Forefront Fintech Digest Week in Review: July 29 – August 2
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Broker News
RBC Capital Markets Taps HSBC for New Director of Central Bank Sales
The TRADE News | Wesley Bray
RBC Capital Markets has appointed Mitul Patel director, central bank sales, based in London. As part of the role, Patel will hold responsibility for distributing global rates product, alongside collaborating closely with global trading teams, internal partners in DCM, syndicate, and sales to execute strategy and drive growth. In addition, Patel will support the execution of RBC’s global distribution strategy and coverage model for the central bank and sovereign wealth fund client base.
Exclusive: Citi Breached a Rule Meant To Keep Banks Safe, Made Liquidity Reporting Errors
Reuters | Lananh Nguyen & Tatiana Bautzer
Citigroup repeatedly breached a U.S. Federal Reserve rule that limits intercompany transactions, leading to errors in its internal liquidity reporting, according to a Citi document from December seen by Reuters. Reuters is reporting the infractions for the first time. Under so-called Regulation W, banks are required to restrict transactions like loans to the affiliates they control. The rule is meant to protect depositors whose money is insured up to $250,000 by the government. The Regulation W infractions come as Citi works to fix separate problems in its risk management and internal controls.
Wells Fargo Names BNY Mellon’s Bridget Engle as New Head of Technology
Fintech Futures | Cameron Emanuel-Burns
Industry veteran Bridget Engle has been named as the new senior EVP and head of technology of US banking giant Wells Fargo, effective 12 August 2024. Engle, who has been tasked with overseeing “all technology” across the bank, will report directly to Wells Fargo CEO Charlie Scharf and will also join the bank’s operating committee. Wells Fargo highlights that its new head of technology brings over 30 years of expertise to the role, with vast experience “managing large, global technology organisations in complex financial institutions”.
UBS and CIBC Execute ‘World’s First’ Intraday FX Swap on Regulated Venue
Securities Finance Times | Daniel Tison
UBS and CIBC have settled “the world’s first” intraday FX swap to be executed on a regulated venue. The EUR/USD FX swap, negotiated using the Finteum Platform and executed on the TP ICAP UK MTF, was completed within minutes. The banks settled both legs of the swap at pre-agreed times, within the same business day (T+0). Anthony Clark-Jones, who leads the strategic ventures portfolio at UBS Investment Bank, says: “This world-first trade over Finteum is another step towards institutions and their partners realising the commercial, risk-associated and client-related benefits of truly digital capital markets, and compliments recent progress elsewhere with, for example, institutional digital cash and digital collateral.”
Between the Lines: Why Banks Are Rethinking Risk Management
Risk.net | Paulina Pielichata
In April this year, an internal memorandum at Lloyds Bank made its way into the media, announcing a cull of 150 jobs from its risk management function, amid complaints the division had acted as a “blocker”. The reaction was noticeably divided. Some decried the danger of subordinating risk management to the wishes of business lines – one of the mistakes that left Credit Suisse nursing the heaviest losses from the collapse of Archegos Capital Management. However, under the original news report, there were also plenty of comments purporting to come from former Lloyds clients, suggesting the risk division had indeed inhibited the functioning of the bank.
Exchange, ATS & Clearing News
HKEX Appoints New Head of Post-Trade
The TRADE News | Wesley Bray
Hong Kong Exchange and Clearing (HKEX) has appointed Vicky Chan managing director, head of post-trade, effective 5 August. Chan returns to HKEX after previously serving for 15 years at the group in a range of teams including cash settlement, clearing operation and platform development. Previously in her career, Chan held roles at various companies including AIA Group, Goldman Sachs, UBS and PricewaterhouseCoopers.
COVID Halted Variance Trading. Can Cboe Revive the Market?
Risk.net | Helen Bartholomew
After two failed attempts at listing variance futures on the S&P 500, Cboe is taking a third run at convincing traders to adopt the contracts. Twenty years after its first try, the exchange is betting a more user-friendly structure and new margin requirements for non-cleared trades will stimulate demand for a new version of a product it delisted in 2022. “This time, what’s really different – and how the market has changed – is there have been some changes to uncleared margin rules that have affected the viability of trading variance in the OTC market,” said John Hiatt, vice-principal of Cboe Lab, speaking on a webinar hosted by the exchange to unveil the new contracts on July 23.
Swiss Stocks Halted for Hours in Second Outage in 13 Months
Bloomberg News | Allegra Catelli & Joe Easton
Switzerland’s stock market operator halted equity trading for hours Wednesday after a technical snag that made it impossible to distribute pricing data, the exchange’s longest outage ever and the second to hit it in little more than a year. The halt began at 10 a.m. Zurich time and trading resumed at 2:30 p.m., SIX Swiss Exchange said. The exchange hadn’t been able to disseminate market data and indexes since about 9:10 a.m., a spokesperson said. Data for the Spanish stock market, owned by SIX, also was affected for several hours, though trading there continued.
