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.
While CME is following in the recent footsteps of other exchanges, such as NYSE Euronext, in bolstering its valuation assets, for CMA, its new parentage clearly opens up opportunities to reach a broader potential marketplace with greater ease.
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 pricing data world, 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.”