SmartStream: Moving parts – Reference data and regulation

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February 10, 2025

Linda Coffman is the executive vice president and head of reference data services for SmartStream. Reflecting on 2024 and looking ahead to 2025, she shares with Global Trading how client demands are changing and the impact of new regulations.

Why reference data services?

Our founders realised that it did not make sense for the industry to individually do the same tasks over and over, so the concept of the reference data services came alive. The best way to describe our uniqueness is that we neutralise as much of the processing as we can to keep down costs for our clients.

We accomplished this through a combination of managed technology, AI and subject matter experts. It’s our own technology, which we have developed in house, plus our data operations teams that, together, deliver the service that we provide to our clients.

We give clients the data via a couple of different methods, whether that be files or application programming interfaces (APIs), in an easily digestible manner so that they can then consume it and put it into their internal systems.

However, with the rise of how much people are using AI and getting value from data internally, we also provide customisations to drive business. We mutualise everything we can to drive down costs and then we provide our subject matter experts, whether that’s in a consultative manner or through our data operations team, to assist where we need to so that we can customise a client’s output based on their individual needs and strategies.

How does the service help clients adapt to new regulations?

In the regulatory space, there are two aspects. There’s the interpretation of the regulation, which is definitely individualised a bit, and then where to get all of the necessary data. Firms end up spending a lot of money looking internally. If the regulatory mandate requires access to a certain bucket of data, but that bucket is filled from ten different resources within the organisation, it takes time, energy, and money to get that data and make sure it’s in the right format. Oftentimes, the pieces from the different parts of the company don’t connect very easily; that’s where a lot of money is spent.

Recent changes in regulations led to the need for a much larger set of reference data, they are not just limited to trade specific data. We normalise the required reference data, so instead of a firm having to source data from a number of different internal and external systems and prepare it for the regulations, we do all that on our side. In addition we give them tools, for example APIs, so they can more easily get the data that they need.

In MiFID II, for instance, we have APIs where you can ask, “is the counterparty I’m trading with a designated reporter (DR) or a designated publishing entity (DPE)?” Then you can figure out who the reporting obligation lands on. We help with that headache of making sense of the data.

SmartStream also provides a Systematic Internaliser (SI) Registry; how was this introduced?

We were primarily focused on security master data until MiFID II came along, and we realised with the help of our customers that our reference data services were applicable to regulatory data as much as to security master data. And so, we went on our first regulatory journey with MiFID II.

While doing that, we realised that there was a set of data that the whole industry needed to meet the obligations of MiFID II, but nobody was providing it. After discussions with others in the industry the SI registry service was born.

We collaborated with a number of APAs to develop a new system, where the firms would send data through their APA, we would then aggregate it, normalise it, and make it into a format that can then be sent back out to the market.

There haven’t been any drastic changes to the SI regime itself, but its application has been changing over the last year. SI data is needed for things like venue of execution and sorting through counterparty reporting rules and regulations, but it’s not needed for post-trade transparency reporting. For post-trade reporting, the EU has transitioned to the DPE regime, and the UK has transitioned to the DR regime.

What other hot topics have you seen in the reference data space?

In the area of regulations, the EMIR Refit in both the UK and EU has kept the industry busy. We are also getting our first peek at what a MiFID III may look like over the next few years as the regulators begin to share more details. Across all jurisdictions and regulations, we see that counterparty and venue classification continues to be challenging for some in the industry

We created a new service called the Regulatory Registry, and this came to be as we recognised that across a number of regulations firms needed to maintain data to correctly classify those they are trading with and the venues they are trading on. Because of changes such as the the new DR and DPE mandates as well as EMIR requirements this set of data has become much more relevant.

And this data set does not stay static nor are the requirements the same across the jurisdictions. For example, for post-trade reporting in the UK, the DR regime is just at the company level. However, in the EU is it is at the legal entity and the asset class level combined.

The end result is that we took data that was spread out across different services of ours, added more, and now we have counterparty and venue of execution indicators where firms can better manage their counterparty risk and exposure and have the right data to more accurately report.

We also did a lot of work around EMIR reporting in the commodity space last year. There’s not a lot of normalisation in the commodities world, so we helped our clients understand the underliers for commodity derivatives in a way that they were able to report accurately.

