Forefront Fintech Digest Week in Review: July 22 – 26
Forefront Communications Group Inc.
Propelling fintechs and financial institutions with specialized marketing and communications.
Your free weekly roundup of everything happening in fintech and capital markets. Sign up here to receive our Forefront Fintech Digest in your email inbox every weekday at 9:00 am ET.
Broker News
Jane Street Gets Millennium Trade Secrets Countersuit Tossed
Bloomberg News | Chris Dolmetsch
A federal judge threw out counterclaims against Jane Street Group by Millennium Management and two former traders whom Jane Street accused of stealing a valuable Indian options trading strategy. In a ruling Thursday night, US District Judge Paul Engelmayer in Manhattan rejected Millennium’s argument that Jane Street’s April trade secrets lawsuit constituted unfair competition because it was brought in “bad faith,” with the sole goal of harming a rival’s business and reputation.
Voice Trading Remains Prevalent in Treasury Trading
Global Trading | Lucy Carter
Earlier this year, Will Boeckman, head of fixed income platform sales at Citadel Securities, stated during a panel at FILS USA that the firm was “still doing a third of our Treasury risk voice, whether it’s manual booking or post-process trade. That’s a pretty significant number for a tech-forward firm,” he added. Significant, perhaps, but not exclusive to Citadel. A recent report from Coalition Greenwich noted that electronic trading levels have hovered at around 60-70% of market share for the year to date, with 2023’s full-year levels averaging at 64%.
JPMorgan Pitches In-House Chatbot as AI-Based Research Analyst
Financial Times | Stephen Morris & Joshua Franklin
JPMorgan Chase has begun rolling out a generative artificial intelligence product, telling employees that its own version of OpenAI’s ChatGPT can do the work of a research analyst. The US bank has given employees of its asset and wealth management division access to a large language model platform which the bank is calling LLM Suite, according to an internal memo seen by the Financial Times. Executives told staff LLM Suite can help them with writing, idea generation and summarising documents through access to third-party models.
Ex-Goldman Sachs VP Joins Outset Global as Managing Director
The TRADE News | Wesley Bray
Outset Global has appointed William Bradley as managing director within its London office as demand for outsourced trading continues to grow. Bradley brings considerable experience in the equity sales and trading space to the role, joining from Goldman Sachs where he served as vice president on the cross-asset sales desk in New York. While at Goldman Sachs, Bradley covered more than 80 institutional clients, trading a range of financial instruments including cash equities, equity derivatives and synthetics.
Exclusive: Barclays Reaps Hedge Fund Riches in Battle of the Prime Brokers
Reuters | Sinead Cruise & Lawrence White
Barclays is winning business from its top Wall Street rivals in prime brokerage, a lucrative investment banking battleground where lenders are battling to serve hedge funds in an array of increasingly complex trades. The British bank has risen to fifth in the revenue table for prime broking for the year to the end of June, from around seventh five years ago, according to data seen by Reuters from research firm BCG Expand.
Exchange, ATS & Clearing News
'Dark Pools' Hit by Outage
Wall Street Journal | Alexander Osipovich
Two small off-exchange platforms for stock trading, or “dark pools,” were temporarily knocked offline today by the massive outage caused by a faulty update from cybersecurity provider CrowdStrike. BlockCross, a dark pool owned by Nomura Holdings’ equities-trading arm Instinet, was down from 9:30 a.m. to 10:10 a.m. ET, a person familiar with the matter said. Clients were told to route their orders to buy and sell stocks elsewhere, and the platform has been running normally since service was restored, the person said. BlockCross accounts for a tiny slice of Nomura’s trading revenue.
NYSE’s Longtime IPO Pitchman, John Tuttle, to Leave After 17 Years
The Wall Street Journal | Alexander Osipovich
John Tuttle, a veteran executive at the New York Stock Exchange who gained prominence as its top salesman for attracting initial public offerings, plans to leave the NYSE after 17 years. Tuttle is set to begin a new job as president of Acrisure, a Michigan-based insurance brokerage and real-estate services company, on Sept. 1, the company said. As vice chairman of NYSE, Tuttle helped persuade companies such as Palantir Technologies and Snowflake to list on the 232-year-old exchange rather than its crosstown rival, Nasdaq.
Fortress CEOs: Dallas Can Be the New Capital of Capital
The Dallas Morning News | Drew McKnight & Josh Pack
We could not be more excited to join the founding ownership group of the Texas Stock Exchange. This is the right time, the right place and the right vision for Dallas to lead on a new front, as the home to a new breed of financial exchange — one that can deliver real commercial benefits to market participants and provide a competitive alternative to today’s virtual duopoly in the New York Stock Exchange and the NASDAQ. Under the leadership of TXSE CEO James Lee, who has 30 years of experience in the capital markets, and backed by more than two dozen founders, including some of the world’s most sophisticated financial institutions, TXSE is an ambitious undertaking.?
