Forefront Fintech Digest Week in Review: August 26 – 30
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Broker News
Trump’s Wall Street Middleman Taps Network for Potential Administration Roles
Reuters | Lananh Nguyen
The co-chair of U.S. Republican presidential nominee Donald Trump's freshly minted transition team has begun tapping his network from a career on Wall Street to build a roster of thousands of candidates to serve in a potential administration. “I want to support President Trump and assist him in finding the greatest talent, the greatest athletes to put on the field, to create a wonderful, first-class administration,” said Cantor Fitzgerald CEO Howard Lutnick, who co-chairs the team with wrestling magnate Linda McMahon.
Interactive Brokers Introduces Enhancements to Global Bond Offering
Traders Magazine | Staff
Interactive Brokers, an automated global electronic broker, today announced significant enhancements to its global bond offering available through the IBKR Bond Marketplace. Clients of Interactive Brokers can now access greater liquidity for global corporate bonds, European Government Bonds (EGBs) and UK Gilts for up to 22 hours a day. In addition, clients will now be able to trade Swiss Franc-denominated (CHF) bonds on the IBKR platform.
Inside 8 Innovative Technology Projects on Wall Street, From Blackstone to Goldman Sachs
Business Insider | Bianca Chan
In investment banking, private equity, and trading, Wall Street firms are using technology to better assess risk and make more informed decisions faster. Business Insider spoke with eight of the world's largest financial institutions to get a peek at exactly how. Generative AI and data initiatives — including consolidating info and figuring out the best way to move it from hard drives to clouds — are among Wall Street's biggest priorities.
TD Securities Names New Head of European Cash Equities
The TRADE News | Claudia Preece
Carl Hayes has been named head of European cash equities at TD Securities, having most recently worked as head of sales trading at Cowen and Company. In the role, Hayes will report to Sharon Kim, executive managing director and head of Europe. Alongside the established team, he will be focused on strengthening TDS’ presence in the European equity markets as well as helping to solidify its multi-asset capabilities across Europe. Hayes has previously held roles at Deutsche Bank and HSBC Securities.
BNP Paribas Hired a New Head of High Yield Trading Even Though It Already Has One
eFinancialCareers | Sarah Butcher
BNP Paribas has quietly hired a new head of high yield trading in London. It is not clear what this means for the person who was already doing this job. BNP's new high yield trading head is Daniel Cohen, a man who has been the head of high yield trading at HSBC, Nomura and - from 2019 to the other week - Jefferies. Cohen already appears to be in his new seat at BNP in London. It's a homecoming of sorts: he worked at BNP as a mere trader between 2011 and 2013.
Exchange, ATS & Clearing News
CME, Ice Tread Nuanced Path to US Treasury Clearing
Risk.net | Bernard Goyder & Helen Bartholomew
CME Group and Ice are pitching subtly different access models for their proposed US Treasury clearing houses. CME has in recent weeks briefed key stakeholders – including banks, broker-dealers and hedge funds – on preliminary plans for its proposed central counterparty (CCP) for US Treasury trades. A clearing executive at a large US bank describes CME’s proposal as a “hybrid” approach that will allow banks and broker-dealers to offer US Treasury clearing as a standalone service or bundle it with execution.
Warsaw Stock Market Aims for Revival After ‘Lost’ Years
Financial Times | Raphael Minder
The new head of the Warsaw stock exchange is upbeat that his bourse can recover from a lost decade in which it failed to keep pace with Poland’s booming economy. Last year the total capitalisation of companies listed in Warsaw dropped to 22 per cent of Polish GDP, compared with 35 per cent in 2013. That has come as fresh initial public offerings have dwindled — Polish parcel locker company InPost opted to float in Amsterdam in 2021, raising €2.8bn — and trading volumes across Europe have fallen away.
Fighting Financial Crime Could Pay for Nasdaq
Wall Street Journal | Telis Demos
Nasdaq made its name in stock trading. But its future may be about crime fighting. The exchange operator has for many years been diversifying its traditional business listing and trading stocks. One move was to acquire financial-technology company Verafin. Its tools are used by banks to detect financial crimes such as payments fraud and money laundering.
Nasdaq Looks to Offer Bitcoin Options, Following Rival NYSE’s Plans
CoinDesk | Helene Braun
Nasdaq is seeking approval from regulators to allow the launch and trading of options tied to the price of bitcoin (BTC), the exchange said Tuesday. The proposed Nasdaq Bitcoin Index Options (XBTX) is in partnership with index provider CF Benchmarks and would track the CME CF Bitcoin Real-Time Index operated on the Chicago Mercantile Exchange exchange. This will help investors hedge investments in the asset class, the Nasdaq (NDAQ) said.
