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Monday, March 17, 2025
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Broadridge Enhances Multi-Asset Post Trade Processing with GenAI-Powered Analytics

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Press Release
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NEW YORK, LONDON, TOYKO January 16, 2024 – To better streamline multi-asset post-trade processing and operational reporting, Broadridge Financial Solutions Inc. (NYSE: BR), a global Fintech leader, today announced it added an GenAI-powered advanced analytics feature to its platform. A key component of the Broadridge’s OpsGPT ® application, this new GenAI-powered functionality enables users to generate insights and visualizations directly from their trade data using natural language, eliminating the need for data migration.

“Integrating this AI advanced analytics feature into our post-trade platform delivers simplification and innovation, significantly improving risk management and operational efficiency, especially in response to growing regulatory demands,” said Danny Green, head of international post-trade at Broadridge. “The multilingual capabilities and seamless integration provide an accessible solution for broker-dealers and banks, allowing them to quickly access actionable insights without the complexity of traditional reporting tools.”

This new feature, part of Broadridge’s OpsGPT, leverages generative AI and natural language interactions to supply instant reports, data visualization and quickly generated summaries in an intuitive and user-friendly interface. A key benefit of the new feature is its ability to reduce reliance on manual reporting, replacing it with an AI-driven analytics tool that supports multiple languages, including English and Japanese, with plans for Chinese capability in the near future.

The advanced analytics feature is instrumental to international firms navigating evolving regulatory and market dynamics. By streamlining reporting tasks, the tool enables current and prospective post-trade platform users across EMEA and APAC to better manage their operations and maintain compliance, while addressing the challenges posed by faster settlement cycles and compressed margins.

The feature underscores Broadridge’s data and AI strategy and commitment to innovating to enhance user productivity, capabilities and compliance. With faster and deeper data analytics, users can swiftly identify and rectify anomalies, employing predictive analytics to anticipate and mitigate potential bottlenecks.

For more information on streamlining post-trade operations, please see here.

About Broadridge

Broadridge Financial Solutions (NYSE: BR), is a global technology leader with the trusted expertise and transformative technology to help clients and the financial services industry operate, innovate, and grow. We power investing, governance, and communications for our clients – driving operational resiliency, elevating business performance, and transforming investor experiences.  

Our technology and operations platforms underpin the daily trading of more than $10 trillion of equities, fixed income and other securities globally. A certified Great Place to Work®, Broadridge is part of the S&P 500® Index, employing over 14,000 associates in 21 countries. For more information about us, please visit www.broadridge.com.  

Russell US Indexes to Move to a Semi-Annual Reconstitution Frequency from 2026

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Press Release
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  • Reconstitution of Russell US Indexes will be held semi-annually in June and November from 2026
  • Decision based on data analysis and market consultation undertaken in response to the recent evolution of market dynamics and increased volatility
  • Moving Russell US Indexes to a semi-annual reconstitution frequency supports index goals of maintaining accurate representation of the US equity market and ensuring practical usability of the indexes

FTSE Russell, the global index provider, today announces that the Russell US Indexes reconstitution will move to a semi-annual frequency in 2026, with rebalancing continuing on the fourth Friday in June and with the additional implementation date of the second Friday in November.

Russell US Indexes are currently reconstituted annually in June and based on more recent market dynamics and increased volatility, FTSE Russell explored the impact of reconstituting the Russell US Indexes semi-annually. Based on this evaluation, FTSE Russell announces the decision to add a semi-annual Russell US Indexes reconstitution on the second Friday of November, beginning November 2026, contingent on a successful parallel test run in November 2025.

Commenting on moving the Russell US Indexes to a semi-annual reconstitution, Catherine Yoshimoto, Director, Product Management of FTSE Russell, said:

“Since their inception, regular reconstitutions have been a critical part of maintaining the Russell US Indexes by accurately reflecting the ever-changing US equity market. With increased volatility within US equity markets over the past five years, compared to the prior fifteen years, moving to a semi-annual Russell reconstitution frequency to update membership changes earlier will enable greater alignment with the dynamic changes in the current market environment.”

