Friday, April 19, 2024

DTCC Appoints Frank La Salla President & CEO

New York/London/Hong Kong/Singapore/Sydney, April 25, 2022 ‒ The Depository Trust & Clearing Corporation (DTCC) today announced that its Board of Directors has appointed Francis (Frank) La Salla, currently Chief Executive Officer of BNY Mellon’s Issuer Services business and a member of the BNY Mellon Executive Committee, as President and Chief Executive Officer (CEO) of the company, effective August 12. La Salla’s appointment as CEO reflects the Board’s long-term succession planning and rigorous search process with the scheduled retirement of Michael C. Bodson, who has served as DTCC’s CEO since July 2012.

Frank LaSalla

La Salla will also serve as President and CEO of DTCC’s principal operating subsidiaries, The Depository Trust Company (DTC), Fixed Income Clearing Corporation (FICC) and National Securities Clearing Corporation (NSCC), and a member of DTCC’s Board of Directors. Additionally, he becomes a member of DTCC’s Management Committee. La Salla joins DTCC on June 13, 2022 as CEO-elect, and between June and August, La Salla and Bodson will work together to ensure a seamless and orderly transition of responsibilities.

La Salla joins DTCC following a 28-year career at BNY Mellon, where he held several senior-level positions, including most recently as Chief Executive Officer of its Issuer Services business and a member of BNY Mellon’s Executive Committee, the senior-most leadership committee at the firm. Prior to that, La Salla was CEO of Corporate Trust, which included responsibility for Depositary Receipts. He previously served as CEO of BNY Mellon’s Alternative Investment Services and Structured Products business, and before that he was a member of the Executive Committee of Pershing LLC, a BNY Mellon company, where he was co-head of Global Client Relationships and head of Trading Services. Earlier in his career, La Salla was president and chief operating officer of BNY Clearing Services LLC.

Prior to joining BNY Mellon, La Salla was CEO of BHF Securities Corporation, the U.S. broker-dealer subsidiary of Germany’s BHF Bank AG, and COO of Société Generale Securities, responsible for developing the French financial institution’s U.S. brokerage business. 

“We are very pleased to welcome Frank as President and CEO of DTCC,” said Robert Druskin, Non-Executive Chairman of DTCC’s Board. “Frank brings extensive global experience across a wide range of front office and functional support roles to DTCC, which will be pivotal to advancing the organization’s growth strategy at a time when markets are evolving rapidly. Throughout his career, Frank has distinguished himself as a dynamic leader who brings a global perspective, collaborative approach and entrepreneurial mindset to the complex business challenges facing clients and the industry. He shares a deep appreciation for DTCC’s mission of protecting the safety and stability of the global financial system, is committed to further strengthening the firm’s risk management framework and will pursue an innovation agenda to position the company for long-term success.”  

La Salla said, “It is an honor to be appointed CEO of DTCC and have the opportunity to lead an organization that makes a positive difference every day by safeguarding the global financial system, protecting the capital markets and supporting the investing public. Mike Bodson has been an outstanding steward for the industry over the last ten years, delivering client value, driving innovation and galvanizing the industry to advance critical initiatives. I look forward to working with Mike and his leadership team to ensure a smooth transition. I am also excited to work alongside incredibly talented and experienced DTCC colleagues as we identify new ways to broaden and enhance our level of support for clients, regulators and other stakeholders.”  

Druskin thanked Bodson for his leadership over the past decade, citing his role in navigating DTCC through several major crises, including the Knight Capital market event, Superstorm Sandy and the COVID-19 pandemic, extending its reach and impact across the industry and transforming the organization to position it for continued growth and success in the future.

“On behalf of the Board, I want to offer Mike our deepest appreciation for his commitment, dedication and leadership as CEO,” Druskin said. “Over the past 10 years, Mike has transformed DTCC into a client-driven firm that stands at the forefront of innovation and is recognized as a respected and influential voice on a wide range of key industry topics. He has strengthened virtually every part of the organization during his tenure and has positioned DTCC to remain a global leader during a period of unprecedented change.”

La Salla holds numerous industry registrations and is an active member of the Financial Industry Regulatory Authority’s Board of Arbitrators, also represents BNY Mellon on the boards of Euroclear plc., and Euroclear SA/NV. He earned a Bachelor of Science degree in Economics from The City University of New York and a Master of Business Administration in Finance from Wagner College. He also holds a Master of Arts in Theology from Fordham University.