Singapore Exchange’s Head of Capital Markets Song to Depart
Bloomberg News | John Cheng
Singapore Exchange Ltd.’s head of capital markets, Matthew Song, is departing from the bourse, about a year after he took on the role following a revamp, according to people familiar with the matter. Song resigned this week and is expected to leave the firm later this year, the people said, asking not to be identified discussing a private matter. Koh Jin Hoe has been leading that business together with Song. An SGX spokesperson declined to comment.
Vendor News
Banks Fret Over Vendor Contracts as Dora Deadline Looms
WatersTechnology | Luke Clancy
Banks are racing to renegotiate contracts with thousands of technology vendors to ensure compliance with the European Union’s Digital Operational Resilience Act (Dora), which comes into force next January. Dora requires financial institutions to identify and assess the criticality of their third-party service providers and ensure they have the right contractual clauses in place to manage any risks. The head of operational risk at a large European bank says his institution has more than 1,000 service providers that will need to be assessed for compliance purposes.
Tradefeedr and FactSet Integrate for FX Data Analytics
Traders Magazine | Staff
Tradefeedr, a network for FX trading analytics and collaborative data sharing, has announced that FactSet’s clients will be able to connect to Tradefeedr’s suite of analytical services and will be able to access a new pre-trade decision-making service from within FactSet’s EMS, Portware. According to Balraj Bassi, CEO & Co-founder of Tradefeedr, this collaboration with FactSet automatically provides clients with a cohesive and transparent view of trading data, enabling more astute decision-making.
S&P Global Market Intelligence Launches AI Monitor Tool Powered by Visible Alpha Estimates of U.S. Technology Companies
Press Release | N/A
S&P Global Market Intelligence today unveiled a comprehensive look into the current state and projected growth of the core publicly-traded companies within the technology and AI industry in the newest version of the Visible Alpha AI Monitor. The AI Monitor includes consensus estimates across 66 publicly-traded U.S. technology companies. This data was aggregated by leveraging detailed sell-side analyst estimates and analysis of AI-exposed revenues, those revenue line items S&P Global Market Intelligence analysts have identified as likely to see growth from AI, to provide a snapshot of current and projected AI-related revenues for each company.
Appital Adds Pre-Trade Price Discovery Capability to Boost Natural Buy-Side Liquidity
The TRADE News | Annabel Smith
Buy-side book-building platform Appital has moved to expand its pre-trade price discovery capabilities to allow for greater natural liquidity amongst its buy-side clients. Named Price Discovery in Appital Insights, the tool allows buy-side users to invite select feedback on live orders in order gain insights on potential pricing and volume before committing an order to a bookbuild or before launching a bookbuild themselves.
Buy-Side News
Feuding Founders of Two Sigma Hedge Fund Stepping Down
Wall Street Journal | Gregory Zuckerman
The founders of mega hedge fund Two Sigma are stepping down as co-chief executives in a bid to resolve a yearslong clash that had riven the $60 billion quant-trading powerhouse. Disagreements between John Overdeck and David Siegel, first reported by The Wall Street Journal, were so intense and distracting that they inhibited decision-making, according to people at the firm. Things got so bad Two Sigma felt compelled to disclose the strife to investors.
BlueCrest, Dymon Hire for Japanese Currency, Rates Trading
Bloomberg News | Bei Hu & Nishant Kumar
Dymon Asia Capital and BlueCrest Capital Management added new hires to focus on Japan, the latest examples of the rush for talent as Asia’s second-largest economy emerges from decades of deflation. Keisuke Hino started at Dymon as a Singapore-based portfolio manager focused on Japan currency and rates trading, according to people with knowledge of the matter and his LinkedIn profile. He left Morgan Stanley, where he was Asia-Pacific head of G-10 spot and electronic trading, earlier this month.
Recommended by LinkedIn
Back to Basics: Data Management Woes Continue for the Buy Side
WatersTechnology | Wei-Shen Wong
For all of financial services’ progressiveness with technologies such as as generative AI capabilities and cloud or exploring the realm of quantum computers, there’s one thing they have yet to master: data management. There are many challenges when it comes to data management: data quality, data timeliness, data lineage, and data completeness, but one of the biggest is the ability to consolidate data from various counterparties.
