Our FinTech update includes news from CalSTRS, Digital Asset, Refinitiv, Napier, Barclays and Eurex.
BBH to Be Registrar for Active ETF
Brown Brothers Harriman & Co. (BBH) has been appointed as the custodian and administrator for the first actively managed exchange traded fund (ETF) domiciled in Hong Kong, officials report.
“The ICBC CICC USD Money Market ETF is being launched by China International Capital Corporation (CICC) with ICBC Asset Management (Global) Company Limited acting as Investment Advisor. Brown Brothers Harriman Trustee Services (Hong Kong) Limited serves as trustee and registrar,” according to a statement from BBH officials. “This ETF is the third money market ETF listed on HKEX.”
The new active ETF offers a same-day settlement cycle “for all primary market creations and redemptions,” according to BBH, which will be applying it service model and proprietary technology to facilitate a T+0 model.
“We are excited to launch this first of its kind, actively managed ETF, in Hong Kong,” says Ning Lin, managing director of China International Capital Corporation Hong Kong Asset Management Ltd., in a prepared statement.
Hong Kong is one of two market in Asia where ETF issuers can launch actively managed ETFs.
CalSTRS Appoints Director for New Business Unit
Major pension fund the California State Teachers’ Retirement System (CalSTRS) has appointed Geraldine Jimenez as director of the new Investment Strategy and Risk unit, officials say.
The unit, “situated in the CalSTRS Investment Branch, was established in May 2019,” officials report. “The unit is responsible for implementing and monitoring CalSTRS’ overall investment portfolio strategy and risk profile.”
The Investment Strategy and Risk unit has three components: total fund portfolio management, risk management and innovative strategies, officials say. Though risk management and innovative strategies are not new to the CalSTRS Investment Portfolio, their combination with Total Fund Portfolio Management allows for a single dedicated team to look at overall risks, opportunities and collaborative partnerships,” officials say.
Before her new director position, Jimenez served as the portfolio manager leading the CalSTRS Investment Engagement Unit where she responded to stakeholder priorities and worked with the Teachers’ Retirement Board, senior investment team and executive staff to research investment information on external issues such as legislation or environmental, social and governance (ESG) issues, officials add.
Jimenez will report to Scott Chan, deputy chief investment officer for CalSTRS.
“As we bring more intelligence gathering and data analysis function in-house, her understanding of CalSTRS investment needs and priorities means the unit’s work has a substantial head start,” Chan says in a prepared statement. “As we continue to implement the Collaborative Model, this unit will leverage it for the total portfolio.”
Digital Asset Reports More Collaborations for DAML
Digital Asset, a provider of distributed ledger technology (DLT), reports that its partners, HACERA and Blockchain Technology Partners, have integrated the Digital Asset Modeling Language (DAML) with the Hyperledger Fabric and R3’s Corda blockchain platforms, as well as the Aurora cloud storage engine at Amazon Web Services (AWS).
DAML is an “open source platform-agnostic smart contract language designed for use in multi-party business processes,” Digital Asset says in a statement. “DAML codifies rights and obligations in a similar manner to traditional legal contracts and workflows, and is more easily interpretable by a non-technical audience than most programming languages,” officials add.
Amazon Aurora will be the first DAML integration with a traditional cloud-native database,” according to the statement.
Refinitiv & Napier Partner for AML
Refinitiv and Napier, an anti-money laundering (AML) and compliance software provider, have partnered to offer a transaction monitoring process designed to “help corporates and financial institutions tackle money laundering and combat emerging threats in financial crime,” according to a statement from the vendors.
The partnership offers Napier’s analytics, automation and artificial intelligence, “backed by Refinitiv’s World-Check Risk Intelligence data, to meet an evolving range of AML compliance requirements,” the firms say in a statement.
“One of the most important challenges financial services firms face today is protecting themselves from money laundering, external and internal fraud and other financial crime-related activities,” says Phil Cotter, managing director of the Refinitiv risk business. “Together, Refinitiv and Napier will bring significant advancements in technology combined with trusted risk intelligence to help organizations monitor transactions and screen for suspicious financial activity.”
Refinitiv provides financial markets data and infrastructure to more than 40,000 institutions in over 190 countries, the company notes in a statement. It provides “data and insights, trading platforms, and open data and technology platforms that connect a thriving global financial markets community — driving performance in trading, investment, wealth management, regulatory compliance, market data management, enterprise risk and fighting financial crime,” the company says.
Eurex Expands Distribution Net via Barclays
Barclays has joined EurexOTC Clear to expand its U.S. distribution network. In so doing, Barclays becomes the “first European bank to offer Eurex’s OTC [over-the-counter] clearing services through its U.S. registered futures commission merchant (FCM) to U.S. clients,” according to a Eurex statement, noting that the “first transaction has been already successfully cleared.”
In the first quarter of the year, “Citi was the first U.S.-based FCM which began offering its clients swap clearing through Eurex Clearing,” according to the statement. “Also, in early 2019, two U.S.-based Swap Execution Facilities (SEF), Bloomberg and Tradeweb, established direct connectivity with Eurex OTC clearing granting U.S. clients the ability to directly submit their executed swap transactions to Eurex Clearing.”
In December 2018, Eurex Clearing was approved by the Commodity Futures Trading Commission (CFTC) to also offer customer swap clearing in the U.S., per the statement, which notes that Eurex Clearing, had “launched a legal framework that complies with the LSOC (Legally Segregated Operationally Commingled) requirements stipulated by the CFTC for the clearing of customer swap transactions.”
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