CME Group Disciplinary Activity Remained Steady in 2025 with Lower Aggregate Monetary Penalties

Press Release
-
0
CME Group Disciplinary Activity Remained Steady in 2025 with Lower Aggregate Monetary Penalties

The CME Group imposed the second-lowest level of aggregate monetary penalties since 2018, while disciplinary activity remained steady, according to a new report by Cornerstone Research.

The report, Trends in CME Group Disciplinary Notices: 2018–2025, found that the CME Group issued 962 unique disciplinary notices against market participants between 2018 and 2025. After declining 55% from 2019 through 2022, the number of notices increased 80% in 2023 and has since remained relatively steady, with 120 notices issued in 2024 and 127 in 2025.

Over the eight-year period, the CME Group imposed more than $81 million in monetary penalties, including about $59 million in fines, $12 million in disgorgement, and $10 million in restitution. Aggregate monetary penalties fell in 2025 amid shifts in the types of violations cited. Most notably, both the number of notices citing violations of Disruptive Practices Prohibited and their associated penalties declined, with fines falling from $1.58 million in 2024 to $330,000 in 2025.

“While the overall number of disciplinary notices changed little in 2025, the composition of enforcement activity shifted considerably,” said Nicole Moran, a report coauthor and vice president at Cornerstone Research. “The findings suggest that while enforcement activity remained robust, the types of violations drawing scrutiny changed. Disruptive Practices Prohibited, historically the most frequently cited violation category, appeared in only seven notices in 2025, while Providing and Keeping Records was cited in 31 notices.”

Although aggregate monetary penalties declined in 2025, 125 of the 127 notices carried a fine. The median nonzero fine fell to $25,000, compared with an annual average of $40,000 between 2018 and 2024. The median nonzero restitution amount was $16,007, compared with an annual average of $98,969 over the prior seven years.

“While we saw a lower level of penalties in 2025, we also saw broad enforcement activity, with nearly half of notices citing multiple rules,” said Laurent Samuel, a report coauthor and principal at Cornerstone Research. “At the same time, fines were concentrated in certain areas, with four categories alone accounting for about half of all fines: Providing and Keeping Records, Member Coordination, Position or Margin Limit Violations, and Failure to Supervise Employees.”

Enforcement activity also became increasingly concentrated later in the year. Sixty percent of 2025 notices were issued in the second half of the year, continuing a similar pattern from 2024 and marking a return to the back-heavy distribution last seen from 2018 through 2020.

Financial products and energy derivatives appeared in more CME Group disciplinary notices in 2025 than their respective historical annual averages. Financial products were involved in 43 notices, compared with an annual average of 37 from 2018 through 2024, while energy derivatives were involved in 36, compared with an annual average of 24. Agricultural and metals products, by contrast, appeared in fewer notices than their respective historical averages.

Source: Cornerstone Research

DERIVSOURCE: CFTC’s Michael Selig Outlines Derivatives Priorities

Anna Lyudvig
-
0
DERIVSOURCE: CFTC’s Michael Selig Outlines Derivatives Priorities

The Commodity Futures Trading Commission (CFTC) is reviewing its regulatory framework as round-the-clock trading, tokenized collateral and new derivatives products reshape derivatives markets.

Speaking with SIFMA President and CEO Kenneth E. Bentsen, Jr. at SIFMA’s 2026 Annual Meeting on Tuesday, October 20, CFTC Chairman Michael S. Selig outlined the Commission’s priorities, including extended trading hours, perpetual futures, artificial intelligence and derivatives market oversight.

Michael Selig, CFTC
Michael S. Selig

Selig said the Commission is also reviewing elements of the post-financial-crisis regulatory framework, including swap data reporting requirements, to determine whether existing obligations remain necessary. “There was a lot that was really appropriate and has worked very well,” he said, pointing to central clearing, swap data reporting and oversight of over-the-counter derivatives. However, he argued that some requirements may no longer be justified, calling for a “right-sized approach” and the “minimum effective dose of regulation.”

The expansion of trading hours was a key focus of the discussion, with Selig emphasizing that the CFTC is taking different approaches depending on the asset class. “It’s not going to be a one-size-fits-all approach for 24/7 at the CFTC,” he said.

The Commission has allowed continuous trading in certain products, including cryptocurrencies and some prediction markets, while agricultural and energy derivatives have raised different concerns. Selig said commercial market participants have expressed reservations about extending trading hours, and the Commission has been working with exchanges and industry participants to address those issues.

Selig referenced CME’s decision to withdraw a proposed offering involving extended trading hours for energy products, saying the exchange had been cooperative in addressing industry concerns. He also pointed to negative oil prices during the COVID-19 pandemic as an example of the risks associated with extreme market conditions. “If this is coming, I think firms need to start preparing for that,” Selig said, citing operational staffing, systems and additional coverage outside traditional trading hours.

He acknowledged that the Commission may need to consider additional rules or work with Congress before allowing certain products to trade continuously. “We can only hold up these products for so long,” he said.

