Welcome back to the Forefront Week in Review, where we take another look at top recent stories from the action-packed world of trading and market structure.
Before we get to the headlines, we have some company news to share. In working to drive top-line results for our clients, we sometimes work with freelancers to augment our efforts, and we’re always looking for people who have a strong understanding of the media and bring a new perspective to our team. With that said, we’re thrilled to have Alice Uribe aboard as our newest Vice President. Alice joins us from The Australian Financial Review and has worked with us on several projects in the past, making this a natural hire. Please join us in welcoming her, both to Forefront and to the States!
Looking at the news cycle, one of the biggest stories from the past week concerned Bloomberg’s plan to exit two key lines of business, Sell-Side EOMS and KYC. It’s just the latest sign that trading technology providers are facing increasing pressure as their clients are reviewing their budgets with renewed scrutiny. Other stories included Credit Suisse making a big hire from the buy side, Andurand Capital closing its New York office and bitcoin’s unlikely jump back to $5,000.
This week’s Week in Review features stories by Dan DeFrancesco of Business Insider, Frank Chaparro of The Block and Hayley McDowell of The TRADE, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Fintech Digest if you’re not on our list already.
Credit Suisse Made a Big Hire from State Street as It Looks to Beef Up Its Stock Trading Team
Business Insider | Dan DeFrancesco
Credit Suisse recently made a senior hire to its equities team in what has been a string of appointments and strategy decisions for the Swiss bank all aimed at growing its stock trading business. Chris Rice was named global head of execution strategy for Credit Suisse in recent weeks, according to an internal memo seen by Business Insider. Rice comes to Credit Suisse from State Street Global Advisors, where he most recently served as the $2.5 trillion asset manager’s global head of trading.
Exchange, ATS and Clearing News
LSEG’s Capital Markets Director to Step Down by Year End
The TRADE News | Hayley McDowell
The director of the capital markets segment at the LSEG is due to step down from his position by the end of the year. LSEG confirmed in a statement that Raffaele Jerusalmi announced his intentions to step down from the role, but will continue to lead Borsa Italiana in his current role as CEO. Jerusalmi will also remain an executive director of the board of LSEG, and a member of the exchange group’s executive committee, reporting to Group chief David Schwimmer. LSEG’s capital markets business consists of its electronic trading platforms for equities, bonds and derivatives, including Turquoise, MTS and CurveGlobal.
Bloomberg is intending to exit two key lines of business in the coming months: its Sell-Side Execution and Order Management Solutions (SSEOMS) unit and its Know-Your-Customer (KYC) business, which includes Entity Exchange and Entity Intelligence, WatersTechnology has learned. A spokesperson for Bloomberg confirmed that it intends to exit both lines but could not go into details about its exact plans. The information giant does not have plans to exit any other business lines, such as its multi-asset, sell-side focused Trade Order Management Solutions (TOMS) unit or its Asset and Investment Management (AIM) buy-side OMS.
Buy Side News
Commodities hedge fund manager Pierre Andurand closed his firm’s New York office after a tough trading year in 2018, according to people familiar with the matter. Andurand Capital, led by the eponymous trader famous for his bullish oil calls, has seen some portfolio managers and staff leave the firm recently, the same people said, asking not to be named discussing private information. The New York office, which opened in late 2017 and had just a few employees, was closed in November, another person said, adding that the hedge fund’s plan was always to reevaluate the need for an American base after one year.
Deutsche Boerse Interested in FX Trading Platform FXall
Reuters News | Staff
German stock exchange operator Deutsche Boerse is interested in buying foreign exchange trading platform FXall, Handelsblatt business daily reported on Monday. “If FXall were put on the market we would of course look at it,” Deutsche Boerse’s Global Head of FX, Carlo Koelzer, was quoted as saying. FXall is part of former Thomson Reuters unit Refinitiv, now 55 percent owned by private equity firm Blackstone.
Regulatory & Legal News
US legislators have scheduled hearings on sustainable investing for the first time according to Meg Voorhees, research director for US SIF, the forum for sustainable and responsible investment. Voorhees spoke yesterday on a webinar about the release of the biennial Global Sustainable Investment Review 2018. The survey found that global sustainable investment assets reached $30.7 (€27.4) trillion at the start of 2018, an increase of a third from 2016.
Blockchain & Crypto News
Bitcoin’s Recent Surge Has Very Little to Do with Algos and April Fools’ — Here’s Why
The Block | Frank Chaparro
Bitcoin’s eye-popping return to $5,000, its highest level in over five months, sent financial media and analysts into a tizzy Tuesday morning as they attempted to unearth the catalyst. The theory that picked up the most steam was that the rally was tied to an April Fools’ Day piece penned by Rachel McIntosh at Finance Magnates. The faux report claimed the SEC approved the elusive crypto exchange-traded fund. “April Fools’ joke may have been the trigger for the cryptocurrency rally,” Bloomberg reported Tuesday morning. A closer examination of last night’s green candles reveal that this upward spike in the price of the world’s largest digital asset is no joke.
Forefront Client News
Rule 606 Update Nears
Markets Media | Terry Flanagan
A lot has changed in equities markets since 2000, when the SEC adopted Rule 606 to improve public disclosure of brokers’ order-routing practices. Given the risk of ‘information leakage’ compromising order execution, the SEC has stipulated that information about not held orders be shared with customers, but not released publicly. “Customers will be able to take this granular, standardized data and do a more thorough comparison of routing performance than they were able to do in the previous 606 regime,” said Venu Palaparthi, Chief Compliance Officer and Head of Regulatory Affairs at Dash Financial Technologies.
Rethinking Trade Matching: Roman Ginis, Imperative Execution
TABB Forum | Larry Tabb
As the equities market has become increasingly electronic, it has become increasingly efficient. But the traditional exchange matching process, while down to microseconds, may not be the best way to match buyers and sellers. Historically, brokers have spent an enormous amount of energy building algos to slice and dice exchange orders to minimize market impact, notes Roman Ginis, CEO, Imperative Execution, which runs the IntelligentCross ATS. Speaking with TABB Group founder and research chairman Larry Tabb, Ginis explains the IntelligentCross mid-point matching process and how it minimizes price movement while maximizing matches.
SEC to Shops: Help Us Help You Adopt Blockchain, AI
Ignites | Jill Gregorie
The SEC has assigned staffers to investigate whether emerging technology can help midsize shops compete with larger rivals, but firms looking for such an edge should “get off the sidelines” and start updating their systems and processes now, consultants say. One of its main uses is that firms can use blockchain to cut certain intermediaries out of the investment process, says John Liu, chief product officer at Fusion Foundation, a blockchain service provider that caters to financial institutions. “If 2% to 3% of the returns were chewed up by middlemen, now all of a sudden that same set might become a worthwhile investment,” he says.
Fund Managers Re-Engineer Data Workflows for N-PORT
Waters Technology | Emilia David
As financial services firms move to diversify their investments and expand their holdings, it has become important for regulators to have a better understanding of fund managers’ portfolios. Regulators are now asking for more information on a more frequent basis to better understand—and respond to—emergent sources of systemic risk. Tom Pfister, vice president of global product strategy at Confluence, says the new reporting rules have forced many companies to take a closer look into their holdings. But the industry, he predicts, is largely ready for N-PORT and SEC modernization.
That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.