Other areas where we’re seeing interest include data requirements for new derivatives exchanges, and new products like cryptocurrency underliers. We’re working with our clients to make sure that they’re getting all the data they need to manage that trading and risk.

How have managed services client demands been changing around data?

In the vendor managed services space, firms increasingly want the ability to process data from numerous sources instead of being reliant on one or two providers. We’re being asked to pull in and normalise across a larger number of providers and sources of data.

Our symbology data, where we can take symbols from different providers and link them together, is very important, especially with automated trading. We just had a use case where a broker and a client couldn’t talk to one another because they were using different identifiers. We were able to link those together for them. Symbology is one of our strongest products across all the asset classes; firms need their machines to be able to talk to each other, not just their humans being able to talk to each other. Even within an organisation, you can go from one department to another, and their formats differ.

What’s on your agenda in 2025?

We’re doing a lot from a technology perspective. We’re focused on making sure that our cloud strategy and our ability to meet our clients’s regulatory needs like DORA are achieved.

From a functionality perspective, we are working on the user story more, making sure that as things are becoming more automated our products can align with the workflow that our clients need. We’re making sure data is in an accessible format that can be digested into the new way that people are dealing with data externally.

Personally, I also joined Markets Media’s Women in Finance board in 2024. I really enjoyed interacting with the larger group and being invited to the Women in Finance Awards in November. I got my feet wet last year, and this year I’m looking forward to interacting with the group more and getting more involved in all the functions that they have planned.

www.smartstream-stp.com

©Markets Media Europe 2024

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Pham criticisms are false reports from “disgruntled individuals”, CFTC says

By

Lucy Carter

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February 7, 2025

The CFTC has hit back at Bloomberg’s claims of policy infringement by acting CFTC chairman Caroline Pham, calling the statements “an unfortunate attempt by disgruntled individuals that are under investigation to distract from the CFTC’s important mission”.

According to Bloomberg, anonymous sources at the CFTC have claimed that acting chairman Caroline Pham is removing from post those who have opposed her historically, infringing internal policies and executive orders.

Quiet personnel changes at the CFTC include the removal of Joel Mattingly, chief financial officer, and Marti Tracy, chief human capital officer, according to anonymous sources at the commission.

In her role, Tracy had been working on an investigation into Pham’s treatment of employees, Bloomberg’s sources said. The CFTC clarified that Tracy was removed from her post as part of an internal investigation into failures to address HR matters, which included allegations of misconduct by division of enforcement staff and “targeting Republicans illegally in violation of the First Amendment, including senior officers of the United States and Presidential appointees that are protected from the Biden Administration’s politically motivated attacks.”

Criticisms of Pham’s treatment of employees were first formally raised in 2023, when a complaint against her was filed by the National Treasury Employees Union. In the individual and institutional grievance report, staff alleged: “The CFTC has improperly allowed Commissioner Caroline Pham to reportedly intimidate, harass and abuse other CFTC employees in public, which has created and fostered a hostile work environment for all bargaining unit employees (BUEs) who must necessarily interact with or encounter Pham in their professional capacities.”

“BUEs are now afraid to do their work that requires them to interact with Pham, to speak up in defense of their right to be free from her intimidating, hostile or abusive conduct in the CFTC workplace, and/or to approach the Union with their concerns for fear of retaliation by Pham.”

The report also highlighted Pham’s open dislike for the CFTC’s enforcement division, expressed in both dissenting statements and public social media posts. Her complaints were often against broad enforcement measures and regulation by enforcement.

Last week, Pham announced a reorganisation of the enforcement division and stated that a simplified structure would prevent regulation by enforcement. She added: “These much-needed changes will maximise the CFTC’s resources to bring more actions to pursue fraudsters and other bad actors, and not punish good citizens.”

Mattingley, who has been at the CFTC since 2014 and been chief financial officer since 2020, has criticised Pham’s travel expenses – such as business class upgrades and luxury hotel stays – on several occasions, CFTC staff told Bloomberg.

On these accounts, the commission stated: “Claims about Acting Chairman Pham’s travel are categorically false. All aspects of Pham’s travel have been reviewed and approved by agency officials […] with voluminous supporting documentation.

