London Stock Exchange bid to trade digital assets

The London Stock Exchange Group took a big step towards boosting its capacity for trading digital assets. LSEG announced on 22 February it had agreed to acquire TORA for $325 million. TORA is a cloud-based technology provider that supports customers trading multiple asset classes across global markets including digital assets, equities, fixed income, FX and derivatives.

If regulators approve, the transaction may close in the second half of 2022.

TORA offers technology solutions for trading, including an order and execution management system (OEMS) and portfolio management system (PMS). The support customers who trade Institutional market participants are increasing their exposure to crypto and other digital assets, according to the LSEG press release.

Andrea Remyn Stone, Group Head, Data & Analytics LSEG, said: “Combining TORA’s multi-asset technology and global expertise with the strength and breadth of LSEG’s Data & Analytics division will create a compelling customer proposition.

“This acquisition is a great example of LSEG’s strategy to provide customers with a global, multi-asset class financial infrastructure that operates across the capital markets and investment lifecycle as an open ecosystem.”

The addition of digital assets to LSEG’s trading capabilities strengthens its presence in this rapidly expanding asset class, at a time when It will enable LSEG’s customers to benefit from a differentiated trading solution that combines the multi-asset class capabilities of TORA’s software with the Group’s rich data and analytics services. Once the deal is finalized, TORA will join LSEG’s Data & Analytics division.

The transaction will further enhance the global footprint of LSEG’s Trading & Banking Solutions business.

TORA was founded in 2004 and has established itself in Asia and North America, with offices in Hong Kong, New York, Singapore and Tokyo among others, according to this Reuters story, and it operates in Europe. The deal will give asset managers and traders access to crypto trading venues through LSEG software.

According to a story by Reuters: “LSEG bought a stake in London-based Nivaura in 2019, betting on a digital platform which was behind the world’s first automated cryptocurrency-denominated bond issuance.

“TORA partnered with investment firm Kenetic in 2018 to launch crypto trading platform Caspian which provides a single interface into all major crypto exchanges.” A story in Ledger Insights explains “Caspian is TORA’s digital assets solution that links to almost 30 cryptocurrency exchanges and liquidity providers, including Binance, Coinbase and FTX, as well as derivatives providers such as CME Group and Deribit.”

Digital assets strategies at global exchanges

According to Ledger Insights, stock exchanges worldwide are each choosing their route into digital assets trading.

  • Nasdaq’s Marketplace Services Platform has been providing technology for digital asset marketplaces for some time.
  • Switzerland’s SIX has perhaps been the most courageous in launching its SIX Digital Exchange (SDX) for native digital assets.
  • ICE, owner of the NYSE, founded BAKKT, which initially provided crypto derivatives but has expanded to offer a consumer-facing tokenized rewards and crypto application.
  • Singapore’s SGX is involved in initiatives that tokenize real-world assets such as bonds and carbon credits.
  • Elsewhere, several exchanges are adopting blockchain technology in post-trade processes, including ASX, HKEX and the Deutsche Börse. The latter provides part of the infrastructure for the collateral management platform HQLAX.

This blog has also reported on Africa’s digital MERJ Exchange in Seychelles, which claimed to be the world’s first fully regulated exchange that can handle both securities and digital assets, has a fully regulated post-trade processing infrastructure and works with a central clearing model. MERJ operates a stock exchange for equities, debt and derivatives and says it will be first global market to offer the full cycle in primary and secondary markets in digital of the first regulated national exchanges

Digital asset trades with data and analytics

Robert Dykes, Chief Executive Officer, TORA, said: “Bringing together TORA’s compelling trading solution with LSEG’s wealth of data has the potential to create a powerful toolkit for our customers, enabling them to trade more efficiently. I’m confident that by collaborating with the wider Data & Analytics team, we will innovate further and continue to deliver best-in-class solutions for our customers.”

Dean Berry, Group Head of Trading & Banking Solutions, LSEG, said: “This transaction is an important extension of our global trading business. Acquiring TORA will enable LSEG to deliver critical ‘at trade’ capabilities for the buy side, seamlessly connecting into our next generation desktop Workspace. Combining TORA’s international footprint with LSEG’s global reach will drive further growth and we look forward to collaborating in order to continue this expansion.”

Digital assets could include crypto currencies and non-fungible tokens (NFTs).

Disclosure: the author owns shares in MERJ Exchange.

PHOTO ATTRIBUTION: gren, Public domain, via Wikimedia Commons


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