FCA fines Infinox for CFD transaction reporting failures

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January 30, 2025

Steve Smart, joint executive director of enforcement and market oversight, FCA

The enforcement action highlights the risks of the UK’s opaque, lightly-regulated market in contracts-for-difference.

Infinox Capital Limited has been charged £99,200 by the regulator, which states that the firm failed to submit 46,053 transaction reports between October 2022 and March 2023 – either by the close of work the following working day or at all. The reports considered single-stock contracts for difference (CFD) trades executed through one of Infinox’s corporate brokerage accounts, which covered 60% of the business line.

CFDs are contracts between a provider and a client to pay one another the change in price of an underlying asset. Upon expiry, the two pay exchange the difference between the opening and closing price of a specified financial instrument without owning it. They are considered a high-risk product in the UK due to the change of market abuse, and have been banned in countries including the US, Brazil and Hong Kong.

Popular CFD trading platforms in the UK include retail brokers IG, City Index and Admirals. The firms’ trading volumes are not reported, furthering opacity around the already risky investment vehicle.

By not submitting reports, the FCA said, Infinox could have allowed market abuse to go on undetected. The company recognised that it had not passed these reports on to the FCA after a third-party review, but did not proactively report the failure to the regulator.

Steve Smart, joins executive director of enforcement and market oversight at the regulator, explained: “As a data-led regulator, it is vital that firms submit accurate and timely transaction reports, and promptly bring any failures to our attention. Infinox failed to do this, which meant market abuse could have flown under the radar and risked the integrity of the market.”

This is the first transaction reporting fine issued under MiFIR came into force in the UK, more than a decade ago.

According to the FCA, these incidents highlighted weaknesses in Infinox’s transaction reporting systems and controls for a high-risk investment product. However, it acknowledged that the breach was not deliberate or reckless, caused little loss or risk of loss to market users, and that Infinox received little or no profit or loss as a result.

Infinox completed its back-dated reports by 15 December 2023. By agreeing to resolve the case at an early stage, Infinox received a 30% discount on the original £141,800 penalty.

©Markets Media Europe 2025

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Sterling Trading Tech Adds Chris Contrino to Sales Team

By

Etienne Mercuriali

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January 30, 2025

Sterling Trading Tech has brought on Chris Contrino as sales director, adding to its growing business development team.

Contrino has worked in business development, client engagement, and product marketing within financial technology. Before joining Sterling, he was a service manager at Trading Technologies, focusing on customer service and solutions delivery. He also held roles in business development and client solutions at Eventus from 2021 to 2024 and at Fidessa from 2012 to 2019, with a focus on derivatives trading technology.

At Sterling, he will oversee sales and client relationships as the firm expands.

Sterling CEO Jennifer Nayar said the company is continuing to grow globally and sees hiring experienced professionals as part of that process. “Chris brings the expertise and skill set that will aid in strengthening our franchise as we grow regionally, diversify asset classes, broaden client segments, and enhance product offerings,”

Contrino said he looks forward to joining Sterling and contributing to its growth.

Sterling Trading Tech provides order management, risk system solutions, and trading platforms for equities, options, and futures markets, with over 100 clients across 20 countries, including brokers, clearing firms, and proprietary trading groups.

©Markets Media Europe 2024

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HSBC exits non-Asia ECM

By

Lucy Carter

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January 29, 2025

Following last year’s surprise East-West division, HSBC now plans to shutter its M&A and equity capital markets activities outside Asia.

The debt capital markets and equities trading businesses in the region will not be impacted, sources familiar with the issue confirmed.

A spokesperson said: “As part of our ongoing efforts to simplify HSBC and increase leadership in our areas of strength, we are finalising a review of our investment banking business. We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East and will begin to wind-down our M&A and equity capital markets activities in the UK, Europe, and the US, subject to local legal requirements.”

The news contrasts comments made in the H1 2024 analysts call, where former CEO Noel Quinn stressed the firm’s global nature: “Fundamentally, at the core, we’re an international bank […] we’re essentially about helping businesses and individuals trade internationally, invest internationally.”