“Any personal travel by Pham, including business class travel, hotel stays, and commuting expenses, was paid for with personal funds and was not paid by the CFTC and is substantiated with receipts.”

It concluded: “At all times, Pham complied in full with all laws, regulations, and agency policies.”

©Markets Media Europe 2025

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Northern Trust nabs APG quants

By

Lucy Carter

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February 7, 2025

Guido Baltussen, international head of quant strategies, Northern Trust Asset Management

Northern Trust Asset Management has again expanded its quantitative investment strategies team, seeking to get ahead in the competitive space. Four of its central hires come from Dutch pension company APG’s asset management division.

A total of 13 new hires have joined the Amsterdam office in quant research and development and portfolio analyst roles. From APG Asset Management, Tim Zwinkels and Edmund Wadge have been named senior quantitative researchers, Maarten Smit a senior portfolio analyst and Gijsbert de Lange an investment solutions expert.

Guido Baltussen, international head of quant strategies, told Global Trading: “These individuals are further strengthening the platform, and showing the market that we’re really investing in quant. It’s a key focus area for us.”

These are the latest in a string of quant hires from Northern Trust. Baltussen was appointed in late 2023, and joined by Milan Vidojevic as director the following January. Last November, Jan Rohof became APAC director of the division.

Baltussen continued: “We have strong heritage with the quality factor. Everything we do is focused on risk efficiency. We want clients to understand every base point of risk that they take. That’s where most of our research efforts go.

“To do effective research you need certain tech skills, and the people using that research need to know what they’re doing with it. You need to understand what’s happening to bring the best returns to clients.”

At the end of 2024, Northern Trust Asset Management managed US$43 billion in quant strategies across equities and fixed income.

©Markets Media Europe 2025

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UK confirms EU T+1 transition alignment

By

Lucy Carter

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February 7, 2025

Andrew Douglas, chair, Accelerated Settlement Taskforce Technical Group

UK cash equities will begin trading on a T+1 settlement cycle from 11 October 2027, T+1 Accelerated Settlement Taskforce (AST) has confirmed. This marks an alignment with the EU’s transition date.

Andrew Douglas, chair of the AST technical group, told Global Trading: “The UK and the EU independently reached the same conclusion on date, which in my view confirms the validity of 11 October as the best date.”

The AST was established in December 2022 by then-Chancellor Jeremy Hunt. Tasked with determining the timeline for a T+1 transition in the UK, and the operational and technical changes this would require, the committee provides recommendations to the government, regulators and market participants. Members include representatives from major banks, such as Citi and Goldman Sachs, infrastructure providers and trade associations.

In its final implementation plan the taskforce has outlined a code of conduct for T+1 (UK-TCC), including twelve actions within four business areas which must be made by all market participants to facilitate the transition. A further 27 actions are ‘highly recommended’.

Firstly, the taskforce requires the Treasury to amend the central securities depository regulation (CSDR), an EU and UK regulation focused on cross-border settlement in the region. Trading venues are requested to update their rulebooks to align with T+1, taking the scope of the settlement cycle into consideration. Prior to implementation, financial market infrastructures (FMIs) must remove any barriers to T+1 that may exist in their current technology, procedures and operations.

Douglas elaborated: “The major update required is to replace references to T+2 with T+1 and to review the FMI’s own processes and procedures for other impacts and amend accordingly. These are Critical Recommendations Zero B, FMI 01a and FMI 01b, and we will see the result of this analysis (FMI01a) by the end of 2025.

“As regards CSDR, our recommendation Zero A covers the request to HM Treasury and the detail is clearly set out in Sections 1.1-1.4 of the implementation plan. We believe this is comprehensive.”

The taskforce also advises that the CREST settlement system modernisation project avoids scheduling major changes to systems immediately before, during or after the T+1 go-live. A response from the EUI on an updated timeline is expected to be received in the first half of 2025.

Stock lending recalls are another key issue. According to the plan, the International Securities Lending Association (ISLA) will develop timing guidelines for optimal practices in this space, with consideration to cash market sale trade execution, communication in the securities lending workflow and recall coverage. Recalls should be automated either in-house or through vendor partnerships, the group said, and instruction deadlines must align with end-of-day at the LSE.

