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.
One of the biggest stories we’ll review today broke early last week: Japan Exchange Group (JPX) is set to acquire the Tokyo Commodity Exchange, creating a single, consolidated exchange in the Land of the Rising Sun. Given all the hand-wringing over the fragmentation of the exchange space, it was interesting to see this deal buck the trend, but with the Small Exchange and MEMX set to launch later this year, there will be more players vying for market share soon enough.
Other major stories included the launch of Deutsche Bank’s new electronic stock-trading venue, Bloomberg’s continued dominance of the OMS space and smart contracts platform UMA launching a tokenized version of the stock market.
This week’s Week in Review features stories by Alexander Osipovich of the Wall Street Journal, Dan DeFrancesco of Business Insider and Frank Chaparro 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.
After Job Cuts, Deutsche Bank Plans New Electronic Stock-Trading Venture
Wall Street Journal | Alexander Osipovich
Deutsche Bank said it plans to launch a new electronic platform where it will trade U.S. stocks directly with large clients, instead of matching buyers and sellers for a fee like Wall Street banks typically do. The bank announced the plans in a press release Thursday along with exchange operator Nasdaq Inc., which will build the technology behind the new venue. The platform is expected to go live in the third quarter of 2019, the companies said.
Exchange, ATS and Clearing News
CME’s CEO Explains How Main Street Is Taking More Control Over Its Portfolio from Wall Street and How the Futures Exchange Is Adapting
Business Insider | Dan DeFrancesco
Main Street investors are more interested than ever in managing their own investments, and CME Group’s chairman and CEO, Terry Duffy, is happy to oblige. Duffy’s exchange group, which owns and operates some of the largest trading venues for futures, told Business Insider that a growing population was taking its money out of Wall Street’s hands. In 2018, CME saw a 27% uptick in trading activity from its retail customers compared with the previous year. “I think they have become more and more sophisticated in leaving it less up to maybe somebody else. You know, ‘I want to be able to manage my portfolio,'” Duffy said.
Bloomberg Maintains Dominance of OMS and EMS Space, Analysis Finds
The TRADE News | Hayley McDowell
Bloomberg has dominated an analysis of OMS and EMS used by asset managers, who spent $1.4 billion on deploying such systems in 2018. According to the analysis of US and Europe asset managers carried out by Greenwich Associates, Bloomberg’s EMSX platform is most popular in equities trading with a majority of 38% of buy-side traders stating that it is their primary EMS platform. Following Bloomberg was ITG’s Triton EMS, now part of Virtu Financial, which is the primary EMS for 19% of buy-siders surveyed for the analysis, and then Charles River, now part of State Street, which is the main equities EMS for 8% of respondents.
Buy Side News
JPMorgan to Cut Hundreds of Jobs After Staffing Review
Bloomberg News | Michelle Davis
JPMorgan Chase & Co. is dismissing hundreds of workers in its asset and wealth-management division after a periodic review of staffing, according to a person briefed on the matter. The bank is reducing the number of employees in support roles across the unit and laying off some wealth-management workers, said the person, who asked not to be identified discussing internal strategy. The reductions are being made globally.
JPX Set to Acquire Tokyo Commodity Exchange
Financial Times | Robin Harding
The largest futures exchanges in Japan are set to announce a merger this week as part of a national effort to take on foreign rivals and restore Tokyo’s place as the financial centre of Asia. According to people briefed on the negotiations, Japan Exchange Group (JPX) will announce a basic agreement to acquire the Tokyo Commodity Exchange (Tocom) after a board meeting on Thursday. The merger is aimed at creating a single, consolidated financial exchange that can boost trading volumes.
Regulatory & Legal News
SEC Delays Disputed Plan to Probe Exchange Pricing Conflicts
Reuters News | John McCrank
The SEC on Thursday delayed a controversial plan aimed at evaluating how stock exchange fees and incentives affect how brokers trade, while the exchanges sue the regulator in an attempt to kill the experiment. The SEC approved its so-called Transaction Fee Pilot in December, aimed at testing how lucrative rebate payments from exchanges to brokers for stock orders that others can trade against influences brokers’ behavior. But Nasdaq, Cboe and NYSE, which together own 12 of the 13 U.S. stock exchanges, all filed lawsuits against the SEC in February saying the plan was an exercise in government price-setting and would put controls on competition.
