This Week: EU CT updates, OpenFin, DTCC/Nomura, TMX/Clearstream, and more

Bloomberg, MarketAxess and Tradeweb establish independent company for EU CT efforts; Finbourne’s Ryan to lead

Bloomberg, MarketAxess, and Tradeweb announced this week that they have signed a joint venture agreement to establish an independent company for the purpose of participating in the public procurement procedure to become the fixed-income consolidated tape provider (CTP) in the EU.

Neil Ryan has been selected to lead the CTP initiative. He has served over 30 years in various senior positions across the public and private sectors, and has experience in the fixed-income space. He will focus on producing a comprehensive prototype that utilizes the expertise of the three companies in fixed-income markets and trade reporting, to be able to deliver a CT that provides enhanced transparency and access to robust, reliable data.

Financial data management provider Finbourne Technology had been previously selected as the technology infrastructure provider to build and operate the CT. Finbourne will now work closely with the joint initiative to demonstrate the capabilities and features of their proposed CT platform.

OpenFin secures $35 million in funding

Application interoperability operating system provider OpenFin has secured $35 million in Series D investment. The latest funding round was led by Bank of America with significant participation from Pivot Investment Partners and ING Ventures. Additional investors in the round include CME Ventures, CTC Venture Capital, SC Ventures and Tribeca Early Stage Partners.

The investment will be used to help accelerate the adoption of OpenFin OS across the financial industry and beyond. Other major OpenFin investors include Bain Capital Ventures, Barclays, DRW Venture Capital, HSBC, JP Morgan, NYCA Partners, and Wells Fargo Strategic Capital.

DTCC, Nomura Research Institute collaborate to bring post-trade automation to Japan

The Depository Trust & Clearing Corp. (DTCC) will collaborate with Nomura Research Institute (NRI) to provide automated central matching capabilities for cash securities transactions in Japan.

NRI provides various financial services to Japan’s financial services firms. Through this partnership, regional firms in Japan will be able to leverage DTCC’s Central Trade Matching (CTM) platform for the central matching of cash securities transactions directly from NRI’s SmartBridge Advance offering to streamline and enhance the post-trade process, enabling users to achieve a shorter time to settlement and increased efficiency. In addition, the offering will include standing settlement instruction (SSI) enrichment from DTCC’s Alert, a database currently holding over 14 million SSIs, with an aim to increase accuracy and reduce risk.

Leveraging increased straight through processing and automation in the post-trade process aligns with steps being taken across the industry as firms prepare for the T+1 settlement cycle in the US on May 28, 2024.

TMX Group, Clearstream to launch Canadian collateral management service

TMX Group and Clearstream, the international central securities depository of Deutsche Börse Group, have announced plans to launch a new, automated Canadian Collateral Management Service (CCMS). They will work together to leverage their complementary services to develop and deliver the CCMS, which will include the introduction of Canada’s first domestic tri-party repo capability.

Targeted for launch in the third quarter of 2023, the new CCMS will facilitate optimization and collateralization of securities finance activities throughout the Canadian market. The initial phase of the CCMS will be offered to market participants in Canada’s secured funding market, providing an automated and efficient process throughout the transaction cycle. The CCMS will also support the industry shift to a T+1 settlement cycle for the Canadian and US markets in 2024, to promote increased efficiencies and collateral mobility, while reducing operational risk.

DRW executes intraday repo transactions on Broadridge DLR platform

Broadridge Financial Solutions has announced that DRW, Societe Generale and another global tier-one bank have successfully executed intraday repo transactions on Broadridge’s Distributed Ledger Repo (DLR) platform. These latest transactions build on the momentum of DLR’s first intraday repo transaction in April 2023 and further expands the network across the global repo community.

The DLR platform, which leverages Digital Asset’s Modeling Language (DAML), provides a utility where market participants can agree, execute, and settle repo transactions, providing flexible settlement cycles based on counterparties’ needs.

ISS ESG, Qontigo Launch ISS Stoxx biodiversity index suite

ISS ESG, the sustainable investment arm of Institutional Shareholder Services (ISS), and Qontigo, a global provider of innovative index, analytics and risk solutions, announced the release of the ISS Stoxx biodiversity index suite.

The new co-branded index suite helps interested clients align portfolios with their biodiversity impact reduction goals. All indices in the suite exclude companies involved in activities assessed to be causing significant harm to biodiversity or reducing the biodiversity footprint. They also enhance alignment with biodiversity-oriented UN Sustainable Development Goals (SDGs), such as life below water and life on land. At the same time, the index methodology targets an aggregate reduction in carbon intensity of at least 30 percent across the included constituents.

In addition to the baseline family, the suite also includes a biodiversity leaders family, which consists solely of companies deriving at least 20 percent of their revenues from activities that are deemed to make a positive net contribution to the SDGs. These activities include preservation of marine ecosystems and sustainable agriculture and forestry.

Each new index family uses a granular index construction methodology, built on ISS ESG’s extensive datasets and a three-part framework to select index constituents based upon an “avoid, minimize and enable” approach: avoid companies involved in activities causing harm to biodiversity, minimize exposure to companies with negative impacts on biodiversity, and capture companies enabling positive impact on biodiversity through scoring high on biodiversity solutions. This framework goes beyond simple exclusion criteria, positively screening for companies with low negative impact on biodiversity and those companies actively enabling the planet’s biodiversity—in line with the goals of the 15th Session of the Conference of the Parties (COP 15) to the UN Framework Convention on Climate Change.