Once operational, the Financial Markets Standard Board’s standards for sharing of standard settlement instructions must be followed by all market participants.

In a statement, the Treasury said: “The government welcomes this report and will set out its response shortly.”

©Markets Media Europe 2025

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Cboe names Meaghan Dugan US options lead

By

Lucy Carter

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February 6, 2025

Former head of options at the New York Stock Exchange Meaghan Dugan has joined Cboe as head of US options.

NYSE confirmed that Dugan had left the firm in September, but declined to comment further. She had been head of options at the firm since August 2022, before which she was a senior director at the Intercontinental Exchange.

As part of his role as head of markets, Kevin Tyrell now oversees the options division, NYSE has confirmed.

Earlier in her career, Dugan was a director at Merrill Lynch and vice president of electronic trading at Morgan Stanley.

Dugan’s appointment is the latest in Cboe’s expansion of its derivatives team, with recent hires made across the US, EMEA and APAC in sales and market intelligence roles.

Catherine Clay, global head of derivatives, commented: “Customer demand for accessing Cboe’s derivatives markets and products has continued to grow rapidly, and in many ways, our hiring mirrors our customers’ evolving needs: expanding globally, while requiring tailored solutions for individual markets.

“Having local teams on the ground, supported by world-class research and content, is expected to further deepen our customer engagement and grow our global client base.”

©Markets Media Europe 2025

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Nvidia, before and after Deepseek

By

Nick Dunbar

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February 6, 2025

Nvidia accounted for one in fourteen of every S&P 500 shares traded last week, as the company reeled from Deepseek’s AI breakthrough.

A new Global Trading visualization shows how trading volume in US chipmaker Nvidia more than doubled in last week, with 433 million shares traded, more than double the previous week’s average daily volume (ADV). The surge was prompted by news that Chinese AI startup Deepseek had released a large language model that could outperform rival US-owned LLMs at less than a twentieth of the cost, undercutting the business case for Nvidia’s expensive graphical processing units (GPUs) which are used to perform AI calculations. The news led to an 18% fall in Nvidia’s share price, with an annualised realised volatility of 140%.

S&P 500 Treemap

Disclaimer: This visualisation is a reconstruction using public sources, without the involvement of S&P Dow Jones Indices. There may be differences between the data shown here and the actual index.

In our visualisation, the chart has two adjustable parameters – the size of rectangles that denote individual S&P 500 stocks, and the colour of the rectangle. For the size, you can choose four options – ADV for the past year, ADV for the week ending 31 January, ADV for week ending 24 January (before the Deepseek news), and market cap. For the colour, you can choose from volatility or return for the weeks ending 31 January and 24 January, as well as the one-year return. Click on an individual rectangle to see the data for a particular stock, and click on the header labels to return to a sector or overall index view.

©Markets Media Europe 2024

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CME chases increased volume in return for lower fees with Robinhood deal

By

Etienne Mercuriali

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February 5, 2025

CME Group has struck a deal with Robinhood to bring its futures products to the platform with significantly discounted execution fees compared to competitors, a move that underscores CME’s strategy to boost trading revenues by attracting retail flow.

The integration will provide Robinhood’s US retail customers with access to futures contracts across five major asset classes, including the four leading U.S. equity indices—S&P 500, Nasdaq-100, Russell 2000, and Dow Jones Industrial Average—along with cryptocurrencies, major FX currency pairs, and commodities.

Robinhood’s new futures offering comes with a notably aggressive commission structure, with execution fees set at just US$0.50 per contract, significantly undercutting competitors such as E-Trade (US$1.50 per contract). This pricing strategy aligns with CME’s broader effort to attract more retail participation, trading off lower per-trade fees for higher transaction volumes. However, Interactive Brokers told Global Trading that Robinhood’s pricing was not competitive compared with its own offering, when volume discounts were taken into account.

Julie Winkler, chief commercial officer at CME Group, highlighted the strategic importance of expanding retail access to futures trading, calling it “an integral step in educating and empowering this new crop of investors.” Meanwhile, JB Mackenzie, vice president and general manager of futures and international at Robinhood, emphasised that launching CME futures marks “a significant step forward in making Robinhood the best place for active traders,” pointing to a newly introduced mobile trading ladder designed for ease of use and efficiency.

