In other FinTech briefs, SIX Group announces a reorganization, and CME Group rallies support for clearing foreign exchange NDFs.
FinTech & Service Providers Among R3’s Stable of Vendors
The blockchain/distributed ledger technology (DLT) revolution is hitting milestones and software vendor R3 has just announced that more than 60 technology companies from multiple industries and regions have joined the Corda partner network, which supports the Corda platform.
Corda is an open source, “blockchain-inspired” DLT platform that enables institutions “to transact directly using smart contracts,” R3 officials say. The platform is the result of two years of research and development via R3 and its 100-plus members.
The network of partners consists of technology providers, systems integrators working on proof-of-concepts, pilots and production solutions for clients on Corda, and consulting firms focused on the business potential of DLT and Corda, and software vendors building end-user applications for Corda.
Among the members of the Corda partner network are: Accenture, Bain & Company, BCS Consulting, Calypso, Cognizant, EY, Finastra, Infosys, Intel, KPMG, Microsoft, Swapshub, Synechron, TCS, TradeIX and Wipro.
“In addition to its Corda partners, R3 also counts over 100 banks, insurance companies, financial institutions, regulators, trade associations and technology companies as members,” according to R3 officials.
SIX Group Lays Out New Course for Its Businesses
The SIX Group board of directors announced that it is making strategic and organizational overhauls that will take effect next year “to strengthen the competitiveness of SIX and the Swiss financial centre in a changing business,” officials say.
The changes are in response to the changes that have been underway over the past decade, and “the environment SIX operates in has changed fundamentally (in terms of technology, new competitors, regulation and pressure on margins),” officials say.
In addition to revamped businesses, SIX launching a CHF50 million ($50.1 million) venture fund and has established “dedicated units to develop services to cover specific shareholder requirements,” officials say. The venture fund will “promote innovation within Switzerland’s financial centre. This new innovation unit will also develop services to cover specific shareholders’ requirements, which can then be hived off in collaboration with the relevant shareholders,” officials add.
“As part of a strategy and organization review, the Board of Directors has, since the beginning of the year, been analyzing the changing requirements that banks and the market are placing on SIX,” officials say.
Among the changes to come, SIX will:
- Change its branding to SIX;
- Bundle all activities in the securities business via a merger of “exchange trading and post-trading areas into one organizational unit, with all securities trading services now provided from a single source;”
- Reorganize its payments business by creating a competence center for operations, development and greater innovation in Swiss payments. “This will include the infrastructure for interbank payments, for connections to the SEPA region and for card-based and mobile payments. For e-bills and direct debits, the collaboration with PostFinance to standardize and bundle infrastructure will be continued;”
- Consolidate its market position in the data business, “in particular in international reference data. SIX intends to utilize the resulting synergies to provide even better solutions to respond to the demand from banks for high quality at attractive conditions;”
The overhauls are slated to be “fully implemented in the second quarter of 2018,” officials say. “Until then, SIX will continue to operate with its current organization and business models.”
SIX Group also picked a new Group CEO (please see “SIX Board Picks New Group CEO.”)
Seven Top Players Agree to Clear FX NDFs via CME Group
Seven major market participants have agreed to clear over-the-counter (OTC) foreign exchange (FX) non-deliverable forwards (NDFs) by the end of the first quarter of 2018, according to the CME Group, which encompasses derivatives and options trading marketplaces and related services such as clearing.
The seven top players are: BBVA, Citi, Itau Unibanco, NatWest Markets, Santander, Standard Chartered and XTX Markets, according to CME Group officials.
“As more clients and liquidity providers are affected by uncleared margin rules, additional market participants clearing NDFs will provide greater access to the capital efficiencies of OTC FX Clearing for clients around the world,” according to CME Group officials. “Emerging market currencies provide a unique opportunity to cross-margin NDFs with Non-Deliverable IRS cleared at CME, offering potential initial margin savings of up to 51 percent.”
The CME NDF clearing solution “leverages the same guaranty fund as the entire CME Group-listed futures and options complex, enabling material capital savings for our NDF clearing members and lower fees for customers clearing via an FCM [futures commission merchant] as well as setting the conditions for the portfolio margining of FX futures versus NDFs,” according to a statement from Sean Tully, senior managing director of financials and OTC products at the CME Group.
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