Forefront Fintech Digest Week in Review: October 7 - October 11
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Broker News
New Titans of Wall Street: How Jane Street Rode the ETF Wave to ‘Obscene’ Riches
Financial Times | Will Schmitt & Robin Wigglesworth
When Wall Street scrambled to launch bitcoin funds earlier this year, there was just one trading company named in regulatory filings as an anchor market-maker for every single one: Jane Street.?The move underscored how a quirky and opaque New York firm has used its dominance in exchange traded funds and embrace of more finicky financial securities as a springboard to become the most profitable of all the trading firms that are now a significant force in markets.
Forget Cold Plunges or Biohacking: Here’s How Wall Street’s Rising Stars Stay Sharp
Business Insider | Michelle Abrego, Alex Morrell, Alex Nicoll, Bianca Chan, Bradley Saacks, Daniel Geiger, Emmalyse Brownstein, Hayley Cuccinello & Reed Alexander?
Call it superstitious, but Mark Zhu, a 34-year-old managing director at Blackstone, likes to start every day the same way. He has two Trader Joe's yogurt cups, one banana-flavored and one blueberry-flavored, eaten in the same order, followed by his supplements, which also have their specific sequence.
Fidelity Is Set to Unveil a Revamped Desktop-Trading Platform
Bloomberg News | Paige Smith
Fidelity Investments is unveiling a revamped desktop platform for active traders, featuring faster processing speeds and a refreshed look. The firm’s Active Trader Pro platform, which will include a new engine powering behind-the-scenes processes, will be rolled out to some customers Tuesday, according to a person with direct knowledge of the plan. A waitlist for additional sign-ups will also be offered on Reddit, the person said, asking not to be identified because the plan hasn’t yet been announced.
Bank of America Is Losing Work Over Block-Trading Probe in Asia
Wall Street Journal | Alexander Saeedy
Allegations that Bank of America employees in India shared nonpublic information with investors ahead of stock sales are costing the bank business.?Private-equity firm EQT pulled the bank from a mandate for an upcoming initial public offering of a student-loan company, according to people familiar with the matter. A Norwegian conglomerate planning to take an Indian subsidiary public also has concerns about working with the bank because of the allegations, some of the people said.
TD Bank Agrees to $3 Billion in Penalties and Growth Restrictions in U.S. Settlement
Wall Street Journal | Justin Baer, Dylan Tokar & Vipal Monga
TD Bank agreed to pay more than $3 billion in penalties and accepted limits on its growth in the U.S. as part of a settlement Thursday with regulators and prosecutors over charges it failed to properly monitor money laundering by drug cartels and other criminal groups. As part of the agreement, the bank’s primary U.S. regulator, the Office of the Comptroller of the Currency, imposed an asset cap barring the bank’s retail business from growing above its current level of assets in the U.S.
Exchange, ATS & Clearing News
Matrix Executions Launches ATS for US Listed Options
The TRADE News | Claudia Preece
Matrix Executions has launched a new electronic alternative trading system (ATS) for US listed options named Matrix QRX ATS.?Designed specifically for institutional investors, the offering provides price improvement, liquidity enhancement, and best execution practices including algo suite integration, and exchange auction mechanisms. Matrix QRX ATS offers blind indications of interest (IOIs), paired crossing orders, and low latency matching to streamline orders of all types while ensuring optimal pricing.
LME Defeats Elliott Management in Nickel Crisis Appeal
Financial News | Jeremy Chan
Elliott Management has lost its appeal against the London Metal Exchange’s decision to cancel $12bn in nickel trades. The LME’s move to void the trades on 8 March 2022 was a “once in a generation event” but necessary given the potential alternative, according to a court ruling published on 7 October. “To have allowed the 8 March trades to stand would have meant a real risk of what has been graphically described as a ‘death spiral’ in the international metals market,” the ruling said.
TSE Updates Trading System as Closing Auction Demand Soars
Global Trading | Lucy Carter
Among increasing interest in trading at the close, the Tokyo Stock Exchange (TSE) is the latest to offer a closing auction to investors. The launch comes alongside the introduction of extended trading hours and changes to the exchange’s cash equity trading system, set to go live on 5 November. Soaring trading volumes in Japanese equities and recent volatility have prompted the TSE to make changes to its cash equities trading platform and structure.?