Neither CME nor Robinhood, who were approached for comments, have provided further details on the financial arrangements underpinning their partnership, leaving open questions about how CME is providing Robinhood with discounts for the fee reductions. Until now, the business model pursued by Robinhood is dependent on a Payment For Order Flow (PFOF) model to procure its clients with “free” execution, a practice which is legal in the US but banned in other jurisdictions.

In its latest 10-Q filing, dated November 2024, CME reported an increase in transaction and clearing fees of $387 million for the nine months to September 2024, offset by a decrease due to the average rate per contract of US$33 million. This suggests that CME has considerable headroom for further contract rate reductions to attract retail customer flow from Robinhood.

Regulators have found that Robinhood has failed across a broad range of its obligations and provisions of federal securities laws. At the same time, its use of PFOF, and the exposure of retail customers to high-risk trades, have attracted regulatory scrutiny in the past, and most recently the company attracted a US$45 million fine for record-keeping failures.

©Markets Media Europe 2025

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Buy side cries price gouging, exchanges say it’s a smokescreen

By

Lucy Carter

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February 5, 2025

Backed by buy-side organisations including EFAMA, AFME and Plato Partnership, a report from Market Structure Partners has garnered criticism from exchanges – and raised concerns about losses the buy side could face under the Retail Investment Strategy.

The report sets up a fight between fund organisations and exchanges on the one hand, and a regulatory spat between the European Commission in Brussels and ESMA in Paris.

The Market Structure Partners (MPS) report asserted that European exchanges are increasing their data fees to compensate for poor market conditions, pushing up prices to make a profit amid low trading volumes, reduced market share, greater use of automation and a smaller customer base.

Exchanges cited in the report, including LSEG, Euronext and Deutsche Borse, have called the claims “misleading” and requiring “extensive corrections”, saying that any changes in market data fees have been aligned with the wider market landscape.

Arguments have also been raised that this is an effort by industry associations to detract from the impact the Retail Investment Strategy (RIS) could have on buy-side firms.

The RIS, part of the European Commission’s Capital Markets Union project, intends to improve protection and support for retail investors. It covers marketing, information provisions, disclosures and accessibility, and is expected to be finalised this year and come into play in 2026 or 2027.

ESMA, a commissioner of the MPS report, and the European Institute of Public Administration (EIOPA) have both voiced concerns about the RIS, calling for a simplified initiative and an evaluation of the administrative, human operational and consumer testing costs that it could require.

The claims

In recent years, value transacted on European equity exchanges has declined. The report cites a 17% drop at Euronext between 2020 and 2023, a 29% decline at Deutsche Borse, and a 26.9% decrease at Nasdaq Nordics between 2021 and 2023. However, drops in revenue were minimal relative to these figures, the report said: 0.5%, 12% and 8.8%, respectively.

At the same time, market data revenue as a proportion of total equity revenue was up at all three exchanges. Euronext’s rose by eight percentage points, Deutsche Borse’s by 10 and Nasdaq Nordics’ by four.

LSEG’s Turquoise saw the most drastic decline in trading turnover between 2020 and 2022, the report stated, down 61%. It noted that market data revenue went from 10.5% to 27% of total equity revenue.

These increased revenues have occurred without any changes in the cost of running a trading platform or producing market data, Market Structure Partners said. Instead, profits are coming from complex fee structures that charge for factors such as data consumption method and the number of devices able to access the data.

Thomas Richter, CEO of the German Investment Funds Association (BVI), argued: “Asset managers are legally forced to use stock market prices, benchmarks, credit ratings, and other data from third-party providers. Because of the existing oligopoly market structures with only a few providers per segment, there is a case for competition law authorities. We call for an EU data vendor act that regulates the commercial behaviour of these entities. Because if we don’t, the already considerable cost pressure in the fund industry will intensify even further – also to the disadvantage of the consumers.”

Thomas Richter, CEO, German Investment Funds Association (BVI)

The impact of these structures is more acute for some firms than others; if one customer receives reduced costs, others will have theirs elevated. Market Structure Partners stated that firms competing with traditional stock exchanges have seen the sharpest cost spikes; with prices rising by up to 481% for trading venues and by between 97% and 170% for index providers between 2017 and 2024.

