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A-Team Insight Brief

SIX Partners with Clearstream to Enhance Reference Data Distribution Through Connexor and D7 Integration

SIX, the Swiss financial market infrastructure provider, has entered into a strategic partnership with Clearstream to integrate SIX’s Connexor platform with D7, Deutsche Börse’s digital post-trade platform. The collaboration aims to digitise and standardise the processing and distribution of financial instrument reference data, aligning with the German eWpG regulation and responding to market demands for more standardisation.

The integration of Connexor and D7, provisionally scheduled to be activated in 2H 2024, promises to streamline reference data management, enhance regulatory compliance, and improve data quality through automation. By providing a unified access point through D7, the partnership also aims to simplify reporting obligations for issuers, reducing process costs and enhancing data efficiency.

OSTTRA and Baton Systems Partners to Launches FX PvP Service to Mitigate Bilateral Settlement Risk

Post-trade solutions provider OSTTRA, has unveiled a new FX PvP (Payment versus Payment) settlement orchestration service, aimed at reducing bilateral settlement risk among participants. Delivered on distributed ledger technology (DLT) from Baton Systems, the initiative seeks to enhance intraday funding, liquidity, and credit risk management. The service, which facilitates the settlement of transactions not covered by CLS, including trades such as offshore Chinese renminbi, addresses the Bank for International Settlements’ call for increased PvP adoption in FX transactions to lower settlement risks.

The service forms part of OSTTRA’s wider strategy to reform OTC market structures, potentially evolving to include settle-to-market functionalities that could decrease derivative counterparty exposures and the associated regulatory capital requirements. HSBC and Wells Fargo, early adopters of Baton’s CoreFX offering, are expected to join the service in the first half of 2024.

CCData Partners ANNA and DTIF to Ease Adoption of Digital Token Identifier

CCData, an FCA authorised benchmark administrator and provider of digital asset data and index solutions, has made a strategic partnership with the Association of National Numbering Agencies (ANNA) and the Digital Token Identifier Foundation (DTIF) to introduce Digital Token Identifiers (DTIs) and International Securities Identification Numbers (ISINs) into its Asset Metadata product.

The integration of the identifiers means stakeholders in both parties can access metadata for more than 7,000 digital assets and respective ISO identifiers via CCData’s REST API. This should enhance transparency in the digital asset market by distinguishing between the ISIN-identified asset itself and its blockchain-based implementation identified by the DTI.

Microsoft Azure Marketplace Adds Xceptor Data Automation Solutions

Xceptor, an automation platform for financial markets, has moved into the Microsoft Azure Marketplace where clients, partners, and prospects can quickly identify Xceptor solutions and services to meet their data automation needs and benefits from a built in streamlined procurement and payment process. Xceptor offers its clients and prospects the option to either select pre-packaged solutions or collaborate on tailored options that are then integrated via Azure Marketplace.

“Joining forces with Microsoft Azure Marketplace brings us closer to our clients who want convenient, accessible tools to manage their intricate data management and automation needs. This platform simplifies the purchasing process and expedites onboarding,” says Josh Monroe, chief revenue officer at Xceptor.

ICE Benchmark Administration Offers Update on Cessation of Final LIBOR Settings

Intercontinental Exchange (ICE) has confirmed that ICE Benchmark Administration (IBA), the FCA authorised and regulated administrator of LIBOR, has provided an update on the cessation of sterling LIBOR.

In line with feedback from its June 2022 consultation and previous statements, the FCA has used its powers under UK Benchmarks Regulation (UK BMR) to require IBA to publish the 3-Month sterling LIBOR setting using an unrepresentative synthetic methodology until 28 March 2024. The FCA has stated that it has no intention to require publication beyond then and that this setting will cease after publication on that date.

IBA is also required by the FCA to continue to publish the 1-, 3- and 6-Month synthetic US dollar LIBOR settings. The FCA has stated that it intends to require IBA to publish these settings until 30 September 2024, but not beyond that date, when it expects publication to cease.

All other LIBOR settings have ceased to be published.