ON THE MOVE: Franklin Resources Adds Sandy Kaul; Todd Glickson to Coalition Greenwich

Sandy Kaul

Franklin Resources, a global investment management organization operating as Franklin Templeton, has appointed Sandy Kaul as Senior Vice President, to provide advisory consulting and thought leadership as part of the Franklin Templeton Institute. Based in New York, Kaul brings over 25 years of well-rounded industry experience, joining from Citi, where she served as Managing Director and Global Head of Business Advisory Services.

Todd Glickson

Coalition Greenwich has hired Todd Glickson as Head of Investment Management, North America. Glickson has extensive experience advising managers on product, marketing, distribution and growth strategy across both traditional and alternative asset management. He has held senior positions at Cohen & Steers, Principal Global Investors, Hartford Investment Management, and Federated Investors. 

Bryon Cole

LiquidityBook has hired Bryon Cole as Director of Buy-Side Sales, based in New York. He will report directly to Head of Global Buy-Side Sales James Baxter. Cole most recently served as Director of Sales and Business Development at GLS Fund Services, where he led all sales and business development initiatives for the company’s data and intelligence products. 

Nick Garrow

Trading Technologies International has added London-based industry veteran Nick Garrow in the new position of EVP Multi-Asset & Buy Side. Garrow has more than 20 years of senior management experience in capital markets and prime brokerage, leading significant global technological and operational transformation of businesses ranging from a tier-1 bank, to brokerage and clearing firms, to an exchange and fintech company. Garrow reports to TT CEO Keith Todd and joins the firm’s leadership team. Serving since 2019 as Global Head of IT and Operations for Societe Generale Prime Services in London, Garrow will now lead TT’s expansion into new asset classes beyond exchange-traded derivatives and a range of new services for the buy-side community, with the firm’s Software-as-a-Service (SaaS) platform as the foundation.

Swaad Golam has been named Chief Technology Officer for BXS. Golam brings extensive expertise and adds value for our clients; leveraging his subject matter expertise in low latency trading, real time trading analytics and telemetry. He comes from a highly diverse and unique background in capital markets, low latency trading, and quantitative development, having previously worked for BGC Partners, Tradeweb Markets, and Corvil. 

State Street Corporation has appointed Michael Knowling to head its Global Clients Division (GCD). Knowling will report jointly to Joerg Ambrosius and Chris Coleman. Knowling joins from Prudential Financial where he was the Head of client relations and business development within Prudential Retirement with responsibility for managing the profitability, growth and client satisfaction for Prudential while developing and delivering innovative retirement solutions. 

Confluence has appointed Chris Riggio as Chief Revenue Officer and Phillipa McLune as Chief Client Officer. Riggio joins Confluence from ISS Market Intelligence, where he was Global Head of Sales and Client Engagement. McLune joined Confluence with the acquisition of Investment Metrics where she was Global Head of Customer Success. She brings over 25 years of experience delivering software-as-a-service (SaaS) and enterprise technology solutions to the world’s leading financial institutions. 

Capitolis has made a number of key strategic hires and notable promotions across the New York and Tel Aviv offices. Lindsey Baptiste has been promoted to Chief Financial Officer. Thomas Droumenq joins as Head of Capitolis’ Ionic Product. He spent 23 years at Société Générale where he held roles as Head of Equities & Derivatives and Head of Sales for the Americas region. Nancy Henderson joins as Program Structurer, tasked with leading the development of the Capital Marketplace structures. Prior to Capitolis, she held the dual position of Global Head of Fixed Income Asset Management and Branch Manager of the New York Office at FMS Wertmanagement Service. Leon Leviner has taken the role of Head of FX Engineering based out of Capitolis’ Tel Aviv office. Prior to Capitolis, Leon was Chief Technology Officer at Otoma. Taylor King has joined as Head of Marketing for Brand, Strategy and Operations. Prior to Capitolis, she held roles in both global and regional marketing at technology software giant SAP, most recently serving as Director of Strategic Initiatives within the company’s Global Demand Center. In addition, the company’s Strategy and Corporate Development team expands with Keerthan Harish joining as Senior Manager of Corporate Development, and Eyal Pelleg stepping into the role as Senior Manager of Strategy.

