This Week: State Street/CF Global Trading, HSBC, KPMG, and more

State Street completes acquisition of CF Global Trading

State Street Corporation has completed its acquisition of CF Global Trading, a firm specializing in outsourced trading for equities, listed derivatives, and fixed income. The deal will look to extend State Street’s outsourced trading services to clients in the UK and EU. 

Dan Morgan, global head of portfolio solutions at State Street, says the acquisition is part of efforts to expand front-office outsourcing functions, building on the 2018 acquisition of Charles River. “That was our march forward into front-office functions. This acquisition is a continuation of that theme,” he tells WatersTechnology.  

Outsourced trading allows a firm to offer services such as trade execution, research, middle and back-office functions, and international market access to others, often investment managers and hedge funds. Typically, it can be a way for a firm to expand its global reach, access new asset classes, and stay on top of regulatory changes. 

State Street will look to fit CF Global’s services into its Alpha workflow. Alpha, which the company launched in 2019, is a software platform that gives investment professionals tools for deciding what to trade, all the way to the dealing function itself. “With this acquisition, we want to grow the dealing part from a multi-asset class security perspective,” Morgan says.

Following the completion of the purchase, State Street’s outsourced trading footprint will include trading desks in Boston, New York, Toronto, London, Lisbon, Hong Kong, and Sydney, giving the company a complete global trading solution within the Alpha platform.

“At present, we have our dealing operations for securities trading… But our boots are ‘on the ground’ in securities trading mostly in the Americas and APEC … This acquisition allows us to expand our client coverage into the UK and the EU, where many of our franchise products already exist,” Morgan says. The EU securities trading operation will be based out of Lisbon.

CF Global was a pioneer in outsourced dealing more than 20 years ago, Morgan says. “One of the luxuries of having the time to talk with a firm is you get to know them and their culture,” which Morgan says aligned well with that of State Street’s. “We’re bringing a small firm into a large firm—I’ve done this before—it’s a journey.” Morgan calls the blending of the two firms “an exercise in adaptation” and says the acquisition, which has been in the works for a considerable amount of time, is a “huge opportunity”. 

The decision to acquire CF Global presented an opportunity for the bank to move into the outsourced dealing space in the EU and UK inorganically. The cost savings and ability to work off CF Global’s clients was a boon for the deal, he says. 

“We’re bullish globally, but we’re also bullish on the region,” Morgan says of the EU and UK.

UK’s PRA fines HSBC £57 million over depositor protection failings

The Prudential Regulation Authority has fined HSBC Bank and HSBC UK Bank £57,417,500 for historic depositor protection failings. The PRA says the infractions arose from HSBC’s failure over many years to properly implement the requirements of the Depositor Protection Rules. 

The failings at HSBC occurred between 2015 and 2022, and at HSBC UK between 2018 and 2021. The fine, which is the second highest ever imposed by the PRA, “reflects the seriousness of the failings” according to the release.

KPMG UK and Xceptor partner on tax solutions

Xceptor, an automation platform for financial markets, has partnered with KPMG UK on tax solutions for financial services. Xceptor and KPMG will offer tax expertise and technology as regulatory and client needs evolve. 

Xceptor’s platform assists in operational tax processes by automating data management. KPMG’s expertise will strengthen this offering, and the partnership will also see longer-term plans for expanded product offerings.

CMC Markets partners with Sernova Financial

CMC Markets, an online trading and investing provider, is partnering with Sernova Financial, a cloud-based post-trade service provider. The partnership will allow CMC Markets to offer enhanced cross-product market access to 27 futures exchanges internationally.

Sernova Financial’s post-trade services aim to reduce the costs for financial institutions by ensuring efficient and secure clearing processes. CMC Markets, which will integrate Sernova’s technology into its platform, aims to give clients access to trading across various financial products, and improve its cross-product market access.

FalconX integrates with TP ICAP’s UK crypto exchange, Fusion

FalconX, an institutional digital asset prime broker and CFTC-registered swap dealer, is integrating with Fusion Digital Assets, TP ICAP’s UK-based, wholesale spot crypto asset exchange. 

The integration with Fusion Digital Assets provides FalconX with access to competitive pricing and liquidity from TP ICAP’s wholesale clients within a secure framework, combining FalconX’s institutional crypto native franchise and institutional-grade custodial capabilities provided by Fidelity Digital AssetsSM with TP ICAP.

The partnership allows institutional digital asset prime brokers and their clients to access liquidity at venues and exchanges operated by major financial market infrastructure providers.

Silverview Credit Partners taps Broadridge’s Sentry

Silverview Credit Partners tapped Broadridge Financial Solutions’ Sentry portfolio management solution to improve its technology for private debt and direct lending investments. Silverview Credit Partners will use Sentry to improve operational efficiencies and transparency in its portfolio management for its direct lending business. 

Broadridge’s Sentry supports private debt investment and portfolio management processes. The platform provides an integrated approach to tracking private debt investment as well as syndicated loan markets in real time. Sentry can help firms analyze hypothetical trade scenarios, dynamic waterfall projections, loan administration, and data aggregation. 

Tokenbridge releases model portfolio token design targeted at institutions and wealth managers

Tokenbridge, a token aggregator and distribution platform for the wealth and fund management business, has introduced features for constructing, distributing, and evaluating tokenized model portfolios.

The new functions target improving connectivity between tokenized and un-tokenized funds and securities to help automate tasks within portfolios.