Citi Securities Services’ ETF Services business has onboarded 23 new exchange-traded funds (ETFs), with approximately US$9 billion in assets in North America. The book is comprised of both transparent and non-transparent ETFs.
The mandate further expands Citi’s relationship with Nuveen, an existing markets client. Its parent company, TIAA, is supported by Securities Services and Treasury and Trade Solutions.
Peggy Vena, head of ETF services for Citi Securities Services
Peggy Vena, head of ETF services for Citi Securities Services, said: “With this mandate, we are committed to using our global network and fund accounting expertise to provide Nuveen with a seamless client experience as we continue to expand our ETF Services business globally.”
Leveraging Citi’s global Advanced Citi ETF System (ACES), Nuveen will benefit from automated processing across the entire ETF lifecycle, from basket creation, order processing to settlements, and daily order management of positions via real-time updates in the Investment Book of Record (IBOR).
Citi ETF Services supports 12 markets as the business continues to expand. From 2021 to 2023, Citi added US$425 billion in ETF assets under administration.
BlackRock predicts that global ETF assets are set to reach US$14 trillion by the end of 2024, having hit US$12 trillion in 2023.
Earlier this year, Citi added FIX API connectivity to its ACES platform to benefit clients and market participants in a T+1 environment. The ETF Services business was also appointed to support the first covered call ETFs listed in Hong Kong.
Citi Securities Services has approximately US$24 trillion in assets under custody and administration.
Jefferies’ Q2 results have seen the investment banking and capital markets firm’s reported revenue hit US$1.66 billion, a 59.6% increase against the same period last year, boosted by strong underwriting revenues.
The firm’s total capital markets revenues for Q2 reached US$691.27 million, a 27.4% increase against Q2 2023. Investment banking net revenues hit US$803 million, a 57.5% increase year over year.
For equities, the firm’s net revenues were US$407.09 million, a 43.7% increase. In equity underwriting, the figure was US$249.19 million, a 67.9% increase on Q2 2023.
Brian Friedman, president, Jefferies
Jefferies CEO Richard Handler, and president Brian Friedman, said: “Capital Markets net revenues of $691 million were modestly lower than the prior quarter and up 24.1% versus the same quarter last year, with strength in equities offsetting a moderation in fixed income after its strong first quarter.
“Overall, momentum continues to build across our investment banking business, as the market opportunity improves and the investment we have made in our platform translates to increased market share,” the pair added.
Morgan Stanley analysts suggested that trading showed “considerable strength” amid low volatility with investment banking revenues buoyed by an underwriting boost. “We are increasing our trading estimates in 2H24/2025. We view positive CEO commentary on 2H24/2025 … as a vote of confidence the capital markets rebound is building.”
Artificial intelligence (AI) has, despite a flurry of media attention in recent times, been around for sometime. But the ability for humans and computer systems to interface in a more conversational way, drawing on large datasets and freeing people from repetitious grunt work, has sparked a wider debate around the use of the technology. ipushpull CEO, Matthew Cheung spoke to Global Trading about the use of AI on trading desks, the products – and solutions – his firm provides, and why we have nothing to worry about from the AI revolution.
Is AI having a measurable, actionable impact on trading, or is it still very much an ‘edge’ case technology?
There are two answers to this. One, AI has been around since World War Two, so in that sense, it’s nothing new. But generative AI has changed people’s perceptions of what you can do with it. With ChatGPT, people have started looking at AI, chat and chat bots in a different way.
Having the ability to interface, to use more natural language, when querying AI means AI can provide a number of different tools on the trading desk. It can take the unstructured chat of typical chatbots and make it into something more usable. This is definitely an area where I have seen a lot of focus. It is an area where traders and brokers on one side, and salespeople on the other, are very keen to see automation because it solves a problem that has been around a long time – double-keying things, manual processes, emails and spreadsheets.
There is however a reluctance, due to the risk element, to start using these tools externally with clients due to hallucinations* within Large Language Models (LLMs). So, we suggest keeping a human in the loop so that while you are removing a lot of the grunt work, you can still have some oversight in place. Ultimately, however, there will probably be full automation in some capacity.