Tokenized Collateral Could Improve Margin Efficiency

Tokenization was another focus, particularly its potential to facilitate collateral transfers outside traditional banking hours. Selig said tokenized assets could help address the need for additional collateral when trading continues over weekends. “When you’re offering 24/7 markets now, or weekend trading, typically what happens is you’re over-collateralizing,” he said. “With stablecoins and other types of tokenized assets, you can freely move them just like you would during regular trading hours, and I think that is a huge advantage.”

The CFTC is coordinating with the Securities and Exchange Commission (SEC) on the use of tokenized securities as collateral in regulated markets. Selig also highlighted the potential for smart contracts to support programmable collateral movements. The Commission is working with software developers to understand how blockchain-based systems operate and determine whether regulatory relief may be required, he said. “I view this as just a really exciting opportunity to bring more liquidity into our markets and to make capital much more efficient,” he said.

The development of perpetual futures and renewed interest in security futures are also prompting closer coordination between the CFTC and SEC. Selig said existing legislation provides flexibility to accommodate perpetual contracts, which do not have a fixed expiration date. “I don’t think there’s any requirement in the statute to have an expiration date or anything like that,” he said.

Perpetual contracts could be structured as futures or swaps under existing legislation, he explained, although additional regulatory requirements might be appropriate for certain products. Security futures are another area receiving attention, with Selig pointing to activity involving CME and firms seeking to list security futures perpetual products. “We’re of course more harmonized as agencies, I think, than ever before,” he said, referring to cooperation with the SEC.

The agencies are working together on product classification, cross-margining and jurisdictional questions involving new derivatives contracts and prediction markets. Selig described the overlap between securities and derivatives regulation as resembling a Venn diagram, where certain products may fall within either framework depending on their structure.

Crypto Proposals Could Expand Federal Oversight

The CFTC is pursuing a federal registration pathway for eligible cryptocurrency exchanges under its existing statutory authority, following the lack of progress on comprehensive crypto market structure legislation. The proposed framework would allow firms to register as designated contract markets (DCMs) or under a proposed crypto asset market (CAM) category.

Selig said firms already registered as DCMs, futures commission merchants (FCMs) or derivatives clearing organizations (DCOs) could leverage their existing regulatory infrastructure. The proposed framework would permit vertical integration but require separate registrations for brokerage, trading and clearing activities.

However, Selig acknowledged that voluntary federal registration would leave gaps in oversight for exchanges continuing to operate under state money transmitter frameworks. “These regimes really are designed for payment businesses. They’re not designed for markets, for exchanges,” he said. He added that comprehensive legislation would provide a more durable framework for crypto market oversight.

Artificial intelligence is raising additional questions for derivatives market surveillance as trading firms and retail participants adopt increasingly sophisticated technologies. Bentsen asked whether existing safeguards, including circuit breakers, would remain adequate if autonomous AI systems contributed to market disruptions. Selig said the CFTC is monitoring the use of AI in trading and considering whether existing requirements need to be modernized. “We want to come up with a framework that allows for innovation, allows people the freedom to utilize AI and to come up with their own innovative trading strategies,” he said.

The Commission is also developing AI-based tools for enforcement and surveillance, while continuing to rely on exchanges and the National Futures Association for market oversight.

Selig also raised concerns about the impact of bank capital requirements on derivatives market access. He argued that capital rules should reflect actual risk rather than impose excessive costs on intermediaries and commercial hedgers.

The CFTC is engaging with other financial regulators on Basel III capital requirements and their implications for FCMs and commercial hedgers. Selig argued that capital requirements have discouraged some FCMs from serving smaller commercial hedgers, including farmers, ranchers and producers. “I think that’s really been detrimental to our markets because so many commercial firms that are going to use these markets for risk management purposes are now not able to access the markets or have to put up excess money,” he said.

Selig pointed to tokenization, blockchain technology, stablecoins, round-the-clock trading and artificial intelligence as developments reshaping financial markets. “We’re in a completely different world than we were 20 years ago. Our markets have totally changed,” he said.

The image for this article was generated using AI.

NEXTPredict Summit to Examine the Future of Prediction Markets

Anna Lyudvig
-
0
NEXTPredict Summit to Examine the Future of Prediction Markets

As prediction markets attract growing interest from financial institutions, investors and regulators, questions around market structure, oversight and institutional participation are becoming increasingly important. The NEXTPredict Summit, taking place in New York City on October 22–23, will bring together industry participants to examine these developments, with discussions focused on institutional adoption, regulation, market infrastructure and emerging use cases.

In an interview with Traders Magazine, Pierre Lindh, Co-founder and Managing Director of NEXTPredict, discusses the industry’s transition from niche markets toward broader financial applications, the challenges facing operators and investors, and what attendees can expect from the summit.

Pierre Lindh

What inspired the launch of NEXTPredict, and what makes this year’s summit particularly timely?

We launched NEXTPredict when it became clear that prediction markets were no longer a niche conversation within sports betting or cryptocurrency. The industry was attracting attention from financial institutions, regulators, media organizations and investors, but there was no central forum bringing those conversations together.

