A-Team Insight Brief
Broadridge acquires Shadow Financial Systems
Broadridge Financial Solutions has acquired Shadow Financial Systems, a provider of multi-asset class post-trade solutions for the capital markets industry. The acquisition builds on Broadridge’s post-trade processing capabilities by adding a market-ready solution for exchanges, inter-dealer brokers and proprietary trading firms. The acquisition also adds capabilities across exchange traded derivatives and cryptocurrency.
BIS Releases Basel III Monitoring Report 2019
The Basel Committee’s latest Basel III monitoring exercise shows that on a fully phased-in basis, the capital shortfalls at the end-December 2018 reporting date are €23.5 billion for Group 1 banks at the target level. These shortfalls are almost 75% smaller than in the end-2015 cumulative QIS exercise, thanks mainly to higher levels of eligible capital. For Group 1 banks, the Tier 1 minimum required capital (MRC) is expect to increase by 3% following full phasing-in of the final Basel III standards relative to the initial Basel III standards. This compares with an increase of 3.2% at end-2017. On average, at end-June 2018, the total change in Tier 1 MRC at the target level was higher at 5.3% for Group 1 banks. This higher increase was largely driven by the higher market risk impact prior to the application of the recalibrated 2019 standard. The final Basel III minimum requirements are expected to be implemented by January 1, 2022 and fully phased in by January 1, 2027.
Atlantic Equities Migrates from Bloomberg SSEOMS to Itiviti Platform
Itiviti has taken on another firm needing to replace a Bloomberg SSEOMS platform that is being withdrawn, this time announcing that Atlantic Equities, a US equity agency brokerage, has elected to move to Itiviti’s high touch, low touch, and post-trade suite of hosted solutions. As well as supporting Atlantic’s core trading desks, Itiviti’s solution will be used by Atlantic’s Frankfurt-based team in preparation for the UK’s potential withdrawal from the EU.
Broadridge Releases Centralised Solution for MBS Trade Assignments
Broadridge Financial Solutions has released a centralised Trade Assignment Portal (TAP) that will allow mortgage originators and broker-dealers to transform the execution of Mortgage-Backed Securities (MBS) Trade Assignments. TAP is a web-based platform designed to provide operational efficiency by automating workflow and allowing mortgage originators and broker-dealers to electronically send and receive trade assignments, thereby processing MBS Trade Assignments at a faster rate. Several firms are completing user acceptance testing in preparation for going live on TAP.
Asset Managers Migrate to the Cloud
IHS Markit research among asset managers in Europe and North America shows an industry segment becoming more strategic in its approach to data management, but not immune to problems including mounting fees, rising costs and demanding regulations. The research notes 52% of firms use the cloud for data management and a further 28% plan to migrate in the next 18 months. Almost half of firms will have a data warehouse within two years, but two-thirds report that business teams have limited/no visibility of where data came from, who touched it, how it was altered and where it went.
Volante Releases SWIFT Message Validation Service on AWS Cloud
Volante Technologies has introduced financial message validation on the cloud. It is available as an Amazon Machine Image (AMI) on the AWS Marketplace as a microservice to users looking to test their SWIFT Standards Release (SR) 2019 messages ahead of go-live on November 17, 2019. The validation service provides APIs for validating messages ready for applications to use. The service not only identifies valid/invalid messages, but also returns a list of errors encountered. This helps reduce the frequency and severity of formatting errors, and minimises the risk of rejected messages. The cost of the service is based on hourly use.
Broadridge Moves Asset Servicing Solution into AWS Cloud
Broadridge Financial Solutions has made its global asset servicing solution available on the Amazon Web Services (AWS) cloud. A global Tier 1 investment bank is in live operation with the solution and another is onboarding. The company’s end-to-end solution is designed to address industry, business and operational challenges in global asset servicing by streamlining corporate actions, dividend and coupon processing across multiple asset classes, business lines and regions. Operating the solution on AWS can add increased operational agility, improved and faster client onboarding, quicker deployments, and enhanced security, scale, and resilience.
EBS Readies Next-generation EBS Direct Platform
EBS, a provider of electronic trading platforms and technology services in foreign exchange markets, and part of CME Group, has launched a next-generation EBS Direct platform with enhanced capacity and speed that will deliver round trip processing times below 50 microseconds. The platform is in beta-testing and is designed to offer faster market data and provide greater certainty of execution and improved fill ratios. EBS will transition clients to the platform in four phases over 18 months. The rollout is expected to be completed by the first half of 2021, after which time current EBS Direct architecture will be decommissioned.
FCA Finds MiFID II Research Unbundling Rules Working Well for Investors
Multi-firm review findings published this week by the FCA has found that, post-MiFID II, most asset managers have chosen to pay for research from their own revenues, instead of using their clients’ funds. Firms have also improved their accountability and scrutiny of both research and execution costs, including where firms have chosen to charge research costs to clients. This has resulted in investors in UK-managed equity portfolios saving around £70 million in the first six months of 2018 across a sample of firms. The review also indicated that research budgets have fallen by 20-30%.
Firms Still Uncertain About Libor Transition
Although four out of five financial providers have Libor transition plans in place, just 18% say their plan is mature, while only one in five say they are operationally ready for the change – according to the Accenture 2019 Libor Survey. Almost half (41%) do not feel they have a unified and consistent approach to transition and remediation, while two in five believe that regulatory uncertainty and lack of clarity are hampering execution of their remediation efforts.