Basel Committee Cracks Down on Banks Window-Dressing Ahead of G-SIB Scores

The Basel Committee on Banking Supervision met last week to take stock of recent market developments and risks to the global banking system and discuss policy and supervisory initiatives. One issue on the agenda was global systemically important banks (G-SIBs) and window dressing. Building on discussion at its previous meeting, the committee looked at empirical analyses that highlight window-dressing behaviour by some banks in the context of the framework for G-SIBs. Such regulatory arbitrage seeks to temporarily reduce banks perceived systemic footprint around the reference dates used for the reporting and public disclosure of G-SIB scores.

As noted previously by the committee, window-dressing by banks undermines the intended policy objectives of the committee’s standards and risks disrupting the operations of financial markets. To that end, the committee agreed to consult on potential measures aimed at reducing window dressing. The consultation paper, and an accompanying working paper summarising the empirical analyses, will be published next month.

Fusion Risk Management Adds Generative AI Powered Resilience Copilot

Fusion Risk Management, a provider of cloud-based operational resilience, business continuity, and risk management solutions, has announced general availability of its generative AI-powered assistant, Fusion Resilience Copilot, following a successful global beta program. The Copilot is pre-configured to answer questions at the click of a button and enables practitioners to automate manual and time-consuming activities, unlock deeper insights into incidents, and quickly respond to disruptions. Users can also reduce the time and effort required to fully understand the scope and status of an incident and quickly communicate critical insights to stakeholders through
AI-generated summaries.

“Today’s risk teams need a better way to leverage generative AI and automation to streamline manual processes and minimise the response time between impact and action when an incident occurs,” says Eric Jackson, chief product officer at Fusion Risk Management. “Resilience Copilot gives Fusion customers a resilience power-up by placing actionable insights and guidance at their fingertips. Customers can extend their continuity and resilience teams without hiring additional staff and free up critical resources to focus on other value-added activities.”

Nature-linked Indexes Added to S&P Sustainability Benchmarks

S&P Dow Jones Indices has added another set of ESG-themed benchmarks to its roster, this time providing a gauge for nature-focused investors.

The S&P 500 Biodiversity Index and the S&P Global LargeMidCap Biodiversity Index are intended to provide broad views of the impacts companies are having on nature and vice versa.

The new suite follows the creation of a set of indexes that track corporate alignment with United Nations Sustainable Development Goals (SDG). The nature-linked indexes are calibrated to the COP15 Montreal biodiversity protection targets and built on S&P’s nature, biodiversity and carbon datasets as well as its SDG metrics.

“Research shows that 85 per cent of the world’s largest companies have a significant dependency on nature and biodiversity. This makes access to nature- and biodiversity-focused data, insights, and analytics essential in the support of market participants understanding, managing, and mitigating exposure of nature-related risks and impacts,” said Steven Bullock, global head of research and methodology at S&P Global Sustainable1, S&P’s ESG business unit.

Investors See Relevance in Double Materiality Ratings: ISS ESG Survey

Institutional investors believe that ESG ratings built on a double materiality methodology are “very relevant” to them, according to an ISS ESG survey of client needs.

The analysis also found that investors consider the reporting standards of International Sustainability Standards Board (ISSB), UN Global Compact (UNGC) and the Task Force on Climate-related Financial Disclosures (TCFD) most relevant to their needs.

The findings were contained in the company’s ESG Corporate Rating Survey, in which it sought to gauge client responses to the methodologies it uses to create its sustainability research.

The survey results, which will be discussed in a webinar next month, also show that investors’ most relevant ESG theme is addressing climate change.

Aquis Markets Introduces Conditional Order Functionality to Enhance Trading Efficiency

Aquis Markets, the pan-European equities trading arm of Aquis Exchange PLC, has introduced conditional order functionality on its Aquis UK and Aquis EU platforms. This enables members to simultaneously post liquidity across multiple venues without the risk of over-trading. Through this functionality, members can issue an ‘Indication of Interest’ (IOI), which may trigger a ‘firm-up invite’ for potential matches. Acceptance must then occur within a 300 microsecond window, upon which trades will take place on the Aquis Matching Pool (AMP), Aquis’s dark pool.

Members can also set a Minimum Execution Size and specify Large-in-Scale (LIS) executions, ensuring that orders meet specific size criteria. Additionally, Aquis has broadened trading strategies by allowing regular conditional orders to match with AMP liquidity or other conditional orders, and by enabling interaction with clients of OptimX, a block trading consolidator set to launch later this quarter.