This Week: FCA, Plato/Turquoise, Franklin Templeton, and more

FCA makes final rules on payment optionality for research, updating Mifid II rules

The UK’s Financial Conduct Authority (FCA) has set out a package of measures designed to help strengthen the country’s capital markets and position as a global financial center.

Key to the package are proposed rules to establish the new Public Offers and Admissions to Trading Regime, which will replace the existing UK Prospectus Regulation.

Under the proposals, companies will still be required to publish a prospectus when first admitting securities to public markets. However, a prospectus would not be required when a company raises further capital except in limited circumstances.

Also included in this package are new rules that give asset managers greater freedom in how they pay for investment research, by allowing the bundling of payments for research and trade execution. These new rules aim to improve competition in the market for the benefit of investors. The new payment option is also compatible with rules in other jurisdictions, making it easier for asset managers to buy research across borders.

“All eyes now on the largest asset managers to see if an early adopter group emerges in the short term,” says Mike Carrodus, CEO of Substantive Research, a research company providing transparency in market data pricing structures. “But what’s clear is these changes make an end investor funded research market in Europe in the next few years much more likely. Whether that stimulates more research on UK small and medium-sized enterprises (SMEs), however, is another matter entirely.”

The final part of the package is a consultation outlining proposals for the derivatives trading obligations to help improve the regulation of secondary markets, reduce systemic risk and disruption to firms.

Franklin Templeton selects BlackRock’s Aladdin to unify investment management technology

Global investment manager Franklin Templeton has selected BlackRock’s flagship investment platform, Aladdin, to unify its investment management technology platform across public market asset classes.

Aladdin will aid in the simplification of Franklin Templeton’s operation and reduction of long-term capital expenses, as well as enable the firm to meet the diverse needs of its specialist investment managers and further support its growth initiatives.

Aladdin will provide the firm with an investment book of record to enable scale and provide business transformation while preserving the autonomous investment processes of Franklin Templeton’s specialist investment managers. Beginning in fiscal year 2025, the transition will be phased over multiple years.

Plato Partnership and Turquoise to end commercial partnership in 2025

Plato Partnership, a non-profit member association driving innovation in the equities marketplace, and Turquoise, a pan-European trading platform owned by the London Stock Exchange Group, have announced that their commercial partnership will conclude in 2025. This decision marks the end of eight years of collaboration that they say has played a central role in advancing block trading and enhancing market efficiency across Europe.

While their commercial partnership has ended, Plato Partnership and Turquoise will continue their cooperation in the interests of the marketplace. Both organizations say they are dedicated to fostering a more efficient, transparent, and inclusive trading environment, ensuring ongoing benefits for all market participants.

KKR to acquire Janney Montgomery Scott from Penn Mutual

Global investment firm KKR and the Penn Mutual Life Insurance Co. have signed a definitive agreement, under which investment funds managed by KKR will acquire Janney Montgomery Scott LLC.

Founded in 1832, Janney is a wealth management, investment banking and asset management firm. It over $150 billion in assets under administration, with more than 900 financial advisers providing financial planning, asset allocation, retirement planning and other financial advice and services to clients across 135 offices in the US.

Following the close of the transaction, Janney will become a standalone private company that will continue to operate independently.

KKR will support Janney in creating a broad-based equity ownership program to provide the company’s 2,300 employees with the opportunity to participate in the benefits of ownership after the transaction closes. Officials say this strategy is based on the belief that team member engagement through ownership is a key driver in building stronger companies.

The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in Q4 2024.

FB Fund Services selects NeoXam to bolster investment accounting processes

NeoXam, a provider of data management, reporting, portfolio management, and valuation software, announced that fund administrator FB Fund Services, a subsidiary of French private equity group 123 Investment Managers, will integrate NeoXam’s GP4 solution this year to bolster the company’s investment valuation, accounting, reporting, and auditing processes.

NeoXam’s multi-markets GP4 solution—which supports private equity structures with investment accounting for private assets and liabilities, management of commitments, and calls and distributions with investors—will provide FB Fund Services with centralized book-keeping monitored in real time, workflow automation, and integration with key data sources.

Designed to support financial institutions’ back-office functions, NeoXam GP4 is a fund accounting software hosted, maintained, and operated by NeoXam on behalf of FB Fund Services. Since NeoXam acts as a single point of contact that provides the infrastructure, updates, and security to the back office, FB Fund Services will reduce the long-term total cost of ownership and risk of its data operations and maintenance.

Franklin Templeton, SBI Holdings to establish Japanese joint venture

Franklin Templeton has signed a memorandum of understanding with SBI Holdings, a Japanese online financial conglomerate providing a range of financial services including securities, asset management, banking, and insurance, to establish a joint venture in Japan.

The proposed venture will harness capabilities from both firms by combining Franklin Templeton’s investment products including exchange-traded funds, and its experience in digital assets, with SBI’s strengths in distribution, integrated financial services capabilities, and reach in the Japanese market.

Through this partnership, Franklin Templeton and SBI will aim to provide investors in Japan with greater access to a diversified range of investment solutions, and it will seek to enable new synergies by leveraging Franklin Templeton’s experience with tokenized money market funds and digital assets-backed ETFs in the US.

Baton Systems adds JSCC to growing CCP network

Baton Systems, a provider of back-office technology solutions, has completed bi-directional integration with the Japanese Securities Clearing Corp. (JSCC) through its Baton Core-Collateral network.

With JSCC joining the network, JSCC’s clearing member clients using the Core-Collateral platform will be able to directly access the largest central counterparty clearinghouse (CCP) in Asia-Pacific. This addition complements the already-integrated Singapore Exchange, expanding the network of Asia-Pacific CCPs accessible through Baton.

This direct connectivity ensures clearing members receive normalized data from Baton directly from the CCP, bypassing the need to receive files through their clearing members. This enables the clearing member to receive real-time balances with the ability to check eligibility and then to instruct and move cash and non-cash collateral to JSCC.

Baton’s Core-Collateral clients can now automate the movement of cash and securities across 13 CCPs, including the largest nine, covering 95% of global initial margin according to public quantitative disclosures data. They can do this through a single platform that also consolidates and normalizes real-time updates regarding required margin, sources of collateral, and eligibility profiles. Additionally, Baton is integrating collateral eligibility data for JSCC into its Baton eligibility API, which enables automated determination of which assets can be used as collateral.

Quartr partners with Stocktwits, announces API deal

Quartr, a financial research and market intelligence platform for hedge funds, asset managers, investor relations professionals and other market participants, has partnered with Stocktwits, a social network and community of investors and traders. The partnership enables Stocktwits to leverage Quartr’s API solution, providing its approximately 8 million registered users with direct access to Quartr’s database of earnings calls and accompanying documents.

By integrating the Quartr API, Stocktwits will enhance its market offering and strengthen client relationships with investors, traders and other finance professionals. Stocktwits’ users will now receive access to a diverse range of datasets powered by Quartr. These include live and recorded earnings calls from over 10,000 public companies, annual reports and quarterly filings, and slide decks from earnings calls and capital markets days, among other resources to guide investment discussions on the Stocktwits platform.