London Stock Exchange Nears Microsoft Roll out After Landmark Tie-up
Financial News | Jeremy Chan
The London Stock Exchange Group will shortly launch several new products after signing a landmark deal with Microsoft. "Our partnership with Microsoft is approaching commercialization as the first product becomes more widely available by year-end," said David Schwimmer, chief executive of the London Stock Exchange Group Thursday. The exchange said that several projects were entering external pilots and would be available more widely in the fourth quarter. LSEG sealed a 10-year partnership with Microsoft in 2022, which also saw the tech giant take a 4% stake in the exchange.
Would 24/7 Trading Be a 24/7 Nightmare?
Boxes and Lines Podcast | Ronan Ryan & John Ramsay
24/7 trading – it’s the topic JR and Ronan love to hate and, according to a recent wave of press this year covering Wall Street’s wariness to adopt it, they’re not alone. But does everyone need to get with the program? Many retail brokers, including Robinhood and Interactive Brokers, offer 24-hour trading on weekdays for US stocks, and start-up 24 Exchange, backed by Steve Cohen’s Point72 Ventures fund, is seeking SEC approval to launch the first always-on exchange.?
Vendor News
Bloomberg Adds AI Earnings Summaries to Apple Vision Pro App
WatersTechnology | Max Bowie
Bloomberg is enhancing its terminal app on Apple’s Vision Pro headset display with the addition of AI-generated earnings call summaries and multi-language support. The data giant is looking to forge ahead with its focus on making data more easily accessible via mobile devices in ways that save users time and provide consistent information flow between their workplace terminal display and other ways of keeping up to date with Bloomberg’s data. Bloomberg launched its AI-Powered Earnings Call Summaries in its terminal in January, about a week before it unveiled the Bloomberg Pro for Vision app for Apple’s Vision Pro headset.
Dave Antonelli Joins IMTC from BlackRock
The DESK | Lucy Carter
Fixed income technology provider IMTC has appointed Dave Antonelli as a strategic account executive within its sales team. Antonelli has more than two decades of industry experience, and has spent his career at BlackRock. Most recently he was head of the New York Core portfolio management (PM) team, before which he was a managing director and deputy head of the Core PM team. He joined the firm as part of the operations group in 2002.
Gravis Capital Management Enhances Front-Office Capabilities Through Bloomberg AIM Integration
The TRADE News | ?Claudia Preece
UK asset manager Gravis Capital Management has become the latest to integrate Bloomberg AIM in a bid to enhance its front-office workflows. Specifically, Gravis is set to utilise Bloomberg AIM to provide operational intelligence and management for its front-office to enhance pre-trade processes and order generation workflow, as well as for fund holdings reconciliation.?
Broadridge Taps 30-Year APAC Veteran and Ex-LSEG Executive as New Regional President
TradingView | Claudia Preece
Broadridge Financial Solutions, Inc. has appointed David Runacres as its new President of Asia-Pacific (APAC), effective immediately. Runacres, who will be based in Tokyo, will lead Broadridge's regional operations and serve as Senior Country Officer for Japan, a key market in the company's growth strategy. With over 30 years of experience in the APAC region, Runacres joins Broadridge from the London Stock Exchange Group (LSEG), where he spent 12 years as head of Japan. He holds a Bachelor of Applied Sciences in Computing from Monash University in Australia.
Power-Hungry Data Centers Are Gobbling Up Texas Amid AI Boom
Bloomberg News | ?Brooke Sutherland, Naureen S Malik & Julie Fine
One business may finally be getting too big for Texas: data centers, those whirring warehouses packed with the electricity-sucking computer servers that power the modern internet and the development of artificial intelligence. Up until now, the business-friendly state has welcomed their growth, which has been a boon for land values and property taxes. Texas offers vast tracts of land and a broad supply of cheap energy sources, including wind and solar. But the boom in data centers threatens to gobble up quite a bit of both.
Buy-Side News
Citadel Appoints New Equity Trader
The TRADE News | Claudia Preece
Robert Whelan has joined Citadel as equity trader following almost eight years at Pictet Asset Management. Whelan joined Pictet AM as an equity trader back in 2016. Prior to that, he worked at Morgan Stanley, initially joining as an electronic trading associate before going on to a role as equity sales trader. Whelan will act as an execution trader on behalf of the desk and his role is non-risk taking, The TRADE understands.