The timing is significant because the industry is entering a new phase. Questions around institutional participation, regulation, market structure and real-world applications are becoming immediate priorities for the people building the category. What we’re seeing is an industry moving from the margins toward the mainstream.

What are the main themes shaping the agenda, and which discussions do you expect to generate the most debate?

The agenda is built around four themes: institutional adoption, regulation, market infrastructure and real-world use cases.

Regulation will likely generate the most debate. The industry is still working through fundamental questions about how different types of prediction market contracts should be classified and supervised. The answers have significant implications for operators, investors, institutions and users.

There is also a broader conversation about whether prediction markets become a distinct asset class, a risk-management tool, an information product or some combination of all three. That debate may be just as important because it speaks to what this industry ultimately becomes.

Which speakers or sessions are you particularly interested in, and why?

I’m particularly interested in the discussions that bring institutions, operators, investors, policymakers and market infrastructure providers into the same room.

Prediction markets have reached a point where the industry’s biggest opportunities and challenges need to be considered from several perspectives. The future of the category will depend on how those groups work together, which makes these discussions especially important.

The industry has spent the past several years proving there is demand for prediction markets. The next stage is determining how they scale, attract institutional participation and fit into the broader financial system. Those are the conversations that matter most right now.

How do you see prediction markets evolving beyond their traditional focus on politics and sports?

Politics and sports helped introduce prediction markets to a broader audience, but the larger opportunity lies in helping organizations make better decisions under uncertainty.

Across finance, media, research, forecasting and risk management, there is growing interest in how market-based probabilities can inform decisions. We’re already seeing early examples of that evolution.

Over time, their most significant impact may come from helping individuals and institutions understand and price uncertainty more effectively.

What role could institutional investors and established financial firms play in the growth of prediction markets?

Institutional participation could be one of the industry’s defining growth drivers.

Large financial firms bring liquidity, credibility, research capabilities and new applications for prediction market products. Many are already studying the category closely, both for research and as a potential tool for clients.

Retail participation has helped establish demand. Institutions can build on that foundation by expanding the ways these markets are used and connecting them to a wider range of financial and business decisions.

What are the biggest regulatory challenges facing the industry, and how will these be addressed at the summit?

The central challenge is establishing a clear and durable framework for regulating prediction market contracts.

Regulators, policymakers and industry participants still have differing views on where certain products fit and which rules should apply. That uncertainty affects investment decisions, product development and institutional participation.

The summit will bring these groups together to discuss those questions directly. Having regulators, operators, investors and market participants in the same forum creates an opportunity to understand different perspectives and identify where greater clarity is needed.

What do you hope attendees will take away from NEXTPredict, and where do you see the industry heading in 2027?

The objective is for attendees to leave with a clearer understanding of where the industry is heading and who will help shape its future.

The prediction markets industry is being formed. We’re building its home. 

Prediction markets have already demonstrated an ability to attract attention and generate growth. The more important question now is how the industry evolves into a durable ecosystem that includes operators, institutions, regulators, media organizations, investors and infrastructure providers. 

By 2027, the conversation will likely be less about whether prediction markets matter and more about how they fit into the broader financial and information ecosystem. The organizations helping answer that question will play an important role in defining the industry’s next decade. 

Who Pays for the Price? 

DataBP
-
0
Who Pays for the Price? 

By Mark Schaedel, CEO of DataBP

Mark Schaedel

Copenhagen was wallpapered with billboards during the World Financial Information Conference last week. Pyth, the oracle network, had covered the town from the airport to the city centre with the slogan: “The Price of Everything. Everywhere. No License Fees.” Oscar Wilde defined a cynic as someone who knows the price of everything and the value of nothing. He could not have asked for a better illustration. 

The same week, at the Fixed Income Leaders Summit, the consolidated tape panel was asked whether the bond tapes have a free rider problem. They do, but it is not the one the panel discussed. The industry has started arguing about who pays for the tape and has still not asked who pays for the price on it. 

Start with what a price actually is. A displayed, executable quote is a public commitment to trade, exposed to adverse selection from the moment it appears. Somebody has to be willing to be wrong in public for a price to exist at all. Investors and market makers supply that commitment and carry that risk; venues provide the regulated plumbing that makes it visible and actionable. Consolidated tapes aggregate the result, and so do oracles, and it is worth being clear-eyed about what that means: neither of them creates a basis point of information. A tape is a mirror, and a mirror with a billboard budget is still a mirror. 

For most of the industry’s history, nobody needed to pay for the information separately, because there was nowhere else to take it. The quote and the trade arrived together at the central venue, and the transaction fee quietly compensated both. Decentralisation has cut that weld. The quote still carries all the risk it ever did, but the liquidity it attracts can now be executed somewhere else entirely, against a reference that cost the executing venue nothing. The transaction no longer pays for the information because the transaction no longer happens where the information was made. 

