This Week: Nasdaq, NSCC, State Street, OpenFin/Broadridge, and more

Nasdaq, banks join forces to establish a trading venue for private assets

Nasdaq, SVB Financial Group, Citi, Goldman Sachs, and Morgan Stanley have announced a joint venture to establish an institutional-grade, centralized secondary trading venue for issuers, brokers, shareholders, and prospective investors of private company stock.

Nasdaq Private Market, the exchange’s marketplace for private company shares, will be spun out as an independent company, which will receive strategic investments from SVB, Citi, Goldman Sachs, and Morgan Stanley. Nasdaq Private Market’s existing technology, client relationships, and regulatory infrastructure will provide a foundation for the joint venture to develop a suite of liquidity solutions for private companies. Private companies, brokers and investors will be able to access, connect, manage and execute their stock transactions through a global marketplace and customized technology solutions. The platform will continue to manage and support private company stock transactions including tender offers, buy-side book-building, auctions, investor block trades, company directed windows of liquidity, and pre-direct listing continuous trading. In addition, the platform will provide end-to-end settlement process management and an inter-broker global marketplace through its existing alternative trading system for all customers from employees to institutions to access and transact.

These new capabilities will help fulfill unmet market demand and provide a more transparent and efficient offering for private companies, their employees and investors looking for access to private assets.

Nasdaq Private Market’s core operating team will remain in place with its bi-coastal presence in New York and San Francisco.

NSCC launches solution for ETF collateral management process

The Depository Trust & Clearing Corporation, a market infrastructure for the global financial services industry, has announced that its subsidiary, National Securities Clearing Corporation, has launched an automated solution that streamlines and simplifies the exchange-traded fund collateral management process. It adds new fixed-income ETF capabilities, meant to free up capital and increase operational efficiency during market uncertainty and volatility.

The new NSCC solution fully automates the exchange of ETF collateral, reducing risks in the ETF fund process from trade date to settlement date. With this enhancement, NSCC will process create/redeem instructions, generate payment orders, and ensure collateral is exchanged between authorized participants and servicing agents—all within a no-touch process. By closely integrating the collateral process within the existing NSCC settlement process, NSCC can free up capital for its members by reducing the amount of collateral required on components that are eligible for NSCC’s netting process.

Additionally, NSCC has further expanded the ETF service to support the clearing of certain fixed-income ETFs, including corporate and municipal bonds. Orders for corporate and municipal bond ETFs can now be processed through NSCC and included in the same trade guaranty provided to securities cleared and settled at NSCC—the assurance that the trade will be completed, even if a counterparty to the transaction defaults on its obligation. Firms that choose to process eligible fixed-income ETFs via NSCC also benefit from continuous net settlement, an automatic process at NSCC that offsets trades down to one position per client, by reducing the value of payments that need to be exchanged and minimizing security movements and costs.

The new collateral management solution and the additional clearing capabilities are part of a series of ETF enhancements to provide industry-wide benefits, including increased transparency, cost savings and automated workflows. DTCC anticipates it will complete the final planned enhancement of its ETF service, which will support clearing related to other types of fixed-income ETFs including mortgage-backed securities and government securities, such as treasuries, by the end of 2022.

State Street to acquire Mercatus, launching State Street AlphaSM for Private Markets

State Street has entered into an agreement to acquire Mercatus, a front-and-middle-office solutions and data management provider for private market managers. The transaction is expected to be completed in September subject to customary closing conditions. Mercatus has operations in the US, UK, and India, and manages more than $1 trillion invested across its global private markets client base.

In connection with the acquisition, the company will launch its State Street AlphaSM for Private Markets solution which will allow institutional investors to fully manage the entire lifecycle of their infrastructure, private equity, real estate, private debt, and fund-of-funds investments through a fully integrated, digital front-to-back platform. This includes the ability to provide whole portfolio exposure to managers investing in both public and private markets.

The solution will also reach across key areas such as cloud-based asset management, deal management, ESG, investor relations, and portfolio monitoring allowing clients to make faster and more informed investment decisions.

Broadridge to utilize OpenFin operating system

Broadridge Financial Solutions will utilize OpenFin’s operating system for financial desktops.

With this new digital workspace solution, asset managers using Broadridge’s portfolio and order management system will benefit from apps with highly configurable layouts and intuitive workflows. Traders and portfolio managers will be able to manage their desktop real estate more efficiently and increase productivity by reducing the effort and time navigating across multiple windows and screens. Notifications will also keep users up to date with the most relevant insights.

Refinitiv partnering with Xinthesys for enhanced post-trade regulatory reporting

Refinitiv is enhancing its post-trade regulatory reporting capabilities through a partnership with Xinthesys that enables sell-side traders to potentially save costs with a fully integrated platform for trade reporting. Refinitiv’s integration of Xinthesys’s Adept Software-as-a-Service platform allows broker-dealers access to critical regulatory risk management tools through a 360-degree view of their trading and reporting data.

The Refinitiv-Xinthesys Adept platform allows users to connect across different technology providers. The platform enables centralization and storage for reporting using a cloud-based source. The solution is integrated with Refinitiv’s Autex Trading Route for Fix connectivity and enables users to work seamlessly with Refinitiv trading platforms and Quod Financial as a sell-side offering.

Trading Technologies allows access to derivatives products listed on Warsaw Stock Exchange

Trading Technologies, a provider of professional trading software, infrastructure and data solutions, and the Warsaw Stock Exchange, the national exchange of Poland, have announced that TT’s global user base can now access derivatives products listed on WSE through the TT platform.

The addition of WSE to Trading Technologies’ range of connected markets further strengthens the TT offering with seamless access to Central and Eastern Europe’s leading derivatives market. The exchange’s listings span index futures, single-stock futures, currency futures and index options and include WIG20 index futures and options, mWIG40 index futures, USD/PLN, EUR/PLN, GBP/PLN and CHF/PLN FX futures.

Aite-Novarica group formed as new advisory firm

Aite Group and Novarica have joined forces to create a new advisory firm focused on helping executives from banks, payments providers, insurers, securities firms, and their respective service providers respond to important technology, market, operations, and regulatory changes. Additionally, Kurt Reisenberg, former chief executive at Datos Acquisitions, has joined Aite-Novarica Group as the new chief executive officer.

Fidelity selects Finbourne for data strategy for global asset management business

Fidelity International has selected Finbourne to drive its data strategy for its global asset management business. 

Finbourne, an investment management technology solutions start-up established in 2016, has also received a strategic investment from Fidelity International Strategic Ventures, a dedicated venture capital team at Fidelity, in a recent funding round alongside a number of other undisclosed investors. 

Finbourne’s Lusid platform is a cloud-native, API-centric architecture, specializing in simplifying complex data hierarchies for enhanced control, performance, and insight. Lusid enables asset managers to not only ingest, aggregate, and distribute data to their entire organization, but allows for extensible calculations across functions such as risk and performance, and sharing all of this with clients.

BSO upgrades main routes between Shanghai and London, Hong Kong, and Tokyo

BSO, a global infrastructure and connectivity provider, has announced that it has upgraded its main routes between Shanghai and key financial hubs in London, Hong Kong, and Tokyo. The upgrade delivers the fastest connectivity to Shanghai equities and futures markets of any other connectivity provider.

Shanghai hosts China’s largest stock exchange and third largest in the world, establishing itself as the gateway to Chinese equities and futures markets.