Forefront Communications

Forefront Week in Review: August 19, 2018

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Sam Belden

Sam Belden

Welcome 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 end of the week brought a major regulatory headline: Citigroup was fined $10 million by the SEC after three of its traders made an $81 million loss. Other top storylines included the continued stagnation of bitcoin and Nasdaq’s announcement of higher fees for institutional dark pool trades.

This week’s Week in Review features stories by Joe Rennison of the Financial Times, Oscar Williams-Grut of Business Insider and Hayley McDowell of The TRADE News, among others. Keep scrolling for more, and don’t forget to subscribe to the Forefront Trading Digest if you’re not on our list already.

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Broker News

UBS Trials Netflix-Style Algorithms for Trading Suggestions
Financial Times | Joe Rennison

Picking an investment may soon start to be more like choosing a TV show on Netflix or finding new music on Spotify. UBS is looking at applying recommendation algorithms to suggest trades to its asset management and hedge fund clients, similar to those used by a host of consumer technology companies.

[minti_button link=”https://www.ft.com/content/1d4454ec-9c04-11e8-9702-5946bae86e6d” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More ($)[/minti_button]

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Exchange, ATS and Clearing News

Nasdaq Ups Reporting Fees for Dark Pool Trades with FINRA
The TRADE News | Hayley McDowell

US exchange giant Nasdaq is set to introduce higher fees for institutional dark pool trades reported to its trade reporting facility. The trade reporting facility, which is operated alongside the Financial Industry Regulatory Authority (FINRA), will increase fees for dark pool transactions as of 1 September in response to the rising costs of operation.

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Vendor News

Inside Symphony’s Battle to Break Into a $28 Billion Market for Wall Street Chat — and Avoid Becoming Bloomberg Roadkill
Business Insider | Oscar Williams-Grut

Banks hope Symphony can engineer a new, super-secure communication superhighway that help them cut down on Bloomberg terminals, the crucial but expensive trading and data tool that has dominated finance for decades. Almost four years into the Symphony project, the platform now offers apps, bots, and integrations from the likes of Dow Jones, Factset, Eikon by Thomson Reuters, and S&P Global Markets Intelligence. It’s grown to have hundreds of thousands of users across Wall Street who send millions of messages each week and has been privately valued at over $1 billion.

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Buy Side News

AQR: Investor Worries Over Trading Costs May Be Overblown
Institutional Investor | Julie Segal

The total costs of equity trading just went down. In a new paper, AQR principals Andrea Frazzini, Ronen Israel, and Tobias Moskowitz argue that equity trading costs are actually lower than previous academic studies have shown. What sets their findings apart from previous studies is that the authors used execution data from $1.7 trillion worth of live trades made over 19 years by AQR Capital itself. The underlying data represented trades in 21 developed markets for nearly 10,000 stocks.

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M&A/Investment News

Fintech Frenzy: Hype or Reality? A Closer Look at Six Key Sectors
Fortune | Matt Harris (Bain Capital Ventures)

Writing in Fortune, Matt Harris, managing director at Bain Capital Ventures, discusses investment divergence across six key fintech sectors. 

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Regulatory & Legal News

SEC Fines Citi After Traders Make $81 Million Loss
The TRADE News | Hayley McDowell

Citigroup has been fined a total of $10 million by the US financial regulator in two enforcement actions, one of which related to a $81 million loss made by three of its traders. The Securities and Exchange Commission (SEC) said that Citi has agreed to pay $5.75 million to settle the first charge of inaccurate records and insufficient trader supervision after three traders mismarked illiquid positions in proprietary accounts they managed.

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Blockchain & Crypto News

There’s Now an Exchange-Traded Bitcoin Note That American Investors Can Buy
Bloomberg News | Lily Katz & Rachel Evans

If you want to buy Bitcoin without actually buying Bitcoin, you now have another way to own the controversial digital currency. No, it’s not the U.S. exchange-traded fund investors have been touting as a catalyst for demand for the embattled virtual money. It’s an exchange-traded note, and starting Wednesday, investors can buy it more easily even though it’s technically listed and regulated in Sweden.

[minti_button link=”https://www.bloomberg.com/news/articles/2018-08-15/lovelorn-u-s-bitcoin-etf-fans-may-find-satisfaction-in-sweden” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.