The acquisition of credit derivatives data specialist Credit Market Analysis (CMA) by derivatives exchange CME Group is positioned as enabling CME to grow its activities in the OTC credit derivatives market, and as generating opportunities to combine the CMA data services with CME’s trade execution and clearing capabilities to create new offerings for the marketplace both in the credit space and beyond.
When CMA bolstered its flagship QuoteVision price discovery tool with DataVision, its end of day pricing service, it made something of a splash in the credit derivatives data world, until that point dominated by Markit. CMA says it is differentiated from other providers because DataVision is based on buy side, rather than sell side, pricing data. CMA clients include European hedge fund BlueCrest Capital Management.
CMA will be a wholly-owned subsidiary of CME Group, and will remain headquartered in London and continue to operate under the CMA name. Laurent Paulhac will carry on as CEO, and, according to CME, the existing CMA management team is expected to remain in place. CME will, through its subsidiary CME Swaps Marketplace, buy 100 per cent of the share capital of CMA, and all of its operating assets and intellectual property. Further terms of the sale are not being disclosed.
Says Paulhac: “This move will take CMA’s business to new levels, enabling us to expand our product line and explore opportunities within and beyond the credit derivatives market. Taking the longer view, we will leverage synergies between CMA’s products and CME Group’s market data and trading-related capabilities to provide greater market transparency and to better serve the industry.”
Adds CME CEO Craig Donohue: “CME Group’s OTC strategy has focused on identifying opportunities where we can leverage our strengths in technology and clearing services, which will create greater efficiencies and opportunities for market participants. It’s impossible to overestimate the importance of accurate, timely and reliable sources of market data to the smooth functioning of financial markets, especially in today’s environment. Working together, we believe that we can expand CMA’s existing services in the credit derivatives markets, as well as to additional asset classes that would benefit from additional transparency or central counterparty clearing services.”