Row Erupts as Cboe Seeks to Define Exchange Boundaries
The DESK | Dan Barnes
On 13 February 2024, Cboe Exchange filed with the Securities and Exchange Commission (SEC), a proposal to adopt a new rule regarding order and execution management systems (OEMSs). The proposed rule change was published for comment in the Federal Register on 5 March 2024 and in April the SEC designated a longer period to consider the matter and, following a series of letters opposing the ruling, it decided to institute proceedings to determine whether to approve or disapprove the proposed rule changes.
Baton Systems Welcomes Japanese Securities Clearing Corporation to its CCP Network
The TRADE News | Wesley Bray
Baton Systems has completed bi-directional integration with the Japanese Securities Clearing Corporation (JSCC) through its Baton Core-Collateral ecosystem. The move will enable JSCC’s clearing member clients using the Core-Collateral platform to have direct access to the largest central counterparty clearing house (CCP) in Asia Pacific (APAC). The addition builds upon the existing integration with SGX, increasing the network of APAC CCPs accessible through Baton.
Vendor News
Once a Blockchain Cheerleader, Axoni Changes Its Playbook
WatersTechnology | Nyela Graham
The year is 2017. The Nintendo Switch has hit shelves worldwide, Brexit negotiations have begun, and distributed ledger technology is at the center of consortiums, innovation labs, and startups across capital markets. As DLT proponents, pioneers, and enthusiasts made noise across capital markets, New York-based startup Axoni was carving out a niche. As financial firms sought to uncover pain points that might be remedied by the nascent, trust-centric technology, Axoni was looking to solve what it calls the data coordination problem, a post-trade issue in which data shared between counterparties is out of sync.
Liquidnet Integrates AI Technology for Bond Deal Processing
Finance Magnates | Damian Chmiel
Liquidnet, an agency execution specialist, has announced a partnership with Boltzbit, an artificial intelligence company, to enhance its fixed-income primary markets operations. The collaboration is intended to improve the processing of new bond deals. According to Liquidnet, the integration of Boltzbit's AI and machine learning technology has reduced the time required to process and display new bond announcements. The company estimates a 90% improvement in the time from receiving unstructured deal data to having bonds ready for trading.
SS&C Continues Blue Prism Roll Out; Eyes Other Acquisition Targets
WatersTechnology | Wei-Shen Wong
SS&C Technologies is continuing to roll out Blue Prism—a robotic process automation specialist it acquired in 2022—internally. ?“We are continuing to roll out Blue Prism within SS&C. In some ways, we are building momentum because as more people get trained up, we have more capacity to have additional processes be subject to that robotic process automation and AI-type enhancements,” Rahul Kanwar, president and COO at SS&C, said during the firm’s Q2 earnings call on July 25.?
New Liquidity, New Investors, New Tech Transform the Loan Market
Euromoney | Peter Lee
At the end of June, Versana, a technology company founded by leading agent banks in the syndicated loan market to capture digitally the ever-changing data on corporate loans and make it available to lending banks in close to real time through APIs, achieved a key breakthrough. JPMorgan, a founding back, has achieved straight-through processing on a number of term loans and revolving credits, sending as an agent and receiving as a lender, in close to real time, new updates on loans without any manual re-inputting of data.
Buy-Side News
Millennium CFO Kevin Byrne to Move to Rival Balyasny as COO
Bloomberg News | Nishant Kumar & Laura Noonan
Kevin Byrne, the chief financial officer of hedge fund Millennium Management, is leaving to join rival Balyasny Asset Management, according to people with knowledge of the matter. He will join Balyasny as the firm’s global chief operating officer, the people said asking not to be identified because the details are private. Daniel Widawsky, Millennium’s chief administrative officer, will additionally take the role of the CFO, one of the people said. Representatives for Millennium and Balyasny declined to comment.
Hedge Fund Assets Rise to Record
Markets Media | Staff
Hedge fund capital extended the recent rise, narrowly surpassing the historic 1Q record and advancing further above the historic $4.3 trillion milestone in 2Q24 with managers navigating and positioning for an evolving, fluid, complex election cycle and geopolitical environment. Upcoming elections throughout Europe and upcoming US elections represent a significant risk of policy shifts, economic transition, trade adjustment and structural dislocations in coming months.
