Forefront Fintech Digest Week in Review: July 15-19
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Broker News
Citadel Securities Crafts Plan to Shake Up Banks’ Trading Desks
Bloomberg News | Katherine Doherty & Sridhar Natarajan
Inside Ken Griffin’s Citadel Securities, a new strategy for handling even more of Wall Street’s trading is starting to take shape — with implications for struggling banks and brokerages around the world. The goal is to offer such firms a white-label trading service: They would deal with customers while Citadel Securities manages the guts of their trading desks, including technology, analytics and order execution. The nascent plan, described by people with direct knowledge of the matter, could be pitched as a solution for units where profits are getting eroded by stiffer capital rules, competitive pressures to lower fees and the need to make costly upgrades.
State Street Shifts Brazil Head to Focus on CF Global Integration
The TRADE News | Chris Lemmon
State Street has appointed Tomas Truzzi as CEO of State Street Brazil, replacing Telly Theodoropoulos, who has led operations in the country since its foundation in 2019. In the role, Truzzi will be responsible for overseeing all strategic initiatives and operations within the country, with a view to promoting growth within one of Latin America’s key markets. Truzzi joined State Street Brazil in 2019 as head of FX trading. In his previous role, he oversaw the foreign exchange market making desk and managed Banco Commercial’s local treasury function.?
Citi Names New EMEA Head of Electronic Equity Sales Trading
The TRADE News | ?Annabel Smith
Citi has named a new head of electronic equity sales trading for the EMEA region, The TRADE can reveal. Based in London, Jamie Miller has been appointed to head up the division in EMEA after eight and a half years as an employee of the bank, specialising in equity sales trading, according to an update on his social media. Miller originally joined Citi after serving for two internships in the bank’s markets division in 2013 and 2014. He joined the bank as a permanent fixture in 2016 as a graduate analyst in its markets division, later moving into equity sales trading in 2018.?
Growth of US Electronic Equities Trading Sees Interest in Expanding Team Headcounts Increase
The TRADE News | Wesley Bray
With electronic equities trading continuing to rise, a notable proportion of US low-touch desk expect to expand their teams over the next 12-18 months, a new report from Coalition Greenwich has found. Roughly a third of respondents plan to bolster their algo sales and desk coverage, while a quarter are looking to boost their execution and analytics consulting, on-desk trading assistant, and trade operations or algo support headcounts. Coalition Greenwich found that the rest have decided to remain steady, however various respondents did indicate that they plan to expand in the longer-term.
Analysis: Hidden Road Eyes Opportunities in Futures Clearing
FOW | Luke Jeffs
Hidden Road, the US credit network, became in January the first new US futures commission merchant (FCM) to start clearing CME Group futures and options in a long time, reversing a trend that has seen brokers exiting the market for decades. Speaking to FOW as the US firm marked six months as an FCM, Hidden Road's global head of business development Michael Higgins said the long-term consolidation among clearing brokers has affected the commercial dynamics between clients and their FCMs.
Exchange & ATS News
Eurex Expands Crypto Derivatives Suite With the Launch of Ether Futures and Options
The TRADE News | Daniel Kuhn
Eurex is set to expand its crypto derivatives portfolio with the launch of FTSE Ethereum index futures and options on 12 August. The move builds upon the launch of FTSE Bitcoin index futures and options last year, falling in line with Eurex’s goal to offer secure access to cryptocurrencies in a regulated market environment. According to the exchange, there is significant trading and hedging demand from institutional and professional customers for Ethereum, as reflected in record trading volumes in derivatives and other investment products.
Liquidnet Enhances Bond Deal Speed Through Incorporation of Boltzbit’s AI Solution
The TRADE News | Claudia Preece
Liquidnet has implemented Boltzbit’s offering to enhance its operations through Gen-AI with the aim of making bonds more readily available through its dashboard.?This technological enhancement to Liquidnet’s fixed income primary markets workflow specifically allows Liquidnet to receive, process, and display newly announced bond deals at a significantly faster rate.?The technological enhancement speeds up the time between users receiving unstructured deal data and the bonds being ready by 90%, according to Liquidnet.
Crossover Markets Believes in ECN Model for Crypto
Markets Media | Shanny Basar
Crossover Markets was named with the intention of bringing expertise from traditional finance into cryptocurrency and, in time, to deliver crypto expertise into TradFi, such as 24/7 trading. The firm has launched CROSSx which it said is the first execution-only crypto electronic communication network (ECN) for institutional participants and raised $12m in funding in June this year. Brandon Mulvihill, co-founder and chief executive of Crossover Markets, told Markets Media: “We were the first ECN in the crypto space.”
