eflow Set For Growth Following Investment From South West Ventures Fund
A Wells based company which develops software for the banking and financial industry has secured £330,000 from the YFM Group managed South West Ventures Fund. The funding will enable eflow (UK) Limited to take advantage of a growth in demand for specialist software by financial traders following the introduction of the Markets in Financial Instruments Directive (MiFID).
eflow’s TransacTzar software provides evidence that a trading firm has achieved ‘best execution’ and has complied with the new European MiFID regulation. It does this via a comprehensive transaction monitoring platform that re-creates and stores the market conditions, trade by trade. The software is considered by Thomson Reuters (a shareholder and partner in the business) to be a unique product in terms of its flexibility and functionality. TransacTzar can be deployed in the five main asset classes: equities, foreign exchange, money markets, commodities and derivatives.
The MiFID regulations cover all companies trading financial instruments, including banks, investment banks, broking houses, market data companies, trading platforms and exchanges. The Directive requires all financial institutions to adhere to a code of best execution – taking into account price, venue, cost and speed – and to demonstrate transparency, retaining concise details of every trade for a period of five years.
eflow was founded in 2004 by Marsha Parker, who developed the successful PATH (Peer Application Transaction Hub) technology, which carries out much of the workflow between trading and settlement systems. Users include the Co-operative Bank and Hypo Vereinsbank; PATH has enabled Hypo Vereinsbank to move from 800 trades a day and 20 back-office staff to more than 6,000 trades a day and just five staff.
TransacTzar uses PATH technology to create a trades-based data model which sits alongside the trading software used by financial institutions, ‘listening’ to and recording all transactions to create a detailed record and to match this against real-time pricing data. The software then reconciles each trade and measures whether the transaction achieved best execution, ensuring compliance with the MiFID regulations and the creation of a full audit trail for FSA purposes. The results are displayed on a ‘dashboard’ that highlights any exceptions; the trader will note on the system the reason for the exception, which is then passed to the treasurer for authorisation or further action.
The technology is delivered by a hosted application service provider via the internet on a fee-per-transaction basis and as such is suitable for both small and large users.
Marsha Parker said: “eflow deals with and supports blue chip clients in the City with Mission Critical system. YFM Group’s funding will enable us to roll out the software platform to other blue chip institutions across the city. eflow recently completed an implementation with MF Global (Man Securities) in London. MiFID is in its infancy and MF Global believe that TransacTzar provides the best solution of MiFID compliance, particularly as the directive evolves over time.”
Julian Dennard, Senior Investment Manager at YFM Group, managers of the South West Ventures Fund, said: “The market has grown as a result of the MiFID regulations. Tier 2 and lower financial institutions do not have the systems or infrastructure to record and store the information required to be compliant. Many do not have the resources necessary to implement a solution in-house, creating demand for TransacTzar’s ‘off the shelf’ solution.”
The professional team advising in respect of this deal included Andrew Betteridge, of Ashfords Solicitors in Bristol, and Alan Cottle, of Pegasus Funding Resources. Due diligence was performed by Richard Plunkett at Milstead Langdon.
ENDS
NOTES TO EDITORS:
YFM Group - South West Ventures Fund
The YFM Group managed South West Ventures Fund is a £21m fund that has been set up to provide venture capital to small and medium sized enterprises (SMEs) based in the South West of England. Initial investment can be up to £330,000 with an ability to invest a further £330,000 after six months. In certain circumstances, alongside other new investors, the Fund can follow on its investments to provide a total of £2.5 million to one company. To date the fund has invested £9.5m in 29 companies.
YFM Group – is the UK’s most active investor in the small and medium enterprise marketplace. YFM Group manages in excess of £300 million of funds with investment sizes ranging from £50,000 to £5 million. Principal offices are located in Leeds, Manchester, London and Bristol with over 45 investment professionals being employed across the UK.
South West Ventures Fund is managed by YFM Venture Finance Limited part of the YFM Group. YFM Venture Finance Limited is authorised and regulated by the Financial Services Authority.
For further information about YFM Group and South West Ventures Fund, please telephone 0117 906 3410, log on to www.southwestventuresfund.co.uk or email info@southwestventuresfund.co.uk
Media enquiries:
To arrange an interview with South West Ventures Fund, please contact Matt Anderson or Hannah Roberts at Montage Communications on 0845 644 5404 / 07872 399 767 or email hannah@montagecomms.com