Can you tell us about what solutions you offer, and what challenges they solve?
We are a sharing and workload automation platform. We are used by traders, brokers and exchanges, data companies, and fintechs. We are solving a lot of problems around data sharing where a great deal of this falls into manual, legacy ways of doing things. We do workflows around data distribution, where we can plug into a bank that may have bond axes, or a broker that has prices they are quoting. We can pull that data and distribute it to lots of different applications and services. For example, a trader at a small hedge fund might be happy consuming data in a spreadsheet, whereas a more sophisticated trader, a quant perhaps, might want a FIX API. An OTC trader might want to consume something directly in chat, because that is where they are doing the majority of their trading. We are agnostic, in that sense, to what format the end user wants to consume things in.
We have other workflows where customers use us to grab data from their clients. That could be sending prices out, to a trader, and then that trader wants to initiate an order, or trigger an RFQ, for example.
We can pull all of the unstructured conversation and text from different platforms and turn it into a structured object, and then plug that into a service to get a response. Then we have different workflows where we plug different components together so that we can provide standalone tools for different people in the market.
If I’m typing stuff into lots of different chats or I’m emailing different people, that information is not stored anywhere, but now you can start capturing it and then start creating analytics based on it. For example, if I’m a trader at a buy-side firm, instead of my broker coming to me with quarterly broker reports telling me how well that broker has performed, I now have my own statistics and analysis. In short, our service makes processes a lot more efficient and allows firms to build data around what they do as well.
Do you foresee a situation where firms allow AI to execute trades entirely without human oversight or intervention?
That is already happening in some areas, depending on the size of the trade. One of our clients uses a bot that, under a certain amount, can trade. But over that amount, the trade will be routed to a particular salesperson to pick up.
I think what we are headed towards is something like a co-pilot, where you can start to digitise some of the workflows, which will give you the ability to automate a lot. Looking ahead, I see the trader and the AI working together where all these trades, services and systems are largely automated with a trader acting in an oversight capacity doing exceptions handling. The human would also get involved if there was a sudden rate cut from a major central bank, or if a bomb went off in a major city.
AI is a tool, like fire, electricity, computers – it will never replace humans. The more you can embrace it and understand it, the better. Therefore, it is essential to have a strategy about how to use AI, both in terms of your own products, and on the trading desk.
We have seen the evolution from floor trading to screen trading to more quantitative algo trading. But there is still a need for humans, with their experience and broad range of skills, and their ability to connect the dots. In terms of headcount, AI doesn’t necessarily mean job cuts. If AI frees people from more rote, grunt work, they can be better deployed, servicing clients. It is very much freeing people’s time up, rather than losing jobs. We will see people moving on to more higher value tasks, rather than sacking them because AI has taken their job. I don’t see that happening because there’s higher value tasks people can be doing, rather than typing stuff into chat and opening up emails and opening up spreadsheets. That’s just a rubbish use of anyone’s time. n
*AI models are trained on data, and they learn to make predictions by finding patterns in the data. However, if the training data is incomplete or biased, the AI model may learn incorrect patterns. This can lead to the AI model making incorrect predictions, or hallucinating.
Atul Pawar, incoming chief risk officer, Clear Street
Clear Street has appointed Atul Pawar as chief risk officer, effective July.
Based in New York, Pawar will be responsible for overseeing risk management in Clear Street’s institutional and active divisions.
The institutional division handles securities financing and lending, clearing and settlement, execution, professional clearing and custody, capital introduction and investment banking, while the active division provides active traders with products and services to improve their speed, efficiency and reliability.
Pawar has close to 20 years of industry experience, with his career to date spent at Goldman Sachs. He currently serves as a managing director and head of US prime, clearing, FCM and counterparty risk at the firm.
Prior to this he was part of the company’s strategy group, leading portfolio analytics and stress test builds.