Ex-JP Morgan PB Singapore Head to Lead KGI’s Wealth Business
Citywire | Cheryl Heng
领英推荐
KGI Securities Hong Kong has appointed former JP Morgan Private Bank’s Singapore Asia head James Wey as its new wealth management head. Wey takes on the role of head of international wealth management for Hong Kong and Singapore on 1 August, according to a release from the firm. He will drive growth and expand the firm’s reach as KGI bolsters its wealth management capabilities catering to high-net-worth clients in the region. Reddy Wong, KGI Securities Hong Kong CEO, said Wey’s experience in serving high-net-worth clients and driving international growth will help to expand the firm’s Asia footprint.
State Street Global Advisors Appoints New Senior Global Equity Trader
The TRADE News | Claudia Preece
Jamie McKenna has been appointed vice president, senior global equity trader at State Street Global Advisors (SSGA) following almost two decades at GMO trading. Boston-based McKenna joined GMO in 2004 as a pricing analyst, and most recently worked in a multi-asset trading role for 15 years. His expertise includes equities, ETFs, merger arbitrage spreads, equity swaps, futures, options, and FX. Prior to GMO, he worked as an operations specialist at Evergreen Investments and has also previously worked in a custody-related accountancy role at Investors Banks & Trust.
More Than 50% of Top U.S. Hedge Funds are Investing in Crypto, Report Says
The Street | Sabrina Toppa
More than half of America’s largest hedge funds are investing in bitcoin, according to data from investment firm River. Some hedge funds like Millennium Management have a nearly $2 billion exposure to bitcoin, the world’s largest cryptocurrency, and that number is expected only to increase with greater institutional adoption of cryptocurrency in the coming years. River analyzed the cryptocurrency exposure of the country’s largest 25 hedge funds and determined that more than 50% are investing in bitcoin.
To Woo Investors, Hedge Funds Are Reviving a Strategy Left for Dead Post-Crisis — Supercharged Index Investing
Business Insider | Alex Morrell
Faced with higher rates and a daunting fundraising climate, hedge funds are wooing investors with a seemingly antithetical pitch: index investing with a twist. Hedge fund industry insiders are abuzz right now about "portable alpha," a blast-from-the-past strategy that's undergoing a revival. Portable-alpha strategies, historically popular among large pension funds, seek to accomplish the mission of beating the market in part by being the market.
M&A / Investment News
Euronext ‘Ready to Strike’ With Further Acquisitions
Financial Times | Nikou Asgari?
Europe’s biggest stock exchange operator Euronext is on the lookout for more acquisitions as it seeks to entrench its position in the region’s capital markets. Stéphane Boujnah, chief executive, said “combining Euronext with any large exchange in Europe” could “create a lot of synergies”. “We are monitoring all sort of situations and we are ready to strike or jump on any situation that becomes actionable,” he told the Financial Times.?
BNP Paribas in Talks To Buy Axa’s Asset Management Arm for €5.1bn
Financial Times | Ian Smith, Harriet Agnew & Sarah White?
French insurer Axa has entered exclusive talks to sell its investment management arm to BNP Paribas for €5.1bn, in a deal that would create one of the largest players in Europe. The anticipated transaction would create a business within the French bank with €1.5tn of assets under management, which would continue to provide investment services to Axa under a long-term partnership.? If finalised, the deal would mark the latest example of consolidation in the European asset management industry as companies seek acquisitions to boost their scale and access new growth areas.
Primary Portal Secures ￡7.5m to Revolutionise Equity Markets With Digital Solutions
Fintech Global | Staff
Primary Portal, a platform that aggregates and digitises equity capital market processes, has successfully completed the first stage of its ￡7.5m Series A. The round was spearheaded by the venture capital arm of Deutsche B?rse Group, DB1 Ventures, and also saw additional contributions from existing shareholders Dutch Founders Fund (DFF) and Flow Traders. This substantial injection of capital underscores the growing confidence in Primary Portal’s mission to transform the traditionally cumbersome and error-prone equity capital markets.
Billionaire Ackman Pulls IPO of Pershing Square USA Days Before Debut
Reuters | Svea Herbst-Bayliss
Billionaire investor Bill Ackman scrapped the launch of Pershing Square USA on Wednesday, days before the fund was slated to begin trading on the New York Stock Exchange. Ackman downsized the initial public offering (IPO) plans just a day earlier for the second time in a week, having seen at least one prominent pledged investor back out and undergoing a fresh bout of regulatory scrutiny. On social media platform X, where Ackman has 1.3 million followers, the investor released a four-paragraph statement saying his team had reevaluated the fund's structure.
Regulatory & Legal News
Regulator Sets Out New Rules To Boost UK Capital Markets
Financial Times | Nikou Asgari?
The UK’s financial regulator has proposed new rules aimed at making it cheaper and easier for companies to raise money, the latest in an ongoing programme of reform intended to boost Britain’s capital markets. The proposals announced on Friday by the Financial Conduct Authority included lifting the threshold at which companies need to issue prospectuses for secondary fundraisings from 20 per cent of their issued share capital to 75 per cent.?