SEC Greenlights MIAX's August Launch of New Taker-Maker US Options Venue
The TRADE News | ?Annabel Smith
MIAX has gained approval from the US Securities and Exchange (SEC) for its new US options electronic exchange and physical trading floor, MIAX Sapphire. Set to launch on 12 August, the new electronic exchange will operate using a taker-maker pricing and price-time allocation model. The physical trading floor is expected to go live in 2025 and will be the first national securities exchange to be established in Miami, Florida.?
Japan Stock Exchange Chief Says Reforms Are Cutting Down ‘Aimless’ Listings
Financial Times | David Keohane & Kana Inagaki
The chief of Japan’s stock exchange said fewer companies were listing “aimlessly” as a result of its corporate governance drive and rising shareholder activism. Hiromi Yamaji, the head of the Japan Exchange Group which controls the Tokyo Stock Exchange, said in an interview with the Financial Times that in the past, companies “just kept listing because it was prestigious.” He added: “But now that is changing due to increased expectations from shareholders and because of the exchange’s own push to improve corporate governance.”
Vendor News
Bloomberg Launches Auto Allocation Capability
Traders Magazine | Anna Lyudvig
Bloomberg has continued the integration of its trading automation offering into the buy-side workflow, by launching an auto allocation capability. “Post-trade Allocation is a critical part of trade life cycle that happens after a trade is executed but has not yet been settled, said Chris Clodius, Global Head of Buy-Side Trade Automation, Bloomberg. The handoff between the trade and operations teams is often forgotten, but it can have financial implications if something fails or not doing in a timely manner, he said.
Pico, Blue Ocean Partner for After-Hours US Equities Trading
Markets Media | Staff
Pico, a leading global provider of mission-critical technology services, software, data and analytics for the financial markets community, announced a connectivity partnership with Blue Ocean Technologies, LLC (BOT), a capital markets fintech leader in global trading and data, to expand Pico’s market services for after-hours trading. As a result, PicoNet? clients will now be connected to BOT’s Blue Ocean ATS to access enhanced overnight trading capabilities for US equities.
Northern Trust Offers Internal Fund Accounting, Data Tools to Clients
WatersTechnology | Wei-Shen Wong
Custodian bank Northern Trust is building tools to improve oversight and transparency in the services it provides to its buy-side clients. The objective is to help asset managers meet their obligations to regulators and their end investors. Though these obligations have always existed, they haven’t necessarily been a priority in conversations with asset managers, says Caroline Higgins, Asia-Pacific head of global funds services at Northern Trust. The bank aims to change that. “For example, in fund accounting, we have tools that allow us to complete our oversight of our activities that evidence that.?
How is ChatGPT Making Inroads on Wall Street?
TabbFORUM | Ivy Schmerken (FlexTrade Systems)
There is a buzz around generative AI systems, with their ability to produce content and calculate new data, but no one is replacing higher-level jobs in trading or investment management, writes Ivy Schmerken, Editorial Director at FlexTrade Systems. While some predict that Large Language Models (LLMs) can play a transformative role in research, investing and trading, firms are proceeding cautiously and are focused on using ChatGPT to create efficiencies and boost productivity while keeping humans in the loop as decision makers, Ms. Schmerken explains.
Buy-Side News
Scaramucci’s SkyBridge Limits Client Exits Even as Crypto Soars
Bloomberg News | Katherine Burton
Anthony Scaramucci effectively barred clients from exiting SkyBridge Capital’s crypto-focused hedge fund, even though returns have jumped. Investors who own about 70% of the fund’s shares asked for their money back in the latest redemption period that ended in March, according to a regulatory filing. The fund — which returns money through a tender offer — bought back roughly 7% of those shares. Scaramucci, 60, declined to comment, but he previously said the fund lets him limit redemptions and that he’s “operating inside the ambit of the prospectus.”
BlackRock to Integrate Aladdin and Preqin to Create New Private Markets Platform
WatersTechnology | Eliot Raman Jones
Asset management giant BlackRock will combine the capabilities of its investment platform and order management system (OMS), Aladdin, with the data and analytics features of its most recent acquisition, Preqin, to provide a “differentiated technology and analytical platform” for private markets, said CEO Larry Fink. BlackRock made a significant push into the alternative assets space when it announced on July 1 its intention to buy the London-based alternative assets data provider for $3.2 billion. Fink said he believes the combination of Aladdin and Preqin will lead to the creation of a powerful new platform for the private markets.
领英推荐
Ex-Jefferies Fund Manager in Fraud Suit Quits Weeks Into New Job
Bloomberg Law | Carmen Arroyo?
