In other news, Acadia & Northeastern University collaborate, the Shanghai Stock Exchange signs another MOU & Northern Trust taps State Street for a new APAC post.
SEC: Current NMS Has Too Many Conflicts of Interest
Citing conflicts of interest in the current national market system (NMS), the SEC is ordering equity exchanges such as the Nasdaq Stock Market and New York Stock Exchange, and FINRA, the self-regulatory organization (SRO) for U.S. broker-dealers, to revamp and improve the governance of market data that flows through the NMS.
The exchanges and FINRA have been ordered to develop a new NMS plan that will “replace the three existing national market system plans that govern the public dissemination of real-time, consolidated equity market data for national market system stocks,” according to the SEC.
The new directive follows a legal battle and a May 6, 2020 order from the SEC that requires “the new plan allocate votes by exchange group and provide for an independent administrator,” according to the SEC.
“Developments in technology and changes in the equity markets have heightened the inherent conflicts of interest between the equity exchanges’ regulatory responsibilities in their oversight of existing NMS plans and their individual interests in maximizing the viability of the proprietary data products they sell,” the SEC says.
The current situation “has raised concerns about whether the existing NMS plans for equity market data continue to fulfill their regulatory purpose to ensure the availability of information with respect to quotations for and transactions in securities,” according to the SEC.
The new order “addresses conflicts of interest inherent in the current governance structure of the existing equity data plans and is designed to improve the efficiency of NMS plan operations and the responsiveness of the plan to the concerns of market participants that are not self-regulatory organizations,” according to the SEC.
The new NMS plan will be published for public notice and comment. “Until such a new NMS plan is effective, the current NMS plans will continue to govern the provision of consolidated equity market data,” according to the SEC.
The order impacts Cboe BYX Exchange, Cboe BZX Exchange, Cboe EDGA Exchange, Cboe EDGX Exchange, Cboe Exchange, Investors Exchange, Long Term Stock Exchange, MEMX, MIAX PEARL, Nasdaq BX, Nasdaq ISE, Nasdaq PHLX, NYSE American, NYSE Arca, NYSE Chicago, and NYSE National, according to the SEC.
Industry association SIFMA has thrown its support behind the SEC’s action.
Kenneth E. Bentsen, Jr
“SIFMA supports the action taken today by the SEC to order the exchanges and FINRA to update the governance structure of the current equity market data plans. We have long held the view that updates were needed to streamline and make more efficient the distribution of equity market data, which is the lifeblood of the U.S. equity markets,” says Kenneth E. Bentsen, CEO of SIFMA, in a prepared statement.
“Today’s action is designed to establish a new, single equity market data plan to replace the three that currently exist, thus fostering greater efficiency in the distribution of equity market data. We look forward to reviewing the order and offering the industry’s views,” Bentsen says.
Acadia & Northeastern University Launch Quant Derivatives Program
Acadia, a provider of risk, margin, and collateral management services for derivatives processing, is working with the Boston-based Northeastern University D’Amore-McKim School of Business to offer a professional certification program, dubbed Quantitative Derivatives Pricing and Risk Modeling, officials say.
“The certification program will dive beyond basic derivatives pricing and risk concepts into advanced industry applications through real-world examples, self-guided exercises, and live facilitated sessions with D’Amore-McKim School of Business faculty, Acadia leadership, and other industry experts,” according to Acadia.
The program will have an eight-hour-per-week schedule over six months and is “designed for recent graduates and professionals with basic quantitative finance, risk management, and financial modeling experience, with some knowledge of C++ and/or Python preferred though not strictly required,” according to Acadia.
“Upon completion of the program, participants will receive a Northeastern University digital credential that reflects the rigor of the course’s experience. The digital credential will provide individuals with a competitive advantage in the quantitative finance derivatives risk management job market,” Acadia officials say.
Program participants “will get hands-on experience, working closely with and contributing to the Open Source Risk Engine (ORE), an industry-leading software toolkit used by Acadia for its hosted risk services and also locally in production at several large banks, hedge funds, and asset managers, facilitated by ORE’s founding authors at Acadia,” according to the provider. “ORE was developed as a free and open-source platform for pricing and risk analytics of traded instruments, providing contemporary market and credit risk analytics that meet post-2008 heightened industry requirements.”
Featured lecturers will include Scott Sobolewski and Roland Lichters, Acadia’s co-heads of quantitative services, and Felipe Cortes, D’Amore-McKim School of Business associate teaching professor of finance, officials say.
“We firmly believe that having freely available, standardized tools to navigate such complexity should be accessible to all, which is why open-source technology is so crucial,” Lichters says.
Enrolment began Monday, Sept. 4, 2023, and the first cohort will begin Monday, November 6, officials say. “Further cohorts will begin on Monday, April 1, 2024, and Monday, October 7, 2024.”
Shanghai Exchange & Saudi Tadawul Group Sign MoU
The Shanghai Stock Exchange signed a memorandum of understanding (MoU) on Sept 3 with the Saudi Tadawul Group that will “promote mutual development and cooperation between the two exchanges,” officials say.
“The MoU was signed by Mr. Cai Jianchun, president of the Shanghai Stock Exchange, and Mr. Khalid Abdullah Al-Hussan, CEO of the Saudi Tadawul Group, during the Shanghai Stock Exchange high delegation’s visit to Saudi Arabia,” according to Shanghai Stock Exchange officials.
Cai Jianchun and Khalid Abdullah Al-Hussan
The MoU allows the exchanges to “explore opportunities in cross-listing, fintech, ESG, data exchange, and research, as well as promote diversity and inclusion in both markets. The partnership will also facilitate knowledge sharing in listing businesses, dual-listings of ETFs, and Investor Relations initiatives while developing the infrastructure of both capital markets,” officials say.
“We look forward to working closely with the Saudi Tadawul Group to advance ETF and other product cooperation and further strengthen the cooperation between China and Saudi Capital Market,” says Cai Jianchun, president of the Shanghai Stock Exchange, in a prepared statement.
“This partnership will help facilitate greater connectivity between Saudi Arabia and China and encourage companies in both countries to consider cross-listing,” says Al-Hussan in a statement.
The SSE has signed MOUs with “57 overseas institutions and has successfully engaged in exchanges and cooperations in various forms within the framework of these agreements, exploring practical ways to serve the capital markets of both sides,” officials say.
Northern Trust Taps State Street for New Post in Hong Kong
Aisling Keane
Custodian Northern Trust has tapped State Street for a new post and appointed Aisling Keane to the new post of head of Asset Servicing, Hong Kong, effective Sept. 4, officials say.
“Keane will lead Northern Trust’s asset servicing business in Hong Kong, Macau, and Taiwan. Keane will be responsible for overseeing the overall strategic direction for the asset servicing business and providing solutions to clients,” officials say.
Keane has 20 years of industry experience and served as head of alternative investment solutions, Asia Pacific (APAC) at State Street, officials say.
Before her time at State Street, Keane was head of hedge fund services, APAC at BNP Paribas Securities Services, and director at Credit Suisse, officials say.
At Northern Trust, Keane reports to Angelo Calvitto, head of Asia Pacific, officials add.
Northern Trust has a network of offices across Asia Pacific in Beijing, Bengaluru, Hong Kong, Kuala Lumpur, Manila, Melbourne, Pune, Singapore, Sydney and Tokyo. Northern Trust offers customized asset servicing, asset management, and capital markets solutions to Asian-Pacific central banks, sovereign wealth funds, government agencies, corporations, and asset managers, officials say.
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