Quadriserv Inc., operator of a centrally-cleared marketplace for securities lending transactions, has raised $34 million in new VC funding. International Securities Exchange led the round, and was joined by Interactive Brokers Group, SunGard and return backers Bessemer Venture Partners, Renaissance Technologies and Round Table Investment Management. The company had previously raised around $17 million.
Quadriserv, Inc. today announced that the International Securities Exchange (ISE), which operates the world’s largest equity options exchange, has led a $34 million Preferred Stock investment round to support the AQS securities lending platform. AQS is operated by Automated Equity Finance Markets, Inc., a wholly owned subsidiary of Quadriserv. ISE was joined in this investing round by, among others, Interactive Brokers Group, SunGard, Bessemer Venture Partners, Renaissance Technologies, and Round Table Investment Management, who join existing institutional investors.
“This investment, led by securities exchange innovators and market leaders, demonstrates critical and widespread industry support for Quadriserv’s mission of bringing transparency and efficiency to the securities lending market,” commented Quadriserv Chief Executive Officer Thomas J. Perna. “We are especially honored by our new relationship with ISE and Eurex Clearing, whose deep commitment to innovation and structural market improvements are principles our companies fundamentally share.”
Gary Katz, President and Chief Executive Officer of ISE, added, “ISE’s strategic investment in Quadriserv underscores our focus on the development of market structure and technology that infuses new efficiencies and operational innovations into securities trading. We are firm believers that the AQS platform is a revolutionary solution that will dramatically improve the way securities lending transactions are executed and reported. Under the leadership of Quadriserv’s strong management team, we are excited about the prospects for the AQS platform to modernize this industry and meet the pressing demands of the current market environment.”
As part of the investment, Thomas Ascher, ISE’s Chief Strategy Officer, will join Quadriserv’s Board of Directors.
“The additional financial and strategic resources committed by our investing partners have been carefully considered and are important to the successful widespread adoption of the AQS marketplace, as will be the guidance and counsel of Tom Ascher, whom we are delighted to welcome to our Board of Directors,” added Perna.
AQS matches lenders and borrowers in an exchange-like platform using automated liquidity and price discovery mechanisms. The resulting matched loans are processed through The Options Clearing Corporation (OCC), which provides central counterparty guarantees and trading anonymity. Post-transaction reporting capabilities include real-time reporting of executed transactions, stock and cash movements through the Depository Trust Company, as well as record keeping and reporting via industry standard formats.
In addition to its clearing agreement with OCC for domestic equities, Quadriserv recently announced that it has executed a letter of intent with Eurex Clearing, under which Eurex Clearing would provide its state-of-the art central counterparty services to Quadriserv’s AQS platform for European equities.
About Quadriserv, Inc.
Quadriserv is a leader in delivering transformational market structure changes to the securities lending industry. Quadriserv, through its wholly-owned subsidiary, Automated Equity Finance Markets, Inc., has developed the AQS platform for securities lending. AQS, through its relationships with The Options Clearing Corporation and Eurex Clearing, has created a centrally-cleared marketplace for securities lending transactions. As a FINRA member broker-dealer and a SEC regulated Alternative Trading System (ATS), AQS aims to maximize liquidity, access, credit and transparency, while mitigating systemic risk, through a fully automated trading environment. For more information about Quadriserv, please visit www.quadriserv.com.
The International Securities Exchange (ISE) operates the world’s largest equity options exchange and offers options trading on over 2,000 underlying equity, ETF, index, and FX products. As the first all-electronic options exchange in the U.S., ISE transformed the options industry by creating efficient markets through innovative market structure and technology. Regulated by the Securities and Exchange Commission (SEC) and a member-owner of The Options Clearing Corporation (OCC), ISE provides investors with a transparent marketplace for price and liquidity discovery on centrally cleared options products. ISE continues to expand its marketplace through the ongoing development of enhanced trading functionality, new products, and market data services. As a complement to its options business, ISE has expanded its reach into multiple asset classes through strategic investments in financial marketplaces that foster technology innovation and market efficiency. Through its two minority investments, ISE participates in the securities lending and equities markets.
ISE is a wholly owned subsidiary of Eurex, a leading global derivatives exchange. Eurex itself is jointly owned by Deutsche Borse AG (Ticker: DB1) and SIX Swiss Exchange AG. Together, Eurex and ISE are the global market leader in individual equity and equity index derivatives. For more information, visit www.ise.com.
About Bessemer Venture Partners
Bessemer Venture Partners is a global investment group with offices in Silicon Valley, Boston, New York, Mumbai, and Tel Aviv. As the oldest venture capital practice in the United States, Bessemer has partnered as an active, hands-on investor in Ciena, Ingersoll Rand, Parametric, Skype, Staples, VeriSign, and W.R. Grace. Over the last century, Bessemer Venture Partners and its predecessor funds have invested in more than 100 companies that have gone public on exchanges in Canada, India, London, and the United States. To learn more, visit www.bvp.com.
About Interactive Brokers Group
Interactive Brokers Group, Inc., together with its subsidiaries, is an automated global electronic market maker and broker specializing in routing orders and executing and processing trades in securities, futures, foreign exchange instruments, bonds and funds on more than 70 electronic exchanges and trading venues around the world. The company provides professional traders and investors with direct access to stocks, options, futures, forex, bonds and mutual funds from a single IB Universal Account(SM). Employing proprietary software on electronic exchanges worldwide, Interactive Brokers is continuously integrating its software with a growing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention. To learn more, visit www.interactivebrokers.com.
SunGard is one of the world’s leading software and IT services companies. SunGard serves more than 25,000 customers in more than 70 countries, including the world’s 25 largest financial services companies.
SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software.
With annual revenue exceeding $5 billion, SunGard is ranked 472 on the Fortune 500 and is the largest privately held business software and services company on the Forbes list of private businesses. Based on information compiled by Datamonitor*, SunGard is the third largest provider of business applications software after Oracle and SAP. Continuity, Insurance & Risk has recognized SunGard as service provider of the year an unprecedented five times. For more information, please visit SunGard at www.sungard.com.