In other FinTech news, Refinitiv launches post-trade FX support, Willis Towers Watson taps SimCorp, Linear Investment embraces Genesis, and more dealers back the MTU.
CFTC Issues No-Action SEF Relief for Prime Brokers
Prime brokerages are getting new encouragement to trade swaps via swap execution facilities (SEFs), according to a recent action via the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO).
Officials at the division announced that they will provide no-action relief to facilitate prime brokerage activities on SEFs.
“Providing clarity regarding pre-trade disclosures for these trades will bring increased liquidity onto registered venues without regulatory uncertainty,” says Matthew Kulkin, DSIO director, in a prepared statement. Kulkin also issued a letter about the regulator’s action.
“This letter responds to a request from the private sector members of the Financial Markets Lawyers Group on behalf of its members that are SDs [swap dealers] … that DSIO provide a position of no-action if an SD acting as a prime broker fails to provide certain disclosures … prior to entering into a swap so long as the swap is a ‘mirror’ transaction to a swap executed on behalf of the SD anonymously on a swap execution facility (SEF) pursuant to a prime brokerage arrangement,” Kulkin says in the letter.
“Under the relief provided today, a swap dealer, acting as a prime broker, which is excused from making required disclosures with respect to an on-SEF anonymous transaction entered as part of a prime brokerage arrangement will also be excused from making the required disclosures when entering into the equal but opposite transaction off-SEF with a prime brokerage client,” according to the division.
More details about the action can be found here.
Refinitiv Launches Cloud-based FX Post-Trade Management
Refinitiv, created from the former Thomson-Reuters risk and trading group, is launching Deal Tracker as a Service (DTaaS), a managed, cloud archiving and compliance solution for FX post-trade flow sourced from the Refinitiv FXT foreign exchange trading capabilities, officials say.
The vendor is hoping to “eliminate local software deployment and data storage costs, and facilitate MiFID II compliance needs,” officials say. “DTaaS is an extension of Refinitiv Deal Tracker, a suite of tools for monitoring and processing FX trades on all major foreign exchange platforms globally, both front and back office.”
The DTaaS offering monitors trade activity in real-time, tracks net positions, and archives data for search and compliance needs, officials say. In addition, there are operational and visual features for a streamlined workflow, encompassing the early detection of trade processing breaks, and the review, validation, and highlighting of expectations.
“FX traders need cost saving and compliant solutions at all points in the trading process, especially in the post-trade workflow where data archiving is both necessary yet expensive,” says Neill Penney, co-head of trading at Refinitiv, in a prepared statement.
Willis Towers Watson Picks SimCorp Dimension
SimCorp, a provider of services and systems for the global financial services industry, reports that Willis Towers Watson, an advisory, broking and solutions firm, has chosen SimCorp Dimension to create the front-to-back system for its delegated investments business.
The agreement with Willis Towers Watson, SimCorp says, “demonstrates SimCorp’s ability to deliver scalable and integrated solutions to the global pensions industry, including the UK fiduciary market, which stands at £142 billion in assets under management.”
Willis Towers Watson’s investments business will “utilize a broad spectrum of SimCorp Dimension, from ‘Asset Manager’ in the front office, through to investment accounting, and … client reporting needs.” The firm will also employ SimCorp’s IBOR, or its integrated investment book of record.
Willis Towers Watson’s investments business has more than 950 associates worldwide, assets under advisory of more than $2.3 trillion and more than $120 billion of assets under management, according to a statement from SimCorp.
Software Vendor Genesis Works with Linear Investments
The capital markets software vendor Genesis reports that it is launching real-time portfolio margin, or RPM, its new scalable system for real-time cash-and-margin management, with Linear Investments, a prime broker and a hedge-fund incubator.
RPM, Genesis says, “delivers interoperable technology, with the flexibility to meet the varying requirements of Linear Investment’s clients.”
RPM was formulated for prime brokers “who need to be able to better assess the risk of clients and prospects whilst managing their holistic relationships with their own brokers,” according to a Genesis statement, which also notes that RPM “comes in response to Linear not being able to find an off-the-shelf solution to meet their needs for asset coverage, flexibility, real-time calculations and time to market at a cost point that made sense.”
“The reason we chose to work with genesis is their open-minded approach,” Paul Kelly, CEO of Linear Investments, says in a statement. “They listened to us, understood the real business challenge, learned from our experiences and applied that to the solution.”
Linear Investments Ltd is based in London and Hamburg.
DTCC-Euroclear Global Collateral Pilots MTU to More Dealers
DTCC-Euroclear Global Collateral Ltd., a joint venture of Euroclear and the Depository Trust & Clearing Corp., report that their margin transit utility (MTU) venture is moving beyond the pilot production phase, as six dealers “join over 30 firms, including investment managers, administrators and custodians, to streamline collateral settlement and reporting.”
The most-recent adopters of the MTU are Goldman Sachs, JPMorgan, Morgan Stanley, Société Générale, UBS and Wells Fargo, according to the joint venture.
In fact, the new members “join over 30 investment management, administrator and custodian firms, including Brandywine Global Investment Management, Fidelity International, Franklin Templeton, Vanguard and Brown Brothers Harriman,” all of whom have adopted the service, according to the DTCC-Euroclear Global Collateral statement.
GlobalCollateral also spotlights its establishment as a way to “help firms address an array of collateral- and liquidity-related needs that have become more acute in recent years as regulatory mandates have extended their reach. Specifically, mandatory clearing of standardized derivatives and new margin requirements for non-centrally-cleared derivatives are boosting the number of margin calls. This activity is stressing traditional manual processes and creating the need to simplify collateral settlement processing and optimize the use of collateral. Furthermore, collateral mobility across borders and within the U.S. domestic market is needed to match global demand for high-quality liquid assets.”
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