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.
The past week was a wild one on the M&A front — a number of firms were snapped up by larger players, sending reverberations throughout the financial services industry. Unsurprisingly, data was the common thread in several of these deals. The London Stock Exchange Group acquired ESG fixed income data provider Beyond Ratings, Liquidnet acquired NLP and machine learning specialist Prattle, and IRESS acquired market data provider Quanthouse. Finally, SimCorp closed a deal with buy-side data management firm AIM Software, capping the buyout bonanza.
There were also a number of high-profile people moves: Jason Leung, head of the trading operation at Cumberland, DRW’s crypto arm, left the firm, while Steve Grob, a longtime executive at Fidessa, left ION Markets. Meanwhile, MEMX added staff, including a new Chief People Officer.
This week’s Week in Review features stories by Bradley Saacks of Business Insider, John Brazier of The TRADE and Annie Massa and Lananh Nguyen of Bloomberg, 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.
Exchange-traded funds are bolstering the corporate bond market, according to executives from Bank of America and Jane Street. The growth of fixed-income ETFs is making it easier to determine bond prices and smoother to carry out large trades, said Sonali Theisen, head of fixed-income market structure at Bank of America. ETFs enable credit-portfolio trading, a tactic for trading large blocks of corporate bonds at once, used by banks such as Goldman Sachs Group Inc.
Exchange, ATS and Clearing News
Growing the MEMX Team: A Staffing Update
Medium | Jonathan Kellner (CEO, MEMX)
In January, it was first announced that we were putting together a new equity exchange, one intended to increase competition, improve operational transparency, simplify execution, and further reduce fixed costs. After officially joining the company in February, I’m pleased to let you know that MEMX is making great headway in assembling a team that will help fulfill that mission. We have hired Lindsay Stone Gilliam to be our Chief People Officer. Additionally, we’ve been able to hire Anders Franzon as our General Counsel. These additions, plus our senior technology team of five, bring our MEMX team to a total of 10 people.
Steve Grob Exits ION
Global Investor Group | Louisa Chender
ION Markets’ chief marketing officer Steve Grob has left the company less than a year after his former firm merged with rivals. Grob had been at London-based tech firm Fidessa for almost fourteen years before it was acquired by Dublin-based rivals ION in a £1.5 billion deal last year. Grob joined Fidessa back in November 2004 and was director of group strategy. He was responsible for the strategic development of four global service lines providing automated solutions across cash equities and derivatives, for the buy and sell-side.
Buy Side News
Billionaire Investor Stanley Druckenmiller Says There Should Only Be ‘200 or 300’ Hedge Funds, Not Thousands — and He Expects a Culling of the Herd
Business Insider | Bradley Saacks
In Stanley Druckenmiller’s mind, there’s only five to 10 people who are worth the fees hedge funds charge — and the problem is that there’s thousands of hedge funds run by people who aren’t. Speaking to an audience at an event Monday night at the University Club hosted by the Economic Club of New York, Druckenmiller said the industry originally had “eight to 10 savant superstars in the 70s and 80s” that charged “Rolls Royce fees” and were worth it. The problem was thousands of imitators followed them, said Druckenmiller.
Liquidnet Continues Acquisitions with Capture of NLP Analytics Specialist
The TRADE News | John Brazier
Liquidnet has announced its latest acquisition as it seeks to enhance its capabilities around AI-based trade and investment analytics. Prattle, a natural language processing (NLP) and machine learning specialist, was launched in 2014 and currently provides analytics on approximately 3,000 publicly traded companies and 15 central banks. Its analytics measure sentiment and predict the ‘market impact of publicly available content’ — including central bank and corporate communications – designed to provide buy-side users with the ability to understand and anticipate market movement, buff investment theses and inform trading strategies.
Regulatory & Legal News
Swiss Regulator Fines Banks for Fixing Forex Trading
Reuters News | John Revill & Silke Koltrowitz
Five banks have been fined a total of 90 million Swiss francs $90.5 million for colluding to rig the multi-trillion dollar foreign exchange market, Switzerland’s competition authority said on Thursday. The Swiss fines come on top of 1.07 billion euros ($1.20 billion) of fines handed out last month by the European Union. Barclays, Citigroup, JP Morgan and Royal Bank of Scotland were all punished by the Swiss authority, known as WEKO. It said it found “several anti-competitive arrangements between banks in foreign exchange spot trading”.
Blockchain & Crypto News
Cumberland Bids Farewell to Its Global Head and Final OG
The Block | Isabel Woodford
Jason Leung, the man who has helmed DRW’s crypto trading operation, has opted to leave the firm, The Block has learned. It is the firm’s second executive departure this month following Bobby Cho, Cumberland’s former COO. Former Goldman Sachs exec James Radecki also left the firm after a one-year stint in March, as first reported by The Block. The departure leaves the unit with a younger, more tech-centric staff, sources say. Leung, a former Bank of America principal and Citadel trader, joined Cumberland’s parent company DRW in 2013, stepping into the executive role at its crypto operations in 2017.
Forefront Client News
The Buy-Side Trader Is Latest Job to Be Outsourced as Costs Rise
Bloomberg News | Justina Lee
For some managers, keeping a trading desk isn’t worth it any more. For one thing, there are enormous costs. Then there are the reams of rules — perhaps you have heard of MiFID II. Enter outsourced trading. Once a niche business aimed at startups, these desks are seeing demand grow as money managers face mounting pressure to cut costs in an increasingly onerous market environment. According to Andrew Walton, head of European business at Tourmaline Partners LLC, the largest source of growth is among asset managers overseeing $10 billion to $100 billion that are looking to supplement their own desks.
Pico Launches Low Latency Connectivity Service
Finextra | Staff
Pico, a leading infrastructure, connectivity, cloud technology, data and analytics services provider to the financial services industry, today announced the launch of its global connectivity ring, expanding the PicoNet backbone to the major financial data centers in North America, Europe and Asia. PicoNet is Pico’s private, proprietary network that enables clients to excel in today’s competitive markets by providing low-latency and reliable connectivity to hundreds of liquidity sources, information providers and counterparties.
TCA Is Moving Upstream
TABB Forum | Pascal Kuyten (TORA)
Transaction cost analysis (TCA) is not a new concept for asset managers and hedge funds. For some, it’s been used for several decades now. Spurred by regulatory change and the emergence of new artificial intelligence (AI)-powered technology, it has evolved from being an after-the-fact, report card-type exercise to one of the highest and most informing trading and investment decisions in real-time.
Caspian Cements Reputation as a Leading Crypto Asset Management Solution for Institutions
Global Newswire | Staff
Caspian was launched one year ago by TORA, a leading global supplier of asset management technology. Led by an experienced team and leveraging the capabilities and resources of two existing, successful financial businesses, Caspian has built a crypto ecosystem that enables sophisticated traders to operate more efficiently and improve their performance. Caspian’s launch enabled institutional investors to gain access for the first time to a full-stack crypto trading, portfolio and risk management platform. Today the platform provides connectivity and interoperability across 35 cryptocurrency exchanges and OTC desks.
That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.