Swiss exchange Six has joined the consortium behind messaging network and data provider for structured products Contineo as a strategic partner and investor.
Contineo will integrate Six's Connexor listing functionality and infrastructure for product data, to provide additional functionality to existing clients of the platform and 'better serve their relationship managers and adhere to regulatory requirements'.
The partnership would enhance Contineo's post-trade processing, enhancing user experience, and that the new partnership represented a clear backing of Contineo's unique model according to Contineo's chief executive, Mark Muñoz (pictured).
"Our success was built on a consortium framework that allows top tier institutions to join together to build a utility service that drives costs down and creates market efficiencies," said Muñoz. "The commitment from Six embodies our core principals of operating an open and shared network that benefits all financial institutions."
According to Muñoz, Six is very strong in Europe and it provides Contineo with an additional European edge. "We already have a number of UK European banks in the consortium but Six brings a unique angle as they are not an issuer but an exchange, as well as a data and a technology provider," said Muñoz. "The synergies and the philosophy of both firms are very much in line. Being able to leverage Six post-trade infrastructure and work with their buy-side clients is an endorsement of our platform and business model. The structured products in Asia is driven by the primary market but this could open up new opportunities around the secondary market.”
As a strategic investor, the Swiss exchange joins the platform's other shareholders including AGDelta, Barclays, BNP Paribas, Goldman Sachs, JP Morgan, HSBC, and Societe Generale.
Six's Connexor offers market participants a series of services throughout a financial instrument's entire life-cycle and supports the fulfillment of regulatory obligations such as Mifid 2 or IRS 871(m). The central, standardized capture and maintenance of product data simplifies workflows and reduces the number of interfaces.
'Six brings new technology, expertise in the European structured product market and an important new business opportunity,' said Christoph Landis, division CEO at Six Swiss Exchange. 'Over the last year we've more than doubled the number of private banks and issuers on our network, enabling us to extend our post-trade data capabilities. Six is a leading exchange provider in Europe and we look forward to incorporating their best in class features into our offering.'
According to Landis, joining the consortium of Contineo as a strategic partner and investor is a first major step towards the internationalization of the Connexor service. The geographic expansion is intended to standardize processes along the value chain and the life-cycle management of structured products internationally, said Landis. This approach will enable shareholders and clients of Six to utilize their established set-ups already used in local markets also outside of Europe and thereby benefit from synergies and scale in return.
Earlier this year, Six Swiss Exchange integrated its subsidiary Six Structured Products Exchange to comply with new regulatory guidelines from the Financial Market Infrastructure Act (FMIA) which required a new application for all existing licenses for stock exchanges and institutions similar to a stock exchange. The merger of the two stock exchanges follows a period of 10 years, where exchange trading in structured products in Switzerland has been operated by Six Structured Products Exchange.
Contineo also launched in January I/O, a suite of data solutions for equity-linked structured products in the Asia-Pacific region to provide subscribers on the network insight into their business and performance, and provide other market participants with insight into this previously opaque market.
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