ICAP Sells Stake in Traiana to Seven Investment Banks

ICAP has sold a stake in technology unit Traiana to seven top banks in the latest example of the world's largest broker partnering with clients on key projects in a bid to retain their long-term support.

LONDON, Jan 14 ICAP has sold a stake in technology unit Traiana to seven top banks in the latest example of the world's largest broker partnering with clients on key projects in a bid to retain their long-term support.

ICAP said on Monday it had sold 12 percent of Traiana, which sells systems to streamline traders' back offices, to the banks for about $35 million.

The banks are Bank of America Merrill Lynch, Barclays, Citigroup, Deutsche Bank, JP Morgan, Nomura and Royal Bank of Scotland .

"Traiana's market leading technology assisted the foreign exchange industry in lowering the cost of processing transactions, which helped us make the $4 trillion of daily volumes that you see today a reality," said Troy Rohrbaugh, global head of foreign exchange and rates trading at JP Morgan.

The banks also struck a deal with ICAP whereby they can buy in the future an additional 20 percent of Traiana for $82.5 million, they said.

ICAP said it had changed Traiana's board to reflect the new ownership structure with each of the banks taking a seat alongside the division's chairman Gil Mandelzis and chief executive Andy Coyne.

Traiana, which provides banks and other trading firms with systems to automate post-trade processing and risk management, looks well positioned to tap reforms to make the over-the-counter (OTC) trading market more transparent.

Regulators want to force more of the vast OTC market to use exchanges and clearing houses to tackle some of the problems that arose after the collapse in 2008 of Lehman Brothers, a big OTC trader.

This will change how banks and brokers process these trades which could create more demand for Traiana products.

"Traiana is an increasingly important firm for us and our clients," said Thomas Gillie, co-head of G10 foreign exchange trading at BofA Merrill Lynch.

The Traiana sale is the latest example of ICAP selling stakes in its key initiatives to clients.

ICAP said in December Citigroup had joined Barclays, BofA Merrill Lynch, Deutsche and JP Morgan as an investor in the broker's swaps broking system i-Swap.

The British broker also said last month the door is open to other participants in i-Swap.