Commenting on Pawar’s appointment, Chris Pento, CEO and co-founder of Clear Street, said: “Risk management is the most important part of our value proposition and was the crux of why we founded this business six years ago. The financial industry still operates on infrastructure built in the 1970s, which can lead to costly errors, reduced profit margins and unattractive risk profiles.
“Atul’s proven experience and veteran status at a premier competitor speaks to our increasing presence and forward growth trajectory in the industry. We’re excited to welcome him to our world-class team as we continue to bring our clients compelling and tech-forward products and services.”
Pawar stated: “Clear Street is challenging the status-quo by building a modern, cutting-edge, centralized technology platform unlike any other available on the street. I look forward to contributing to the Company’s expansion plans and continued success.”
In this regulatory round-up, US regulator the Securities and Exchange Commission (SEC) comes down on firms over market manipulation and securities fraud, while work is underway across Asia Pacific (APAC) to shore up corporate governance code in Hong Kong, and admit a Bitcoin ETF in Oz. Elsewhere, EU regulator ESMA has appointed new members to its securities and markets stakeholder group.
SEC charges Meta Materials with market manipulation, fraud
CFTC approves capital comparability determinations for non-US nonbank swap dealers
Terraform and founder Kwon to pay $4.5bn in securities fraud case
Stock Exchange of Hong Kong enhances corporate governance code
ASX admits first Bitcoin ETF
Laser Digital completes Abu Dhabi licensing process
ESMA appoints new members to its securities and markets stakeholder group
ESAs propose improvements to the sustainable finance disclosure regulation
FIA and Acuiti release report on European listed derivatives markets
AFME stresses jurisdictional coordination amid EU implementation of Basel III standards
GDF, ANNA and DTIF collaborate to establish digital asset standards
Americas
SEC charges Meta Materials with market manipulation, fraud
The US Securities and Exchange Commission has filed charges against Meta Materials and its former CEOs, John Brda and George Palikaras, over a concerted market manipulation scheme, which raised US$137.5 million from investors in an at-the-market (ATM) offering in June 2021 immediately prior to the merger of Brda’s Torchlight Energy Resources and Palikaras’ Metamaterial that formed Meta Materials.
The SEC’s complaint alleges that Brda and Palikaras conducted the manipulative scheme that included, among other things, issuing a preferred stock dividend immediately before the merger. The complaint alleges that Brda and Palikaras told certain investors and consultants that the dividend would force short sellers to exit their positions and trigger a “short squeeze” that would artificially raise the price of the company’s common stock.
While investors held or bought the company’s common stock to receive the dividend, the complaint alleges, the company was cashing in by selling US$137.5 million in an ATM offering at prices that the company, Brda, and Palikaras knew were temporarily inflated by their manipulative scheme.
Eric Werner, SEC
“The conduct we allege was a sophisticated, yet brazen plan by a public company and its former CEOs to purposely mislead investors in the company’s stock,” said Eric Werner, director of the SEC’s Fort Worth regional office. “This conduct is particularly alarming because it involves public company CEOs who were more concerned with ‘burning the shorts’ than creating long-term value for shareholders.”
The SEC’s complaint charges Brda and Palikaras with violating the antifraud and proxy disclosure provisions of the federal securities laws, and charges Brda with aiding and abetting Meta Materials’s violations of the reporting, internal accounting controls, and books and records provisions. Meta Materials was ordered to cease and desist from violations of the relevant provisions of the federal securities laws and to pay a US$1,000,000 penalty.
CFTC approves capital comparability determinations for non-US nonbank swap dealers
The Commodity Futures Trading Commission (CFTC) announced today it has approved four comparability determinations and related comparability orders granting conditional substituted compliance in connection with the CFTC’s capital and financial reporting requirements to certain CFTC-registered nonbank swap dealers domiciled in Japan, Mexico, the European Union (France and Germany), or the United Kingdom.
Pursuant to the orders, non-US nonbank swap dealers subject to prudential regulation by the Financial Services Agency of Japan, the National Banking and Securities Commission of Mexico and the Mexican Central Bank, the European Central Bank, or the United Kingdom Prudential Regulation Authority may satisfy certain Commodity Exchange Act capital and financial reporting requirements by being subject to comparable capital and financial reporting requirements under the respective foreign jurisdiction’s laws and regulations, subject to specified conditions.
