In other FinTech briefs, CTA research requirements under MiFID II are clarified, Wilmington Trust partners with AcadiaSoft, and JPMorgan and Citi will work with truePTS.
Integral Also Launches iOS App
Foreign exchange (FX) technology vendor Integral is now offering market data support for Bitcoin, Ethereum, Bitcoin Cash and Litecoin via its trading platform, the Open Currency Exchange (OCX), officials say.
The expanded market data coverage will include the top pairings of: BTC/USD; ETH/USD; BCH/USD; and LTC/USD.
Over the coming weeks, the Integral FX Benchmark “will be extended to include these leading cryptocurrency pairs,” according to the vendor. “This expansion will allow cryptocurrency traders to benchmark their execution on a continuous basis and will provide previously unavailable second-by-second midrates, at no cost. Integral developed this unique methodology in collaboration with Stanford University.”
The vendor is also launching the OCX Viewer, a free Apple iOS app that will let end-users monitor real-time cryptocurrency prices. The OCX Viewer app will enable users to monitor currency prices in OCX, and is available as a free download from the App Store, officials say.
“We are excited to incorporate Integral’s cryptocurrency market data to offer a wider selection of products to our customers,” said Charalambos Psimolophitis, CEO of FxPro Group, an Integral customer.
CFTC Clarifies CTA Research Requirements Under MiFID II
The CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) just issued an interpretative guidance clarifying that “a futures commission merchant (FCM), swap dealer (SD), or introducing broker (IB) that receives separate compensation for commodity trading advice is not required to register as a commodity trading advisor [CTA].”
The guidance covers advice offered as “solely incidental” to the business of FCMs or swap dealers or it’s “solely in connection” with the operation of the introducing broker’s business, according to the CFTC.
“The interpretation was requested as a result of the European Union’s Markets in Financial Instruments Directive II (MiFID II Directive), which will require certain investment managers to make separate payments for investment research services and execution services commencing January 3, 2018,” according to the CFTC. “The interpretation, however, also extends to separate payments for commodity trading advice received by FCMs, SDs, and IBs outside of the requirements of the MiFID II Directive.”
Wilmington Trust & AcadiaSoft to Build Margin Management Service
Wilmington Trust, a provider of corporate and institutional services including custody and collateral solutions, is working with AcadiaSoft to launch a margin management service for clients.
The Wilmington Trust Margin Management offering is “designed to assist clients in satisfying their margin and collateral obligations arising from derivatives, repurchase agreements, TBAs, and other bilateral agreements,” officials say. The offering will enable Wilmington Trust to “support all aspects of the margin and collateral process with limited client involvement, as a fully outsourced solution.”
Wilmington Trust reached out to AcadiaSoft because its “suite of products provided an integrated solution for our new Margin Management service,” says Scott Linden, Wilmington Trust’s managing director for Collateral Management, in a statement. “AcadiaSoft’s ProtoColl and MarginSphere services enable our team of custody administration specialists to manage the growing client demand for margin and collateral solution,” Linden adds.
The Wilmington Trust’s Margin Management service will offer:
- A service provider and custodian to manage the margin and collateral process;
- A reduction in the need for the client’s operational and technology resources in the collateral process;
- And volume insensitivity to clients “as their trading demands and/or market volatility increase.”
The new service will be available to Wilmington Trust clients in early 2018, officials say.
JPMorgan and Citi Join Forces with TruePTS
JPMorgan and Citi are joining the New York-based truePTS post-trade derivatives processing and “product-agnostic” venue in an effort to help their clients, officials say.
“The relationship helps truePTS address the regulatory and high cost pressures impacting industry participants by providing innovative technology solutions, such as a proprietary matching and validation engine as well as AI enhanced voice deal capture,” according to truePTS officials. “These features allow auto-matching and direct clearing, automating the manual processing of derivatives, one of the largest source of errors, revisions, and operational risks.”
Automated solutions are needed given that 45 percent of derivative trades were executed off swap execution facilities (SEFs) in the third quarter of 2017, according to truePTS.
“We look forward to working with truePTS and the other market participants to develop new processing solutions for our clients,” says Kieran Hanrahan, global head of markets middle office at JPMorgan, in a statement.
In addition to the two major banks, other industry participants are expected to join in the coming months, say truePTS officials.
TruePTS, whose offerings are slated to go live early next year, will offer processing and allocation services for “very high volumes of trades with a ‘no touch’ process that eliminates the need for trade affirmation while providing an instant clearing status,” officials say.
The truePTS system can retrieve and port positions among major clearinghouses and FCMs, and offers straight through processing with allocations support in 21 currencies, officials say. The system also offers direct access to LCH and CME venues.
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