This Week: Esma, Crossover Markets, SteelEye and more

Esma’s DLT pilot regime goes live

Over 50 security tokens have been given digital token identifiers (DTIs) after the European Securities and Markets Authority (Esma) launched its digital ledger technology (DLT) pilot regime. The pilot allows some exemptions from the EU’s Markets in Financial Instruments Regulation (Mifir) and Central Securities Depositories Regulation (CSDR) regimes, making it easier for market participants to trial DLT when trading and settling financial instruments. The pilot also helps bring pre- and post-trade transparency and market abuse monitoring to DLT-based securities.

As part of the pilot, Esma recommends the International Organization for Standardization (ISO) standard 24165 DTI codes, issued by the DTI Foundation (DTIF) as a compensatory measure.

DTIF and the Association of National Numbering Agencies (Anna), which is the registration authority for ISO 6166 International Securities Identification Numbers (Isins), have set up a joint task force to explore synergies between DTIs and Isins. The task force has recommended close cooperation between the registration authorities and has been working on identifying security tokens with existing Isins so that these can be issued DTIs. So far, over 50 such tokens have been identified, verified and added to the DTI registry.

Crossover Markets launches execution-only digital asset trading venue CrossX

Digital asset trading technology firm Crossover Markets Group has launched a cryptocurrency electronic communication network (ECN), CrossX.

The crypto trading engine avoids conflicts of interest by decoupling trade execution from custody and brokerage, allowing institutions to choose their own credit counterparties. As an execution-only trading venue provider, Crossover does not hold client funds, directly handle assets or carry counterparty risk. It also supports anonymous, disclosed and semi-disclosed trading over one-to-one, one-to-many and many-to-many connections.

Investors in the firm’s seed round include Nomura’s Laser Digital, Two Sigma, Flow Traders, and Wintermute Ventures.

SteelEye uses ChatGPT in surveillance platform

SteelEye has integrated ChatGPT into its compliance platform as part of a case study to evaluate the AI tool’s applicability in market surveillance. The results show that ChatGPT can be beneficial for surveillance investigations when implemented correctly and used with care, the company said in a press release.

As part of the case study, the large language model (LLM) was implemented in SteelEye’s user acceptance testing (UAT) environment. The functionality enables the analysis of specific communications records—such as voice calls, chats, meetings, and emails—against a number of key questions, and then produces a summary of compliance issues identified and suggestions on what a compliance officer should do next.

This capability is particularly useful when analyzing communications in foreign languages, as the system returns insights in English regardless of the languages being used.

GoldenSource unveils new investment book of record

GoldenSource, which provides enterprise data management (EDM) and master data management (MDM) tools, has released a real-time investment book of record (Ibor). The new product, GoldenSource Ibor, can be used for warehousing of point-in-time analytics as well as client, account, and product data management. Users can also update prices and transactions intra-day.

By updating valuations as transactions and prices are published, regardless of the time of day, the new product also enables portfolio managers to see asset allocations and exposures across time zones without a lag.

Confluence, FundGuard join forces on fund reporting

Confluence’s fund administration platform Unity will integrate with investment accounting tool Fundguard to streamline fund reporting for asset managers. In a press release, the companies said that their complementary offerings would enable more consistent reporting on a greater range of funds.

62% of UK asset managers still using fax machines: report

Just 41% of UK asset managers believe their fund to be mostly or fully automated, with 62% still using fax machines, according to research by funds network Calastone. The Global Funds Automation Report also found that the top technology priorities among UK fund managers included the use of digital forms (49%) and business processes and workplace management (45%).

Shorter settlement cycles risk market inefficiencies, Torstone/Firebrand report finds

Over 90% of market participants in a study conducted by Torstone Technology and Firebrand Research see an increased risk of trade failures and market inefficiencies as a result of shorter settlement cycles.

The report, entitled “The British Perspective on T+1,” highlights the key concerns for the UK market as North America prepares to shift to T+1. It also finds a high level of uncertainty about the feasibility of the timeline between now and May 28, 2024, the implementation date announced by the US Securities and Exchange Commission (SEC). You can read more about the May 2024 T+1 deadline here.

Seilern Investment management taps Finbourne

Seilern Investment Management has selected Finbourne’s Lusid platform to store and analyze client and transactional information. Lusid assists with the aggregation, analysis and reporting of portfolio information.

SEI extends relationship with Evelyn Partners

Investment solutions technology company SEI has announced a new agreement that will extend its relationship with wealth manager Evelyn Partners for a further five years. SEI powers Evelyn Partners’ online investment platform, Bestinvest.

Volksbank Wien completes SaaS lift-and-shift project with Murex

Volksbank Wien, the central entity of an association of Austrian banks, has migrated trading and investment platform MX.3 from bank premises to a private cloud. Trading solutions provider Murex, which runs MX.3, has transferred the platform’s database and interface into the cloud hosting Murex software-as-a-service (SaaS). The migration is designed to reduce the total cost of ownership and achieve quicker time to market.

The project took nine months to reach UAT readiness, according to a press release on the Murex website.

DTCC launches new centralized communication solution to support Libor transition

The Depository Trust & Clearing Corp. (DTCC) has unveiled a Libor Benchmark Replacement Index solution to support the industry’s transition from Libor rates to Secured Overnight Financing Rate Data (Sofr) by June 30, 2023. Market participants will be able to access the solution through DTCC’s Legal Notice System (Lens), a repository of notices designed to report organizational actions that affect securities issues from issuers, agents and trustees, as well as via an automated datafeed that will support machine-to-machine capture of standardized reference data.

Users of the new tool will be able to view information for over 100,000 debt securities whose rate is currently based on USD Libor and leverage Lens to disseminate the new alternative indices.

For decades, markets have used Libor as the benchmark reference for determining interest rates for debt instruments, including structured securities, corporate debt, and municipal bonds. Sofr, which is published by the Federal Reserve Bank of New York, was recommended by the Alternative Reference Rates Committee (ARRC) as the Libor replacement benchmark.

Apex, Inveniam.io win NewVest mandate

Financial services provider Apex Group has been appointed to administrate NewVest’s inaugural Private Equity 50 Index Fund (PE 50). NewVest is a platform of index funds that aims to provide investors with passive exposure to private markets, in the same manner that ETFs provide passive exposure to public markets.

Apex Group will provide fund administration, transfer agency and fund-of-fund middle-office services. In parallel, the fund will also use Inveniam.io’s blockchain technology and data operating system to manage capital account data for NewVest’s portfolio fund commitments.

Surecomp, Contour strike up partnership on digital trade finance

Surecomp is partnering with trade finance network Contour to integrate Surecomp’s trade finance platform Rivo with Contour’s decentralized network of banks. Contour’s member banks will be able to access digital letter of credit workflows on Surecomp’s back-office applications.

Parameta, Numerix partner on automated OTC derivatives valuations

OTC data provider Parameta Solutions has partnered with over-the-counter (OTC) analytics and derivatives pricing company Numerix to provide automated valuations of OTC derivatives. The companies say that joining forces on the solution will enable them to create a cost-efficient offering.