This Week: ICE, DTCC, Northern Trust, Microsoft, and more

ICE launches service to identify entities and securities subject to sanctions programs

Intercontinental Exchange (ICE) has launched a service to help institutions comply with global sanctions, including those administered by the UN, EU, US, and others. The new service, which comes at a time of increased geopolitical uncertainty, uses ICE’s data offering and capabilities to identify securities, entities, and groups falling under sanctions programs.

Sanctions can target companies, governments, or individuals and often consist of asset freezes, economic and financial measures, and embargoes.

“Geopolitical pressures have risen in volume in the last couple of years,” says Spencer Gallagher, senior director of product management for ICE. “I think people are more sensitive to this than maybe they were five years ago.”

According to the United States Office of Foreign Assets Control, there has been a total $567 million issued in civilian penalties so far this year. “The regulators are not putting out these sanctions and ignoring them. This is aggressively reviewed,” Gallagher tells WatersTechnology.

The ICE offering uses information from regulators to identify whether a company is holding a security that may have come under sanctions in a particular jurisdiction. Within an ETF or a mutual fund, for example, there may be a single security under sanctions. ICE identifies this at the security level using an ISIN, CUSIP, or other asset identifier.

Gallagher explains that often, the parent institution issuing the security may not fall under a sanction program, but because its subsidiary does, the security will be caught within a sanction violation.

“Sanctions in geopolitical parts of the world could have something to do with,oil supply, and there could be a political pressure to reduce sanctions in another area to increase liquidity or volume,” he says. “That all comes into play here because sanctions are not globally set up. They’re set up by the individual countries.”

Without a sanctions compliance program, “it’s hunting and pecking”, for firms to sort this manually. Gallagher notes that while ‘know-your-customer’ and sanctions products began appearing around a decade ago, in the last few years, they’ve seen increasing demand for this.

“We put out an alert about a year ago that we were thinking about doing this and the response was so immediate,” he says. 

Quantum-computing start-up Photonic raises $100 million from BCI, Microsoft, and others

Startup Photonic has raised $100M USD in a funding round led by Microsoft, British Columbia Investment Management Corporation (BCI), the UK government’s National Security Strategic Investment Fund (NSSIF), Inovia Capital, and Amadeus Capital Partners. 

Photonic is aiming to build one of the first scalable, fault-tolerant, and unified quantum computing and networking platforms based on photonically linked silicon spin qubits. The technology uses the memory and computing capabilities of spins and the connectivity of photonics.

GoldenSource launches risk factor taxonomy ahead of FRTB framework

GoldenSource, an enterprise data management and master data management solutions provider, has created a risk factor data standard, called ‘curve master definitions’. Sell-side financial firms can use the standardized risk factor typology to record market rates and volatilities and then connect these to pre-defined curve and surface structures, giving standardized dimensions for risk data aggregation and reporting.

The taxonomy allows financial market institutions to conform to the pre-requisite trading book processes for the Fundamental Review of the Trading Book (FRTB) framework, coming into effect on January 1, 2025 in most jurisdictions.

The new standard aims to provide investment banks with one risk factor taxonomy for market rates used to price over-the-counter (OTC) derivatives, including yield curve building, volatility surface calculations, and industry standard interpolation methodologies.

CQG to be acquired by group of internal senior executives

CQG, a tech provider for integrated trade routing, global market data, and analysis tools, has entered into an agreement for a group of its senior executives to acquire the company. Until now, the firm was owned by Tim Mather, who founded the company in 1980.  

CQG began providing front-end trading software to U.S. traders in 1980 before expanding to Europe in 1988 and Asia in the 1990s. The provider’s solutions are targeted for market makers, traders, brokers, commercial hedgers, and exchanges,

TNS increases network capacity ahead of OPRA data feed expansion

Transaction Network Services (TNS) announced an upgrade to its network capacity with multiple 100 gigabits-per-second (Gbps) circuits to support the Options Price Reporting Authority (OPRA) expansion.

OPRA aggregates and disseminates price quotations for listed US options contracts and will be moving from a 48-line to a 96-line multicast network in February 2024.

TNS offers US equity options market data coverage with a network design able to handle high-bandwidth data volumes. TNS has ultra-low latency dark fiber on all New York financial routes.

DTCC releases service for OTC derivatives data access

The Depository Trust & Clearing Corporation (DTCC) has launched OTC Direct Connect, a service that will provide access to OTC derivatives transactions data reportable in the US and Canada.

As a data delivery solution, it aims to help subscribers manage market risks and trading risk factors faster by eliminating manual data collection methods and providing automated access to the DTCC Data Repository’s Public Price Dissemination Dashboard published data.

TS Imagine taps Kayenta for treasury management services targeting hedge funds

TS Imagine, a trading, portfolio management, and risk management provider, and Kayenta, a hedge fund treasury management system provider, have partnered to allow hedge fund clients to control their financing relationships across their portfolios using TS Imagine’s multi-asset trading and risk management solution, TS One. 

Kayenta uses market, position, and prime broker data to offer actionable insights for data driven decision-making. Their technology offering can also help automate data and reporting processes.

TS One clients can now use Kayenta’s analytics for cash and collateral management, liquidity, and cost control services for multi-asset, multi-prime portfolios.

Northern Trust partners with Novata on private markets data and benchmarking

Northern Trust will make available Novata’s ESG data management software solution to Northern Trust asset servicing clients after a strategic investment in the company. 

Novata’s data management solution will be added to Northern Trust’s Whole Office strategy to provide asset owners with a view of the ESG impact of private companies on investment portfolios.

Northern Trust participated in the Series B funding round for Novata in April 2023. The technology platform was founded as a public benefit corporation by a consortium of non-profit and for-profit organizations. It offers technology to simplify ESG data management for the private markets.

FIA Tech joins ISITC trade association

FIA Tech, a futures industry technology provider, has joined the International Securities Association for Institutional Trade Communication, a trade association. ISITC aims to bring together asset servicers, broker dealers, asset managers and solution providers and works to develop standards and best practices across the securities industry.