Opsmatix, an innovative fintech providing AI-powered unstructured communications management solutions, has hired New York-based seasoned finance and technology executive Dan Kramer as CEO. Kramer replaces Justin Forrest, who is now the global COO of the company. He has held senior leadership roles at BNY Mellon, JP Morgan, Deutsche Bank, Merrill Lynch, and Morgan Stanley. Most recently he was Vice-Chair at Calastone. 

U.S. Bank Announces Real-time Payment Collaboration with Apex

U.S. Bank has partnered with Apex Fintech Solutions to provide greater speed and security to money movement between individual investors and broker dealers.

With nearly 70,000 employees and $587bn in assets as of March 31, 2022, U.S. Bancorp is the parent company of U.S. Bank National Association. 

The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. 

Through its subsidiary Apex Clearing Corporation, Apex provides clearing and custody services to some of the top online brokerages. 

With this real-time payment solution, brokerages using Apex will be able to offer individual investors a more streamlined payment solution that enables instant funding of their brokerage accounts and instant disbursement from their brokerage accounts to their bank accounts.

Shailesh Kotwal

“U.S. Bank is focused on making the adoption of real-time payments simple and effortless so businesses and consumers can take advantage of the power of instant payments,” said Shailesh Kotwal, Vice Chair, Payment Services at U.S. Bank. 

“We’re proud to work with Apex to help remove payment pain points for brokerages and individual investors, who stand to greatly benefit from the speed and security of real-time payments.”

U.S. Bank and Apex have worked together in recent months to develop a tailored solution that will create a frictionless payment experience for individual investors. 

From their broker dealer’s app or website, investors will be able to use real-time payments to request: immediate movement of funds from their bank account instantly into their brokerage account 24/7/365, reducing the risk and operational hassles of an ACH return for broker dealers; movement of funds from their brokerage account instantly into their bank account, enabling immediate access and an improved investing experience.

Real-time payments are expected to be available for brokerages using the Apex platform in the third quarter of 2022.

“The need for real-time payments has been steadily growing across multiple industries. At Apex, we are committed to driving innovation to stay ahead of consumer demands and are pleased to provide safe, easy, and seamless access to payment solutions,” said Bill Capuzzi, CEO at Apex. 

“U.S. Bank is a trusted partner, and we’re thrilled to bring real-time payments to market as we deliver a customer-centric solution to our clients,” he added.

Record RFR Adoption in March

The ISDA-Clarus RFR Adoption Indicator increased to an all-time high of 40.5% in March 2022 compared to 36.4% the prior month. The indicator tracks how much global trading activity (as measured by DV01) is conducted in cleared over-the-counter and exchange-traded interest rate derivatives (IRD) that reference the identified risk-free rates (RFRs) in six major currencies. On a traded notional basis, the percentage of RFR-linked IRD comprised 31.9% of total IRD in March compared to 27.0% the prior month.

Key highlights for March 2022 include:

  • RFR-linked IRD DV01 increased to $18.2 billion from $14.7 billion the prior month.
  • Total IRD DV01 transacted increased to $45.0 billion from $40.3 billion the prior month.
  • RFR-linked IRD traded notional jumped to $78.2 trillion from $62.1 trillion the prior month.
  • Total IRD traded notional transacted increased to $245.0 trillion compared to $229.5 trillion the prior month.
  • The percentage of trading activity in SOFR reached 41.1% of total USD IRD DV01 transacted in March compared to 33.4% the prior month.
  • GBP saw the largest percentage of RFR-linked IRD trading activity, totaling 99.8% of total GBP IRD DV01.
  • JPY had the highest percentage of RFR-linked IRD DV01 executed as transactions with tenors longer than two years.

To access interactive charts and export the data, click here.

A whitepaper on the methodology is available here.

Source: ISDA

FLASH FRIDAY: Define “Exchange”

FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.

What is an exchange?

In capital markets parlance, the definition is a straightforward one: a place where stock trades are sent to meet the other side for execution. Go in a buy or sell order, come out a done deal. 

But as markets are always evolving, so too are definitions. Today’s stock market isn’t your father’s stock market, when the New York Stock Exchange and Nasdaq were a duopoly and stock trades were executed only on exchanges. The electronification of markets allowed stock trades to execute anywhere, at least theoretically, and alternative trading systems have over time captured about one-third market share from the incumbent exchanges.

