In other FinTech news, the deVere Group challenges Trump, Wisconsin’s public pension fund jolts its middle office, the LCH wants a centralized service for non-cleared derivatives, and the DTCC’s GTR covers all of Canada.
U.K. Firm Wants Cost-Effective, Scalable Back Office
Liberum, a pan-European investment bank, signed a multi-year deal with Torstone Technology in July to deploy the vendor’s Inferno back-office system and went live earlier this month with the new system, achieving a four-month implementation, according to Liberum and vendor officials.
An employee-owned firm, Liberum offers pan-European equity sales, research, corporate broking, advisory and trading services, officials say.
The Inferno back-office system is processing Liberum’s post-trade flow, starting from trade capture to the settlement, accounting and reconciliation processes, according to the vendor.
The firm chose Inferno because it offers “a cost effective, scalable platform that allows us to operate more efficiently and respond more dynamically to client and market requirements,” says John Truscott, operations director at Liberum, in a prepared statement. The implementation will also allow the firm to update processes to comply with regulatory requirements, according to Liberum.
“Liberum’s choice to use Inferno follows a growing trend among the U.K. broker community to outsource the technology while insourcing operations,” says Torstone’s CEO Brian Collings, in a statement. “We look forward to supporting Liberum’s growth by removing operational complexity and associated risk and providing a more streamlined back-office system.”
The London-based Torstone Technology has offices in New York, Hong Kong and Singapore.
deVere Group: Trump Should Repeal FATCA
Nigel Green, founder and CEO of deVere Group, an outspoken critic of the Foreign Account Tax Compliance Act (FATCA), is calling upon President-elect Donald J. Trump to “show some backbone” and repeal FATCA because Green argues the law “negatively impacts foreign financial institutions (FFIs) and is forcing a record number of Americans to ditch their U.S. passports.”
FATCA was passed as part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010, and requires foreign financial institutions (FFIs) and other non-financial foreign entities to report upon “the foreign assets held by their U.S. account holders or be subject to withholding on withhold-able payments,” according the U.S. Treasury and Internal Revenue Service (IRS). “The HIRE Act also contained legislation requiring U.S. persons to report, depending on the value, their foreign financial accounts and foreign assets.”
Green has consistently argued that FATCA will adversely affect FFIs and millions of Americans around the world.
“Donald Trump has publicly stated that he will revoke some of Obama’s executive orders,” Green says. “I would urge him to make repealing FATCA one of those he revokes. This must be a major priority as FATCA negatively impacts millions of U.S. citizens. It has been responsible for the record number of Americans, most of whom are proud patriots, feeling that there is no other option than to relinquish their U.S. citizenship.”
“Since FATCA was introduced, official figures show that more and more Americans give up their U.S. passports every year. This correlates with a deVere Group survey carried out last year that reveals 73 percent of Americans living overseas are tempted to give up their U.S. passports,” Green adds.
Green says that Trump’s election is “a golden opportunity” for him to “reverse a fatally flawed, misguided, imperialistic law that’s nothing more than a masterclass in the law of unintended consequences. Once in the White House, he must do the right thing and show some backbone on FATCA.”
However, during the 2016 presidential primary and general election campaigns, FATCA never became an issue although several groups were pushing for the controversial tax law to get the spotlight.
State of Wisconsin Investment Board Expands Eagle Arrangement
BNY Mellon and its Eagle Investment Systems affiliate are providing “a full suite of middle office services” that will support the State of Wisconsin Investment Board’s (SWIB) investment operation, a public pension fund with assets valued at $105 billion as of September 30, 2016, vendor officials say.
“SWIB’s investment and data management needs through BNY Mellon’s OnCore suite of middle office solutions, including a fully integrated data warehouse, portfolio accounting, trade support, corporate actions, collateral management, pricing, performance measurement and derivatives processing,” according BNY and Eagle officials.
BNY Mellon and Eagle have been providing SWIB with investment and integrated data management services since 1991. The offerings encompass custody, data management, cash management, and securities lending programs, among others, officials say.
The expanded relationship with BNY Mellon/Eagle will yield “a state of the art platform” to support SWIB’s new portfolio management system, says Michael Williamson, executive director of SWIB, in a statement.
“This new system supports SWIB’s innovative investment approach and our data management requirements,” Williamson says. “BNY Mellon’s middle office solution allows us to leverage the strategic investments we’ve made throughout our long-standing relationship.”
In addition, the conversion to BNY Mellon’s investment book of record (IBOR) “allows us to deliver a high level of data quality for our investment teams,” Williamson adds.
“Expanding our relationship with SWIB through OnCore is an important milestone for both firms. Our investments in technology and people will enable SWIB to transform their operating model and drive value for their organization,” says Chandresh Iyer, global head of middle office solutions at BNY Mellon, in a statement.
LCH Wants to Launch Centralized Service for Non-Cleared Derivatives
Clearinghouse LCH wants to launch a new, centralized service next year for non-cleared, over-the-counter (OTC) derivatives, dubbed LCH SwapAgent, that will provide trade processing, valuation, margining, risk calculation and optimization services, officials say.
The service will be subject to regulatory approvals and the expectation is that the new service will go live during the first half of 2017, officials say. The goal of the new service is to bring standardization and streamlining of bilateral OTC market infrastructure and end-to-end workflow and processing
“LCH SwapAgent will act as an independent calculation agent, facilitating the calculation and exchange of bilateral margin and settlement payments, but will not become the central counterparty to the trade,” LCH officials add. “LCH SwapAgent’s customers will be able to benefit from services including CSA standardization, end-to-end trade life cycle management, independent valuation and risk calculation, dispute elimination, payment netting and compression.”
LCH officials say the pending service has gotten initial support from 11 dealers, including: Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley and RBS. LCH is majority owned by London Stock Exchange Group
DTCC’s GTR Now Supports All Canadian Provinces and Territories
The DTCC’s Global Trade Repository (GTR) has added trade repository services for Newfoundland and Labrador, marking the utility’s support for all Canadian provinces and territories, officials say.
The utility’s GTR already provided support for Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Quebec, Saskatchewan, Nunavut, Northwest Territories, Prince Edward Island and Yukon.
“In an effort to achieve improved risk analysis, all Canadian provinces and territories have adopted harmonized derivatives reporting regulations, as applicable, rules 91-507 and MI 96-101,” DTCC officials say.
“These rules require reporting for over-the-counter (OTC) derivatives transactions, including rate, credit, equity, FX and commodity derivatives. GTR is anticipated to begin support for public price dissemination in January 2017, across all Canadian provinces and territories,” officials say.
“As the only global trade repository offering reporting services across all five asset classes, we continue to work with regulators, service providers and end users to facilitate reporting in Canada and other major jurisdictions,” says Marisol Collazo, CEO of GTR Americas for DTCC.
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