The numbers show where that leads. In 2025, more than half of US equity volume executed off exchange for the first time. In Europe, lit continuous trading has fallen from 54 per cent of turnover in 2022 to under 45 per cent in 2025 on ESMA’s own measure, and to barely 37 per cent on independent estimates. The NBBO and the fledgling EBBO now contain a shrinking minority of the market, yet best execution is measured against them, retail orders are priced off them, funds are valued by reference to them, and every derivative, index and tokenised product settles against them. When LIBOR stopped representing its market, regulators treated it as a systemic failure and rebuilt the benchmark. The equity benchmarks are drifting towards the same condition, and the regulatory response has been to approve more of the trading that moves activity away from them. 

Economists call this free riding: consuming a good that others paid to produce while contributing nothing to its production. In most settings it is a nuisance. In a market whose product is the price, it is a slow demolition, because the good being consumed is the very thing the consumption erodes. The internaliser executes against the public reference without displaying comparable interest of its own. The perpetual futures venue settles single-stock exposure against an oracle price. The oracle, for its part, mostly republishes the public order book, consumed under an exchange licence written for display screens, run through a model and resold. “No licence fees” turns out to mean somebody else’s licence, repackaged, and a business model whose entire margin is the fee it declined to pay. 

None of this is illegal, and I am not suggesting any of it should be banned. All of it, though, is built on public price formation, and that dependence appears nowhere in how data is licensed or how tape revenue is distributed. Policy is making three mistakes at once. 

The first is pricing data to its cost. ESMA’s reasonable commercial basis rules now make it unlawful to price data by the value it represents to the user; the UK insists fees track cost; the new tapes are tendered on price. Every one of those rules can see the plumbing and none can see the substance. Valuing a price by the cost of producing it is like valuing a Rembrandt by the cost of the paint. The value does not disappear when the rules refuse to recognise it. It transfers to the firms that depend on the price and contribute nothing to forming it. 

The second is paying every reported trade the same. A continuous execution against displayed interest, a midpoint match, a negotiated block and a benchmark-priced print convey very different information, and a tape that pays them identically is buying volume, not information. The US has already run this experiment twice under Regulation NMS, and the lesson for every new tape is the same: reward the behaviour the market needs, and expect anything cheap to manufacture to be manufactured by Tuesday. 

The third is treating the cost of consolidation as the value of the information. The UK bond tape tender bid its price cap from £1,209 to 68 pence and then landed in court. For roughly the cost of a chocolate bar, the UK bought itself a bond tape. What does that tell you about whether the data is complete, timely or sustainably produced? Nothing at all. 

Each mistake has a remedy, and the remedies fit together. Classify the uses of price data into two tiers and price them in opposite directions. The first tier is public access: retail investors, display users, researchers, the press. Price it low enough that intermediaries can offset the fee, with the explicit aim of reaching as many people as possible. The 15-minute delay, incidentally, belongs in a museum. 

The second tier is commercial dependence: the index provider with trillions tracking a weighted list of public closing prices, the internaliser, the systematic internaliser, the derivatives venue, the tokenisation platform and the oracle reselling to all of them. Could any of them exist without the price-forming market? No. Does any of them contribute a quote to it? Also no. That tier pays a licence fee scaled to its use: by assets benchmarked, by notional executed against the reference, by notional settled. Every one of those quantities is already measured for some other purpose, so the metering problem is a reporting problem, and reporting problems are the kind this industry has been solving since MiFID I. 

The proceeds fund the public tier and flow back to the contributors of price formation through tape allocations that can tell an execution that formed a price from a print that merely referenced it. The Market Model Typology, already mandated for post-trade flagging in the EU and UK, provides the vocabulary. The weights are the policy decision, and it is the one regulators are making right now, whether they realise it or not. The FCA’s CP26/31 rightly requires the UK equity tape to share income with contributors; the consultation this autumn on how that income is divided is where the contribution distinction has to be made explicit. 

Every other information industry settled its economics this way. Music did not survive digital distribution by charging everyone the same or by giving up on charging; it survived by metering use. Nobody put the royalty rate out to tender and congratulated themselves when it reached 68 pence. 

The data economy has arrived in capital markets, and the rules still treat price discovery as a utility to be run as cheaply as possible rather than as the asset on which everything else is built. Benchmarks do not fail overnight; they drift, and LIBOR drifted for years before anyone acted. The equity benchmarks are drifting now. Every consultation that closes without asking who pays for the price is a year the market will not get back. 

Issuers Have ‘Little Reason’ to Allow 3rd Party Stock Tokenization

Shanny Basar
-
0
Issuers Have ‘Little Reason’ to Allow 3rd Party Stock Tokenization
EMSAC Looks to Reduce Trading Halts

Some issuers have objected to their stock being tokenized on new platforms called Tokenized Securities Venues (TSVs), and this is likely to continue.

Graham Ferguson at tokenization platform Securtize, said on X:

Four Pillars, a research and blockchain enterprise, said in a newsletter said that this is the first case of the issuer objection process taking effect since the SEC announced an innovation exemption on 17 September 2026. The SEC allowed TSVs to trade tokenized NMS stock with certain limitations including market share thresholds.