Blockchain & Crypto News
A Crypto Venture Is Launching a Tokenized Version of the Stock Market
The Block | Frank Chaparro
UMA, a smart contracts platform, is bringing the S&P 500 to the blockchain with the launch of a new ERC20 token that’ll represent ownership in the largest 500 companies in U.S. financial markets, the company announced Wednesday. UMA, an entity affiliated with Risk Labs, a Two Sigma Ventures-backed firm, also said the new token would trade on Beijing-based decentralized exchange DDEX, to start. MakerDao, the firm behind stable coin DAI, is also involved in the new token, per the release. Investors looking to buy the token are required to purchase it with DAI.
Forefront Client News
Firms have experienced huge success using alternative data to drive decision making. Providers are proliferating, too, to more than 400, according to industry group AlternativeData.org. One that attended the New York event was Thasos Group, which sells mobile-phone-location analytics to hedge funds tracking the health of retail chains and shopping malls. “Malls have turned out to be a very good proxy for retail sales,” said founder Greg Skibiski, who noted the information predicted December’s unexpected plunge to a nine-year low — and January’s rebound.
Thasos Taps Metaxas for Chief Revenue Officer Role
Waters Technology | Max Bowie
New York-based alternative data provider Thasos, which captures geolocation data from mobile phones, has hired Chris Metaxas as CRO, responsible for all sales activity and strategic partnerships. Metaxas was previously CEO of location data and analytics provider Digital Recognition Network, which was acquired earlier this year by Motorola. Before that, he was president of sales and business optimization advisory firm MetaPartners, prior to which he was SVP of LexisNexis’ government business, served as SVP of worldwide sales at network security technology vendor CipherOptics, and was VP of sales at Con Edison Communications.
Thasos, FactSet Partner on Alt Data
Markets Media | Staff
Thasos, an alternative data intelligence firm that transforms location information from mobile phones worldwide into real-time, objective and actionable insights, today announced an agreement with FactSet, a global provider of integrated financial information, analytical applications and industry leading services, to offer geolocation data on the Open:FactSet Marketplace(OFM). The OFM will feature Thasos’ ConsumerStreams product, which covers over 120 publicly-listed consumer companies, providing daily foot traffic data from their U.S. locations, with historical data available back to 2015 for time series analysis.
Witad Awards 2019 Write-Ups: Market Data Professional of the Year—Emily Kasparov, SIP Operating Committees
Waters Technology | Josephine Gallagher
As an associate general counsel and corporate secretary of NYSE’s Chicago Stock Exchange, Emily Kasparov has a lot on her plate, by any measure. But it’s her work as chair of the SIP Operating Committees (OCs) that has helped land her the title of market data professional at this year’s Women in Technology & Data Awards held in London on March 8. In 2015, Kasparov became the youngest person and the first woman to be elected to the position, and during her tenure she has transformed the OCs’ operational processes. Since taking up the role, she has implemented effective governance.
STA Partners with Knopman Marks on Financial Training
Globe Newswire | Staff
The Security Traders Association (STA) today announced an agreement with Knopman Marks Financial Training, a leading provider of licensing examinations training and course material for professionals within the financial services industry. The agreement extends to STA members, and members’ friends and families, on Knopman Marks’s training program for the Securities Industry Essentials (SIE or Essentials) Exam, FINRA’s newest exam for securities industry professionals. SIE Exam results are valid for four years and must be combined with a qualification exam appropriate for the type of business the individual will engage in.
FINOS Debuts FDC3 Version 1.0
Markets Media | Staff
After 16 months in development, the Fintech Open Source Foundation has released version 1.0 of its Financial Desktop Connectivity and Collaboration Consortium (FDC3) standard, which aims to bring universal connectivity to the financial industry’s desktop applications. OpenFin started working on the standard in November 2017, before contributing its work to the Symphony Software Foundation in February 2018, which became FINOS two months later.
That’s all for this week. Don’t forget to subscribe to the Forefront Trading Digest for more headlines like these.