In other news, Derivative Path hires from Wells Fargo, TS Imagine expands in Montreal & the CFTC wants more feedback on climate-related risk.
BNY & Goldman Sachs Pioneer DLT-Based Securities Financing
BNY Mellon and Goldman Sachs have “completed the industry’s first agency securities lending transactions” via the distributed ledger technology (DLT) platform of HQLAᵡ , a financial technology vendor focused on securities finance and repo transactions.
“As part of the combined series of 35-day term transactions with a total size in the hundreds of millions of US dollars, HQLAᵡ created ISIN-level securities trackers called Digital Collateral Records (DCRs) from loaned securities it received from BNY Mellon, giving Goldman Sachs a digital copy of those trades,” according to the official announcement from HQLAᵡ. “The ISIN-level DCRs are the first of their kind, representing specific ISIN quantities held in custody.”
The DCRs are intended to “enable holders and agents to transfer ownership of any security on the HQLAᵡ distributed ledger, without the need for conventional settlement mechanisms,” according to HQLA ᵡ. “It also paves the way for eligible clients to reuse ISIN-level DCRs in onward collateral obligations at one or more triparty agents.”
Agency securities lending is “the single biggest source of liquidity for the collateral upgrade market, so welcoming BNY Mellon as a liquidity provider to our platform represents a tipping point for recurring, scalable volumes on our platform,” says Guido Stroemer, co-founder and CEO of HQLAᵡ, in a prepared statement.
“The potential to enhance collateral and inventory mobility is very exciting and something that has been a key industry focus for a number of years,” said Bill Kelly, head of securities finance at BNY Mellon, in a prepared statement.
“This represents another key step in our adoption of DLT to facilitate traditional financial activity in order to unlock efficiency gains across market participants. We are looking forward to growing volumes with our counterparts over the coming months,” says Amar Amlani, head of EMEA Digital Assets at Goldman Sachs, in a statement.
Wells Fargo Vet Joins Derivative Path
Matthew Petrik
Derivative Path, a provider of capital markets technology and derivatives services to regional and community banks, reports that Matthew Petrik, an industry veteran, has joined as the company’s FX head of product.
In this post, Petrik will “oversee the vision and roadmap for Derivative Path’s rapidly growing Foreign Exchange product,” according to the vendor’s statement.
Petrik joins Derivative Path after more than 23 years at Wells Fargo Bank, where most recently he was head of product for FX payment solutions, the Walnut Creek, CA-based firm’s statement notes.
In early July, Derivative Path reported that it had entered into a strategic collaboration with Goldman Sachs Transition Banking to “launch a cloud-based, digital solution that provides financial institutions with greater efficiency for spot FX and international payments transactions,” according to the statement.
The vendor points out that it has “developed a technology-led solution to assist financial institutions, buy-side, and commercial end-users in executing and managing their international payments, foreign exchange, over-the-counter commodity and interest rate derivative transactions.” — L.Ch
TS Imagine Expands Montréal Operations
TS Imagine, which characterizes itself as a specialist in “trading, portfolio, and risk management solutions for capital markets,” reports that it is “expanding its presence in Canada with new facilities in Montréal to boost its North American operations and drive its international growth.”
TS Imagine notes that it opened its Montréal development hub in 2019 and is expanding to a new facility in July to help the firm serve clients worldwide.
The TS Imagine’s Montréal staff includes “more than 50 people who develop software and analyze data across the firm’s trading, risk, and portfolio management software platform, which connects to a network of brokers, banks, and exchanges across North America.”
TS Imagine adds that, since it arrived in Quebec, the company has “benefited from the support and guidance of economic development agencies including Investissement Québec International and Montréal International. The company is actively recruiting as it continues to grow its Montreal team.”
TS Imagine also spotlights its more than 400 employees in 10 offices worldwide, “serving approximately 500 buy-side and sell-side institutions in North and South America, EMEA, and Asia-Pacific, including hedge funds, traditional asset managers, pension funds, mutual funds, and financial institutions.” — L.Ch
CFTC Wants More Feedback on Climate-Related Risk RFI
(Photo: Chris Leboutillier via Unsplash)
The Commodity Futures Trading Commission (CFTC) is extending to October 7, 2022 the deadline for the public comment period regarding a Request for Information (RFI) on climate-related financial risk.
The RFI was published in the Federal Register on June 8, with a 60-day comment period originally scheduled to close on August 8.
Now, the CFTC is extending the deadline by an additional 60 days so that all comments are due by October 7.
“It’s critical that the Commission proactively understand how climate-related financial risk may affect the commodities and derivatives markets as well as our registered entities, registrants, and other market participants as they increasingly rely on the derivatives markets to manage their climate-change induced physical and transition risk,” CFTC Chairman Rostin Behnam says in a statement. “I look forward to feedback from all corners of the derivatives markets, especially the farmers, ranchers, producers, and other end-users who will be on the front lines of the effects of climate change.”
On June 2, the CFTC announced it was seeking public feedback on all aspects of climate-related financial risk, including as it may pertain to the derivatives markets, underlying commodities markets, registered entities, registrants, and other related market participants.
The RFI also seeks responses on questions specific to data, scenario analysis and stress testing, risk management, disclosure, product innovation, voluntary carbon markets, digital assets, greenwashing, financially vulnerable communities, and public-private partnerships and engagement.
Comments may be submitted electronically through the CFTC’s Comments Online process. All comments received will be posted on the CFTC website. To submit a comment, go to: https://bit.ly/3omXzcm — L.Ch
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