ANZ Finds No Evidence of Market Manipulation in Preliminary Analysis
The DESK |?Lucy Carter
Investigations into ANZ’s Australian Markets business are ongoing, with preliminary analysis by the organisation finding no evidence of market manipulation. The Australian Securities and Investments Commission’s (ASIC) investigation into the situation, which is expected to last a number of months, considers ANZ’s issuance of 10-year Treasury Bonds by the Australian Office of Financial Management (AOFM) in 2023. Stating that it is “cooperating fully” with the regulator, ANZ’s external counsel is in the process of gathering trading data analysis around the issue from independent experts.
US Regulators Seek to Limit Asset Managers’ Sway Over Big Banks
Financial Times | Stephen Gandel & Brooke Masters
US banking regulators are pursuing a plan that could limit investment managers’ sway over governance and strategy at American banks, in a move the industry called an “alarming” attempt to curb shareholder input. The Federal Deposit Insurance Corporation approved a proposal on Tuesday that would require large managers of passive investment funds to meet new restrictions before they can buy and hold large stakes in publicly traded banks.
ESMA Warns on Global Crypto Firms with Non-MiCA Venues
Markets Media | Staff
European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor authority, issued today an Opinion to address the risks presented by global crypto firms seeking authorisation under the Markets in Crypto Assets (MiCA) Regulation for part of their activities (crypto brokerage) while keeping a substantial part of their group activities (intra-group execution venues) outside the European Union (EU) regulatory scope. ESMA recognises risks associated with global crypto firms’ complex structures where execution venues fall outside of the scope of MiCA.?
Talking Fintech Oversight; SEC Urged to Bar Penny Stock Listings on Exchanges; Senate Panel Returns to Big Bank Bashing
TabbFORUM | Robert Schmidt, Robert Schmidt & Ryan Tracy
Virtu Financial has tirelessly, and very publicly, battled Gary Gensler over his overhaul of stock trading rules. Now, the firm is looking for help from the SEC chief, inviting him to weigh in on an industry fight with big money on the line. The under-the-radar tiff revolves around penny stocks, and it pits market makers and brokers against the major stock exchanges. Earlier this month, Virtu petitioned the commission to force the exchanges to quickly delist companies when their shares fall under $1. The firm also wants the trading platforms to mandate additional disclosure from issuers.
Crypto?& Digital Asset News
Wall Street Blockchain Pioneers Are Torn Over Crypto’s Gray Zone
Bloomberg News | Suvashree Ghosh
As Wall Street pulls ahead of crypto-native players in the field of tokenizing real-world assets, mainstream institutions face the question of whether to push on into the gray area of decentralized finance. This gray zone, also known as DeFi for short, comprises projects that use automated software atop blockchains to deliver various financial services. Such ecosystems are typically outside the control of any one party, shrouded in regulatory ambiguity and open to a potentially wide pool of participants.
The Biggest Takeaways From ETH ETFs’ Opening Week in the US
Blockworks | Ben Strack
Though investors exiting the Grayscale Ethereum Trust (ETHE) hurt the US spot ETH ETF market’s initial net flows figure, four of the funds saw solid traction. The nine ETFs collectively posted net outflows of $342 million in their first four trading days (July 23-26), according to Farside Investors data. Sizable inflows into products by BlackRock, Bitwise and Fidelity could not make up for the $1.5 billion leaving higher-priced (2.5%) ETHE.?
A Deeper Look At Grayscale’s Spin-off ETF Launches, Crypto Outlook
Blockworks | Ben Strack
The low-cost sibling to Grayscale’s Bitcoin Trust launched Wednesday, marking a new step in the firm’s strategy to attract investors with diverse product priorities.? By adding another US spot bitcoin ETF to the mix, the crypto-focused asset manager now has two products “on different parts of the spectrum,” Grayscale managing director John Hoffman told Blockworks in an interview. Sporting ticker BTC on NYSE Arca, the Grayscale Bitcoin Mini Trust’s day-one net inflows totaled $18 million, Farside Investors data shows.?
Ripple Execs Denounce SEC Over its Plan to Amend its Complaint Against Binance, Says It Adds To Confusion
The Block | Sarah Wynn
Ripple executives criticized the U.S. Securities and Exchange Commission's handling of cases it brings against the crypto industry. The SEC said on Tuesday that it plans to change its complaint against crypto exchange Binance regarding "Third Party Crypto Asset Securities," specifically SOL, ADA, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI, according to a court filing. The SEC has brought several cases against crypto firms over the past year or so, focused on platforms that they say need to be registered while also classifying some cryptocurrencies as securities.?