To rely on a comparability order, an eligible non-US nonbank swap dealer must notify the CFTC of its intention to satisfy the CFTC’s capital and financial requirements by substituted compliance.
Terraform and founder Kwon to pay $4.5bn in securities fraud case
The US SEC has fined crypto firm Terraform and CEO Do Kwon more than $4.5 billion over “one of the largest securities frauds in U.S. history”.
Kwon and his firm Terraform orchestrated a years-long fraud involving crypto asset securities that led to “devastating” investor losses when the scheme unravelled.
Gary Gensler, SEC
SEC chair Gary Gensler said: “The economic realities of a product—not the labels, the spin, or the hype—determine whether it is a security under the securities laws.
“Terraform and Do Kwon’s fraudulent activities caused devastating losses for investors, in some cases wiping out entire life savings. Their fraud serves as a reminder that, when firms fail to comply with the law, investors get hurt,” Gensler added.
APAC
Stock Exchange of Hong Kong enhances corporate governance code
The Stock Exchange of Hong Kong, a subsidiary of Hong Kong Exchanges and Clearing (HKEX), has published a consultation paper outlining proposed enhancements to the Corporate Governance Code (Code) and related Listing Rules.
Katherine Ng, HKEX head of listing
HKEX head of listing, Katherine Ng, said: “At HKEX, we are committed to driving the long-term growth and attractiveness of our markets by further elevating the quality of our issuers, and promoting strong corporate governance practices is a key part of our approach. We are therefore pleased to be presenting for consultation the latest proposed enhancements to the Corporate Governance Code. This will ride on the success of our efforts to ban single-gender boards – which will take full effect from the end of 2024 – further helping issuers to create a more diverse boardroom and strengthen risk management and internal controls.”
Key proposals include: Board effectiveness improvements; promoting diversity; enhancing risk management and internal controls; and better capital management.
The proposed amendments will apply to corporate governance reports from 1 January 2025.
ASX admits first Bitcoin ETF
The Australian Securities Exchange (ASX) has authorised its first spot Bitcoin exchange-traded fund (ETF).
The admission of the VanEck Bitcoin ETF (ASX:VBTC) comes as crypto assets, such as Bitcoin and Ether, increasingly move into the investment mainstream, supported by increased regulatory guidance around the product category and growing consumer demand, the exchange said.
Andrew Campion, general manager, investment products and strategy, said: “At ASX, a key part of our role is to ensure that investors can have confidence in trading securities and have certainty in the structure of their holdings. To achieve this, we’ve been working on bringing a crypto asset ETF to market for a number of years, including establishing a new category of permissible underlying assets for ETFs in August 2022 which includes Bitcoin and Ether.
“As the demand for digital assets continues to grow, we are proud to offer a regulated avenue for Australian investors to access the crypto asset market,” Campion said.
EMEA
Laser Digital completes Abu Dhabi licensing process
Digital asset business Laser Digital has been granted a Financial Services Permission (FSP) by the Regulatory Authority of Abu Dhabi. This completes its licensing process with Abu Dhabi Global Market (ADGM).
With this approval, Laser Digital can provide broker-dealer, asset and fund management services for both virtual and traditional assets in and from ADGM. The firm’s UAE business is led by Jez Mohideen, with Ramin Shayesteh serving as head of distribution.
Backed by Nomura, Laser Digital provides scalable opportunities in trading, solutions, asset management and ventures.
ESMA appoints new members to its securities and markets stakeholder group
The European Securities and Markets Authority (ESMA), has appointed new members to its Securities and Markets Stakeholder Group (SMSG). On 1 July 2024 the new members will start their four-year term, during which they will provide ESMA with advice on its policy work and will be consulted on technical standards and guidelines.
Verena Ross, chair, ESMA
ESMA chair Verena Ross said: “ESMA works to enhance investor protection, build more effective and attractive capital markets in the European Union and safeguard financial stability.