The U.S. Securities and Exchange Commission has faced a balancing act. On one hand, regulators need to promote choice and competition in the marketplace for trade execution, which ATSs provide. But on the other hand, regulators need to ensure a level playing field, which means not regulating exchanges tightly while allowing ATSs to skate by without being subject to at least some of the same rules. 

The SEC has been seeking a more expansive definition of exchange for many years. From a 1999 Traders Magazine article:  

“On Dec. 8, 1998, the Securities and Exchange Commission adopted a new regulatory scheme for alternative trading systems (ATS).

The new scheme requires an ATS either to register as a national securities exchange or as a broker dealer and comply with new requirements under Regulation ATS.

The agency has revised its interpretation of the term exchange to apply to ATSs through new rule 3b-16. Previously, the agency relied on the definition in the Securities Exchange Act of 1934 to identify those entities subject to exchange regulation.

Over the past 30 years, the SEC has examined how to apply the term “exchange” to systems that have been variously called proprietary trading systems (PTSs), broker-dealer trading systems, and most recently, ATSs.

In 1990, the SEC excluded PTSs from exchange treatment in its Delta release. In 1995, the SEC adopted rule 17a-23, which treated these systems as broker dealers and imposed certain recordkeeping and notice obligations on PTSs.”

To be sure, markets have changed substantially over the past 24 years, and the rule change that addressed gaps of 1998 isn’t sufficient for today. At least that’s the view of the SEC, which this past January proposed to expand the definition of exchange under Rule 3b-16 of the Exchange Act, to include trading systems that bring together “trading interest”, not just the firmer “orders”.  

Earlier this week, SIFMA, the industry group representing brokers, came out against the SEC proposal, saying it “the Commission is proposing to expand the definition of “exchange” in several significant respects, including to require “communication protocol systems”—a term the Commission does not define,” and the whole notion “needs a far more deliberate, nuanced evaluation and clearer articulation of a compelling policy rationale.”  

So what is an exchange? At least in the eyes of the SEC, the definition needs to be broadened — again. 

Crypto Regulation: The Current State of Play and Where It’s Going Next

By Charley Cooper, Managing Director, R3

Charley Cooper

The story so far

The size and scope of the crypto industry is growing rapidly. Today, the global market cap of the crypto industry is $2.1 trillion, while a recent NBC poll found that one in five adults in the US has invested in, traded or used cryptocurrencies. At the same time, an increasing number of corporates have integrated digital assets into their business models, with the likes of PayPal and Facebook having expanded their crypto offerings over the past twelve months.

Cryptocurrencies are no longer on the fringes of financial services, but are rather poised to play a long-term role in today’s payment and investment infrastructure. In response to this rise, governments around the world have been setting out various approaches towards regulating digital assets.

In March, President Biden signed his long-awaited executive order on the responsible development of digital assets, directing federal agencies to begin meaningful research with an eye towards the ultimate regulation of cryptocurrencies, CBDCs, stablecoins, and decentralized finance. The UK government recently followed suit in April, announcing plans to make Britain a ‘global hub’ for crypto through a variety of measures, including the regulation of stablecoins. 

Given the concerted nature of the impending regulatory push, now is the time to take stock of the current state of regulation and its potential impact on cryptocurrencies moving forwards. In doing so, the industry can wake up to the fact that regulation – when crafted in a collaborative and careful manner – will play a vital role in the evolution of crypto.

The importance of regulation

The issue of regulation is one that divides the crypto community. Some in the crypto space ardently oppose greater oversight. The implementation of new rules, they argue, would stifle innovation and contradict the very decentralised principles that cryptocurrencies were built upon.

While these arguments should be considered carefully, the truth is that as much as some members of this community want this technology to exist outside of the existing financial system, it can’t. The disruption that the original, fully decentralised model seeks to cause will simply not be permitted by government stakeholders whose job it is to ensure orderly and stable market conditions.

Although the aforementioned efforts by the UK and US treasuries are a step in the right direction, in many ways governments have been slow to wake up to the need for regulation. The volatility of cryptocurrencies threatens retail investors with huge losses. Decentralized networks undermine the effective functioning of market infrastructure providers – such as clearing houses and exchanges – that have critical roles to play in ensuring the orderly functioning of markets. Central banks risk losing influence over their own monetary policy as crypto adoption replaces traditional fiat currencies.

