and run in parallel with the traditional infrastructure world. There’s not going to be a lift and shift of established practice overnight into a tokenised world.”
That points to interoperability as a key challenge. Tokenised assets will need to work with existing post-trade systems and processes, particularly as firms begin to explore their use in areas such as settlement and collateral.
OSTTRA’s cross-asset approach puts these developments within the same post-trade architecture. Accelerated settlement, tokenisation, data quality and cross-market processing all increase the need for infrastructure that can handle more activity, more quickly and with fewer breaks.
BNP Paribas’ investment adds another major bank to the group backing that model. As post-trade processes become faster and more interconnected, the institutions relying on that infrastructure are also becoming more directly involved in shaping how it develops.
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