Forefront Communications

Forefront Week in Review: February 24, 2019


Sam Belden

Sam Belden

Welcome back to the Forefront Week in Review. Between last-minute Brexit maneuvers and a number of rumblings from the SEC, including CAT uncertainty and a new proposal regarding IPOs, the past few days have been riveting for those with theirs eyes on the financial headlines. But before we get into the biggest stories of the week, we have an update that hits significantly closer to home for us.

We write the Forefront Week in Review to keep you up to date with the ever-accelerating financial news cycle, but sometimes, our clients make big announcements or come out with buzzy thought leadership that we can’t resist sharing. With the introduction of our “Forefront Client News” section, there’s now a one-stop shop for everything our clients have been up to during a given week. This will make it easier for you, our readers, to learn about some of what we’ve been up to, and it also allows for more stories to be included in this feature each week. The new section is located at the bottom of the post, below the crypto section, so keep on scrolling and check it out.

Of course, there are plenty of other headlines to get into along the way. One of the biggest was a new SEC proposal that would open up the regulator’s “test-the-waters” program, which allows firms to gauge the interest of large investors before going ahead with an IPO, to companies with more than $1 billion in annual revenue, as opposed to smaller companies alone. SEC chairman Jay Clayton is a former Wall Street deals lawyer, and this appears to be his latest attempt to reverse the decline in firms choosing to go public. Other big stories included the launch of SoFi’s brokerage business and Citadel’s hire of one of the only female hedge fund managers in the business.

This week’s Week in Review features stories by Samuel Agini of Financial News, Rachael Levy of the Wall Street Journal and Bradley Saacks and Dan DeFrancesco of Business Insider, 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.

Broker News

SoFi Launches Brokerage Business
Barron’s | Ross Snel

Fintech startup SoFi has jumped into the brokerage business. Founded in 2011, the company’s original business was refinancing student loans for graduates of elite universities, but it later expanded into mortgages, personal loans, bank accounts and robo-advice. Now SoFi is offering brokerage services to the public, a spokeswoman confirmed Tuesday. The SoFi Invest webpage offers a do-it-yourself “Active Investing” option for trading individual stocks and ETFs, and there are no transaction fees.

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Exchange, ATS and Clearing News

City Stock Exchanges Stage Final Brexit War Games
Financial News | Samuel Agini

London’s main stock exchanges are conducting their final tests before moving billions of euros in share trading to the European Union ahead of Brexit. Aquis Exchange, Cboe Europe and London Stock Exchange-owned Turquoise are rushing to ensure banks and fund managers can buy and sell EU27 stocks in the event a no-deal Brexit makes dealing across borders difficult. The UK is set to leave the EU on March 29 but still has to agree the terms of a withdrawal pact that will prevent the overnight loss of single-market access for City-based companies.

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Vendor News

Bloomberg Is Diving in to the Booming Alternative-Data Field with a New Product That’ll Help the Market Become Mainstream
Business Insider | Bradley Saacks and Dan DeFrancesco

Bloomberg LP is the latest mainstream financial company to wade in to the once obscure alternative-data field with a new product that will give clients access to data from more than 20 niche firms. The datasets will be immediately available, according to a release expected later Thursday from Bloomberg, and will include data such as stats on drug approvals, retail foot traffic tracked through cellphones, and construction permits. “Just because the technology didn’t exist to measure something before, does that make it an alternative measurement?” said Greg Skibiski, the CEO of Thasos, a Bloomberg partner that tracks foot traffic in malls.

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Buy Side News

Hedge-Fund Giant Citadel Hires Manager Away From Her Own Fund
Wall Street Journal | Rachael Levy

Citadel, one of the world’s largest hedge-fund firms, has hired one of the industry’s few female founders. Samantha Greenberg is closing her hedge fund, Margate Capital, to join Citadel. Ms. Greenberg specializes in investing in the technology, internet and media and consumer sectors. She previously was a partner at Paulson & Co. In March, she is expected to join Ashler Capital, a unit of billionaire Ken Griffin’s hedge-fund giant Citadel, as a portfolio manager. She may bring members of her current team with her, people familiar with the situation said.

