Seven major global banks have invested $25.4 million to support the ongoing development of a post-trade service for exchange-traded derivatives.
The funding was provided to FIA Tech, the former technology division of the U.S. Futures Industry Association, which is spearheading the project. The banks involved in this initiative include FIA shareholders Bank of America, Barclays, Citi, Goldman Sachs, JPMorgan, and Wells Fargo, alongside newcomer BNP Paribas.
The raised funds aim to accelerate the development of the Trade Data Network (TDN), which will offer a shared ledger of trading information to improve transparency and reduce the fragmentation seen in post-trade processing of exchange-traded derivatives (ETDs). A successful implementation of TDN is also anticipated to help minimize clearing delays for brokers and lower overall costs.
Currently, the TDN initiative includes 16 banks/brokers and 40 investment managers and hedge funds, collectively managing over $37 trillion in assets. The initial rollout of TDN focuses on allocations processing and trade confirmations, enhancing trade lifecycle transparency across multiple brokers and clearinghouses. Upcoming features will include benchmarking, metrics tracking, and reporting to promote best practices within the ecosystem. The initiative also aims to provide value to the independent software vendor (ISV) community by simplifying service delivery to clients.
Nick Solinger, president and CEO of FIA Tech, expressed enthusiasm about BNP Paribas’ support for the next stage of development and acknowledged the backing from existing investors in launching the Trade Data Network. He noted that TDN has already demonstrated operational resilience during times of high market volumes and volatility.
In 2021, FIA Tech announced a Series A investment round of $44 million to facilitate the firm’s spin-off, with original investors including ABN Amro Clearing, Bank of America, Barclays, Citi, Credit Suisse, Goldman Sachs, JPMorgan, Morgan Stanley, UBS, and Wells Fargo.