In other FinTech news items, IHS Markit debuts SOFR support, Cobalt works with BT Radianz and Cloud9 Technologies raises $14 million.
Whistleblower Program Experiences High-Volume Response
The CFTC has handed out more than $45 million in multiple whistleblower awards, reflecting the higher volumes and greater complexity of incoming whistleblower submissions, officials say.
In fact, the regulator last month acknowledged “an award of approximately $30 million to one whistleblower and the first award was made by the program to a whistleblower living in a foreign country,” officials say.
The whistleblower program is mandated by Section 748 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. “Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected. The CFTC can pay awards not only on CFTC enforcement actions, but also related actions brought by foreign futures authorities if certain conditions are met,” officials say. The Commodity Exchange Act (CEA) “provides confidentiality protections for all whistleblowers. Regardless of whether the CFTC grants an award, the CFTC will not disclose any information which could reasonably be expected to reveal a whistleblower’s identity, except in limited circumstances such as when disclosure is required in connection with a public proceeding.”
The regulator will not disclose the “name of the enforcement action in which the whistleblower provided information, the award percentage granted to the whistleblower, and the exact dollar amount of the award granted,” officials add.
The whistleblower awards are paid via the CFTC Customer Protection Fund. “No money is taken or withheld from harmed investors to fund the program,” officials say.
More about the CFTC’s Whistleblower Program can be found here.
IHS Markit Offers SOFR Support for Derivatives Markets
IHS Markit, an information, analytics and solutions vendor, reports that the “first wave” of trades for over-the-counter (OTC) derivatives employing the new secured overnight financing rate, or SOFR benchmark, using MarkitServ to match, confirm and straight through process the trades for clearing and regulatory reporting, has occurred.
SOFR is “a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities,” according to the New York Federal Reserve, which publishes the benchmark. “The SOFR includes all trades in the Broad General Collateral Rate plus bilateral Treasury repurchase agreement (repo) transactions cleared through the Delivery-versus-Payment (DVP) service offered by the Fixed Income Clearing Corporation (FICC), which is filtered to remove a portion of transactions considered ‘specials.’ ”
Many in the industry say they want firms to move away from the Intercontinental Exchange London Interbank Offered Rate (ICE Libor) to SOFR because of the manipulation scandals that have plagued the previous iteration of Libor.
For now, ICE Libor “serves as the first step to calculating interest rates on various loans throughout the world. LIBOR is administered by the ICE Benchmark Administration (IBA) and is based on five currencies: the U.S. dollar (USD), euro (EUR), pound sterling (GBP), Japanese yen (JPY), and Swiss franc (CHF),” according to Investopedia.
To date, IHS Markit says, “seven major derivatives dealers have completed SOFR trades using MarkitSERV.” These included both cleared and non-cleared, as well as party-to-party direct and swap-execution-facility trades, per IHS Markit.
In addition to SOFR, MarkitSERV points out that it currently supports SARON (Swiss Francs), SONIA (British Pounds) and TONA (Japanese Yen).
More than 2,500 firms use MarkitSERV to process OTC derivatives trades, connect with 18 clearinghouses worldwide and report trades in multiple jurisdictions, the firm also notes.
Cobalt Collaborates with BT Radianz to Link Two Data Centers
BT Radianz, a cloud-based, New York City-headquartered network for the financial industry, is collaborating with London-based Cobalt, an FX post-trade processing network built on blockchain and low latency technology, to connect two data centers.
The partnership between the two companies, which was first announced in September 2017, intends to connect Equinix NY4 in New York and LD4 in London, the two data centers, replacing legacy post-trade systems, the firms say.
“While other firms in the blockchain space have been experimenting with the technology, we have designed, built and tested a solution to a very specific and pressing challenge in FX and are now making it live with BT Radianz,” Adrian Pattern, Cobalt’s co-founder and chairman, says in a statement.
Cloud9 Technologies Raises $14M in Series B Funding
Cloud9 Technologies reports the completion of a $14 million series-B investment fundraising, led by Barclays and including JPMorgan and NEX Group.
“Series B” is, of course, the “second round of financing for a business through any type of investment,” as Investopedia puts it, including investments by private equity and venture capital.
Cloud9 will use the series-B proceeds to “accelerate development and global roll-out of our [software-as-service]-based voice communications platform, which provides a comprehensive cloud-based replacement to traditional trading ‘turrets’; immediate access to a growing pool of liquidity; full interoperability with third-party systems; and real-time provision of high-fidelity audio, trading metadata and transcription.”
In addition to its investment, Barclays will “work with Cloud9 on the acceleration of the Company’s adoption across the industry. This follows JPMorgan’s earlier decision to onboard more than 2,000 internal traders and salespeople to Cloud9 as its primary tool for voice communication between the bank and its clients globally,” Cloud9 says.
“Despite being a cornerstone of global financial markets, voice trading and its data have been siloed off from the intelligence that fuel capital markets strategies,” Gerald Starr, CEO of Cloud9, says in a statement. “With the financial and strategic commitment of industry leaders such as Barclays, JPMorgan and NEX Group, we’re equipped to rapidly grow our role as the new standard for voice trading communications world-wide – ushering in an era in which voice is viewed as a key business asset.”
Need a Reprint?