Forefront Fintech Digest Week In Review: November 7 - November 11
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Broker News
Pro Traders and Algorithms Have Overrun the Fast-Twitch Option Market
Bloomberg News | Lu Wang
While it might look like a reprise of meme-era excess, the 2022 boom in very-short-lived index options is more than a retail phenomenon. So say JPMorgan Chase & Co. strategists including Peng Cheng, whose team studied public trading data and found that small-fry investors can’t be responsible for the explosion of S&P 500 contracts that mature within 24 hours, a category known as zero day to expiry, or 0DTE. The assumption that this particular trading frenzy was the province of retail day traders has been fueled by the prevalence of small-size transactions, typically associated with the retail crowd, Peng says.
BNP Paribas Set to Expand Exane in the U.S.
Reuters | Carolina Mandl
BNP Paribas is expanding its equity research house Exane in the United States, after the euro zone's biggest lender took it over last year, the bank said on Tuesday. BNP plans to increase Exane's coverage of U.S. companies to 450 stocks from its current 180 stocks by 2025, mainly in the technology, media, telecommunications, consumer, healthcare and industrials sectors, it said. It also intends to boost its workforce with analysts, traders and salespeople, BNP said in a statement. The strategic plan foresees at least 50 new hires by 2025, a person familiar with the matter said.
Goldman Sachs’s 80 New Partners Are the Happiest People on Wall Street Today
Wall Street Journal | AnnaMaria Andriotis
Goldman Sachs Group Inc. promoted 80 bankers into its partnership on Wednesday, the biggest class since Chief Executive David Solomon took over in 2018. Top brass in recent years had come to view the partnership as less prestigious than it once was, and Mr. Solomon has been trying to restore its allure, in part by elevating fewer people. Goldman promoted 60 new partners in 2020 and 69 in 2018. Both times, it marked the smallest class in two decades. Last year, though, Goldman named its largest-ever class of managing directors, the final role before a coveted partnership.?
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Exchange, ATS & Clearing News
Sam Bankman-Fried Steps Down as FTX CEO as His Crypto Exchange Files for Bankruptcy
CNBC | MacKenzie Sigalos
Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy protection in the U.S., according to a company statement posted on Twitter. Bankman-Fried has also stepped down as CEO and has been succeeded by John J. Ray III, though the outgoing chief will stay on to assist with the transition. Approximately 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and FTX.us, the company’s U.S. subsidiary.
Bloomberg Equity Derivatives Specialist Joins Cboe Global Markets as Head of European Derivatives
The TRADE News | Wesley Bray
Cboe Global Markets has named Iouri Saroukhanov as its new head of European derivatives. Based in London, Saroukhanov will oversee Cboe Europe Derivatives (CEDX), reporting directly to Natan Tiefenbrun, president of Cboe Europe. Saroukhanov replaces Ade Cordell, who will become president, Asia-Pacific, overseeing the business operations of Cboe Australia and Cboe Japan (formerly Chi-X Asia Pacific), alongside holding responsibility for the company’s further expansion into the region. Saroukhanov joins Cboe Global Markets from Bloomberg, where he served as equity derivatives specialist over the last six months.
TMX Embarks on Data Diversification and Expansion Play With WSH Buy
WatersTechnology | Max Bowie
Exchanges have been snapping up data providers in a bid to expand their businesses beyond traditional transactional and market data-based revenues. There’s the Intercontinental Exchange’s purchase of Interactive Data; Nasdaq buying Quandl; the London Stock Exchange Group acquiring Refinitiv; and Cboe assembling a cadre of analytics by piecing together the likes of Livevol, Trade Alert, Hanweck and FT Options. Now, it’s TMX’s turn. The Canadian exchange group’s acquisition of Boston-based events data vendor Wall Street Horizon (WSH) for an undisclosed sum, which was announced on Monday, is part of a drive at the exchange to expand the amount of unique content it can deliver to clients, following the appointment of Michelle Tran as president of its Datalinx data division last year.
Singapore Exchange Launches Digital Asset Trading Solution Through FX Subsidiary
The TRADE News | Laurie McAughtry
Singapore Exchange (SGX) subsidiary MaxxTrader, a single source and direct-to-market FX trading platform, has deepened the digital liquidity pool with the launch of MaxxDigital, a new digital asset trading solution. MaxxTrader’s first foray into the digital space, MaxxDigital offers OTC FX execution features for digital assets trading, as well as streaming, Request for Stream (RFS) and Request for Quote workflows. Users gain access to a deeper liquidity pool, ranging from OTC exchanges and market makers to electronic communication network (ECN) and exchanges offering listed crypto futures.?
