Barclays to Outsource Certain Post-Trade Functions to SunGard

British bank Barclays will become the first customer of a new utility operated by tech vendor SunGard, in which it will outsource specific derivatives clearing operations and technology processes.
By Joe Parsons(2147488729)
British bank Barclays will become the first customer of a new utility operated by tech vendor SunGard, in which it will outsource specific derivatives clearing operations and technology processes.

The decision to outsource comes days after the chief of the bank, Anthony Jenkins, warned they would make further cuts to its investment banking unit if declining profits continued.

The utility will enable derivatives brokers to achieve greater efficient and reduce total cost of ownership by leveraging economies of scale in middle- and back-office processing and technology.

Barclays will migrate specific futures and over-the-counter (OTC) derivative clearing operations and regulatory reporting to SunGard. In addition it will transfer a number of employees to SunGard.

“By taking this leadership position with SunGard, we are able to provide our clients with a practical solution that keeps our products and services at the forefront of the industry,” says Tim Stack, head of agency derivatives services, Barclays.

“We are confident that this utility is a transformational change for the industry, and that it will help provide clear benefits to our clients, to Barclays and to the industry as a whole.”

The utility will be the first time these types of activities for derivatives will be carried out by a third party.

“Post-trade cleared derivatives processing is highly commoditized, providing little differentiated value to each firm at increasingly higher costs due to today’s regulatory environment,” adds Brian Traquair, executive vice president of SunGard Financial Systems.

Around four other banks are looking to sign up to the utility, Traquair told Global Custodian, and expects the utility to go live in Q2.

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