‘User type’ is a critical variable in fee structures, the report said. In response to market participants’ increased use of automation, and the impact this can have on exchanges’ revenues, having a machine handle data in place of a human can be between 35 and 97 times more expensive than it was in 2017, according to MPS.

Limits are also imposed on how exchanges’ market data can be used, the report said, with clauses preventing clients from including it in non-pre-approved projects. This is preventing innovation and market growth, it argued, going against one of the central responsibilities of exchanges in the financial ecosystem and preventing European market competitiveness.

Investment management group The Investment Association warned that the impact is more widespread than the report signals. Galina Dimitrova, director for investment and capital markets, told Global Trading: “The Investment Association has consistently expressed concerns about the escalating costs and complexity of market data our member firms need to purchase from trading venues, index providers and rating agencies. From the largest global asset managers to the smallest investment management firms – all have faced rising prices to acquire business-critical data. This experience is not limited just to the buy-side.

Galina Dimitrova, director for investment and capital markets, The Investment Association

“It is high time we resolve these persistent issues and ensure that the market for wholesale data is fairly priced and accessible to all who need it.”

The counterattack

Exchanges have been quick to offer counter-evidence to MSP’s claims. Both Euronext and Deutsche Borse drew attention to an Oxera report published last September, which found that stock exchange revenues were stable between 2018 and 2023 and minimal increases in market data revenues were the result of regulatory change, inflation and competition for talent. For FESE member exchanges, it added, the majority of exchange revenue still comes from trade execution.

This report also directly opposes MSP’s statement that data dissemination costs are passed on to third parties, with Deutsche Borse highlighting: “DBAG did not pass on all additional costs for market data production and dissemination.”

LSEG has disputed the report’s figures, with a spokesperson stating: “The data presented in the report contains multiple errors and does not accurately present Turquoise’s trading volumes and market data costs. As just one example, the report says that ‘LSEG’ has increased its data fees for private investors by over 150% between 2017-2024. However, market data for retail investors on Turquoise has always been free and there was no change in the LSE data charge for this community over this period. Since January 2025, LSE fees for market data for retail have also been waived.”

A Nasdaq Nordics spokesperson agreed, saying: “The claim that exchange data fees are increasing is misleading; any price increases have been below inflation over the same period, and we are fully committed to fair and transparent pricing.”

On market growth, they added: “We are relentlessly focused on innovation and enhancing the resilience of our world class markets and data services, to ensure they keep up with the accelerating pace and sophistication of trading.”

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FINRA cracks down on securities lending practices with $US3.2m fine

By

Etienne Mercuriali

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February 5, 2025

In a first-of-its-kind enforcement action, FINRA has slapped Apex Clearing Corporation with a US$3.2 million fine for violating Rule 4330—the customer protection rule governing the permissible use of customers’ securities in lending programs.

Unlike the historical enforcement efforts that focused on naked short selling and failures to secure locates, this case targets a fully paid securities lending program designed for retail investors.

Apex Clearing operated a program in which customers’ fully paid or excess margin securities were lent out without the proper safeguards. Under Rule 4330, a member firm must have “reasonable grounds” to believe that borrowing customer securities is appropriate, and must provide specific, clear written disclosures to customers about the risks they face. However, from January 2019 through June 2023, Apex not only entered into lending agreements without a proper determination of customer suitability but also distributed documents to more than five million retail investors that misrepresented the compensation they would receive. They received US$0 fees. In addition, Apex’s supervisory systems fell short, as the firm failed to establish and enforce written supervisory procedures that would ensure compliance with these disclosures and appropriate requirements.

Historically, regulators have focused on short-selling abuses. Naked short selling was first tackled with rule 204 regulation SHO finalised in 2009, where shares are sold without first arranging to borrow them, was for a long time at the forefront of enforcement proceedings. New regulations have been put into place post the Game Stop saga of 2020 to further tighten the regulatory environment surrounding short selling.

In earlier enforcement actions, such as the SEC’s penalties against firms like Goldman Sachs in the mid-2000s and fines imposed on market makers for failing to obtain locates like in the case of Citadel Securities in 2023, the focus was on preventing “failures to deliver.” Those actions addressed the mechanics of short sales by ensuring that firms followed the locate requirement and appropriately marked orders as “short” rather than misrepresenting them. In contrast, the Apex Clearing case is not about naked short selling or the mechanics of executing a short order without securing the shares; rather, it centres on the mismanagement of a fully paid securities lending program that exposed retail investors to undue risks without providing any financial upside.