Multistrats Are No Longer the Hottest Thing in Hedge Funds
Institutional Investor | Michelle Celarier
Institutional investors are starting to lose interest in multistrategy funds that have been the hottest thing in hedge funds in recent years. Many of the multistrat funds are made up of so-called pod shops — independent portfolio managers or teams. “A number of investors think that too much money has gone to them and that it’s going to impact their returns going forward,” said Don Steinbrugge, founder of Agecroft Partners, a third-party marketing firm that surveyed some 2,500 institutional investors at a recent cap intro event regarding which strategies they were considering for investment.
Balyasny Wants to Build an AI Equivalent of a Senior Analyst. A Recent Breakthrough Brings the Hedge Fund One Step Closer.
Business Insider | Bianca Chan
The AI team at Balyasny Asset Management has been vocal about its ambitions to build an AI equivalent of an analyst, and a recently developed tool called Deep Research is getting it one step closer to its goal. Built by the hedge fund's Applied AI team, Deep Research helps analysts and portfolio managers answer complex questions to research stocks before making a trade. They also use it to gauge the impact of global market events on a portfolio or set of stocks. In one recent example, a portfolio manager asked Deep Research to find companies whose supply chains are impacted by tariffs.
M&A / Investment News
New Research Shows Banks Are Unlikely Fintech Acquirers, Especially in Capital Markets
Celent | Monica Summerville
A new report by Oliver Wyman found that top banks made up less than 1% of all fintech acquirers (see figure 1) over the last ten years, and that fintech acquisitions in the “wealth and capital markets” category by banks made up 18% of their overall fintech acquisitions in the same period (see figure 2). Only 13% fintech acquisitions by top banks were over the $300 million in transaction size, and anaylis of the findings shows only one, State Street’s acquisition of Charles River Systems, a provider of management management front office tools and solutions, falls under the capital markets space.
SSGA Takes Stake in Australian Fintech Raiz
Markets Media | Staff
State Street Global Advisors, Inc, the asset management business of State Street Corporation, announced a strategic investment in Raiz Invest Limited, a leading Australian fintech platform that helps customers grow their wealth by helping them to save and invest. The parties have entered into an equity investment agreement (the “Initial Share Purchase”) as part of a strategic relationship pursuant to which State Street Global Advisors will acquire approximately 5 percent of Raiz’s share capital through a placement.
Sweden’s NOBA Bank Expands Its Strategic Review to Include IPO
Bloomberg News | Charles Daly
Swedish lender NOBA Bank Group AB says it’s evaluating a possible initial public offering, confirming an earlier report by Bloomberg News. “The strategic review that was announced in Q3 2023 was expanded to also include a potential public listing of the company,” the group said as part of its quarterly earnings report, published on Wednesday. Owner Nordic Capital Ltd. has lined up banks including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Carnegie Investment Bank AB to work on a potential listing of the business, people familiar with the matter told Bloomberg last week.
Cboe to Acquire 14.8% Stake in Japannext
Global Trading | Alex Pugh
Cboe Global Markets is to acquire a minority equity ownership stake in Japannext, a provider of financial services and market solutions focused on operating an alternative market. Cboe will purchase the 14.8% ownership interest in Japannext from SBI Holdings. Financial details of the deal have not been disclosed. Cboe hopes the acquisition will help strengthen relationships within the industry and expand its presence beyond ownership of Cboe Japan, which it plans to continue to operate independent of Japannext.
Regulatory & Legal News
Traders Push for Shorter Hours Again
Financial News | Jeremy Chan
Traders have renewed calls to shorten hours in Europe to address low activity during the day. A shorter day could concentrate liquidity, with morning hours still a major lull, say industry leaders. “We continue to see lower levels of intraday liquidity, particularly between 10am and 2pm GMT, post the morning rush and before the US open,” said Gareth Exton, Emea head of execution and quantitative services at Liquidnet. Europe’s equities trading hours are some of the longest in the world.
The Standoff Over Separate Account Margining
Risk.net | Janice Kirkel
Listen closely and you might hear the tinny rattle of a can being kicked, and kicked, and kicked down the road. On June 24, the US Commodity Futures Trading Commission issued the latest extension of its no-action letter on the ring-fencing of separate accounts belonging to the end-investor for margin purposes, leaving the relief in place until June 30, 2025 or the effective date of a final rule dealing with the issue.
