Chicago futures body The Clearing Corporation is to acquire onExchange, the Massachusetts-based derivatives and securities trade-processing technology software vendor.
The Clearing Corporation says the acquisition will complement and enhance its offering of clearing and technology solutions as it seeks to diversify its business and revenue streams. The independent clearing body has been forced to look for new sources of revenue since the Chicago Board of Trade shifted its business to the neighbouring Mercantile Exchange in retaliation for The Clearing Corp's alliance with Swiss-German interloper Eurex.
OnExchange's Extensible Clearing System (ECS) is a J2EE-based application framework for real-time transaction processing and straight-through processing to exchange and clearinghouse customers. ECS is currently licensed by the New York Board of Trade, New York Clearing Corporation, the New York Mercantile Exchange, the London Clearing House (LCH), and Hedge Street.
The Clearing Corporation’s purchase will include onExchange's two subsidiaries - onExchange Board of Trade and onExchange Clearing Corporation. Although dormant, the former has been licensed as a DCM (designated contract market), and the latter has been licensed as a DCO (derivatives clearing organisation) by the Commodity Futures Trading Commission.
Upon completion of the transaction, Richard Jaycobs, onExchange CEO, will join The Clearing Corporation as a member of the senior management team and will continue to head onExchange's business activities.