Additionally, there is some truth in Bank of England Governor, Andrew Bailey’s, recent warning that cryptocurrencies are emerging as the new “front line” of fraud. In 2021 alone, crypto scammers took home a record $14 billion. It is these types of statistics that have caused crypto to elicit trepidation from governments and financial institutions, who have continually viewed the digital asset space with a degree of mistrust.

The implementation of regulation will go a long way in tackling this lack of trust, helping to unlocking the huge potential of digital assets while ensuring investors are protected – just like in any other financial market.

A careful, collaborative approach is key

As governments like the US and UK begin to embrace digital assets, it is clear that crypto is here to stay. Regulation is now on the horizon, with it looking increasingly likely that the future of cryptocurrencies will involve some form of regulatory framework.

It is no longer a matter of whether to regulate or not. Instead, the questions facing policy makers are what form regulation should take and how should it be enforced?

It is vital for governments to take a balanced approach to regulating crypto. Heavy-handed regulation has the potential to negatively impact many of the core benefits of cryptocurrencies – such as faster, more efficient payments as well as greater accessibility to finance.

The absence of any regulation at all, however, would be even more damaging. Failure to regulate crypto would handicap the state’s ability to control monetary policy and install the necessary safeguards to protect consumers at a basic level. In this scenario, crypto volatility and fraud would pose a serious risk to consumer protection.

The appropriate balance can only be reached by the public and private sectors working closely together. Only through a collaborative approach – whereby regulation is crafted to fit the unique attributes of the crypto market – will consumers be able to reap the full benefits of cryptocurrencies.

The global financial system has evolved slowly over millennia, and improvements to the way money and assets flow through it have almost always been achieved by successfully integrating a new technology with the existing infrastructure and institutions within it. Responsible and balanced regulation – that protects consumers but at the same time offers crypto the freedom to evolve and innovate – can play a central role in ushering in the next era of digital finance.

Currency.com Makes Foray into US Markets

Steve Gregory

The high-growth global crypto exchange Currency.com has expanded into the US, following a strong growth across its global business.

“Our expansion into the United States represents a milestone moment in the growth of Currency.com as we introduce our simplified, intuitive web-based platform to one of the world’s most mature cryptocurrency markets,” said Steve Gregory, CEO, Currency.com, US.

Registered with the Financial Crimes Enforcement Network (FinCEN) as a Money Services Business, the Exchange will enable US residents to buy, store and invest in cryptocurrencies. 

The Exchange will launch in 48 states and territories across the US. 

Clients in New York and Hawaii will be able to access the exchange in the coming months. 

Currency.com US will launch with Bitcoin followed by other popular cryptocurrencies including Ethereum, Litecoin and Bitcoin Cash. 

More cryptocurrencies will be added over time, Gregory said.

US-based clients will also be able to access news feeds, financial content and analysis from a broad range of education content hosted on the Currency.com website. 

In 2021, Currency.com’s global exchange saw overall trading activity increase by 445% from a year earlier. 

Over the same period, total trades executed on the crypto exchange climbed by 409%.

Gregory said that ever more people are taking more than a passing interest in cryptocurrencies. 

“As a platform authorised and licensed to provide distributed ledger technology services, Currency.com is well placed to support investors in their journey,” he said. 

“Our strong growth put us on track to expand into new markets, diversify the range of products and solutions we offer our clients, and work in close concert with regulators and trade organisations to ensure we continue to provide a secure environment for our clients to buy, sell and trade cryptocurrencies,” he added.

Currency.com US is fitted with a hosted crypto wallet, fiat-to-crypto payment gateways and a faster onboarding process. 

The US clients will be among the first of its global client base to benefit from faster, simplified onboarding and execution, according to Gregory.

Currency.com US will use proprietary machine learning technology to score and assess the risk profile of its clients quickly, while remaining within strict regulatory parameters. 

This will significantly streamline the typical onboarding journey.

“Lengthy turnaround times and cumbersome registration processes are some of the main sources of frustration for online investors. With Currency.com’s new simplified onboarding, a process that usually takes our competitors a couple of days, will take us just  a matter of minutes, if not seconds,” said Gregory.

In addition, for added convenience, Currency.com US also provides clients with fiat-to-crypto capabilities and a crypto wallet with fiat support. 

The fiat-to-crypto capabilities offer clients the flexibility to not only securely buy and invest in popular cryptocurrencies, but a place to also store their cryptocurrency, explained Gregory. 