“This is why I look forward to hearing the SMSG members’ perspectives on market developments and to receiving valuable advice on numerous files under ESMA’s remit.”
ESAs propose improvements to the sustainable finance disclosure regulation
The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have called for a coherent sustainable finance framework that caters for both the green transition and enhanced consumer protection, taking into account the lessons learned from the functioning of the Sustainable Finance Disclosure Regulation (SFDR).
The ESAs focus on ways to introduce simple and clear categories for financial products. The simplifications consist of two voluntary product categories, “sustainable” and “transition”, that financial market participants should use to ensure consumers understand the purpose of the products. The rules for the categories should have a clear objective and criteria to reduce greenwashing risks.
The ESAs recommend that the European Commission consider the introduction of a sustainability indicator that would grade financial products such as investment funds, life insurance and pension products.
FIA and Acuiti release report on European listed derivatives markets
FIA has released a report on the challenges and opportunities facing the European listed derivatives markets. The report is based on responses to a survey conducted recently by Acuiti, a market intelligence firm, that gauged industry sentiment regarding the key trends, opportunities and challenges facing the industry in Europe.
Acuiti surveyed more than 100 individuals at a variety of firms active in Europe, including clearing brokers, asset managers, hedge funds, principal trading firms, exchanges and software vendors. The survey asked for opinions on current trends as well as the outlook for the next five years.
The survey found that the industry is optimistic about the potential for growth and innovation in Europe, but also aware that other parts of the world may offer better growth prospects. The survey also found a high level of concern about existing and prospective regulations as well as the aftereffects of Brexit.
Walt Lukken, FIA president & CEO
Walt Lukken, FIA president and CEO, said: “To better serve the exchange-traded and cleared derivatives markets, FIA is keenly interested in understanding the dynamics of growth and innovation at both the regional and global level. Many of our most important members are based in Europe, and we are delighted to partner with Acuiti on this initiative to understand how the industry sees the outlook for this region.”
AFME stresses jurisdictional coordination amid EU implementation of Basel III standards
The Association for Financial Markets in Europe (AFME) has welcomed the publication of the CRR3 and CRD6 proposals in the Official Journal of the EU (OJEU) and its upcoming entry into force in early July, which marks the implementation of the final Basel III rules in Europe.
AFME supports the EU Commission’s decision to activate the delegated act for the Fundamental Review of the Trading Book (FRTB), which it considers “highly relevant” in ensuring a more consistent timeline for the FRTB implementation across the world.
Caroline Liesegang, head of capital and risk management at AFME, said: “This package strengthens banks’ resilience and recognises their role in financing the economy. European banks are much better capitalised already, and the increased resilience was effectively demonstrated in 2023 following some stress events in the global banking system.
“AFME therefore calls on decision makers to resist further increases in capital requirements in the coming years as the banking sector goes through an important implementation phase. In fact, while the industry pools its capacity to finance, in particular, the digital and green transition, we encourage regulators to begin thinking of targeted adjustments to the regulatory framework that would also future proof the real economy,” Liesegang added.
World
GDF, ANNA and DTIF collaborate to establish digital asset standards
Global Digital Finance (GDF) has partnered with the Association of National Numbering Agencies (ANNA) and the Digital Token Identifier Foundation (DTIF) to establish standardised identification data and best practices within the digital asset industry.
Through the partnership, GDF, which provides a platform for digital asset innovation in financial services, stated that it aims to improve awareness and adoption of market standards that support stronger, transparent and more efficient bridges between TradFi and the digital asset ecosystem.
This partnership follows the ANNA-DTIF Task Force, established in 2021, which aims to ensure a complementary relationship between the International Securities Identification Number (ISIN) and Digital Token Identifier (DTI) ISO standards. In 2023 the initiative expanded to cover new ISINs assigned by ANNA (XT ISINs), based on DTIs for digital assets that are not financial instruments.
Bloomberg has added a series of sustainability tools to its portfolio and risk analytics solutions, in response to diversifying sustainable investment strategies and evolving regulatory requirements.