In addition, if NMS stock is tokenized by a third party unaffiliated with the issuer, the TSV must provide a written notice to the issuer allowing them  to object. A TSV must also verify that the tokenized NMS stock made available for trading  provides holders the same rights and privileges as the traditional NMS stock of an equivalent class, including dividends and voting rights.

The main reason companies are objecting is that the interests of tokenizers and companies diverge, according to Four Pillars. Tokenizers attract users and earn fees by listing tokens, but companies do not receive any new capital, the token price is formed separately from the existing market and liquidity is fragmented.

“Risks such as price divergence may also be passed on to the company,” said Four Pillars. “It is a market where the revenue goes to the tokenizers and the risk goes to the companies, leaving companies with little reason to participate.”

Four Pillars argued that unless this conflict of interest is resolved, similar objections are likely to follow each time. Therefore, the firm believes that the global tokenized stock market is likely to remain a structure in which linked securities models circulate outside the U.S.

Olivia Vande Woude, business development, tokenization at Ava Labs, agreed on X that more issuers are likely to object. She said: “I think the objections are rational: an unaffiliated, always on market in your shares sits outside your investor relations & shareholder communication channels… & management gets little in return for allowing it.”

She believes tokenized stocks will continue to grow in volume but “what launches onchain will depend on which issuers stay silent, & that points toward issuer-sponsored models and the transfer agent as the stronger path for tokenized stocks.”

For example, tokenizaton platorms Securitize and Superstate believe in issuer-sponsored tokenization, where a company issue its shares onchain, with ownership recorded buy its regulates transfer agent. This allows the tokens to maintain the same shareholder rights as traditional equities.

Brian Glider, co-founder and chief executive of Glider, an onchain investment infrastructure platform, said on X that he expects zero traction on the OKX x ICE joint venture because there is no maker or taker demand:

Mike Cagney, co-founder and executive chairman of Figure Technology Solutions, said on X that it is unclear if there is a path to leverage and stock loan ability in the TSV ecosystem. Figure operates a blockchain-native equity market and is a founder of NAVRA, which intends to distribute onchain trading venues.

“This isn’t a product for US investors (they are better off on one of the national markets) and foreign investors can access price action through other mediums,” agreed Cagney. “It will be interesting to see if the OKX distribution can be a difference-maker here.”

Shadow SEC on the TSV “Order”

The Shadow SEC consists of professors John Coates at Harvard Law School, John C. Coffee, Jr. at Columbia Law School, James D. Cox at Duke University School of Law, Merritt B. Fox at Columbia Law School, and Joel Seligman at Washington University School of Law. They said on the Columbia La​w School’s Blue Sky Blog that the innovation exemption was “highly question-begging and likely illegal” and it should have gone through notice and comment.

“It is labeled an exemptive “order,” but in substance it is a legislative rule,” they added. “Taken together, the “Order” attempts to create a new regulatory category for trading venues adjacent to but not part of the national market system, with potentially significant and sweeping consequences.”

For example, they highlighted that the order does not require connectivity between TSVs or aggregation of their quotation or last-sale information. Therefore, this will result in fragmented liquidity, reduced price discovery, and an undercutting of investor protections assured by the existing NMS rules.

They continued that the “Order” leaves too many basic questions open including shareholder communications and voting, liquidity-pool (LP) tokens, conflicts of interest and the means to detect them, fully decentralized protocols and weak enforcement.

“Many practitioner commentaries already raise other questions,” added the blog. “The Commission should revisit its action before it starts to do harm. It should publish a revised framework addressing these types of questions with full notice and comment, and in the meantime withdraw the current relief.”

TD Securities’s Reid Noch: Tokenized Securities Venues Face Uncertain Path to Widespread Adoption

Anna Lyudvig
-
0
TD Securities’s Reid Noch: Tokenized Securities Venues Face Uncertain Path to Widespread Adoption

Tokenized securities venues (TSVs) are gaining attention as Wall Street explores new ways to bring blockchain technology into traditional equity markets. The recent announcement of a joint venture between NYSE parent Intercontinental Exchange (ICE) and cryptocurrency exchange OKX to operate a tokenized securities venue has added momentum to the discussion, raising questions about how these platforms could reshape trading, liquidity and market structure. The Securities and Exchange Commission’s five-year innovation exemption, issued on September 17, opens the door for qualifying TSVs to operate automated market makers and facilitate trading outside the traditional National Best Bid and Offer (NBBO) framework, subject to certain restrictions.

However, their potential impact may be limited. In an October report, Tokenized Securities Venues (TSVs) Deep Dive, TD Securities identified proprietary automated market makers (AMMs) and multi-pool venues as the most promising models, while pointing to regulatory uncertainty, volume restrictions and weak issuer demand as significant obstacles to adoption. Reid Noch, Vice President of U.S. Equity Market Structure, TD Securities believes TSVs could find an initial use case in round-the-clock retail trading, but questions whether they will attract meaningful volumes or institutional participation. In an interview with Traders Magazine, he discusses which TSV models are most likely to gain traction, their implications for liquidity and price formation, and why the NYSE’s broader tokenization initiatives could prove more consequential than its proposed TSV.