Nasdaq Moves First Market to Cloud
Markets Media | Shanny Basar
Nasdaq has completed the move of its first market to the cloud as part of its multi-year partnership with Amazon’s cloud business, AWS, to migrate all of its North American markets. In November last year Nasdaq announced a partnership with AWS to move its North American markets to the cloud in a phased approach, starting with US options market Nasdaq MRX. Brenda Hoffman, chief technology officer for the Market Platforms division, said on a panel at Nasdaq’s investor day on 8 November that over the last year the firm has been moving products and services that run the 25 core trading markets that it owns and operates to the cloud.
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Vendor News
Fordefi Raises $18M Seed Round to Launch Institutional DeFi Wallet and Security Platform
PRNewswire | Staff
Fordefi, a financial technology and software company, today announced an $18 million seed round and the public launch of its institutional MPC wallet built for transacting on decentralized applications (dApps). Led by Lightspeed Venture Partners, the investors of the firm's initial capital raise also include Electric Capital, Alameda Research, Jump Crypto, Castle Island, Pantera Capital, Illuminate Financial, PayPal Alumni Fund, Nima Capital, Digital Currency Group, Defiance Capital and StarkWare.
ION Markets Launches New Derivatives Suite
The TRADE News | Laurie McAughtry
ION Markets has expanded its cleared derivatives offering with XTP, a front-to-back product suite providing real-time insights into net positions, margins, risk, analytics, commissions and more. “Record trading volumes, persistent market volatility and sudden shifts in valuations have challenged the derivatives industry to an unprecedented degree,” said Francesco Margini, chief product officer – cleared derivatives at ION Markets, speaking to The TRADE.?
Stablehouse Announces Partnership with Apex Group, Offering White Label Digital Asset Solutions for Institutions
PRNewswire | Staff
Stablehouse, the digital assets investment platform on a mission to make crypto a part of everyday finance, today announced a white label integrated digital asset and trading solution partnership with Apex Group, a global financial services provider. Apex Group delivers an expansive range of services to asset managers, financial institutions, private clients and family offices with a single-source solution, establishing the broadest range of services in the industry including fund services, digital onboarding and bank accounts.?
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Buy-Side News
UBS’s Global Head of Trading Joins Plato Board
The TRADE News | Wesley Bray
Plato Partnership has added UBS Asset Management’s Lynn Challenger to its board of directors. Challenger holds over 25 years’ experience in capital markets, multi-asset trading, technology, best execution and investment operations. He currently serves as managing director, global head of trading and order generation at UBS Asset Management, where he has spent the last six years. Prior to that, Challenger spent nearly a year at Bridgewater Associates as head of execution – trading. Challenger also previously served on the board of directors at San Francisco-based, non-profit organisation, March of Dimes.
Hedge Fund Firm Millennium to Shake Up Investment Operations
Financial Times | Laurence Fletcher
Millennium Management, one of the world’s biggest hedge fund firms, has unveiled a shake-up of the organisation of its investment operations that will see co-chief investment officer Bobby Jain depart. Founder Izzy Englander wrote to employees on Tuesday, in a note seen by the Financial Times, saying that the firm, which manages $59bn in assets, will set up a so-called “office of the chief investment officer”, which will include two new co-CIOs and the heads of risk management in the asset classes in which the firm trades.?
Vanguard’s Head of Tech Details the Asset Manager’s Move to the Public Cloud That’s Already Helped It Cut Costs by 30%
Insider | Bianca Chan & Carter Johnson
Vanguard's tech chief is ready to play the field when it comes to the public cloud. Since Vanguard's first big push into public cloud in 2019, the firm has primarily relied on Amazon Web Services for much of its cloud tools. But Michael Carr, Vanguard's chief technology officer, told Insider the firm is ready to explore other public-cloud providers as it builds a hybrid model that pulls the best from the likes of Google Cloud Platform and Microsoft Azure. "At some point in 2023, we'll certainly be running in more than one cloud and by maybe 2023, 2024 probably three clouds," Carr said, describing what he called Vanguard's "best-in-breed" approach going forward.
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M&A / Investment News
Binance Walks Away From Deal to Rescue FTX
Wall Street Journal | Patricia Kowsmann, Caitlin Ostroff & Berber Jin
Crypto exchange Binance reversed course on a rescue offer for FTX Wednesday, leaving the prominent digital firm with an uncertain future as it faces a shortfall of up to $8 billion, according to people familiar with the matter. Binance chose not to go ahead with the nonbinding offer following a review of the company’s finances, the exchange said. “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in a statement.