Kraken Must Face SEC Suit Over Crypto Exchange Registration
Bloomberg News | Rachel Graf
Cryptocurrency platform Kraken must face a US Securities and Exchange Commission lawsuit accusing it of operating an unregistered securities exchange, a judge ruled. “The SEC has plausibly alleged that at least some of the cryptocurrency transactions that Kraken facilitates on its network constitute investment contracts, and therefore securities, and are accordingly subject to securities laws,” US District Judge William H. Orrick wrote in an opinion published Friday in San Francisco federal court.
BAML Fined $3 Million Over Manipulative Trading Failures
The TRADE News | Claudia Preece
The Financial Industry Regulatory Authority’s (FINRA) findings state that Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill) and BofA Securities (together BAML) failed to establish and maintain a supervisory system and written supervisory procedures reasonably designed to detect potentially manipulative trading. FINRA states that during a relevant period the firm relied on a number of third-party automated surveillances to assess potentially manipulative activity – including wash trading and pre-arranged trading – which were found to be deficient in several aspects.
Off-Channel Messaging (And Regulators) Still a Massive Headache for Banks
WatersTechnology | Anthony Malakian
Earlier this month, the US Securities and Exchange Commission fined 26 broker-dealers a cumulative $392.7 million for failing to “maintain and preserve” off-channel messages on platforms like WhatsApp, iMessage, and Signal. In a press release, the SEC called the problem “widespread and longstanding.” American Financial Services, Edward Jones, LDL Financial, and Raymond James took it on the chin the hardest, with each receiving $50 million fines. RBC Capital paid $45 million, BNY Mellon Securities coughed up $40 million, and TD Securities forked over $30 million.
Crypto & Digital Asset News
Zodia Custody Partners with Crypto Infrastructure Provider
Markets Media | Staff
Aquanow, a global crypto infrastructure provider trusted by 300+ clients, is announcing a strategic partnership with Zodia Custody, a leading institution-first digital asset custodian backed by Standard Chartered, SBI Holdings, Northern Trust, and National Australia Bank. The partnership will see Zodia Custody provide its enterprise custody solutions, which are trusted by globally recognised financial institutions, for Aquanow’s expansion across UAE and the wider Gulf Cooperation Council (GCC) region region.
The ‘Excited’ Tone Around Crypto’s Institutional Progress
Blockworks | Katherine Ross, David Canellis & Michael McSweeney
We talked about the newest Franklin Templeton announcement late last week, and I want to follow up on a chat I had with Polygon’s Global Head of Institutional Capital, Colin Butler. Butler and I, admittedly, spoke before the Franklin drop, but our conversation touched on a range of topics, including what needs to happen to really see the institutional wave catch on. Butler, like we’ve heard from other folks, thinks that the bitcoin ETF launches at the beginning of 2024 acted as a match to the flame.
Bitcoin Whales Viewed as Potential Sellers Unnerve the Crypto Market
Bloomberg News | Sidhartha Shukla
Bitcoin trails traditional assets in August as the month draws to a close, hampered by ebbing liquidity and lingering worries that governments may sell from their stockpiles of the cryptocurrency. The US, China, UK and Ukraine are potential sources of such disposals, as are creditors receiving tokens from the collapsed Mt. Gox digital-asset exchange, research company Kaiko wrote in a note. That’s part of a possible $33 billion overhang of Bitcoin supply, according to the analysis.
Unpacking Crypto’s Telegram Situationship
Blockworks | Katherine Ross & David Canellis
Crypto is full of paradoxes. Telegram is a big one, and the arrest of CEO Pavel Durov in France over the weekend has only amplified it. On the technology layer, crypto is about as binary as you can get. You either have the private key to sign the transaction or you don’t. The same can’t really be said for centralized stablecoins. Backdoors baked into its Ethereum and Tron smart contracts allow the Tether team to freeze, destroy, blacklist and effectively reverse USDT transfers, even if they’re fully confirmed onchain.
AI’s Race for US Energy Butts up Against Bitcoin Mining
Reuters | Laila Kearney & Mrinalika Roy
U.S. technology companies are pursuing energy assets held by bitcoin miners as they race to secure a shrinking supply of electricity for their rapidly expanding artificial intelligence and cloud computing data centers. Those data centers are driving the fastest U.S. power demand growth since the start of the millennium, outpacing grid expansions and leaving giant technology companies, like Amazon (AMZN.O), opens new tab and Microsoft (MSFT.O), opens new tab, to scavenge for vast amounts of electricity.