READ MORE: HSBC splits

Investment banking revenues have been steadily rising at HSBC over recent years, with a drastic jump from US$622 million in the first nine months of 2022 to US$812 million a year later. In 2024, HSBC changed its reporting to specify revenues for investment banking, with the year’s figures reported at US$819 million.

HSBC’s focus on the Asian market follows strong IPO issuance in local markets. In 2024, the Indian National Stock Exchange and the Hong Kong Exchange made it into the top five issuance venues – balanced out by a decline in European performance. Chinese offerings were also subdued.

In the Q3 2024 analyst call, CEO Georges Elhedery noted the increase in trade between the Middle East and Asia and stated that it was a driving force for the bank’s simplification strategy. “It is meant to help us speed up the build-out of a very promising corridor between the Middle East and Asia. We’re seeing material growth in this corridor over the last few years. Our customers across both the Middle East and Asia are looking for opportunities of trade and investments between them.”

In recent years, HSBC has invested heavily in its Asian businesses – perhaps a sign that this western exit is less sudden than it seems. Bolt-on M&A projects over the last four years include L&T Investment Management in India, Citi’s China business and the complete repurchase of its own Chinese asset management business.

©Markets Media Europe 2025

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LSEG’s Limouzi swiped to lead Broadridge post-trade

By

Lucy Carter

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January 29, 2025

Quentin Limouzi, global head of post-trade, Broadridge

Quentin Limouzi has been appointed head of post-trade at Broadridge. Based in New York, he reports to Vijay Mayadas, president of capital markets.

The technology provider reported US$799M in capital markets revenue in the first nine months of 2024. This accounted for 16% of total revenues over that same time period.

On his plans in the role, Limouzi said: “I am focused on executing the strategy we have laid out to deliver simplification and innovation across global trading and operations. Broadridge is helping clients operate, innovate and grow by leveraging emerging technologies and using the scale, breadth and depth of its post trade platform to drive efficiency and reduce risk in the face of global regulatory demands and complex technology ecosystems.”

Announcing the appointment via LinkedIn, Broadridge commented: “Quentin will be instrumental in supporting our clients in navigating global regulatory mandates and extracting the greatest value from new technologies to optimise their operations.”

The company expanded its multi-asset post-trade processing services earlier this year, allowing users to generate insights and visualisations from trade data without the need for data migration. Improving analytics in this way reduces reliance on manual reporting and eases the regulatory adaptation process, Broadridge explained.

Limouzi joins from LSEG, where most recently he was global head of investment management and execution solutions. He has also been global head of order and execution management and equity trading solutions at the firm, before which he was global head of equity trading at Refinitiv.

Over his more than two-decade career, Limouzi has held senior roles across APAC including head of APAC execution sales at HSBC in Hong Kong, head of electronic and algorithmic trading for Asia at BNP Paribas, and head of APAC sales at TradingScreen.

©Markets Media Europe 2025

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BNP veteran Le Floch jumps to RBC Capital Markets

By

Lucy Carter

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January 29, 2025

Solenn Le Floch, managing director of global markets solutions, RBC Capital Markets

Solenn Le Floch has joined RBC Capital Markets (RBCCM) as managing director of global markets solutions.

In the London-based post, Le Floch is responsible for sponsor and alternative clients within the business. She will also expand RBCCM’s solutions franchise, particularly its balance sheet and equity driven strategies.

She reports to Jason Goss, head of European solutions and structures products, and will work alongside RBCCM’s financing and trading businesses in the role.

Le Floch has more than 20 years of industry experience and joins RBC from BNP Paribas, where she has been a senior managing director since 2017 focusing on private equity solutions.

Earlier in her career, Le Floch was a managing director at both Credit Suisse and Goldman Sachs.

©Markets Media Europe 2025

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LSEG: ETPs, execution and the rise of retail

By

GlobalTrading

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January 28, 2025

Adam Wood, CEO of Turquoise, and Richard Worrell, co-head of equities trading, speak to Global Trading about market trends, the best of 2024 and what to expect from the London Stock Exchange Group in the year to come.

