Citi Makes Strategic Investment in Cicada to Facilitate Institutional e-Trading of Mexican Government Bonds

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The investment was made by Citi’s Markets Strategic Investments unit, which is responsible for the sourcing and execution of strategic investments relevant to Citi’s Markets franchise.

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Wednesday, May 8, 2024
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Tags: 
Professional Services, Technology, Finance, Asset Management, Fintech, Banking, Digital Cash Management, Digital Assets, MSI, CLOB, ATS, Investment, TIIE, OTC, Partnership, Human, Data analysis, Lead, FINRA, Clearstream, RFQ
Geotags: 
MEXICO, UNITED STATES, UNITED KINGDOM, CANADA, CENTRAL AMERICA, NORTH AMERICA, EUROPE, NEW YORK, CONNECTICUT
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Stock Symbol: 
NYSE:C
Summary
Key Points: 
  • The investment was made by Citi’s Markets Strategic Investments unit, which is responsible for the sourcing and execution of strategic investments relevant to Citi’s Markets franchise.
  • Cicada has built an innovative all-to-all electronic alternative trading system (ATS) that helps global institutional buy-side and sell-side market participants trade Mexican Government fixed-income securities without the need of a pre-existing trading relationship.
  • Cicada enables the e-trading of 28 Mexican government bonds, including: nominal fixed-rate notes (Mbonos) and inflation-linked securities (UDIBonos) that can settle in Indeval, Euroclear or Clearstream.
  • The company is also looking to enable the trading of Cetes (Mexican T-bills), TIIE (Mexican interest rate swaps), Mexican corporate bonds and other emerging markets government securities.


Citi has made a strategic minority investment in Cicada Technologies Inc.

The investment was made by Citi’s Markets Strategic Investments unit, which is responsible for the sourcing and execution of strategic investments relevant to Citi’s Markets franchise. Citi will also act as a liquidity-provider for the trading platform.

Cicada is a fintech based in Greenwich, CT that also has a presence in Mexico. Citi joins existing investors Kaszek Ventures, Dila Capital and BCP Securities.

Cicada has built an innovative all-to-all electronic alternative trading system (ATS) that helps global institutional buy-side and sell-side market participants trade Mexican Government fixed-income securities without the need of a pre-existing trading relationship. The ATS is registered with the SEC and the broker-dealer activities of Cicada Securities LLC (a subsidiary of Cicada technologies Inc.) are regulated by FINRA.

Cicada enables the e-trading of 28 Mexican government bonds, including: nominal fixed-rate notes (Mbonos) and inflation-linked securities (UDIBonos) that can settle in Indeval, Euroclear or Clearstream. The company is also looking to enable the trading of Cetes (Mexican T-bills), TIIE (Mexican interest rate swaps), Mexican corporate bonds and other emerging markets government securities.

The size of the Mexican fixed income market is about $500 billion with an average daily trading volume of approx. $5 to $7 billion, according to data from Banxico. The market is lagging in electronification versus other asset classes. It’s estimated by Banxico that at least 85% of local bonds are traded by voice and OTC via traditional non-electronic brokers. To solve this, Cicada aims to enable technology adoption among market participants with the goal of migrating these volumes to e-trading.

Jose Luis Yepez, Head of Local Markets Rates Trading at Citi, said: “As a leading liquidity provider in the Mexican government bond market, our participation in Cicada’s platform reflects our ambition to be at the forefront of electronic trading.”

Cicada aims to speed the adoption of e-trading via a Central Limit Order Book (CLOB) and Request for Quotes (RFQ) protocols. The platform also offers automation tools for buy-side and liquidity providers, efficient execution of trades, connectivity to post-trade services and data analysis of live and historical bond prices.

Ignacio Tovar, co-founder of Cicada said “Traders are embracing technology quickly, and currently 15 well-known institutions are active on the platform and 10 are in the process of joining. Since launching last year, the trading volume on the platform has grown 15 times.”

“We are excited to invest in Cicada. The technology of the trading platform together with Citi’s partnership has the potential to enhance the efficiency of the multi-billion-dollar Mexican fixed income market,” said Aldo Alvarez, LatAm Lead at Citi’s Markets Strategic Investments unit.

Through investments in start-ups and early-stage companies, MSI promotes the development and adoption of new technologies, market structure and solutions to drive innovation.

About Citi

Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in nearly 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.

Additional information may be found at www.citigroup.com | X: @Citi | LinkedIn: www.linkedin.com/company/citi | YouTube: www.youtube.com/citi | Facebook: www.facebook.com/citi

About Cicada

Cicada Technologies, Inc. is a financial technology firm that develops and operates electronic trading solutions for global institutional clients. In 2022, Cicada launched an innovative all-to-all electronic alternative trading system (ATS) that helps global institutional buy-side and sell-side market participants trade Mexican Government fixed-income securities among each other without the need of a pre-existing trading relationship. The ATS is registered with the SEC and broker-dealer activities of Cicada Securities LLC (a subsidiary of Cicada technologies Inc.) are regulated by FINRA.

Additional information may be found at www.cicada.io | LinkedIn: www.linkedin.com/company/hellocicada/mycompany/

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