Jordan Chirico, a former portfolio manager at a Jefferies Financial Group hedge fund, has left restaurant chain FAT Brands Inc. after about two weeks on the job as he faces fraud allegations tied to his previous role. Chirico stepped down as head of debt capital markets to focus on his defense in the litigation brought forward by 352 Capital, a Jefferies fund, according to a FAT Brands spokesperson. He had joined the restaurant chain in early July to work on the company’s balance sheet. He has no replacement at this time, a representative said in an emailed statement.
Morgan Stanley Investment Management’s London Equity Trading Head Retires
The TRADE News | Claudia Preece
Head of London equity trading at Morgan Stanley Investment Management Mark Perry has retired, The TRADE can reveal. Morgan Stanley Investment Management serves both institutions and high net worth individuals worldwide, spanning private equity, private credit, infrastructure and private real estate markets.?The business operates in more than 41 countries, employing over 70,000 professionals globally. Morgan Stanley Investment Management declined to comment when approached by The TRADE.
Balyasny, Squarepoint Hire Gas, Power Traders as Sector Heats Up
Bloomberg News | ?Devika Krishna Kumar & Nishant Kumar?
Hedge funds including Balyasny Asset Management and Squarepoint Capital Llp are scooping up traders and analysts who specialize in natural gas and power as volatility in those markets creates opportunities to profit. Balyasny hired Joe Constantinou, previously a power trader with Bank of America Corp., while Squarepoint hired Ben Chu as a quantitative researcher focused on gas, people familiar with the moves said. BlueCrest Capital tapped Chase Allen, who will start in September in Austin, the people said.?
M&A / Investment News
Bain Capital to Buy Financial Software Vendor Envestnet in $4.5 Bln Deal
Reuters | Niket Nishant
Private-equity firm Bain Capital will buy Envestnet, opens new tab in a $4.5 billion deal, adding to its portfolio a financial software vendor that counts 16 of the 20 biggest U.S. banks among its customers. A cohort of investors, including Reverence Capital, BlackRock, opens new tab, Fidelity Investments, Franklin Templeton, opens new tab and State Street Global Advisors, opens new tab, is backing the transaction, Envestnet said on Thursday. Berwyn, Pennsylvania-based Envestnet offers software for wealth managers and data for financial institutions and investment research firms. Its clients also include 48 of the 50 largest wealth management and brokerage firms.
ION Set to Close $1.5 Billion Deal for Italy’s Prelios This Week
Bloomberg News | Daniele Lepido & Sonia Sirletti
ION Group is set to complete the acquisition of asset manager Prelios SpA as soon as this week, following months of back-and-forth with Italian authorities on the deal. The fintech group’s purchase of Prelios for €1.35 billion ($1.5 billion) could be signed already on Thursday, the people added. The closing is a win for London-based ION, a group controlled by Italian businessman Andrea Pignataro, which first bid for the asset management company in 2023. Spokespeople for ION and for Prelios declined to comment.?
Clear Street to Buy Instinet’s Fox River Algo Business
Markets Media | Staff
Clear Street, a cloud-native financial technology firm on a mission to modernize the brokerage ecosystem, has entered into a definitive agreement to acquire Instinet’s Fox River algorithmic trading business. Fox River provides a comprehensive suite of algorithmic execution solutions in US and Canadian equities. These offerings cater to buy and sell-side firms, including many of the industry’s leading quant-driven funds.
Standard Chartered-Backed Zodia Markets To Acquire Elwood Technologies’ OTC Trading Business
The TRADE News | Claudia Preece
UK-based digital asset trading business Zodia Markets – backed by Standard Chartered – is set to acquire Elwood Technologies’ OTC business. Elwood provides digital asset execution and portfolio management software. Its OTC trading business is based in Jersey?and regulated by Jersey Financial Services Commission. Chris Lawn, chief executive of Elwood, said: “This sale marks an important new chapter for Elwood and strengthens our position as a leading provider of execution and portfolio management software for global institutions that trade and manage digital assets."
Regulatory & Legal News
Banks Cry Foul Over Shock Decision From Basel Committee
Risk.net | Samuel Wilkes
Following 2022’s steep interest rate rises, the Basel Committee on Banking Supervision sought to update the size of hypothetical shocks used in a test identifying banks most at risk from a spike in rates. Not only did it expand the data set underpinning the shocks, it increased the confidence level for determining the historical observation of rate moves on which the shocks would be based. A higher confidence level means a more extreme scenario is selected, upping the severity of the test. Banks say this means they would be using unrealistic scenarios to test interest rate risk.