Nasdaq to Rival Cboe as Trajectory Crossing Takes Off in Europe
Global Trading | Lucy Carter
A growing European appetite for passive investment strategies and index-based investing is driving exchanges to develop their own trajectory crossing solutions. Following Cboe Europe’s BIDS VWAP-X announcement earlier this year, Nasdaq is set to launch a rival product. A form of algorithmic trading, trajectory crossing uses predictive modelling to place orders that will intersect a stock’s price anticipated trajectory in the future, providing optimal pricing and reducing market impact.
Vendor News
FINBOURNE and Propellant Digital Join Forces to Pursue Bond Tape Provider Projects Across the UK and Europe
Press Release | N/A
FINBOURNE Technology, architects of interconnected functionality and data that enables the investment community to better serve clients, and Propellant Digital, a technology provider of fixed income transparency and trading data analytics, today announced a strategic partnership to bid for the bond Consolidated Tape Provider (CTP) projects in the UK and EU. This collaboration will see the companies join forces to create a consolidated tape that prioritises data quality to deliver a clear and consistent view of fixed income markets.?
J.P. Morgan Asset Management Enhances Morgan Money with Expanded Access to Diverse Asset Classes
Press Release | N/A
J.P. Morgan Asset Management today announced an enhancement to its open architecture, short-term investment management platform, Morgan Money, through a strategic partnership with GLMX, a global money market trading platform. Morgan Money clients can now seamlessly access GLMX’s advanced money market trading technology directly on Morgan Money. The integration will broaden short-term investment options and offer a comprehensive suite of money market instruments, including money market funds, repurchase agreements, time deposits, CDs, CP, and government securities.
SS&C Fights ‘Frankenstein’ Perception With Further Advent, Eze Integration
WatersTechnology | Nyela Graham?
Two years ago, Boris Bykhovsky, Frank Matarese, and a handful of their colleagues at SS&C Technologies met in a conference room at the vendor’s offices in San Francisco. The group discussed how they could modernize two decades’ worth of IP contained within its acquired Eze and Advent platforms. In 2015, SS&C bought what was then called Advent Software for $2.7 billion. In 2018 it brought Eze Software into the fold for $1.45 billion.
Icy Attitudes on Internal GenAI Usage Are Thawing—and Just in Time
WatersTechnology | Anthony Malakian
There are four major concerns when it comes to generative AI: data security; copyright issues; explainability; and “hallucinations.” Financial institutions are heavily regulated, so banks were naturally taking a slow, considered approach to rolling out these powerful-but-young tools. But there are signs that these somewhat chilly attitudes towards GenAI are starting to thaw.
Buy-Side News
Point72’s Head of Systematic Trading Technology Raj Kedia Rejoins JPMorgan
Financial News | Bilal Jafar
JPMorgan has hired Point72’s head of systematic trading technology Raj Kedia as a managing director and global head of macro technology. Kedia, who was a managing director at JPMorgan from 2018 to 2022, rejoined the bank’s New York office in September, according to people familiar with the matter.?
Marc Rowan, the Man With a Plan to Remake Wall Street
Financial Times | Antoine Gara?
Early in his career, Marc Rowan, co-founder of Apollo Global, worried that he had missed the greatest windfalls in finance. “I remember getting out of business school in 1984 and thinking ‘God, I am just too late’,” Rowan once said of his early days as an associate at Drexel Burnham Lambert. “‘All the money’s already been made.’” The hard-charging investment bank led by “junk bond king” Michael Milken fuelled the 1980s era of financial risk taking before it spiralled into bankruptcy in 1990.?
The Math That Explains How Multi-Strat Hedge Funds Make Money
Bloomberg News | ?Tracy Alloway & Joe Weisenthal
Multi-strategy hedge funds are still all the rage on Wall Street, but what does it actually mean to be a pod shop and how are they being set up? On this episode, we speak with Dan Morillo, co-founder of Freestone Grove Partners and formerly a partner and head of equity quantitative research at Citadel (one of the most successful multi-strats out there.) While lots of people tend to talk about multi-strategy hedge funds as one big blob, he argues that there are important differences in their business models.?