Meanwhile, its crypto wallet with fiat support feature allows clients to link their Currency.com accounts with their bank accounts or use credit cards to buy or sell cryptocurrencies.

“Our mission is to help make it easy and safe for everyone to invest in cryptocurrencies. We make buying and holding cryptocurrencies so simple and intuitive that you no longer think of it as ‘cryptic’- it’s just new money,” said Gregory.

Nasdaq Reports Record Revenue

Market services contributed its second highest quarterly net revenues as Nasdaq reported record revenues of $892m in the first quarter of 2022.

First quarter 2022 net revenues increased 5% from $851m in the prior-year period reflecting organic growth and the impact of acquisitions and divestitures.

Adena Friedman, president and chief executive of Nasdaq, said in a statement: “As we enter the third year with unprecedented dynamics affecting financial markets, our clients continue to turn to us to help them navigate that increasing complexity. Our record revenue performance this quarter is further evidence that Nasdaq can deliver consistently in multiple operating environments.”

Market services had net revenues of $315m in the first quarter of 2022, a decrease of 6% from the record a year ago.

Friedman said on the results call: “This environment creates volatility in markets, which tends to be a volume driver, and we have continued to experience strong volumes across our US and European markets.”

Market services had net revenues of $315m in the first quarter of 2022, a decrease of 6% from the record a year ago.

Friedman said on the results call: “This environment creates volatility in markets, which tends to be a volume driver, and we have continued to experience strong volumes across our US and European markets.”

Nasdaq said that in equity derivatives it led all exchanges during the first quarter of 2022 in total multiply-listed U.S. options traded and achieved record net revenues of $112m. Nordic and Baltic markets had a total of €289bn of shares traded, the highest in the last decade.

Friedman continued that Nasdaq has a proud and long standing position in Europe, which includes seven markets in Nordic and Baltic countries – Denmark, Estonia. Finland, Iceland, Latvia, Lithuania, and Sweden – and has been extremely diligent in monitoring the threat environment to protect employees and ensure resiliency.

“Our revenue exposure to Russian clients was de minimis and we remain committed to ensuring full compliance of all relevant sanctions,” she added. “In addition, our global workforce is highly engaged in humanitarian and philanthropic efforts to support the needs of those impacted by the senseless war.”

Source: Nasdaq

This year has had a slower start for initial public offerings but Friedman said Nasdaq attracted 70 listings in the US during the first quarter, raising $9bn for an 86% win rate.

“We listed 100% of all operating company IPOs during the quarter and 80% of stock listings in Europe,” she added.

Friedman noted there 270 active IPO filings at the US Securities and Exchange Commission to list on Nasdaq compared to 222 filings at the same time last year.

“We have great engagement with some interesting and large IPO opportunities, but they need to feel that the environment is right to go public and that investors are ready to take risks on new issuers,” she said. “Markets are volatile and it makes it harder for investors to take those risks but we are hopeful that we might see a couple of IPOs in this quarter.”

Investment intelligence

While volatility has slowed down IPOs, market conditions have also led to inflows in Nasdaq’s index products and index futures.

55 exchange-traded products tracking Nasdaq indexes have launched over the last 12 months and accumulated $2.5bn of assets under management. In addition the number of futures and options on futures contracts tracking Nasdaq indexes set a quarterly record with 147 million contracts traded, an increase of 40% year-on-year.

Index revenues grew 20%, or $20m, due to the growth in ETP assets, which had positive net flows of $75bn over the last 12 months.

Adena Friedman

Friedman said: “We created and launched the first index representing the pricing of carbon removal credits during the first quarter based on activity on the Puro.earth carbon removal marketplace.”

Nasdaq launched three new commodity reference price indexes, based on Puro.earth’s Carbon Removal Certificates (CORCs) in March 2022 . Nasdaq acquired a majority stake in Puro.earth in June 2021.

In March 2022 Nasdaq announced that Oliver Albers has been appointed executive vice president and head of investment intelligence, replacing Lauren Dillard who is taking an executive role at a private equity firm. Albers was previously global head of data for the investment intelligence business.

“We are excited about the appointment of Oliver Albers as a 20-plus year veteran of Nasdaq,” added Friedman. “Oliver is an experienced results oriented leader who was instrumental in supporting Lauren in strategically repositioning Nasdaq’s investment intelligence segments into the higher growth, more technology-enabled business you see today.”

