State Street, which this year regained its mantle as the world’s largest custodian bank, by a whisker, looks to be cementing its position by expanding further into front-office services. The Boston-based company last week announced it had acquired a transaction cost analysis specialist for foreign exchange markets, BestX.
The move, for an undisclosed sum, follows the acquisition of front-office information and order management provider Charles River, announced in July. State Street, which was a client of BestX, will acquire the business from Thomson Reuters.
According to ‘Global Custodian’ newsletter, State Street has already integrated the BestX software into its foreign exchange trading platform, FX Connect, so it can provide its global client base with transaction cost analysis capabilities.
BestX was established in 2016 with a view to create an industry standard for FX transaction cost analysis. JP Morgan became BestX’s first major institutional client when it implemented the firm’s third-party best execution analysis for electronic FX trading in January 2017.
Other major banks that have since signed up to use the company’s trading technology include Societe Generale and RBC Capital Markets, as well as State Street.
Jay Hooley, State Street’s chair and chief executive, said of the Charles River deal: “This represents an important milestone in our digital and technology transformation aimed at providing clients with differentiated solutions and data”.
State Street had US$33.8 trillion in assets under custody and administration as of June 30, compared with BNY Mellon’s $33.6 trillion. BNY Mellon had been the largest custodian for the past three years, but State Street has had a very strong couple of years for new business globally.
Greg Bright is publisher of Investor Strategy News (Australia)