领英推荐
Trading at the Frontier
The TRADE News | Annabel Smith
The London-based trading team at Ninety One has a very particular set of skills. The active investment manager specialises in emerging and frontier markets trading across fixed income, credit and specialist equities. And sitting on its global trading desks are a pod of traders known for their ability to interact with some of the most inaccessible financial markets around the world. At the helm of the team is global head of trading Cathy Gibson who oversees trading across the asset manager’s offices in London, the US, Asia Pacific and South Africa.?
What Hedge Funds Are Missing About Messaging
WatersTechnology | Himanshu Gupta
Hedge funds rely on lightning-fast communication between their IT systems. Market data needs to seamlessly flow from direct feeds into trading algorithms, order management systems (OMSs), and, ultimately, execution management systems (EMSs). Every microsecond saved translates to a potential edge in the market. Unfortunately, many hedge funds are held back by outdated messaging solutions that can introduce latency and compromise data integrity during trade scenarios.
M&A / Investment News
EIB Announces Plan to Boost Funding for European Fintechs
Finextra | Staff
The announcement comes amid a decline in fintech funding across the region as well as growing competition from the US and China. But according to the EIB's president, Nadia Calvino, the action plan will ensure that "companies born in Europe, stay in Europe". The plan was presented to EU finance ministers in Luxembourg as part of an EU plan to develop its capital markets as a destination for innovative startups.?
BlackRock, JPMorgan Asset Back Dynasty Financial at $800 Million Valuation
Bloomberg News | Suzanne Woolley
Dynasty Financial Partners, a provider of back-office services to independent investment advisers, won backing from BlackRock Inc. and JPMorgan Asset Management as it looks to accelerate growth. The minority capital raise values Dynasty at about $800 million, according to a person familiar with the matter, who asked not to be identified discussing private details. The firm didn’t disclose the size of the deal, which also included previous investors.
Apollo’s Bet to Take on Banks Hit Snags Before Atlas CEO’s Exit
Bloomberg News | Allison McNeely
The deal had all the hallmarks of Wall Street’s inevitable power shift: Apollo Global Management Inc., king of the rising non-bank lenders, seizing on weakness at Credit Suisse Group AG to snatch up one of the Swiss firm’s most lucrative businesses. But Atlas SP Partners — the structured finance business that’s key to Apollo Chief Executive Officer Marc Rowan’s plan to become a lending machine — has struggled under its new owner since last year’s acquisition, according to interviews with almost a dozen people with knowledge of the unit.
Figment Capital Leads $3 Million Seed Round for Semantic Layer
The Block | MK Manoylov
The decentralized application (dApp) infrastructure developer Semantic Layer raised $3 million in seed financing, which comprises the firm's total funding to date. Figment Capital led the round, which saw additional support from Hack VC, Robot Ventures, Bankless Ventures, Fenbushi Capital, Anagram and Perridon Ventures, according to a release shared with The Block. Semantic Layer aims to bolster transaction execution infrastructure with its tools, Verifiable Aggregation Rules (VAR) and Verifiable Sequencing Rules (VSR). These tools will give dApps more control over multi-blockchain transaction ordering and bundling.
Regulatory & Legal News
SEC Sues Crypto Unit of High-Speed Trading Firm DRW
Wall Street Journal | Alexander Osipovich and Dave Michaels
The Securities and Exchange Commission sued the cryptocurrency unit of high-speed trading giant DRW Holdings, opening a new front in its war on crypto by going after a business that trades with hedge funds and other big market players. The agency accused the unit, Cumberland DRW, of violating investor-protection laws by failing to register as a securities dealer, according to the lawsuit filed Thursday in Chicago federal court. Unlike many of the crypto firms the SEC has sued, Cumberland doesn’t do business with ordinary investors, who regulators have traditionally seen as the population most in need of their protection.
UK Task Force Proposes Excluding ETFs in Event of Early T+1 Move
Financial Times | Alf Wilkinson
The UK could exclude exchange traded funds from the shortening of trade settlement cycles in the event it makes the transition ahead of the EU, if proposals from a government-appointed task force are adopted. The Accelerated Settlement Taskforce has put forward its draft recommendations for the cutting of settlement cycles from two days after the trade date to one day, or T+1.
