Forefront Communications

Forefront Week in Review: December 2, 2018

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Sam Belden

Sam Belden

All of us at Forefront enjoyed a relaxing and fulfilling Thanksgiving, but with the news cycle moving as quickly as ever, we’re pleased to be back at it with another edition of the Forefront Week in Review.

This week, Forefront is excited to attend the Equities Leaders Summit in Miami, a two-day (three-day for buy-siders) gathering of top minds from the world’s most prominent regulators, technology vendors and buy- and sell-side firms hosted by Worldwide Business Research. The agenda is jam-packed, and three of our clients — Dash, Luminex and Imperative Execution — will be on hand to contribute to the program and preach their products to the masses. Dash and Imperative Execution will present to the buy side on Wednesday, while all three firms will be represented during the Thursday panels. To learn more about the ELS, be sure to follow them on Twitter, where they’ll be live tweeting the event on Thursday and Friday.

Top headlines from last week included Refinitiv’s plan to cut 2,000 jobs, BlackRock’s big investment in fintech Envestnet, and the massive paychecks derivatives traders will take home this holiday season.

This week’s Week in Review features stories by Nick Baker of Bloomberg, Meghan Morris of Business Insider and Paul Clarke and Samuel Agini of Financial 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

Biggest Pay Raise on Wall Street Goes to Stock Derivatives Traders
Wall Street Journal | Telis Demos & Gunjan Banerji

The return of volatility might be making many rank-and-file investors queasy, but it is proving to be a boon to some trading desks at the biggest banks. Many desks focused on derivatives tied to stocks are set to generate billions of dollars more in revenue this year, as choppy markets give traders more opportunities to make lucrative, against-the-grain bets on these financial instruments. It is a contrast to recent years, when these desks slumped amid calm, steady markets. As a result, the top traders on banks’ equity derivatives desks are expected to take home healthy paychecks. Pay for the highest ranks could top $3 million this year.

[minti_button link=”https://www.wsj.com/articles/biggest-pay-raise-on-wall-street-goes-to-stock-derivatives-traders-1543401000″ size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More ($)[/minti_button]

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Exchange, ATS and Clearing News

IEX Group, Inc. Announces Senior Appointments to Drive New Ventures
Business Wire | Staff

IEX Group, Inc. announced two senior appointments, Joseph (Joe) Hipps and Prerak Sanghvi, to help capitalize on strategic growth opportunities outside of the company’s core stock exchange business. Mr. Hipps was hired to develop the IEX Group’s new independent analytics business. Previously, he was Head of Client Service and Support at Trade Informatics, a provider of trading data analysis and systematic trading solutions. Mr. Sanghvi, one of IEX Group’s first employees and a critical member of the technology team, was promoted to Head of Ventures Technology. Before joining IEX, he was the Head of Electronic Trading Technology at RBC Capital Markets.

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Vendor News

Refinitiv Cuts 2,000 Jobs After Blackstone Takeover
Financial News | Paul Clarke & Samuel Agini

Refinitiv is in the process of cutting around 2,000 jobs after its takeover by Blackstone. The group is looking to strip out $650m of costs in a bid to reshape and compete better with rival Bloomberg amid a growing demand for data from banks and fund managers. Refinitiv was the subject of the biggest leveraged buyout since the financial crisis when Blackstone paid Thomson Reuters $17bn for a 55% stake in its financial and risk business in January. Around 2,000 employees are being cut from the global business, including those in corporate functions such as accounting and human resources, according to people familiar with the matter.

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Buy Side News

Stock-Picking College Freshman Impress Steve Cohen’s Hedge Fund with Short Idea
Yahoo Finance | Julia La Roche

Steve Cohen’s $12.4 billion hedge fund is letting teens and early twenty-somethings pitch stock ideas to its investment professionals to recruit the next generation of talent. Earlier this month, Point72 Asset Management hosted The Global Case Competition, giving college first-year students and juniors the opportunity to demonstrate their investing skills through a stock pitch — either a long or short idea. The theme of this year’s competition was the fast-casual industry. The first-place team, “Hoos Capital” from the University of Virginia, won with their Shake Shack short.

[minti_button link=”https://finance.yahoo.com/news/stock-picking-college-freshman-impress-steve-cohens-hedge-fund-short-idea-202816240.html” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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M&A/Investment News

BlackRock Is Buying a Stake in a Financial Technology Company to Reach More Than 90,000 Money-Managers
Business Insider | Meghan Morris

BlackRock, already the world’s largest asset manager, wants to distribute its retail products even more broadly. To get in front of more financial advisors, the New York-based firm is buying a 4.9% stake in financial technology firm Envestnet for $123 million, according to a Tuesday announcement. About 92,000 financial advisers use Envestnet’s wealth management platforms, which include portfolio management, reporting and other capabilities. There are about 300,000 financial advisers in the US. The deal comes as financial advisors move away from stock and bond picking, in favor of model portfolios built and managed by third parties.

[minti_button link=”https://www.businessinsider.com/blackrock-buys-minority-stake-in-evestnet-2018-11?r=forefront” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More[/minti_button]

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Regulatory & Legal News

CAT Roll-Out Smooth, but System Still Needs Work
Waters Technology | Emilia David

The first roll-out of the consolidated audit trail (CAT) was largely smooth, but the system still needs to evolve further to be able to handle the influx of information coming from the industry next year, its builders say. Thesys CAT says it processed over 58 billion records of equities, options, and market data. Andre Frank, president of Thesys CAT, says the system successfully launched on November 15 but work still continues to meet the requirements for staggered industry reporting. The CAT national market systems (NMS) committee said in a statement that Thesys CAT plans to complete full CAT functionality by March 31, 2019.

[minti_button link=”https://www.waterstechnology.com/operations/3991921/cat-roll-out-smooth-but-system-still-needs-work” size=”small” target=”_blank” lightbox=”false” color=”orange” icon=””]Read More ($)[/minti_button]

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Blockchain & Crypto News

Wall Streeters Who Rushed to Crypto Create Sheriff for Wild West
Bloomberg News | Nick Baker

Cryptocurrency players including DRW’s Cumberland trading juggernaut and Mike Novogratz’s Galaxy Digital merchant bank have banded together to draft a set of best practices. Through the newly formed Association for Digital Asset Markets, the 10 founding members intend to develop “rules for the efficient trading, custody, clearing and settlement of digital assets,” according to a statement Tuesday. They plan to write a code of conduct to “encourage professionalism and ethical conduct by all market participants, increase transparency by providing information to regulators and the public, and deter market manipulation.”

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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.