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.
If you’ve been keeping up with the headlines over the past two weeks, you know there’s one company whose name has surfaced more than any other: Deutsche Bank. Following months of speculation and tough decisions, the German giant is set to close its equities division and eliminate 18,000 jobs, while other teams at the firm are being reshuffled and restructured. While some former employees have found new roles, equities jobs have been hard to find this summer, particularly in London.
Deutsche wasn’t the only firm to see exits — Boston-based crypto exchange Circle saw two OTC traders leave, just months after its own round of layoffs. In other news, trueEX shuttered its long-operating swaps trading platform and Piper Jaffray acquired Sandler O’Neill.
This week’s Week in Review features stories by Benjamin Bain of Bloomberg, Robert Mackenzie Smith of Risk.net and Nell Mackenzie and Paul Clarke of Financial News, 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.
Equities staff leaving Deutsche Bank as part of the German lender’s radical overhaul of its investment bank will find their skills in scant demand, as lower revenues and electronification pressure rivals’ stock-trading teams. This week, Deutsche started to make the first of what will amount to 18,000 job cuts across its global business as part of its latest strategy rethink. The bank will focus on downsizing its costly markets business by pulling out of equities sales and trading altogether. But recruiters, rivals and analysts covering the sector say investment banks are not looking to hire equities traders at present, as fewer clients trade in and out of rising markets.
Exchange, ATS and Clearing News
trueEX to Shut Swaps Trading Platform
Risk.net | Robert Mackenzie Smith
Interest rate swaps trading platform trueEX will close in less than a fortnight, reinventing itself as a cryptocurrency derivatives exchange, according to a memo seen by Risk.net. The platform’s exit leaves the swaps market in the hands of incumbents: broker-run platforms continue to dominate interdealer trading of interest rate swaps, while dealer-to-client trading will take place on Bloomberg and Tradeweb.
Axioma Debuts Linked Models
Markets Media | Staff
Axioma, the leading global provider of enterprise risk management, portfolio construction, and regulatory reporting solutions, has launched Linked Models, a new feature of the Risk Model MachineTM solution. Linked Models offer investment professionals a streamlined and clear view of risk across regions or sectors, creating consistency in the risk/return profile as viewed from the front and middle offices. “Linked Models enable managers to create a custom risk model that captures exposures from all regions or sectors, without any inconsistencies or skewed reporting,” said Alessandro Michelini, Axioma’s Head of Front Office Solutions.
Buy Side News
Deutsche’s Asset Manager Reshuffles Ranks as Three Top Executives Depart
Financial News | David Ricketts
DWS, the listed fund management arm of Deutsche Bank, has reshuffled its senior leadership team after three executives, including its head of the UK, left the company. Maria Ryan, who joined in 2017, oversaw DWS’s Brexit strategy and stepped up to overall head of the UK and Nordic regions last year. She is departing at the end of July to “pursue outside opportunities”, according to an internal memo seen by Financial News. Elsewhere, Hagen Schremmer, who has overseen retail sales in Germany and Austria for DWS since 2017, is also leaving. And DWS’s chief of staff for Emea and Asia, Alexander Mora, is also departing the asset manager.
Piper Jaffray Nearing Deal to Buy Sandler O’Neill for $485 Million
Wall Street Journal | Rachel Louise Ensign
Two investment banks known for brokering small deals are combining in a deal of their own. Piper Jaffray is nearing a deal to buy Sandler O’Neill + Partners LP for $485 million in cash and stock, according to people familiar with the matter. The deal, which could be announced as early as Tuesday, would add Sandler O’Neill’s business of advising community banks on mergers, equity offerings and debt issuance to Piper Jaffray’s broader client base. Advising banks is a niche that Piper Jaffray has wanted to break into for some time.
Regulatory & Legal News
SEC Chief Defends Rules That Warren Called a Gift to Wall Street
Bloomberg News | Benjamin Bain
SEC Chairman Jay Clayton is striking back at critics who’ve said one of his signature regulatory achievements is a gift to Wall Street. The rules in question, passed by the SEC last month, were supposed to clamp down on broker conflicts of interest. But Senator Elizabeth Warren, the Massachusetts Democrat running for president, said the reforms will make it even easier for financial firms to cheat consumers, while House Financial Services Committee Chairwoman Maxine Waters urged the SEC to rescind them.
Blockchain & Crypto News
Circle Sees 2 OTC Traders Depart Only Months After Layoffs
The Block | Aislinn Keely
Boston-based crypto exchange Circle has seen the departure of two of its traders, according to their LinkedIn profiles. Ryan Salame, the once-head of Circle OTC trading in Hong Kong, left his role in June to head Alameda’s OTC APAC desk. The firm still has Salame based in Hong Kong. Similarly, YinFeng Shao left his position in May, according to LinkedIn, although his profile does not list his new role. Prior to his time at Circle, YinFeng was VP of Product at LedgerX. He’s been based out of New York since 2011. The company said the two roles have been filled, though declined to release the names of the new employees.
Forefront Client News
The Four Critical Questions to Ask Your Outsourced Trading Firm
Traders Magazine | Tim O’Halloran (Tourmaline Partners)
In any commercial transaction – from buying a new car to upgrading your laptop – consumers like to know that they have chosen the best possible option. Whether that means touring dealerships and taking test drives or spending hours online at Best Buy or your local Apple Store, some form of due diligence is part and parcel of every transaction. This principle holds true for institutional trading, as well. The greater the challenge, the more carefully you want to consider your options, and the engagement of an outsourced trading provider is a decision where advanced due diligence will serve you well down the road.
Outsourcing Takes to the Front Office
Waters Technology | Emilia David
As outsourced desks mainly deal with executing orders on behalf of clients, proving best execution is key. Aaron Hantman, CEO of outsourced trading provider Tourmaline Partners, says outsourcers have to prove they follow best execution and do not at all use their investments for internal dark pools. “A big concern for asset managers is the ability to maintain a level of control at the client level. You solve for that by creating bespoke trading solutions for each client so that they realize they are able to shape the outsourced service the way they want. Much of their influence is on workflow and operational factors, less so than on trading itself,” Hantman says.
Corvil to be Acquired by Capital Markets Technology Provider Pico
The TRADE News | Hayley McDowell
Global capital markets technology services provider Pico has signed an agreement to acquire Dublin-based analytics firm Corvil. The acquisition will form a combined company servicing more than 400 banks, exchanges, asset managers and technology vendors. Together, the company will have a workforce of 375 with expertise on machine learning, automation, low-latency technologies and data science. “Corvil’s reputation is second to none for innovation, quality, and data analytics in the financial markets, and we have come to rely on their data to support mission-critical systems,” said Jarrod Yuster, CEO and founder of Pico.
Caspian’s Monthly Trading Volume Surges Over $1 Billion
Globe Newswire | Staff
Caspian, the full-stack crypto trading, portfolio and risk management platform, today announced that it has reached a milestone with its June monthly volume trading figures. The 18 month old firm saw its trading volumes surge to (USD) $1.068 billion in June 2019. Caspian has taken the decision to start publicly releasing their trade volume information in order to enhance transparency in the institutional crypto market.
That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.