Bill St. Louis, executive vice president and head of enforcement at FINRA, summed it up: “Member firms must have reasonable grounds to believe that a fully paid securities lending program is appropriate for customers who participate. It is unreasonable to expect a customer to take on risks and the potential financial consequences of securities lending with no financial upside.” This enforcement action serves as a stern reminder that the use of customer securities—when it comes to lending—carries its own set of rigorous disclosure and supervisory requirements, distinct from the rules governing short selling.

Apex Clearing consented to FINRA’s findings without admitting or denying the charges and has since committed to certifying that it has remediated the identified issues.

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Japan Exchange to mine customer data for product development

By

Lucy Carter

-

February 5, 2025

Koichiro Miyahara, president and CEO, JPXI

JPX’s centralised data management platform J-LAKE will scrape information on market participants, listed companies and customers to develop new products.

Through a partnership between JPX Market Innovation & Research (JPXI) and machine learning-driven data hosting and analytics provider Snowflake, insights gathered will be used to create tailored client solutions, the exchange explained. This information will also be accessible to market participants.

Currently, services are developed based on trend analysis, customer interviews and collaborations with existing partner companies. This partnership will allow JPXI to collaborate with new external vendors, startups and platform providers to meet client demands, it said.

The datasets included on the platform will be determined through customer consultations this month, and are expected to be released before the end of March.

Koichiro Miyahara, president and CEO of JPXI, commented: “Our collaboration with Snowflake represents a new channel through which we can offer greater convenience to market participants while expanding the reach of JPXI’s data products to a broader audience.

“We are excited to enter a new partnership that furthers JPX Group’s long-term vision of contributing to sustainable societal and economic development by evolving into a global, comprehensive financial and information platform.”

Hidetoshi Tojo, managing director at Snowflake, added: “By combining JPXI’s J-LAKE platform with Snowflake’s AI Data Cloud, we believe that we can create an environment where more market participants can access JPXI’s rich and varied data offerings with more ease, efficiency, and convenience, thereby expanding the potential for innovative data usage.”

Snowflake is used by a number of exchanges to facilitate data dissemination and analysis, with LSEG making historical data for fixed income securities available in December last year. Large banks including State Street and Citi are also clients.

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Linda Coffman is the executive vice president and head of reference data services for SmartStream. Reflecting on 2024 and looking ahead to 2025, she shares with Global Trading how client demands are changing and the impact of new regulations.

The CFTC has hit back at Bloomberg’s claims of policy infringement by acting CFTC chairman Caroline Pham, calling the statements “an unfortunate attempt by disgruntled individuals that are under investigation to distract from the CFTC’s important mission”.

Northern Trust Asset Management has again expanded its quantitative investment strategies team, seeking to get ahead in the competitive space. Four of its central hires come from Dutch pension company APG’s asset management division.

UK cash equities will begin trading on a T+1 settlement cycle from 11 October 2027, T+1 Accelerated Settlement Taskforce (AST) has confirmed. This marks an alignment with the EU’s transition date.

Former head of options at the New York Stock Exchange Meaghan Dugan has joined Cboe as head of US options.

Nvidia accounted for one in fourteen of every S&P 500 shares traded last week, as the company reeled from Deepseek’s AI breakthrough.

S&P 500 Treemap

CME Group has struck a deal with Robinhood to bring its futures products to the platform with significantly discounted execution fees compared to competitors, a move that underscores CME’s strategy to boost trading revenues by attracting retail flow.

Backed by buy-side organisations including EFAMA, AFME and Plato Partnership, a report from Market Structure Partners has garnered criticism from exchanges – and raised concerns about losses the buy side could face under the Retail Investment Strategy.

In a first-of-its-kind enforcement action, FINRA has slapped Apex Clearing Corporation with a US$3.2 million fine for violating Rule 4330—the customer protection rule governing the permissible use of customers’ securities in lending programs.

JPX’s centralised data management platform J-LAKE will scrape information on market participants, listed companies and customers to develop new products.

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