SEC Half-Penny Stock Quote Rules Prompt Investor Challenge
Bloomberg Law | Ben Miller
New rules from the Securities and Exchange Commission allowing thousands of stocks and ETFs to be quoted in half-penny increments when trading on exchanges drew their first legal challenge. A package of changes to Regulation National Market System, approved unanimously by SEC commissioners in September and published in the Federal Register on Tuesday, violates the Administrative Procedure Act and the Securities Exchange Act, according to the petition filed in the US Court of Appeals for the District of Columbia Circuit.
Crypto.com Sues US SEC After Receiving Legal Threat From Regulator
Reuters | Manya Saini
Crypto.com filed a lawsuit against the U.S. Securities and Exchange Commission on Tuesday, alleging that the federal agency is overstepping its jurisdiction by regulating the cryptocurrency industry. The crypto trading platform said its move follows the receipt of a "Wells notice" from the top U.S. markets regulator on the grounds that tokens traded on its platform qualified as securities. A Wells notice is a formal declaration that the regulator's staff intend to recommend an enforcement action. The SEC declined to comment.
Citadel Securities CEO Says Regulation Is Deterring IPOs
Bloomberg News | Katherine Doherty
Citadel Securities LLC Chief Executive Officer Peng Zhao said the prospect of too much regulation in corporate America is deterring firms from going public — which he also cited as a reason why the market-maker isn’t considering the move right now. “We’ve seen way fewer IPOs than we used to,” Zhao said at Citadel Securities Global Macro Conference in New York on Wednesday. He cited the “negative side effects” of regulation that comes from being a public company as well as the ease with which firms can raise capital privately instead.
Crypto?& Digital Asset News
‘Panic Buying’ of Chinese Stocks Weighs on Crypto’s Most-Traded Token
Bloomberg News | Muyao Shen
One of the best measures for gauging demand for cryptocurrencies suggests that some Chinese investors are shifting away from digital assets and back to the nation’s surging stock market. While China banned crypto trading in 2021, many mainland residents have continued to use overseas accounts and exchanges to buy and sell digital currencies, in part to avoid capital controls and move assets offshore.
Wall Street Races to Launch Latest Cohort of Crypto-Spot ETFs
Bloomberg News | Isabelle Lee
The race to launch an exchange-traded fund tracking XRP, the seventh-largest digital token, has begun. Canary Capital Group, a new digital asset-focused investment firm founded in September, submitted paperwork with the Securities and Exchange Commission Tuesday to launch the Canary XRP ETF. It comes just a week after Bitwise Asset Management Inc. became the first firm to file for an ETF tracking the token.
FTX Creditors Emerge as Possible Fillip for Ailing Crypto Market
Bloomberg News | Suvashree Ghosh & Sidhartha Shukla
Crypto exchange FTX’s creditors are set to receive more than $12 billion in coming months in a court-approved payout plan, raising the prospect that some of the cash could be plowed back into digital assets. The bankrupt platform in June had $12.6 billion to return to customers, a figure that may reach $16.5 billion after all its assets are found and sold. Initial distributions of about $1.1 billion are relatively small but are set to support Bitcoin, Galaxy Digital Holdings Research Head Alex Thorn wrote in a note.
The Endless Downfall of a Crypto Power Couple
New York Times | David Yaffe-Bellany
He was a wealthy cryptocurrency executive with a shiny white Porsche and a luxury condo in the Bahamas. She was a crypto policy expert with political ambitions, advocating for the industry in Washington. A romance blossomed after they were brought together by an unlikely matchmaker: Sam Bankman-Fried, the founder of the collapsed FTX crypto exchange. Two years ago, the FTX executive Ryan Salame and the crypto advocate Michelle Bond were an industry power couple. Mr. Salame gave tens of millions of dollars to conservative politicians, who celebrated him as a “budding Republican megadonor,” while Ms. Bond ran for Congress, drawing support from Donald Trump Jr.
Almost Half of Traditional Hedge Funds Are Dabbling in Crypto
Bloomberg News | Olga Kharif
Nearly half of hedge funds focused on traditional asset classes now have exposure to cryptocurrencies as increased clarity around regulations and the launch of exchange-traded funds in the U.S. and Asia draw more investors into the asset class, according to a new survey. Among hedge funds trading in traditional markets, 47% had exposure to digital assets, up from 29% in 2023 and 37% in 2022, according to the Global Crypto Hedge Fund Report published Thursday by the Alternative Investment Management Association and PwC.