Reid Noch

What is the strongest use case for TSVs?

TSVs largest use case may be for 24/7 trading for retail in the near term, but as Bruce / other overnight ATSs look to service the weekend, the use case becomes less convincing.

Which TSV model is most likely to gain traction, and why?

As in our report, we think Proprietary AMMs or Multi-Pool TSVs made up of multiple Proprietary AMMs are the models most likely to gain transaction. However, as we discuss in our report, we believe no TSV will gain significant volume.

How could TSVs change liquidity and price formation in equities?

Given the constraints in the TSV relief, I doubt we will see any meaningful changes in liquidity. As for price formation, I think you will see some crazy prints, especially after hours with thin liquidity. We see this in Robinhood’s overseas AMMs, where the vast majority of volume is concentrated in meme tokens, with some of the pairs in limited volume executing multiples over previous closing price.

What are the biggest barriers to institutional adoption of TSVs?

The largest barriers are formal rule making and the harsh limitations. Exemptive relief allows TSVs to function with a stroke of a pen. However, it also can be taken away by a future administration just as quickly. Given how partisan the agencies have become, the long-term durability of this exemption remains uncertain.

On top of that, the harsh volume caps and limitations doesn’t allow for much growth. Both cases make it difficult to see institutions try to integrate a brand-new workflow into existing brokerages, custody, compliance, and trading regimes.

How significant could NYSE’s proposed TSV be for the wider market?

I think NYSE’s proposed TSV may be one of the most legit models coming to market in the near-term, but as discussed above, it will not be significant at all. I think NYSE’s tokenized ATS, which plans to launch later this year / early next year, will be more impactful.

The image for this article was generated using AI.

UK in Strong Position to Meet T+1

Shanny Basar
-
0
UK in Strong Position to Meet T+1
UK in Strong Position to Meet T+1

Market participants feel the U.K is in a strong position to meet the migration to a shorter settlement next year and the focus is on small buy-side firms that may still use manual processes, the readiness of vendors and regulatory oversight.

Lucy Rigby, MP and economic secretary to the Treasury

The UK Accelerated Settlement Taskforce, in partnership with DTCC, the U.S post-trade infrastructure and Euroclear, the central securities depository, hosted a UK T+1: One Year to Go summit in London on 13 October 2026.

Lucy Rigby, MP and economic secretary to the Treasury, said via video at the event that she was confident that the U.K is on track to meet the implementation date for  T+1. She said: “We are entering the final year in a position of strength. The next 12 months matter and we need to accelerate delivery.”

European markets will cut the time for settling trades from two days after a trade, T+2, on 11 October 2027. The migration to T+1 will apply across the 27 member states of the European Union, UK, Switzerland, Liechtenstein, Iceland and Norway. This will bring the region in line with North America, which migrated to T+1 in 2024. In contrast to the process in the U.S., the European transition takes place across multiple jurisdictions, currencies and market infrastructures. For example, there are 31 central securities depositories in Europe.

Jamie Bell, FCA

Jamie Bell, head of capital markets: supervision, policy and competition at the Financial Conduct Authority (FCA), the U.K. regulator, agreed that he is “very confident” on the U.K. meeting the T+1 implementation date as the majority of firms “are in the right place.” However, he also acknowledged that there is work to do in pockets of the market, such as smaller buy-side firms.

Bell said: “You can expect the FCA to be more intrusive as the year progresses and we will be coming to you armed with data. 2027 will be incredibly important for industry testing.”

Daniel Hickey, global head of custody product and network management at State Street, said on a panel at the event that all key clients are engaged in thinking about automating standard settlement instructions (SSIs) and trade matching. Hickey added that the conversations are now about second or third order effects such as the impact of T+1 on foreign exchange, securities lending and UCITS funds, which settle T+3.

“Our top 100 clients have invested in automating SSIs and trade matching, and are in a good place,” said Hickey. “This is the key to success.”

Mimi Yan, FMSB

Matt Johnson, executive director for ITP (institutional trade processing) industry relations and international strategy at DTCC, highlighted on the panel that DTCC has more than 18 million SSIs in its database, with approximately 60% provided by the source. DTCC also has data showing that more than 98% of equities trades in the EU are being matched on the same day on average, and 93.5% in fixed income, which has increased from 2025.

Mimi Yan, technical director at the Financial Markets Standards Board (FMSB) and co-lead, operational issues working group at the UK Accelerated Settlement Task Force technical group, agreed that the industry will eventually move to a hybrid model which includes T0, where participants will move between different rails. She said: “We want to become healthier and fitter but we need to define outcomes. Do we need to train for a heptathlon or can we go jogging three times a week?”

EU

ESMA, the EU financial markets regulator, said in a statement on 16 October 2026 that the regulatory technical standards and guidelines on standardised procedures and messaging protocols have been published, so the regulatory framework is ready.