What have been the key highlights for the London Stock Exchange in 2024?

Richard Worrell: Overall, it’s been a successful year for equities trading. While there continue to be challenges in the global marketplace, generally equity markets have traded higher, and volumes have improved.

At the London Stock Exchange, it was great to see the launch of physically backed and unleveraged Crypto ETNs, with Bitcoin and Ethereum as the underlying asset. Currently, they are open to professional investors only, but we will keep an eye on any change in this assets environment over time. We’ve also seen our average daily traded volume in ETPs rise overall by 28% year on year.

We’re focused on reducing barriers for retail trading and, effective 1 January 2025, we are waiving market data end-user fees for retail investors, allowing them to access real-time market data from both the London Stock Exchange and Turquoise. Having access to the latest, most accurate data available will drive more informed trading by investors in UK securities. We will be the first primary exchange to implement such a groundbreaking initiative.

Similarly, we have also waived fees for trading and clearing for retail brokers and intermediaries. These initiatives aim to significantly reduce the barriers to, and encourage more, retail trading on the London Stock Exchange.

On a more personal level, it’s been great to join the London Stock Exchange this year. I’ve adjusted to a new role on a different side of the industry and having worked on the buy and sell side, I’m now seeing so many new elements – and that’s been fascinating. I’m thankful to everybody that has helped guide me through such an interesting year.

Adam Wood: Turquoise has had a good year. Looking at two of our order books, in particular our Turquoise Plato lit auctions order book, trading volume has more than doubled and share of trading and average daily value traded over 2024 has almost tripled. That’s really positive, as that’s very much a growing segment of the market.

Another area that’s been really interesting this year is the trade-at-last session of our Turquoise Plato dark order books. We’ve seen continued growth this year, with six of our top ten record trading months occurring in 2024. The rise and growth of post-close sessions has been an interesting insight for us this year.

We’ve also been working closely on large block trades and our partnership with the Appital through the Appital Turquoise Book Builder, which posted its €70 million record trade this year. We’re seeing a lot more activity in that part of the market.

What trends do you think have been the most influential this year?

Richard Worrell: ETPs are not a trend anymore, they are a significant part of the industry, and an important area of growth for us. We’ve had three of our top five all-time trading days in ETPs this year, which shows how much the industry is growing. We’re constantly working to make sure that we’ve got the innovative order types and solutions to support the ETP market. We’ve seen increased usage of hidden order types and the growth of our RFQ 2.0 function has been phenomenal, the value traded has trebled year-on-year.

Closer working relationships/ partnerships with the buy side is helping us shape our strategy more than ever. Typically, we talk to primarily our members and historically we considered them our main client base, but the buy side is an incredibly important part of that. We always talk about our strategy being driven by a feedback wheel, and that wheel has a number of components. You have product innovation, client engagement and thought leadership, and as that cycle continues it’s further strengthened by our clients. My message to the market is to please keep coming to us with your feedback!

Adam Wood: The buy side is paying more attention as to how and where they execute. I think it’s a testament to that we welcomed a full house at our inaugural buy-side Forum last year.

As venues, we’ve usually engaged with our direct members, but the buy-side is one of the most important parts of the ecosystem. They’re often the end investors. Getting their feedback on how they are participating, how they want to participate, and what they want to understand, is vital.

One other trend that we touched on earlier is the continuing importance of retail in what we do from a trading perspective. It started a couple of years ago, and is gaining momentum, and I think we’ll see more retail activity in 2025.

Retail has become very important to our ecosystem. Everybody wants to understand more about it. When you talk to market participants, a lot of the conversations are about how to encourage more retail participation in European equities, and not just into the classic Magnificent Seven-type securities. We recently launched our ‘Rise of Retail’ video series’ discussing the work that is being done across the UK capital markets to support retail enfranchisement, touching on the latest innovations and regulatory reforms.

In Europe, on-venue retail participation is typically greater than in the UK. Turquoise launched Retail Max in 2023 for European trading activity, and we are now bringing this service onto our UK venue to give UK and Swiss investors access to the same service from early 2025, further enhancing its pan-European offering.