领英推荐
WorldQuant Grows Non-Millennium Cash It Manages to $10 Billion
Bloomberg News | Nishant Kumar
Igor Tulchinsky’s WorldQuant, which until recent years managed capital exclusively for hedge fund giant Millennium Management, has now built a $10 billion business running money for outsiders. WorldQuant Millennium Advisors, a joint venture Tulchinsky started with Israel Englander’s firm to oversee non-Millennium capital, has more than quadrupled in size since raising $2.3 billion in its 2018 debut. Assets under management have doubled in the last year, according to an internal communication seen by Bloomberg News.
George Weiss Offers to Fund Wind-Down of Hedge Fund He Founded
Bloomberg News | Jonathan Randles
George Weiss has offered to help fund the ongoing wind-down of his eponymous investment firm, which filed for bankruptcy earlier this year. Weiss Multi-Strategy Advisers said in court papers Tuesday that its founder has agreed to provide a $1 million credit line to pay operating expenses and cover payroll for its remaining employees and professionals. The financing must be approved by a New York judge. The hedge fund filed for Chapter 11 in April after announcing it would shut down and return cash.
How the Hottest Hedge Funds on Wall Street Really Manage Risk
Bloomberg News | ?Joe Weisenthal & Tracy Alloway
Multi-strategy hedge funds, also known as "pod shops," have become the hottest ticket on Wall Street. The business model is supposed to allow hedge funds to operate more efficiently. That includes deploying capital in a more productive manner and better managing risk. But how does risk management at some of the most sophisticated funds on Wall Street actually work? In this episode, we speak with Rich Falk-Wallace, formerly of Citadel and now the founder and CEO of Arcana, which provides risk management and portfolio software for multi-strat funds.
M&A / Investment News
Crypto Trading Firm Wintermute in Talks to Raise Funds from Tencent, Other Investors
Bloomberg News | Ryan Weeks
Crypto trading firm Wintermute Trading Ltd. is in talks with investors including Tencent Holdings Ltd. to raise money at a valuation of roughly $2 billion, people familiar with the matter said. As part of the transaction, early investors and employees could sell some shares, said the people, asking not to be named discussing private deliberations. Together with the money Wintermute is raising by selling new stock, the total deal size could be $200 million to $300 million, they said.
KKR to Acquire Janney Montgomery Scott
Markets Media | Staff
KKR, a leading global investment firm and The Penn Mutual Life Insurance Company announced the signing of a definitive agreement under which investment funds managed by KKR will acquire Janney Montgomery Scott LLC. Tracing its roots to 1832, Janney is a leading wealth management, investment banking and asset management firm. Janney has over $150 billion in assets under administration, with more than 900 financial advisors providing financial planning, asset allocation, retirement planning and other financial advice and services to clients across 135 offices in the U.S.
Bill Ackman Slashes Fundraising Target for Us Fund IPO by as Much as 90%
Financial Times | Amelia Pollard, Eric Platt & Costas Mourselas
Bill Ackman has slashed his fundraising target for the initial public offering of his US investment fund Pershing Square USA by as much as 90 per cent, falling far short of the initial target of $25bn. The billionaire hedge fund manager said in a letter filed with the Securities and Exchange Commission that he expected to raise between $2.5bn and $4bn, although the total haul could increase to $10bn depending on how marketing efforts went in the coming days.
Deutsche B?rse Leads Primary Portal Funding Round
Global Trading | Lucy Carter
Digital infrastructure development and operating services provider Primary Portal has concluded the first stage of its ￡7.5 million Series A funding round. Led by DB1 Ventures, Deutsche B?rse Group’s venture capital division, the round also saw continued investment from shareholders Dutch Founders Fund (DFF) and Flow Traders. Expanding the company’s offering, the new investment will be used to connect asset managers’ order management systems with banks to facilitate straight-through processing in capital markets transactions, Primary Portal stated.
Regulatory & Legal News
Wolverine Trading Gets a Slap on the Wrist for Alleged Violations of Cboe Rules
FX News Group | Maria Nikolova?
Wolverine Trading, LLC has agreed to pay a fine as a part of a settlement with Cboe Exchange, Inc. From June 12, 2023, through on or about January 31, 2024, the firm failed to report 156 transactions executed on the floor within 90 seconds after execution. During the Review Period, the firm failed to establish, maintain, and enforce written supervisory procedures (“WSPs”), and a system for applying such procedures, reasonably designed to prevent and detect violations of applicable Exchange rules that require transactions be reported to the Exchange within 90 seconds of the execution in a form and manner prescribed by the Exchange.
French Regulators Propose Two Step Approach to T+1 in Europe
The TRADE News | Annabel Smith
French regulator Autorité des Marchés Financiers (AMF) and Banque de France have released a joint paper proposing a two-step approach to the European Union’s move to T+1 settlement. Europe is now in a ‘when not if’ situation when it comes to its plans to shorten its settlement cycle, as confirmed by the European Commission in January earlier this year. In their statement, the AMF and Banque de France have suggested a two-pronged approach as “the most pragmatic way forward”.