The first deadline for investment firms and their clients to comply with the new requirements on allocations and confirmations is from 7 December 2026. This includes the mandatory use of electronic, standardised communication channels and international messaging standards; and machine-readable communication methods, except in cases of temporary technical disruptions.

Verena Ross, Esma

Verena Ross, chair of ESMA, described T+1 as one of the most impactful recent market structure initiatives that will fundamentally improve the efficiency and international competitiveness of the EU markets.

“The focus now shifts to market participants to comply with the regulatory requirements, ready their systems and processes, and test their preparedness for the change, considering the recommendations of the EU T+1 Industry Committee,” she added.

Elisabeth Plakinger, principal at consultancy Capco, said on LinkedIn that three dates define the immediate delivery agenda: 7 December 2026; 12–14 June 2027 for messaging and T2S changes, and 11 October 2027 for the transition.

“The June sequence leaves two weeks before the next coordinated industry test window,” she added. “Clearstream’s suspended partial-release functionality remains an open dependency.”

Operations

James Maxfield, chief client officer at Duco, the agentic operations platform for financial services, said in a statement that while automation has dominated much of the conversation around T+1 readiness, firms risk overlooking  what happens when things go wrong as zero exceptions is an admirable, but highly unrealistic, goal.

Daniel Hickey, State Street

Maxfield highlighted the growing use of 24/7 AI agents, with some firms already deploying them to investigate and resolve exceptions in real time which reduces the risk of activity spikes and enables firms to manage exceptions at scale. He added: “The work that firms do now to build smarter post-trade operations will also put them in a much stronger position for any future move towards T0.”

Richard Baker, founder and chief executive of Tokenovate, which automates post-trade, collateral, and tokenised settlement lifecycles, said in a statement that according to the firm’s latest research, 88% of respondents identified fragmented data as a significant or critical challenge to post-trade efficiency.Baker urged firms to use the T+1 transition as an opportunity to join up automation across the trade lifecycle, standardise transaction and event data, and keep the legal and economic terms of a trade connected through to settlement.

Hickey said firms should also see the move to T+1 as an opportunity to move to “T flexible”, where firms can choose from a range of settlement options, including atomic settlement, as the industry does not want to lose the benefits of netting.

“T+1 will continue into Asia,” added Hickey. “Settlement will move to digital rails alongside traditional rails as markets move to 24×7.”

VISTA Study Finds Satisfaction and Trust Endure as Investor Priorities

Press Release
-
0
VISTA Study Finds Satisfaction and Trust Endure as Investor Priorities

SIFMA and KPMG LLP have released the results of the 2026 Voice of Investor Satisfaction, Trust, and Advocacy (VISTA) study titled “Expanding Choices, Enduring Investor Priorities.” A KPMG LLP independent study sponsored by SIFMA, the study of over 2,100 U.S. individual investors found that 83% are satisfied that the industry is meeting their needs and 82% are satisfied with their firms’ ethical standards and accountability. Investors who work with financial advisors, whether exclusively or as part of a hybrid approach, continue to report the highest levels of satisfaction and trust.

Source: 2026 VISTA study, “Expanding Choices, Enduring Investor Priorities”

“Investor confidence in our industry remains strong, and this year’s results show that it rests on trusted guidance,” said Kenneth E. Bentsen, Jr., president and CEO of SIFMA. “Investors are increasingly aware of new opportunities, but they are unwilling to trade away trust and transparency in pursuit of innovation. SIFMA will continue working to expand investor access while preserving the protections and confidence of investors across every generation, ensuring our capital markets remain the deepest, most liquid, and most resilient in the world.”

Key findings from the 2026 VISTA study include:

1. Technology Alone Is Not the Difference Maker: Investors are not rejecting technology; they are increasingly choosing advisors plus technology.

  • Hybrid investors who combine human expertise and self-directed market access report some of the highest levels of satisfaction at 87% and just one point lower than satisfaction in fully advisor-supported investment at 88%.
  • While trust in financial advisors as a primary source of investment advice rose to 52%, trust in AI-only financial advice declined across generations, among Gen Z it fell from 20% in 2025 to 10% in 2026.
  • Meanwhile, 43% of investors said they are unlikely to switch providers due to enhanced digital and AI capabilities, up from 35% last year.

Source: 2026 VISTA study, “Expanding Choices, Enduring Investor Priorities”

2. The Next Generation Is Redefining Expectations, Not Priorities: Trust, advice, and performance remain foundational, even as younger investors bring new expectations around transparency and engagement.

  • Gen Z increased its reliance on financial advisors as the primary source of investment advice from 39% in 2025 to 42% in 2026 and now weighs transparency equally with returns.
  • Millennials emerged as the industry’s leading satisfaction and trust segment, with 92% of advisor-supported Millennials satisfied with the industry’s ability to meet their needs and 85% trusting the industry to act in their best interest, up from 77% last year.

Source: 2026 VISTA study, “Expanding Choices, Enduring Investor Priorities”

3. Interest in New Investment Categories Is Growing – Cautiously: For the first time, VISTA examined investor interest in private markets, digital assets, and prediction markets.