Clients can now access EU Sustainable Finance Disclosure Regulation (SFDR) key indicators, greenhouse gas emissions and carbon footprint data, along with Bloomberg’s proprietary ESG scores measuring company performance and disclosure.
These are available through a dedicated ESG screen in PORT, the firm’s portfolio and risk analytics solution, and through PORT Enterprise, where clients can access an integrated enterprise reporting solution.
Soojin Lee, head of ESG integration and analytics at Bloomberg, commented: “Investors need increasingly sophisticated solutions to identify sustainability-related risks and opportunities, and meet their objectives and obligations.
“Bloomberg’s expanded PORT offering enables clients to manage and conduct detailed sustainability analysis on their portfolios, all in one place and through the click of a button. To ensure data consistency across the investment management process, from decision-making to reporting, clients can also access standardised reporting templates, or design their own reports with our PORT Enterprise functionality.”
EMIR Refit is set to come into force in the UK from 30 September 2024, with the goal of increasing transparency, accuracy and efficiency in derivatives transaction reporting. eflow Global’s Ben Parker spoke to Global Trading about the dangerous lack of preparation his firm has seen across the industry.
“Just two weeks before the EU’s EMIR Refit deadline on 29th April, an Italian firm expected a compliant solution to be implemented from scratch,” Ben Parker, CEO and founder of eflow Global, told Global Trading. “While it’s encouraging that firms are seeking technological solutions to navigate regulatory changes, it’s concerning that they even believed this could be accomplished within the given timeframe.”
In order to prevent the same situation happening in the UK, with EMIR Refit coming into force from 30 September, eflow Global has launched the EMIR Refit Readiness Audit. Through a 30-minute consultation, the regtech firm hopes to help businesses understand how they need to prepare for new requirements.
The new regulation includes 89 new data fields and formats, revised reporting templates and enhanced data quality requirements. According to eflow, clients’ particular pain points include the shift to an XML reporting format and how to interact with the new unique product identifier (UPI) field. A lack of preparation to deal with these changes will only result in fines.
The rollout seen in the EU cannot be repeated in the UK, Parker warned. “Whether it is a laissez-faire attitude to the potential consequences of these regulations, misplaced trust in legacy systems or just simply not understanding the task at hand, it is a trend that is in desperate need of changing.”
He concluded: “Ultimately, UK firms have been granted a rare gift with EMIR Refit: the benefit of hindsight. As the September deadline approaches, it’s crucial for UK firms to learn from the experiences of EU companies and avoid similar pitfalls.”
Guy Rowcliffe, co-CEO and chief commercial officer, OSTTRA
Global post-trade solutions provider OSTTRA has processed more than 300,000 cleared Canadian Dollar Offered Rate (CDOR) trades for over 60 customers over the past month, in advance of the transition to the Canadian Overnight Repo Rate Average (CORRA) benchmark.
Trades were processed through CCP Sync, which allows OSTTRA MarkitWire to capture post-clearing activity from multiple CCPs and return results to customers.
The deadline for the CORRA transition is 28th June. This shift will impact much of the swaps market and a significant portion of OSTTRA customers, the firm said.
Melissa Younger, head of rates and credit trade processing at OSTTRA, commented: “Our ability to process such a high volume of CAD trades successfully highlights our commitment to facilitating a smooth transition for our customers, who value our expertise and partnership. Comprehensive support, consistent processing across multiple CCPs and innovative solutions are key to ensuring the industry continues to adjust smoothly to new benchmark rates.”
Jack Seibald, co-head of prime services and outsourced trading, Marex (L) and Paolo Tomucci, chief strategist and CEO of capital markets, Marex (R)
Global Trading speaks exclusively to Paolo Tonucci and Jack Seibald about what the long-awaited addition of a capital markets division brings to Marex, and how this year’s Cowen acquisition has changed their scope.
Marex’s addition of a capital markets division for prime brokerage has been a long time coming.
“Five, six years ago, we consciously decided that we needed to extend a product offering,” Paolo Tonucci, chief strategist and CEO of capital markets at the firm, told Global Trading. “We started making acquisitions to give us presence and product sets in the US – that was the first step in dealing with geographic expansion.”