What are you expecting to see in 2025? What are your plans for the year?

Richard Worrell: Retail. Almost every meeting that I go to has a question on retail, whether it’s buy-side or sell-side, it comes up in every part of the industry. Having waived the fees for trading, clearing and market data, retail is going to be a big focus for us. As this builds, we also have to think about order book innovation for the London Stock Exchange to support the growth of retail activity.

We’d like to host more in-house events and further develop more active connections with the buy side. Deeper client engagement is a significant part of what we’re doing.

Adam Wood: From a Turquoise perspective, we expect to see continued product and tariff enhancements. We’ve been working hard on enhancements to our block trading offering that we look forward to bringing to the market. We will also be announcing a new tariff for our lit order books, which will make us one of the most competitive lit order books in Europe. We’ll certainly have some exciting things to talk about at the end of next year.

www.lseg.com

©Markets Media Europe 2024

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TMX courts US market with ATS launch

By

Lucy Carter

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January 27, 2025

TMX has launched AlphaX US, an alternative trading system (ATS) for US equities. The group enters a crowded battleground, as a growing number of ATSs compete for market share.

TMX’s plan to launch an ATS in the US has been in motion for a number of years, Heidi Fischer, president of TSX Alpha US told Global Trading. “Thinking about how to expand into global markets, it’s hard to look further than your nearest neighbour, which also happens to be the largest wallet in the world from an equity trading standpoint,” she said.

The US ATS market is a crowded place. In the final quarter of 2024 more than half of cash equity volume was traded on alternative systems, up 6.9% year-on-year. In the same time, the number of ATSs registered with the SEC rose from 73 to 76. Demand for off-exchange trading is growing, and firms are launching services to meet it.

“We’re complementary rather than competitive with what exists in the execution quality focused ATS space today,” Fischer said, citing a number of features to the ATS that differentiate it from others in the market. “We’re a frequent auction model. It feels much like a continuous trading market while still offering some protection around the auction. We also introduced counterparty selection and segmentation into an auction mode, which is not as common.”

Execution quality is a focal point for TMX, and what it believes is its differentiator with this product launch. “We match all trades at the midpoint of the buyer and the seller, capped by the NBBO, and we match as many shares as we possibly can, giving as much price improvement as possible in every match event. We prioritise by price and then time. If we have different counterparts on either side of a trade that are willing to trade at different prices, we’re happy to print multiple executions in one match event at different prices,” Fischer shared.

All regulation NMS common stock, ETFs and American depositary receipts can be traded on the platform, with order entry starting 60 minutes prior to the open.

On trading data, TMX plans to give users feedback on how their behavioural changes on the venue could improve outcomes. “We’re building out the ability to go to partners and say, ‘if you had traded with slightly different parameters, here’s what that would have looked like’,” Fischer explained.

Once enough trading data has been gathered, the company also aims to tiered customisation for users. “In today’s world tiering is a bit of a one-size-fits-all dynamic,” Fischer noted. “We’re going to allow participants to customise the time periods that they care about for mark outs, to focus on the performance metrics that matter to them.”

©Markets Media Europe 2024

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Uyeda favours enforcement experience in acting staff

By

Lucy Carter

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January 27, 2025

Sam Waldon, acting director of the division of enforcement, SEC

SEC acting chairman Mark Uyeda has named acting staff to fill vacant senior roles at the commission – favouring enforcement division veterans.

The acting director of the division of enforcement, Samuel Waldon, has been chief counsel for the division since 2022. He was assistant chief counsel for almost 15 years prior to this.

Waldon replaces Sanjay Wadhwa, who has been acting director since the departure of Gurbir Grewal last October.

Jeffrey Finnell is acting general counsel and Ryan Wolfe has been named acting chief accountant. They replace Megan Barbero and Paul Munter respectively, who left the commission in the week before Trump’s inauguration.