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M&A/Investment News

Nomura Invests in Brevan Howard AI Trading Platform
The TRADE News | Hayley McDowell

Nomura has invested in an AI trading venture established by Brevan Howard in 2015. Known as AIM², the platform uses AI technology, as well as data science and machine learning, to develop various alpha investment strategies. New trading tools for market participants in wholesale financial markets are now being built after Nomura partnered with the AIM² platform last year. The new tools will use AI and data science to analyse large sets of real-time and historical high-frequency data, including client flows, in order to establish quotes and recommendations.

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Regulatory & Legal News

Companies Could Get More Input Ahead of IPOs Under SEC Proposal
Bloomberg News | Benjamin Bain

The SEC is looking to dramatically expand companies’ ability to gauge interest from large investors before going ahead with initial public offerings. The agency said Tuesday that it is seeking comment on a proposal to remove restrictions on firms using the “test-the-waters” program, which had been limited to companies with less than $1 billion in annual revenue since it was created in 2012 as a product of the Jumpstart Our Business Startups Act. “Extending the test-the-waters reform to a broader range of issuers is designed to enhance their ability to conduct successful public securities offerings,” SEC Chairman Jay Clayton said in a statement.

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Blockchain & Crypto News

Cumberland Took a Big Step to Modernize Its Market — Here’s Our Conversation with Its Head of OTC Bobby Cho
The Block | Frank Chaparro

DRW’s Cumberland is among the most notable trading firms in the nascent digital currencies market. The firm trades dozens of cryptocurrencies via its over-the-counter trading operation, which has been up and running since 2014. Now, the firm has gotten a major facelift that will allow it to engage with clients electronically, the unit’s head Bobby Cho told The Block in an interview. The firm’s new platform, Marea, will allow its counter parties to trade with Cumberland via a new graphical user interface. It’s a move that follows its Chicago cross-town rival Jump Trading and other market makers in crypto that have modernized their marketplaces.

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Forefront Client News

Large Asset Managers May Hand-Off Some of Their Trading Desks Within 3 Years and It Could Be a Gold Mine for Custodian Banks and Prime Brokers
Business Insider | Meghan Morris

The asset management industry has faced a tough few months, as volatile markets pushed billions of capital out and demand for lower fees continued to eat into revenue. Most small funds have long relied on bank custodians and prime brokers to run their trading operations, lacking the internal resources and trading volume to maintain a full team. Now, their larger peers are considering handing off at least some of their trading desks, according to consultancy Opimas. The trend is driving revenue growth 20-30% annually at outsourced trading desk providers such as CF Global Trading and Tourmaline Partners.

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Tech Talk: Tourmaline Partners
HFM Week | Tim O’Halloran (Managing Director, Tourmaline Partners)

Between MiFID II and advances in technology, hedge funds have their work cut out for them when it comes to finding an edge on the competition. In this Q&A, Tim O’Halloran of outsourced trading firm Tourmaline Partners weighs in on the forces that are shaping the space and the value outsourced trading can create amid this rapidly shifting landscape.

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Fending Off the FAANGS Using High-Performance Switch Technology
TradingTech Insight | Staff

According to Anthony Amicangioli, CEO of HPR (Hyannis Port Research), developer of high-performance networks switches for the trading environment, capital markets firms lack the resources and technologies to make the leap to cloud-based operating environments that could give them the agility to ward off an invasion by the FAANGs. As more trading-related technology is assimilated into the cloud, firms need to consider their options with respect to integration, availability and access to services. “The technology bar is getting very high,” he says. “It’s hard for financial institutions to operate at this level.”

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Confluence Promotes Todd Moyer to President
Globe Newswire | Staff

Confluence, the global leader in investment data management automation for regulatory, financial and investor reporting, today announced that Todd Moyer has been promoted to President, where he will be responsible for the company’s overall strategy and execution including operations, product and business development globally. Moyer joined Confluence in 2012 as Senior VP of Global Sales. In 2014 he was promoted to Executive VP of Global Business Development, leading Confluence’s global growth efforts related to strategic market management, sales strategy and execution. Since 2017, Moyer has been Chief Operating Officer.

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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.

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