During this process, “it became evident that we needed to have a proper presence in financial products,” Tonucci continued. “Not just exchange-traded but a wider range, we needed to be able to service asset managers, the buy side, some of the inter-bank flows and other financial services companies. We recognised that we were subscale in that part of the world – and that’s a very big business area.”
Marex had a clear vision of what prime and outsourced trading could bring the company, with Tonucci noting a number of structural changes in the market. He anticipated increased fragmentation in how hedge funds are serviced, stating that “hedge funds are no longer the only providers of liquidity, they have more choices around who can service them”.
“The consolidation of banks has reduced the number of bank competitors, but the banks have been much more focused on which clients they want to serve that there’s a tier of clients who are somewhat underserved.”
The journey
By early 2023 Tonucci had his sights set on a credible prime offering. “It was clear to me that the chances of growing a credible financial products business that could service the buy side organically was close to zero,” he recalled. “I felt we had to buy it rather than build it ourselves. Those things take years of experimentation, knowledge and expertise before you can get them right.”
That March, TD Bank’s acquisition of Cowen closed – but Marex was hearing from its wider network that the fit wasn’t right. One of the company’s senior equities operators already had a relationship with Jack Seibald and Mike Rosen, heads of the prime brokerage services and outsourced trading division, and when Tonucci heard that Rosen was going to be in London he set up a lunch.
“The opportunity with this group couldn’t have come at a better time, and it couldn’t have been a better group for Marex,” Tonucci summarised.
In New York, Seibald heard about the London meeting. “In the last 27 years, I’ve spent more hours per day with Mike than I have with my wife,” he joked. “We’ve developed a relationship that can be best described as divide and conquer. We tend not to focus on the same thing at the same time, we work on different elements of the business and then consult with each other before making any decisions.”
After reflecting on what their next steps should be, “Mike and I felt a little more emboldened to push the narrative with Cowen management about the possibility of divesting the business,” Seibald said. “We’d [discussed it] previously, because we saw the writing on the wall before closing [the TD deal], but stuck it out and tried to make it work. They ultimately agreed to it and were helpful in convincing TD management, which was very gracious of them.”
Although they were driving for the sale of their company, TD’s team ultimately led negotiations. “Mike and I were only involved in any of the discussions regarding our business and the specifics about our business,” Seibald said. The bank allowed them to solicit interest from firms that they thought would be a good fit, but deals themselves were up to TD’s discretion.
Going public
Just as Seibald and Rosen had settled in, in April Marex announced the launch of its IPO; “a great success”, as Tonucci puts it.
“To be the first financial services company to come to market for quite a few months and to have that happen so successfully is really encouraging and a great endorsement of the capacity of the company,” Tonucci says.
Six months on
Six months on from the integration, Global Trading caught up with Seibald and Tonucci to find out how the partnership was progressing. Both were unequivocally positive about their work together so far.
“The most exciting thing is that we are in an organisation where across the management structure, people understand and are supportive of our business,” Seibald shares. “They have been exceptionally welcoming and made it so that it’s been relatively easy for us to transition to business without interruption to our clients.”
“The best part is, I get to spend much more time in London!” he joked.
“The similarity in culture was immediate, and the relationships are so easy and constructive,” Tonucci agrees. “It was a surprise. I’d normally expect more friction when everyone’s settling in and establishing themselves, but it hasn’t been like that at all.”
Stifel
Soon after the acquisition closed, Marex announced a new partnership with Stifel. “Marex doesn’t have a research offering. For some of the client base, access to research and to research analysts is very important,” Tonucci explains. “It’s not just that they devour all of the written research, but they get access to the analysts, some of the events and conferences that they run.”
Initially, access to research was provided by Cowen. “Under the new agreement with Stifel, clients can access the research directly,” Tonucci explained.
“We’ve also agreed that we be their preferred referral for any prime brokerage clients [and outsourced trading services]. They don’t offer that product, so it provides them an opportunity to further entrench themselves with their clients, and it’s really helpful for us.”