FTX and CFTC Agree to $12.7 Billion Settlement Following Months of Negotiations
The Block | Sarah Wynn
Bankrupt crypto exchange FTX and the U.S. Commodity Futures Trading Commission have agreed to a $12.7 billion settlement, pending approval from a Delaware judge. The two have been negotiating over the past few months, according to a court document filed on July 12 in the U.S. Bankruptcy Court for the District of Delaware. "The Proposed Settlement is an integral and valuable component of the Debtors’ proposed chapter 11 reorganization plan," according to the filing.?
ESMA Consultation on Establishment of Order Execution Policies Opened as Mifid II Review Continues
The TRADE News | Claudia Preece
The European Securities and Markets Authority (ESMA) has today released a consultation, seeking industry input on draft technical standards which will guide investment firms as regards their order execution policies.?The consultation, part of the watchdog’s Mifid II/Mifir review, is aimed at creating technical standards to enhance the establishment and assessment of investment firms’ order execution and consequently “foster investor protection”. Last week, the watchdog published new public consultations with the aim of “reducing reporting burden and promoting convergence in the supervisory approach” which included includes five key focuses.
EU Firms Press for Faster Move to T+1 After Smooth US Rollout
WatersTechnology | Theo Normanton
Just six weeks after North American markets made the switch to T+1, the European Union is contemplating a timeline for its own transition. Heartened by the relatively smooth acceleration across the Atlantic, public authorities and market participants alike are keen to make the leap sooner rather than later. Attendees at a public hearing on July 10 hosted by the European Securities and Markets Authority (Esma) were presented with a poll asking them to pick their preferred date for a move to T+1. The three options were Q4 2027, Q1 2028, and Q4 2028. The Q4 2027 option was chosen by 70% of respondents, with the next soonest date, Q1 2028, coming in second at 18%.
Crypto?& Digital Asset News
Hong Kong Set to Release Stablecoin Consultation Results, Paving Way for Regulation
The Block | Timmy Shen
Hong Kong’s financial authorities will soon release the results of a stablecoin consultation report as part of the region’s legislative proposal to oversee the industry. The Financial Services and the Treasury Bureau said today in a statement that it will soon publish the results of a December consultation on stablecoin issuers in an attempt to draft a legislative bill to be submitted to the Legislative Council. The regulators proposed at the time that all fiat-referenced stablecoin issuers should obtain a license from the Hong Kong Monetary Authority, the de facto central bank that co-released the stablecoin consultation.
Plaintiffs File New, Slimmed Down Complaint in Class Action Lawsuit Against Tether
CoinDesk | Cheyenne Ligon
Plaintiffs in an ongoing class action lawsuit against Tether and Bitfinex have filed a new, slimmed-down complaint accusing the crypto companies of manipulating the crypto markets and violating antitrust laws. The second amended complaint accuses Tether and its sister crypto exchange Bitfinex of operating a “sophisticated scheme to artificially inflate the price of cryptocurrencies” by pushing Tether’s dollar-backed stablecoin, USDT, into the cryptomarket without it being fully backed by U.S. dollars, therefore “creating the illusion of increased demand” for cryptocurrencies, “facilitating trading of [cryptocurrencies] on credit and loaned funds” and ultimately driving up crypto prices.
Crypto Exchanges Clamping Down on Prime Brokers Is Backwards Step for Market Efficiency, Traders Say
CoinDesk | Ian Allison
As the world's largest cryptocurrency exchanges crack down on brokerage firms that have bundled together clients to take advantage of lower trading fees, some market participants are warning the move could harm markets. Binance was the first to prevent prime brokers from leveraging its multitiered fee system to lower their own costs and offer rebates to clients, making changes to its Link Plus interface last month. Now, OKX appears to be following suit and clamping down on access to its VIP fee program.
Ether ETF Battle for Supremacy Ignites as Firms Reveal Fund Fees
Bloomberg News | ?Isabelle Lee & Vildana Hajric
The battle for potential Ether ETF assets is already underway — even as the funds have yet to launch. Issuers including BlackRock, Fidelity, Invesco and Bitwise on Wednesday submitted paperwork with the Securities and Exchange Commission outlining how much they would charge for their respective Ether ETFs, which would directly hold the second-largest cryptocurrency. The filings came in anticipation of the funds debuting as early as next week; the firms are still awaiting a final required signoff from the regulator.
Waters Wrap: The Changing Definition and Perception of Blockchain
WatersTechnology | Anthony Malakian
About three months ago, one of our reporters, Theo Normanton, set out to examine Digital Asset Holdings—its past, present, and future. The thinking was this: The blockchain revolution that was promised in the mid-2010s never materialized outside of crypto in the capital markets. When it comes to settlement, post-trade, and back-office workflows, it’s still just a lot of experimentation and low-level implementations.
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