  • Younger investors report higher levels of familiarity, ownership, and interest in new investment categories than older generations, with 65% of Millennials and 57% of Gen Z very or somewhat interested in investing retirement savings in private markets.
  • Interest does not necessarily translate into participation, as concerns about risk, security, and unfamiliarity remain the main barriers.

Source: 2026 VISTA study, “Expanding Choices, Enduring Investor Priorities”

Overall, the results point to an opportunity for firms to help investors move from curiosity to confidence through education, transparency, protection, and trusted advice.

“In the face of rapidly shifting markets, it’s no wonder that the next generation of investors is focused on building confidence, and ensuring that technology is backed by demonstrable expertise,” said Nadia Orawski, Principal, Advisory Line of Business Lead – Financial Services, KPMG LLP. “Trusted relationships have never mattered more, especially for Gen Z investors.”

For more information and results from the survey, the “Expanding Choices, Enduring Investor Priorities” report can be found here.

Source: SIFMA

IMC Appoints Meaghan Dugan as US Market Structure Strategy Lead

Press Release
-
0
IMC Appoints Meaghan Dugan as US Market Structure Strategy Lead
Meaghan Dugan, Cboe
Meaghan Dugan

CHICAGO, Oct 19, 2026 – IMC, a global, research-driven quantitative trading firm, today announced that Meaghan Dugan will join the firm as Managing Director – U.S. Market Structure Strategy Lead, effective October 19, 2026. Based in IMC’s Chicago office, Dugan will lead the firm’s U.S. market structure strategy and its engagement with exchanges, regulators, clearing organizations and industry bodies.

Dugan joins IMC from Cboe Global Markets, where she most recently served as Senior Vice President, Head of U.S. Derivatives. At Cboe, Dugan’s responsibilities included business strategy, competitive positioning, market structure and market development for Cboe’s U.S. Options and Futures businesses. She brings more than 20 years of experience across listed options trading, market making, electronic trading and exchange leadership.

“We’re thrilled to welcome Meaghan to IMC,” said Kyle Gray, Managing Director of IMC U.S. “Well-functioning markets are the foundation of everything we do, and few people understand how the U.S. trading venue ecosystem fits together better than she does. Meaghan has seen the options market from many vantage points: first providing liquidity, then building the exchange businesses that continue to bring buyers and sellers together in new and innovative ways. That perspective will help us contribute constructively to the industry’s market structure conversations as we keep growing our business in the U.S. and globally.”

“I started my career as a market maker, so joining IMC feels like coming home,” said Dugan. “IMC combines deep trading expertise with technology and a long-standing commitment to fair, efficient and resilient markets. I’m excited to work with the team and our industry partners on the market structure issues that matter most to investors and liquidity providers alike.”

Before Cboe, Dugan was Head of Options at the New York Stock Exchange, where she oversaw the NYSE American Options and NYSE Arca Options markets. She joined NYSE in 2019 as Head of Product and Competitive Strategy for NYSE Options. Earlier, she spent 11 years at Bank of America, most recently as Head of Product for U.S. Electronic Options and Global Futures Algorithms. She began her career on the trading floor at the Pacific Stock Exchange as a market maker for Spear, Leeds & Kellogg. Then later as a specialist and Lead Market Maker in Morgan Stanley’s Automated Market Making business, before moving to its MSET electronic trading group.

Source: IMC

NYSE Introduces Extended Trading Hours for NYSE American Options

Press Release
-
0
NYSE Introduces Extended Trading Hours for NYSE American Options

The New York Stock Exchange, part of Intercontinental Exchange, Inc. (NYSE: ICE), one of the world’s leading providers of financial market technology and data powering global capital markets, today introduced NYSE American Options Extended Trading Hours (“ETH”), giving market participants additional access to options listed on NYSE American.

The initial group of eligible symbols includes options overlying key macroeconomic-focused ETFs such as SPY, IWM, and GLD and options overlying large-cap technology names including Apple, Microsoft, NVIDIA, Alphabet, Amazon, and Oracle. The new early trading session will operate from 7:30 AM to 9:25 AM ET, and the new late trading session will operate from 4:00 PM to 4:15 PM ET.

“Markets have changed tremendously over the years, and that kind of progress only happens when you keep investing in your technology,” said Kevin Tyrrell, Chief Product Officer, NYSE. “Extended trading hours for options reflects market demand for investment opportunities and reliable risk management during a longer period of time, and as we look ahead to bringing the same approach to equities in December, we’ll continue to treat innovation as the foundation for growth.”

NYSE operates with a focus on safeguarding investor confidence through transparent, liquid, and efficient markets that support effective price discovery and robust risk management. The introduction of ETH reflects the NYSE’s commitment to evolve its markets while maintaining the reliability participants depend on.

For additional details, including eligible symbols and session information, please refer to the Extended Trading Hours Fact Sheet.

Source: Intercontinental Exchange

1...567...2,331Page 6 of 2,331