Finnell has been with the SEC since 2001, and was deputy general counsel between 2017 and 2021. He has spent the majority of his time with the commission in the division of enforcement, Wolfe has been chief accountant for the division since rejoining the SEC in 2022.

Elsewhere, Kathleen Hutchinson has been appointed acting director of the officer of international affairs, following the departure of YJ Fischer. She has been with the division since 2003, and was acting director in 2020.

Uyeda’s counsel Robert Fisher is now acting director of the division of economic and risk analysis, after Jessica Wachter’s departure earlier this month. Fisher has a long academic career, and has held several roles at the SEC since 2002. These include positions in the office of compliance, inspections and examinations, the office of international affairs, and the division of economic and risk analysis. He has been a counsel to Uyeda since 2022.

The SEC has not yet announced its acting chief accountant; Paul Munter, who held the role since January 2023, left the commission in mid January.

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Kepler Cheuvreux and Centile Partners join forces in listed derivatives

By

Etienne Mercuriali

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January 27, 2025

Equity broker Kepler Cheuvreux and Centile Partners, a listed derivatives agency broker, have announced a strategic partnership to enter the listed derivatives market.

The collaboration aims to combine Kepler Cheuvreux’s execution capabilities with Centile Partners’ expertise in listed derivatives to provide services to institutional clients.

The partnership will offer execution services on an agency basis for listed derivatives and related financial instruments, targeting institutional clients such as hedge funds. Kepler Cheuvreux’s Execution services platform (KCx) supports equities, fixed income, derivatives, ETFs, and convertible bonds across Europe, America, and Asia.

In addition to this partnership, Kepler Cheuvreux has expanded its European offerings by connecting to Euronext Dark and extended its equity capital markets partnership with Crédit Agricole CIB into the MENA region, including opening an office in the Dubai International Financial Centre (DIFC).

Centile Partners, headquartered in London and led by John Ruskin, specialises in listed derivatives. Ruskin has over 25 years of experience in the financial industry, including co-founding Cube financial group in 1997, which was acquired by Société Générale’s Fimat (Newedge) in 2006. He led Newedge’s futures, options, equities, and fixed-income divisions until 2013. In 2014, Ruskin co-founded Coex Partners Group, which was sold to TP ICAP in 2018. He served as chief executive officer of TP ICAP’s Agency Execution division until 2022.

Recent developments in London’s listed derivatives brokerage sector include Interactive Brokers joining Cboe Europe Derivatives (CEDX) in May 2024 as a direct trading and clearing participant for equity derivatives. Additionally, Clear Street, a New York-based prime brokerage firm, has launched operations in the United Kingdom following approval from the Financial Conduct Authority.

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Blackrock, Vanguard took $500bn in passive fund 2024 inflows as actives fight back

By

Etienne Mercuriali

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January 23, 2025

While the investor rush into passive strategies benefited fund behemoths, some active funds are innovating to win inflows against the tide.

US/EU flows and share of Equity passive investments

While passive strategies continue their dominance in traditional market segments, the industry’s evolution suggests a more nuanced future, based on Global Trading analysis of 1,100 funds tracked by Morningstar. Active managers are carving out new investment spaces in complex strategies where expertise and risk management capabilities attract flows.

In the passive investing space, Vanguard and Blackrock use scale to dominate, seeing inflows of more than US$73 billion in Europe and US$433 billion in the US, while their actively managed counterparts suffered outflows of US$297 billion, according to Morningstar data.

The shift has been particularly pronounced in the US, where passive exchange-traded funds (ETF) have become “the default investment choice,” according to Morningstar analyst Jose Garcia Zarate. The 4 largest exchange-traded funds (ETFs) tracking large-cap US stocks include funds managed by Blackrock and Vanguard with a total US$4.34 trillion in assets passively tracking the market. In the US, Vanguard passive equity vehicles saw inflows of US$305.3 billion during 2024.

Innovation and idiosyncrasies drive rarer positive flows for active equity managers

Largest flows amongst active equity managers

However, the picture is not unremittingly gloomy for active funds, particularly for those who can repackage their stock-picking skill in lower-cost packages that attract fee-conscious investors.