This type of symbiotic relationship is also present in the overall integration with Marex.
New places, new faces
Marex has a global footprint, which Seibald explains will allow his division to solicit in new markets, build brand awareness and onboard more clients. Already putting themselves on the map in Singapore, Australia and Hong Kong, “we think there’s an opportunity to really leverage the business in the EU and MENA,” he notes.
The integration has also necessitated a personnel expansion. “We identified a few parts of the organisation where we needed to enhance our capabilities,” Seibald says. One of these was capital introduction, which had to be paused during the transition from TD Cowen. “Marex’s management was totally aware of that and supportive of us initiating that process again once the transaction closed,” Seibald recalls. “In the US, we’ve already hired two people into the cap intro group.”
In the UK, the organisation has also onboarded a prime broker salesperson to help them break into the family office and private banking market. “There’s an awful lot of activity that takes place in the private banking sector with services that are not dissimilar to those we offer,” Seibald explained, “but are much more limited. We’re hoping that this person’s expertise will open the door for us and identify where those opportunities might come from.”
With opportunities abound and a strong relationship, Marex’s acquisition looks like it will be here for the long run.
Augmentum Fintech has invested £2.6 million in LoopFX following its latest funding round, making it the first institutional investor in the company. Tim Johnson, co-founder and chief operating officer, spoke to Global Trading to share further details of the partnership and to hint at what is yet to come.
“From the first day we began discussing working together, our respective teams shared a synergy and a professional working relationship that felt like they had been with LoopFX since the beginning,” Tim Johnson, co-founder and chief operating officer, told Global Trading.
Augmentum, a publicly-listed, UK-based investment company, has previously backed businesses including Tide, Interactive Investor and Zopa Bank. Its CEO, Tim Levene, will join the LoopFX board, chaired by John Sievwright.
“This investment is a tremendous endorsement of our mission and LoopFX’s future potential,” Johnson continued. “It paves the way for us to accelerate our growth as we continue building a new protocol in FX, which we believe will become an essential part of every trader’s toolkit.”
LoopFX is an independent venue for large spot FX trades. It offers peer-to-bank matching, which allows traders to match with asset managers and banks in real-time without risk of information leakage. Asset managers are able to access LoopFX through existing workflows and collaborations with platforms such as FX Connect, while banks are paid for liquidity matched through the service.
“If a match is found in the Loop, execution costs are reduced. If no match is found, best execution processes are improved simply by checking the Loop,” Johnson explained. “And by keeping banks central to matching in LoopFX, the FX ecosystem is respected and improved for all.”
The technology was integrated into State Street’s FX Connect in September 2023, and became a part of FactSet’s Portware in January 2024.
“For our clients, we have always looked to solutions led by practitioners,” Johnson said. “Our market-neutral position as neither a buy side nor a sell side institution gives us a unique reach and openness with our clients, whom we speak with daily. Our success lies in working with, not against, these institutions to collaboratively build effective solutions.”
As for what comes next, “I can share that we will be announcing our signature to the FX Global Code,” Johnson shared. “We are happy to do so as we develop innovative new ways of improving the transparency, robustness, and efficiency of managing FX trades. The FX Global Code has been central to our thinking.”
Commenting on the announcement, LoopFX CEO and co-founder Blair Hawthorne said: “Augmentum’s experience and network will be strategically vital for LoopFX as we move towards launch. And their investment will allow us to build our team and accelerate our capability to meet the needs of our customers. As our first institutional investor, Augmentum will join the ranks of other world-class collaborators.”
Tim Levene, founder and CEO of Augmentum Fintech, added: “We are increasingly focusing on the opportunity in the capital markets space where we see a trend of incumbents opting to collaborate and partner with innovative early-stage companies.
“We believe LoopFX offers a textbook example of a fintech operating in the capital markets in partnership with blue chip financial institutions. LoopFX brings efficiencies in trading and price discovery to the FX market which in turn will help participants comply with MiFID II’s best execution trading regime.”
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