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.

Trading Technologies Announces Connectivity to EPEX SPOT for European Power Trading

Trading Technologies International, Inc. (TT), has unveiled its new connection to the European Power Exchange (EPEX SPOT), the largest power exchange in Europe, marking a significant expansion into the European physical power markets via the TT platform. This strategic move, developed in partnership with a major European energy supplier, introduces a continuous intraday power trading capability to TT’s clients, offering a fully co-located service.

EPEX SPOT, headquartered in Paris and operating as an independent subsidiary of the European Energy Exchange (EEX), spans power markets across 13 European countries. The integration with TT allows traders to leverage algorithmic trading tools and comprehensive risk management solutions. The initiative aims to foster competitive pricing and greater choice for European electricity consumers, aligning with the broader objectives of market transparency and efficiency.

SIX Adds to ESG Products With SME Assessment Tool

Swiss financial giant SIX has launched a tool that will enable banking clients to make assessments on the sustainability performance of small- and medium-sized enterprises on their loan books.

The service is backed by Greenomy, an ESG assessment and reporting company that the Swiss company acquired late last year. With Greenomy’s software-as-a-service platform, the solution will help banks comply with regulations such as the EU’s new Banking Book Taxonomy Alignment Ratio (EU BTAR).

Further, banking clients will be able to gauge their debtors’ sustainability risk trajectories.

“The importance of gaining a clearer insight into the climate credentials of small and medium-sized enterprises cannot be overstated,” said SIX head of financial information Marion Leslie. “After all, SMEs represent 90 per cent of businesses worldwide, not to mention 99 per cent of the EU’s economy.”

The SME Sustainability Assessment Solution is the latest tool to be released by SIX this year. The Zurich-based operator of the stock exchanges of Switzerland and Spain unveiled a climate-specific data tool last month. That was the first in a programme of product releases that SIX head of ESG product strategy Martina McPherson said would create a one-stop-shop of sustainability data services.

Goldman Sachs Surpasses 99% Same-Day Affirmation Rate with DTCC’s CTM’s M2i Workflow

With T+1 settlement now just three months away, Goldman Sachs & Co. LLC has achieved over a 99% same-day affirmation rate and significant improvements in settlement rates for transactions using DTCC’s CTM’s Match to Instruct (M2i) workflow in Q4 2023. This includes a 38% decrease in same-day affirmation exceptions and a 64% reduction in US settlement fails by value among investment manager counterparties.

CTM’s M2i workflow, a central matching service for cross-border and domestic transactions across multiple asset classes, is a key component of DTCC’s Institutional Trade Processing (ITP) suite and facilitates central matching and auto-affirmation for DTC-eligible securities, significantly improving same-day affirmation rates and efficiency in trade processing.

Adaptive Announces Performance Breakthroughs with Aeron Technology on Google Cloud

Adaptive Financial Consulting (Adaptive) has announced significant performance improvements for its Aeron technology, a cloud-native, open-source, low-latency message transport and cluster technology, following extensive testing on Google Cloud infrastructure. The collaboration between Adaptive and Google Cloud showcased Aeron’s ability to deliver microsecond latency and millisecond recovery, enabling low-latency, resilient trading systems without relying on traditional on-premises infrastructure.

Aeron comprises Aeron Transport, which facilitates messaging, and Aeron Cluster, designed for zero downtime, 24/7 trading systems. Aeron Premium adds an extra suite of components that further enhance performance, security, fault tolerance, and recovery. Aeron Premium employs components for kernel bypass, significantly reducing packet processing overhead and thereby enhancing network transport speeds.