Product innovation remains concentrated in the ETF segment, with active ETFs representing 2.5 per cent of EU ETF assets and 8.5 per cent of US assets according to Morningstar. However, these vehicles differ markedly from traditional active funds, maintaining lower tracking errors and expense ratios to compete in an increasingly cost-conscious market. Complex alternative strategies have emerged as one of the few segments of active management gathering funds, particularly in derivative-based products. JPMorgan’s Equity Premium Income ETF, the category leader with US$ 36.9 billion in assets, exemplifies this trend. Together with its sister fund, the Nasdaq Equity Premium Income ETF (US$ 20.7 billion), JPMorgan dominates the derivative income space, which has attracted US$29.36 billion in fresh capital this year while the category delivered returns of 17.68 per cent.

In the Defined Outcome segment, Innovator ETFs and First Trust advisors have established themselves as the premier providers, at year-end they managed approximately US$ 9.37 billion in assets.

In Europe Pictet hemorrhages while Capital Group gains ground

The European equity management landscape presents a more nuanced picture. While passive strategies dominated with inflows of US$263.2 billion, active managers demonstrated resilience in specific segments despite seeing US$62.6 billion in outflows. Total net flows into European funds reached US$169.3 billion year-to-date, marking a substantial recovery from 2022’s outflows of US$19 billion.

Those that used mega-cap dominated benchmarks or followed strongly performing emerging markets, did best. Active managers attracting European investors included Capital Group which gained more than US$ 3 billion of inflows in its Perspective funds whose largest holdings include Meta Platforms and Microsoft. Meanwhile, Austria’s Union Investment and Germany’s Deka gained both about US$2 billion of flows into their family of funds. Goldmans Sachs Asset Management had a great year with more than $US 2 billion of inflows in their European vehicles focused on India, Japan and China. This contrasts with Swiss group Pictet, whose equity funds bled more than US$ 9.3 billion during 2024, according to Morningstar. Including fixed income, Pictet’s fund flows were overall positive in 2024, a spokesperson for the company said.

ESG loses lustre

Perhaps the most notable shift in European equity markets has been unprecedented outflows from environmental, sustainability and governance (ESG)-focused active funds. European ESG-driven funds led by BlackRock’s Climate Transition Screened World Equity Fund (AUM US$16.9bn), have experienced the region’s largest outflows at US$15.5 billion in 2024, according to Morningstar. Notable losers in this category are Nordea (US$2 billion), Pictet (US$1.2 billion) and Schröders (US$1.02 billion).

Alternative energy funds have faced similar headwinds, with active strategies in this space seeing US$8.3 billion in outflows from a US$29.3 billion asset base. “In Europe, there is an ongoing deceleration for sustainable investment products,” noted Morningstar’s analyst Jose Garcia Zarate, highlighting a trend that has become increasingly apparent over the past two years.

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The enforcement action highlights the risks of the UK’s opaque, lightly-regulated market in contracts-for-difference.

Sterling Trading Tech has brought on Chris Contrino as sales director, adding to its growing business development team.

Following last year’s surprise East-West division, HSBC now plans to shutter its M&A and equity capital markets activities outside Asia.

Quentin Limouzi has been appointed head of post-trade at Broadridge. Based in New York, he reports to Vijay Mayadas, president of capital markets.

Solenn Le Floch has joined RBC Capital Markets (RBCCM) as managing director of global markets solutions.

Adam Wood, CEO of Turquoise, and Richard Worrell, co-head of equities trading, speak to Global Trading about market trends, the best of 2024 and what to expect from the London Stock Exchange Group in the year to come.

TMX has launched AlphaX US, an alternative trading system (ATS) for US equities. The group enters a crowded battleground, as a growing number of ATSs compete for market share.

SEC acting chairman Mark Uyeda has named acting staff to fill vacant senior roles at the commission – favouring enforcement division veterans.

Equity broker Kepler Cheuvreux and Centile Partners, a listed derivatives agency broker, have announced a strategic partnership to enter the listed derivatives market.

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