AWS partnership

In November last year Nasdaq announced a multi-year partnership with AWS to migrate its North American markets to the cloud provider in a phased approach, starting with Nasdaq MRX, a US options market. 

The partnership involves Nasdaq incorporating AWS Outposts directly into its core network to deliver ultra-low-latency edge compute capabilities from its primary data center in Carteret, New Jersey, to create the first private AWS Local Zone for the capital markets industry. AWS Outposts extend AWS infrastructure, services, APIs, and tools to virtually any data center, co-location space, or on-premises facility.

“We are heavily engaged with AWS,” said Friedman. “They are deploying Outposts into our data centre and on May 3 we are going to have our groundbreaking at Carteret for the expansion.”

Equinix and AWS will be doubling both the size and the power of the data center, which is due to finish in 2024, and will make it easier for Nasdaq’s clients to migrate to the cloud in the new AWS Local Zone.

Nasdaq aims to migrate MRX to Outposts and the new Fusion platform before the end of this year and Friedman said the move is on track.

Technology

In February 2022 Nasdaq announced the retirement of Lars Ottersgård, executive vice president for market technology, after 16 years. Ottersgård will transition into an advisory role on April 30 until his formal retirement on August 31 2022.

He is being partly replaced by Roland Chai, currently Nasdaq’s global chief risk officer. Chai joined Nasdaq in 2020 where he was head of post-trade and group risk officer at the Hong Kong Exchange.

“Roland has very specific mandates to strengthen, deepen and progress our client relationships and to continue to innovate across our products,” added Friedman. “I am excited about this transition as it comes at a time when Nasdaq has never had more to offer to our technology clients including our next generation, cloud-native trade lifecycle solutions, a newly built cloud-based trading risk management solution and solutions to meet the needs of digital asset marketplaces.

Nasdaq also announced in February 2022 that Jamie King will be elevated to executive vice president to lead Nasdaq’s anti-financial crime business. King is currently president and chief executive of Verafin, which he co-founded in 2003 and was acquired by Nasdaq

Friedman said: “We have made meaningful progress in the last 12 months on our objective of helping Verafin expand its client franchise into larger tier one and two banks, as well innovative fintech companies.”

Since Nasdaq closed the Verafin acquisition in February 2011, 10 fintech clients and two new banks have onboarded and several proofs of concept are currently underway at major tier one banks.

“We also launched our first digital assets module for traditional banks and virtual asset service providers, including crypto exchanges, to detect and investigate fraud and money laundering within digital wallets, and in transactions between traditional fiat and digital currencies,” added Friedman.

She continued that Nasdaq also responded quickly to the Russian invasion of Ukraine by expanding its sanctions product to include the new sanctions regime.

“By bringing together all Nasdaq’s anti-financial crime solutions, including Verafin, and our market and trade surveillance solutions under Jamie King, we have an incredible opportunity to maximise those cross-product synergies,” said Friedman.

Friedman said a dozen crypto exchanges use Nasdaq technology for trading and also for surveillance.

“The anti-financial crime team has built a module that is specific to digital assets so we are excited that we are rolling that out in the second quarter,” she added.

Citi and State Street Invest in FundGuard

Large strategic investors Citi and State Street Corporation have participated in a a $40m Series B funding round into FundGuard, an AI-powered SaaS investment management and asset servicing enterprise platform.

Other investors in the round included Blumberg Capital, LionBird Ventures, Team8 Capital, and others to back the company’s future-ready technology approach to asset servicing.

Okan Pekin

Okan Pekin, Citi’s Global Head of Securities Services, said: “We are thrilled to partner with FundGuard as they have built an attractive investment servicing platform that complements our vision to leverage cloud technologies to unlock the power of data for the benefit of our clients.”

John Plansky, Head of State Street Alpha, added: “We are excited to partner with FundGuard and its comprehensive, cloud-native accounting platform to support our Alpha strategy.”

FundGuard was founded in 2018 to transform asset servicing operations by leveraging modern cloud and AI capabilities.

The Series B round brings total investment in FundGuard to more than $55m in 3.5 years.

The latest round of financing comes after a busy 12 months for FundGuard including landing asset manager, fund administration and custody bank customers, launching its enhanced investment accounting solution, including support for digital assets. 

The firm also appointed John Lehner, former State Street and BNY Mellon executive as FundGuard’s president.

