Kaizen Reporting has purchased a majority stake in London Reporting House.
London Reporting House was formed in 2021 by chief executive Danny Corrigan, head of product Richard Comotto and a team of fellow repo specialists that aim to bring a new level of real-time transparency to the repo markets.
Its platform aggregates, enriches and evaluates Securities Financing Transactions Regulation (SFTR) trading data on an anonymised basis to provide deeper insight into repo market trading conditions in the European Union and UK.
With the acquisition by Kaizen, London Reporting House’s tools and analytics will be available through its web-based regulatory information and compliance platform known as Kaizen Hub.
Speaking about the transaction, Kaizen Reporting CEO Dario Crispini says: “Our partnership with London Reporting House shows our commitment to expanding the services we can offer our clients. It also highlights our belief in the expertise and creativity that Danny and Richard bring to London Reporting House and the products they are building.
“The products they are creating provide invaluable information for trading and risk teams at a time when financial institutions are looking for enhanced transparency and data across all markets.”
Danny Corrigan, CEO and co-founder of London Reporting House, comments: “By joining forces [with Kaizen Reporting], we are able to enhance our offering and build out our platform which leverages Kaizen’s IT infrastructure and legal framework for onboarding.
“Bringing their expertise and technology together with ours, we are able to offer the repo market a unique service that creates a transparent and deep view of the UK and EU repo markets.”
To explain the rationale for this transaction from a Kaizen perspective, Crispini tells Asset Servicing Times that Kaizen Reporting has a sizeable book of large bank and buy-side clients active in its SFTR reporting service and it has been working with these clients to find ways of delivering additional value from their reporting data.
“Kaizen Reporting is heavily focused on data quality and we offer an SFTR data quality service to assess the quality of SFTR data that firms are reporting to trade repositories,” says Crispini. Subsequently, London Reporting House has applied this SFTR data to develop a range of metrics and analytics for the EU and UK repo markets,
London Reporting House CEO and co-founder Danny Corrigan explains that this repo market solution could not have happened without SFTR, but also could not have been developed without Kaizen and the surety it provides in verifying the accuracy of SFTR reporting from clients using its reporting service.
“Initially we will offer the solution for four core markets, namely repo trades against UK gilts, German bunds, French OATs and the Italian BTP,” says Corrigan. “We will begin with these relatively widely-traded government securities to demonstrate that the service works but, over time, we expect to extend this to repo transactions in other bond markets.”
The aim is to begin with a proof of concept for these four markets and across five products, specifically GC repo spreads and curves, specials, transaction volumes along with collateral haircuts and pricing.
London Reporting House is working with approximately 20 firms in developing this repo market data and analytics solution, with five early adopter firms - including large dealer firms and asset managers - active in testing the initial service offering. “By the summer of 2023, we are confident of being live for several firms and for five products across four markets,” says Corrigan.
“There is no lift or transition process for the users in technology terms. They can pull this data directly from the Kaizen Hub using a user interface (client dashboard) or via API,” he adds.
Kaizen Reporting’s Crispini indicates that the service that London Reporting House is putting together will be the first time this level of market insight and transparency will be available for the EU and UK repo markets.
The full terms of the deal have not been disclosed, but the London Reporting House, led by Corrigan as chief executive, will continue to operate independently with majority ownership from Kaizen.
However, London Reporting House will benefit from some shared resources, including use of Kaizen’s human resources division and expertise within the finance department, legal and relationship management.
Last week, London Reporting House confirmed the addition of securities finance market veteran Mick Chadwick to its team.
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