SEC Lets Deadline Pass for Full Appellate Court Review of Hedge Fund Case
Bloomberg News | Andrew Ackerman
The Securities and Exchange Commission declined to seek a full appellate court review of a June decision striking down a set of rules that would have toughened the agency's oversight of private-equity and hedge-fund firms. The SEC missed a Monday evening deadline to ask the Fifth Circuit Court of Appeals to review the earlier decision by a three-judge panel, which found the rules in question exceeded the agency's authority. The June decision was a blow to SEC Chairman Gary Gensler's campaign to expand his agency's powers over so-called private fund managers.?
Size Matters: US Equity Market Players Wrangle Over New Tick Size Regime
WatersTechnology | Theo Normanton
For the Securities and Exchange Commission, fresh administrations often herald a staffing shake-up, so the pressure is on for the Commission to finalize as many of its planned rules as possible before the winter. One of the most consequential changes proposed by SEC is an adjustment to exchanges’ tick sizes—the minimum increments for quoting trade prices—as well as the access fees that venues charge market participants to access their quotes. Sources expect that the SEC will present the final rule in late summer or early fall, and market participants and venues alike are trying to understand what the finished product could mean for equity markets.
AFME Calls for Capital Market Reforms Roadmap From Labour Government
Global Trading | Lucy Carter
Commending the new Government’s “commitment to UK capital markets”, AFME has shared three key principles that it believes will create “deep, integrated and sustainable” markets that support both companies and investors. The association calls on the Government to provide a clear roadmap on capital market reforms, including a structured timeline for the completion of work under the smarter regulatory framework. Regulators should remain independent within their mandates and retain the ability to react to market developments in a timely manner when justified, AFME continued.?
Crypto?& Digital Asset News
Galaxy Digital Adds Blockchain Infrastructure Capabilities
Markets Media | Staff
Galaxy Digital Holdings announced that it has acquired substantially all of the assets of CryptoManufaktur LLC, a blockchain node operator that provides trusted, secure services to decentralized protocols across the digital asset ecosystem. As part of the transaction, CMF’s seasoned three-person engineering team, led by founder Thorsten Behrens, will join Galaxy’s Blockchain Infrastructure team, which provides staking and validator services to qualified investors, protocols, and digital asset platforms.?
SEC Seen Approving Spot-Ether ETFs in Latest Crypto Milestone
Bloomberg News | Emily Graffeo & Suvashree Ghosh
Regulators approved the first US exchange-traded funds investing directly in Ether, the world’s second-largest cryptocurrency, according to filings and statements from asset managers. 21Shares AG, Bitwise Asset Management Inc., BlackRock Inc., Invesco Ltd., Franklin Templeton, Fidelity Investments and VanEck were among the issuers to receive US Securities and Exchange Commission assent, the documents indicated Monday. The SEC didn’t immediately return requests for comment.
Is AI Stealing Crypto’s Thunder? It’s Complicated
DLNews | Thomas Carreras
When ETF hype pushed Bitcoin to a new all-time high in early March, it seemed like the top cryptocurrency would reach the six-figure mark in no time. Instead, momentum died down and crypto markets began moving sideways, with Bitcoin ranging between $56,500 and $73,000 for four months now. That may be due to Wall Street’s fascination with artificial intelligence, according to Ram Ahluwalia, CEO of Lumida Wealth, a crypto investment advising firm. “Crypto is a momentum asset,” Ahluwalia posted on X. But right now, “Nvidia and the AI theme owns the dominant zeitgeist.”
JP Morgan Touts DLT, Tokens for Collateral Management
WatersTechnology | Emma Hilary Gould
As demand for non-cash collateral has grown following a spate of market stress incidents that sharply raised margin requirements, JP Morgan is using distributed-ledger technology (DLT) to move non-cash collateral faster, managing director Toks Oyebode said during a panel in London on Thursday hosted by the International Swaps and Derivatives Association (Isda). “There are infrastructure issues in terms of how quickly you can move non-cash collateral relative to cash collateral to support something like variation margin payments in the cleared market,” he said.
He Was an Online Drug Lord. Now He’s a Crypto Entrepreneur.
Bloomberg News | Ryan Mac & Kashmir Hill
At a cryptocurrency convention in Austin in May, Blake Emerson Benthall hustled for investor money alongside scores of other entrepreneurs. But none of them, it is safe to say, could pitch their experience as the leader of a multimillion-dollar criminal drug enterprise. In the convention’s “Deal Flow Zone,” Mr. Benthall, 5-foot-4, cleanshaven and wearing a gray tee with his start-up’s logo, turned his laptop around at a lunch table and began giving his spiel to a bespectacled potential investor.