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.
There’s hardly a week that goes by when Facebook isn’t making headlines in some way or another, but new information revealed over the past few days may be of special interest to investors. While the social media giant has for months been rumored to be building its own cryptocurrency, the project’s list of backers may be bigger news than the actual coin, known as Libra. Visa, Mastercard, PayPal and Uber are among the investors that will form a consortium to govern the currency, according to the Wall Street Journal, along with Coinbase, Andreessen Horowitz and a number of other firms later reported by The Block.
For now, the new coin is set to be used as an internal payments system, but big tech’s warming to the crypto world will only push the technology further towards mainstream acceptance. Facebook is set to release a whitepaper on Libra in the coming days, so we’ll know more soon enough.
This week’s Week in Review features stories by Hayley McDowell of The TRADE, Rob Daly of Markets Media and Frank Chaparro and Aislinn Keely of The Block, 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.
Wells Fargo Launches Outsourced Trading with New Prime Trade Services Group
The TRADE News | Hayley McDowell
Wells Fargo has confirmed the launch of its new prime trade services group to provide buy-side clients with access to outsourced and agency trading. Wells Fargo said that the prime trade service group will offer investment firms, ranging from start-up to institutional, experienced traders with the ability to act as an extension of their trading desks. The prime trade services group’s outsourced trading function will include high- and low-touch trading services that can execute entire trading operators, or supplement a client’s in-house trading desk, to achieve lower costs and more time to focus on alpha-generating tasks.
Exchange, ATS and Clearing News
Nasdaq Teams with Microsoft to Expand Use of Real-Time Market Data
Technology Record | Lindsay James
Nasdaq is collaborating with Microsoft to expand the use of real-time US equity market data through individual investors. Using data pulled from the Nasdaq Last sale solution, the general public, including individual investors and students, can now use Microsoft Excel to track the latest stock prices, trading volume and more, without ever leaving the software to search outside sources. Nasdaq Last Sale provides access to trading data globally, offering millions of people around the world Nasdaq-validated data in real time.
Alt Data Investments Continue Their Rapid Rise
Markets Media | Rob Daly
More firms are seeing increasing value in alternative data as firms continue to grow their budgets for the non-traditional financial data significantly, according to a recent study published by industry analysis firm Greenwich Associates. In 2018, alternative data budgets witnessed a 52% year-on-year growth, which was less than the 76% year-on-year growth that budgets saw the previous year, said Richard Johnson, principal, market structure and technology at Greenwich Associates while hosting a recent webinar on the topic.
Buy Side News
A Startup Founded by a Former Hedge Fund Manager Gives Traders as Much Performance Feedback as Athletes so They Can Make Better Decisions. Not Everyone Wants In.
Business Insider | Meghan Morris
Clare Flynn Levy knew she was doing something right picking technology stocks in the late 90s, but she didn’t know exactly why. Her portfolio was soaring in tandem with the tech sector, but she couldn’t find much information to explain why she did so well. Was she holding stocks for the right amount of time, adding appropriately, or exiting particularly well? Now, her firm, Essentia, assesses historical trading patterns for fund managers at more than 30 clients globally. The startup uses machine learning to dig into when traders out- or under-perform and connects them with former fund managers for quarterly analysis and coaching.
Symphony Attracts $165 Million Investment from Standard Chartered and MUFG
The TRADE News | Hayley McDowell
Secure messaging and content sharing platform provider Symphony Communications has raised $165 million in new capital from Standard Chartered, MUFG Innovation Partners and other investors in a recent funding round. The latest funding brings Symphony’s total capital raised to date to over $460 million globally from various financial services firms, venture capital funds and technology companies. Since inception, Symphony has signed up 430,000 licensed users globally from 60 countries.
Regulatory & Legal News
Ex-Trader Accuses Cantor of Aiding Fund Groups to Defraud Investors
Financial Times | Siobhan Riding
A former high-yield bond trader at Cantor Fitzgerald has accused his ex-employer of allowing two asset managers to make fraudulent transactions and potentially leaving retail fund investors in the dark about losses they might have suffered. Ashkan Nadershahi, who is suing the European arm of Cantor Fitzgerald for £1.2m over claims of unfair dismissal and detrimental treatment, told a London tribunal last week that he blew the whistle on millions of euros of prohibited transactions known as wash trades. Mr Nadershahi said he discovered wash trades carried out by Cantor Fitzgerald on behalf of two investment managers over a period of several years.
Blockchain & Crypto News
Facebook has been quietly building out its cryptocurrency for over a year, and it looks like that time has been well spent, enlisting the support of some of the most prominent companies across payments, retail, and technology. As recently reported by The Wall Street Journal, Facebook’s cryptocurrency will be governed by a consortium of firms known as the Libra Association, which includes the likes of Visa, Mastercard, and PayPal. But The Block has gotten its hands on consortium marketing materials and can now report dozens of firms not previously known to be involved, including investors such as Andreessen Horowitz and Union Square Ventures, cryptocurrency exchange Coinbase, and non-profits including Mercy Corps.
Forefront Client News
Capital Markets: The Cloud Services Providers’ Next Play?
Traders Magazine | John D’Antona
Name the industry, and in almost all cases technology-led disruptors have entered and seriously shaken up the status quo. Amazon’s effect on retail is obviously the prime example, but Uber’s impact on the livery industry, Netflix’s impact on content distribution and even Casper’s impact on the mattress industry are others. Perhaps the only major industry to have *not* seen a significant impact due to the entry of new, tech-savy disruptors is the capital markets. Currently, trying to decipher a problem in a large bank’s capital markets infrastructure is like an archaeological dig, according to Tony Amicangioli, Founder and CEO of technology provider HPR.
PanXchange Frac Sand Market Data Now Available on Quandl
Globe Newswire | Staff
PanXchange today announced that it will distribute its proprietary pricing data for frac sand through Quandl, a leading provider of financial and alternative data for financial professionals. PanXchange provides the industry’s de facto benchmark prices for frac sand, considered by many to be a primary economic indicator. In addition, PanXchange currently offers an OTC marketplace for frac sand, allowing buyers and sellers to communicate directly as they navigate a 120 million-ton market. Quandl, owned by Nasdaq, delivers financial, economic and alternative datasets to over 400,000 users, which include analysts, traders and portfolio managers worldwide.
As Asia’s Markets Come of Age, Market Ecosystems Need to Keep Pace
TABB Forum | Roland Hamann (Pico)
Demand from trading firms for access to Asia is on the rise. But colocation involves much more than racks, servers and cables. Critical to the success of any colocation facility is the ability of the host to work with vendors, market participants and even other venues to build a strong market ecosystem.
That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.