Lehner said that by harnessing the cloud and AI, FundGuard’s technology enables their clients to be more cost effective and offer new and innovative products at scale. 

“This new investment will allow us to accelerate our growth and continue to attract top talent so that we can meet the demand we are seeing from asset managers and service providers who realize their legacy technology, simply put, costs too much and can’t do what they need it to do,” he said.

“Having the world’s leading financial services organizations join us as strategic partners and investors is an exciting endorsement of our vision to build a new-generation of global asset servicing capabilities for asset managers and their service providers,” added Lior Yogev, FundGuard CEO and co-founder.

SIFMA Opposes Proposed Changes to Exchange Definition

SIFMA provided comments to the U.S. Securities and Exchange Commission (SEC) on the proposed amendments to the Exchange Act. The Proposal seeks to amend Regulation ATS and Rule 3b-16 under the Securities Exchange Act of 1934 in a number of ways. Most notably, the Commission is proposing to expand the definition of “exchange” in several significant respects, including to require “communication protocol systems”—a term the Commission does not define—to either register as exchanges or operate as alternative trading systems.

EXCERPT

April 18, 2022

Via E-Mail: rule-comments@sec.gov

Ms. Vanessa Countryman
Secretary
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549

Re: File No. S7-02-22; Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange”; Regulation ATS for ATSs That Trade U.S. Government Securities, NMS Stocks, and Other Securities; Regulation SCI for ATSs That Trade U.S. Treasury Securities and Agency Securities

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)1 respectfully submits this letter to the U.S. Securities and Exchange Commission (“Commission” or “SEC”) to comment on the above-referenced proposal (“Proposal”).2 The Proposal seeks to amend Regulation ATS and Rule 3b-16 under the Securities Exchange Act of 1934 (“Exchange Act”) in a number of ways. Most notably, the Commission is proposing to expand the definition of “exchange” in several significant respects, including to require “communication protocol systems”—a term the Commission does not define—to either register as exchanges or operate as alternative trading systems (“ATSs”). In addition, the Proposal would

(i) require ATSs that trade government securities as defined under Section 3(a)(42) of the Exchange Act or repurchase and reverse repurchase agreements on government securities (“Government Securities ATSs”) to comply with Regulation ATS;

(ii) require existing NMS Stock ATSs (as defined in Rule 300(g) of Regulation ATS) to file amendments to their existing disclosures in accordance with a revised Form ATS-N;

(iii) obligate ATSs to file Form ATS and Form ATS-R through the SEC’s EDGAR system; and

(iv) amend the fair access provisions in Rule 301(b)(5) of Regulation ATS (“Fair Access Rule”).

SIFMA supports the SEC’s high-level policy goal of ensuring that rules that govern trading venues keep pace with technological and market developments. To that end, SIFMA has previously supported more narrowly targeted proposed changes to the SEC’s rules regarding venue regulation, such as the Commission’s 2020 Proposal to extend regulatory requirements to Government Securities ATSs. However, SIFMA members have significant concerns with core aspects of the Proposal, in particular the far-reaching implications of the proposed amendments to Rule 3b-16, which go significantly beyond the perceived regulatory gap identified by the SEC and described below. SIFMA therefore believes the SEC should rethink its approach and separate out the proposed amendments to Rule 3b-16, more clearly articulating the rationale for why additional systems should be subject to the SEC’s ATS regulatory program, and issue a concept release regarding potential updates to this definition in keeping with the articulated policy goal.

The Commission’s proposed amendments to Rule 3b-16 (which, unlike many of the proposed amendments to Regulation ATS are being subject to public notice and comment for the first time and without the benefit of a concept release that thoroughly evaluates these ideas) would fundamentally change the definition and interpretation of “exchange” under which market participants have been operating for more than two decades. Notably, the undefined concept of “communication protocol systems” could capture a broad range of activity, beyond that which would typically be considered that of, or that actually functions as, an exchange or market place. There is a significant lack of alignment between the Proposal’s economic analysis, which estimates that there are 22 communication protocol systems in existence today, and the text of the proposed rule itself. As a result, the effect of the proposed changes would extend far beyond the SEC’s stated goal to “extend the benefits of the exchange regulatory framework to investors that use such systems, and reduce regulatory disparities among like markets.”3 Instead, the changes would potentially capture market participants’ internal systems and third-party technology platforms that do not, in substance, perform market place functions and for which

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Source: SIFMA

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