Crypto VCs Reckon With Failing FTX Investments
Blockworks | Sebastian Sinclair
Venture capital (VC) firms Sequoia and Multicoin Capital have issued letters to limited partners advising them of their exposure risk to collapsed crypto exchange FTX. Multicoin Capital, a crypto-focused VC unit, has reportedly told partners of its Master fund that it was unable to pull all of its crypto held on FTX before withdrawals were halted on Tuesday, saving just 24% of the funds held there. FTX had witnessed an influx of $6 billion in withdrawals, triggering a bank run that followed revelations the firm was engaged in talks with Binance over a buyout deal. That deal has since soured.
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Regulatory & Legal News
Sam Bankman-Fried's FTX Empire Faces US Probe Into Client Funds, Lending
Bloomberg News | Lydia Beyoud, Yueqi Yang & Olga Kharif
US regulators are investigating whether beleaguered crypto-exchange FTX.com mishandled customer funds, and they’re looking into the firm’s relationships with other parts of Sam Bankman-Fried’s crypto empire. The inquiries by the Securities and Exchange Commission and the Commodity Futures Trading Commission relate to the liquidity crisis that has pushed FTX to the brink, according to three people familiar with the matter. The SEC’s scrutiny started months ago as a probe into FTX US and its crypto-lending activities, said two of the people, who who weren’t authorized to speak publicly on the matter.
CBDCs Could Reduce FX Transaction Speeds to 10 Seconds, NY Fed Says
CoinDesk | Nikhilesh De & Jesse Hamilton
Foreign exchange transactions could drop from a two-day process to less than 10 seconds if central bank digital currencies (CBDC) were involved, according to an experiment conducted by the Federal Reserve Bank of New York. Project Cedar, a research effort launched by the N.Y. Fed’s New York Innovation Center (NYIC), tested the speed of FX transactions using distributed ledgers, finding that in a simulated example, they could lower the speeds of transactions with multiple participants and observers. The project intended to research the benefits of wholesale CBDCs, according to a brief report published Friday.
Auctions Loom Large in SEC’s Equity Market Overhaul
FlexTrade | Ivy Schmerken
The Securities and Exchange Commission’s plans to overhaul stock trading rules are starting to materialize, and the first set of proposed rules to emerge could focus on routing small retail orders to auctions with midpoint prices. On Oct. 27, the Wall Street Journal reported that the SEC is considering a proposal that will require brokers to route retail investor orders to auctions, “where trading firms would compete to execute them, people familiar with the matter said.”?
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Crypto?& Digital Asset News
FTX Plunges Further into Chaos as Legal and Compliance Staff Quit
Semafor | Liz Hoffman, Bradley Saacks & Louise Matsakis
Most of FTX’s legal and compliance staff quit Tuesday evening, putting the crypto exchange in an even more precarious situation, people familiar with the matter told Semafor. Their departure will likely complicate a still-tenuous rescue of the company, which yesterday agreed in principle to sell itself to a rival, Binance. That deal, which would bring together two of the biggest crypto exchanges that allow users to trade digital assets like bitcoin, remains subject to due diligence by Binance.
B2C2 Names Former Citadel Securities Fixed Income Operations Chief as Group CEO
The TRADE News | Wesley Bray
Crypto market maker B2C2 has appointed former global chief operating officer of fixed income at Citadel Securities, Nicola White, as group chief executive officer. She will replace Phillip Gillespie, who will step down from the role to focus on a ventures role with SBI, the Japanese financial group which acquired B2C2 in 2020. White has been promoted to the position after serving as chief executive officer, USA for B2C2 over the last year. During her tenure, she led the effort to expand B2C2’s capabilities in electronic trading across spot and derivatives.
Google Signals Major Crypto Push With Ethereum, Solana Support
Blockworks | Shalini Nagarajan
Google Cloud has trumpeted a series of collaborations with popular blockchain networks Ethereum and Solana in recent weeks, accelerating the tech giant’s support of Web3. Late last month, Google Cloud announced a node-hosting service for Web3 developers called the Blockchain Node Engine. The tool is designed to help build and deploy on blockchain-based applications and platforms. Ethereum is the first blockchain supported by the engine. Rival network Solana is to follow soon, per a tweet over the weekend. The post sparked a near-20% rally for the network’s native token, although it has since given up most of those gains.
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