FIA has been pursuing strategic partnerships and additional investments for FIA Tech in order to enhance its successful industry initiatives and to further its expansion. With the approval of FIA’s Board, FIA has engaged with a group of 10 strategic investors to raise additional capital to fund FIA Tech’s ability to grow and develop new products, and to further FIA’s overall mission on behalf of members.
What is FIA Tech?
Before the investment, FIA Tech was a wholly-owned technology subsidiary of FIA that was created in 2007 by the FIA Board to automate the documentation and brokerage of give-up transactions between executing and clearing firms. Since that time, FIA Tech has responded to industry needs and expanded its suite of offerings to address reconciliation, compliance, and other needs of the FCM community and their clients.
What is the general structure of the transaction?
The transaction raises $44 million with a significant majority of that capital targeted for FIA Tech’s future growth.
Why has FIA decided to sell a portion of FIA Tech?
FIA Tech has expanded considerably over the past 5 years and is well positioned to bring additional solutions for improving market infrastructure and post-trade processing. As a not-for-profit trade association, FIA has reached the limits of its ability to fund initiatives and industry solutions at this scale. This transaction will enable FIA Tech to continue to operate the very successful products that currently serve the industry (such as Docs, Atlantis, and others) while funding growth and expansion to allow the development of innovative new products to meet the future demands of our industry.
What role will FIA play in the new FIA Tech?
Under the transaction, FIA will own an equal stake with the other ten investors in the new FIA Tech. The new ownership share will include board representation. By retaining some ownership in FIA Tech, FIA will be able to provide industry feedback and strategic direction to the new FIA Tech while increasing the amount of capital available to the company through its new investors.
What will happen to the current FIA Tech products?
FIA Tech’s current products will continue to be central to its growth, and FIA Tech’s Accelerate Platform on which they are built allow new services to be rapidly brought to market to address industry needs. Nevertheless, the transaction includes certain protections to ensure the ongoing servicing of FIA Tech’s current products, including Docs, Atlantis, OCR, Databank and eRecs. In addition, the investors in the transaction are significant users of FIA Tech’s current products, helping align the interests of all parties in maintaining and enhancing FIA Tech’s existing offerings and future growth.
How can the broader market become involved in the new FIA Tech services?
As it does at present, FIA Tech will continue to have a product advisory committee made up of members of the industry beyond the investors. FIA believes the most successful products are those that come from and serve the broader industry. Just as today, FIA Tech will offer its products to the broader marketplace on an equal and fair basis.
Who are the investors in this deal?
The investors are ABN AMRO Clearing, Bank of America, Barclays, Citi, Credit Suisse, Goldman Sachs, J.P. Morgan, Morgan Stanley, UBS, and Wells Fargo.