European depository Euroclear is to acquire Xtrakter, the capital markets services division of trade association ICMA.
Originally established in 1985 to provide market services to the Association of International Bond Dealers, the company extended its brief four years later with the development of the Trax OTC trade matching and regulatory reporting system.
The division was rebranded as Xtrakter last year, when it was spun out of ICMA and now provides a range of capital markets data, operational risk management, trade matching and regulatory reporting services to the global securities market.
The ICMA board approved a proposal to sell off the unit in May this year.
Euroclear says the business will complement the OTC trade matching and routing service (ETCMS) offered by Euroclear Bank since 2000 and will enable it to completely automate the flow of trade information from trade matching through to settlement.
The combination is further expected to strengthen the appeal of the two companies as a mechanism for mandatory trade reporting. Regulators in Belgium, France, the Netherlands and the UK have awarded MiFID-compliant Approved Reporting Mechanism (ARM) status to one or both entities.
In a statement, Euroclear says that by the end of next year, trade data already input into the Trax system will be processed on an STP basis for settlement at Euroclear, "thereby eliminating trade matching duplication and reducing settlement fails, costs and risks".
Financial details of the transaction were not disclosed.