Proposed semi-annual reconstitution methodology overview:

  • The November semi-annual reconstitution will apply the Russell US Indexes construction rules across the size indexes such as the Russell 1000® and Russell 2000® Indexes, however Russell US Style Index changes will be made only to new additions or membership movements (such as for a stock moving from the Russell 1000 Index to the Russell 2000 Index and vice versa) due to the higher projected turnover of Growth and Value Style changes (Russell US Style Indexes will continue to be rebalanced completely in June).
  • The quarterly December IPO inclusion and float/share changes will be incorporated into the November semi-annual Russell reconstitution.
  • Derived indices, e.g. Russell factor indices, which currently rebalance in December, will also be rebalanced in November.
  • The non-Russell, FTSE equity indices will continue with their quarterly December reviews, however cut-off dates will be aligned with those of the Russell US Indexes semi-annual reconstitution in November.

Fiona Bassett, CEO of FTSE Russell, said:

“The annual Russell reconstitution in June is a major event within the US equity market, however, it is important to ensure the Russell US Indexes – which recently celebrated its 41st anniversary – continue to evolve to reflect the dynamic US economy. One of the most attractive features of the Russell US Indexes is that they are designed to represent the US equity market objectively in terms of capitalization and style. Moving to a semi-annual reconstitution frequency will ensure that the Russell US Indexes continue to represent the market, while maintaining the fundamental purpose of the index as a practical portfolio benchmark.”

As adoption of the Russell US Indexes has grown, so has the size of the trade at the annual Russell reconstitution. Since 2019, the dollar amount traded at the close of Russell reconstitution day across Nasdaq and NYSE exchanges has exceeded $100 billion; at market close of the June 2024 reconstitution $219.6 billion was traded.

Approximately $10.6 trillion in assets were benchmarked (by both active and passive funds) to the Russell US Indexes (including growth and value) as of the end of December 2023. Of this total AUM, approximately $2 trillion of the assets were passive, and ETF assets tracking a Russell US index (including styles, sectors, factors, etc.) stood at $658 billion as of the end of September 2024.

At launch in 1984, the Russell US Indexes were reconstituted quarterly, then semi-annually from 1987, and then annually from June 1989 onwards. Balancing representation and turnover have always been key considerations in determining the appropriate frequency of the Russell US Indexes reconstitution.

View the technical notice here.

View the research paper here.

About FTSE Russell, an LSEG business: 

FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally. 

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $15.9 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives. 

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering. 

FTSE Russell is wholly owned by London Stock Exchange Group. 

For more information, visit  FTSE Russell. 

EXECUTION MATTERS: Assessing Trading Speed

By
Editorial Staff
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(EXECUTION MATTERS is a Traders Magazine content series focused on the topics most important to traders and technologists in US equities and options markets. EXECUTION MATTERS is produced in collaboration with Lime Trading Corp.)

It’s well known that trading speed has taken giant leaps over the past generation, as markets transitioned from humans buying and selling on trading floors to screen-based electronic systems. 

But as the so-called race to zero moves closer to its notional endpoint, where does trading speed stand as a differentiation strategy for market makers, proprietary trading firms, hedge funds and other active market participants?

The short answer: being fastest is still an effective trading strategy, but for a smaller universe of firms. For everyone else, being “smarter and fast enough” makes a viable business, according to Crisil Coalition Greenwich, which cited trading speed as one of its 10 market structure trends to watch in 2025.

“If you are the fastest and first to market, your trading logic doesn’t need to be unique to make money,” the consultancy stated in a January 6 report. “But the number of such firms has dwindled dramatically over the past five years, as data and trading links bump up against the laws of physics.”

A speed-first strategy can be likened to a football receiver who runs a 40-yard dash in 4.3 seconds; that’s eye-popping, but the prospect’s speed alone may not be enough to carve out a successful career. Teams may wish to instead draft a 4.4 guy – still wicked fast – who also has precise route-running and sure hands.

“Combining the most creative people with as much compute power you can get your hands on is where principal trading firms and hedge funds are now finding their alpha,” Crisil Coalition Greenwich stated. “Speed still matters, and the bar keeps getting higher. But running a successful quantitative strategy is now about unearthing unique correlations and market anomalies via predictive AI operated by a hyperscaler and capturing the profits before anyone else has a chance to figure out what it is you’ve done.”

In a May 2024 report entitled Trading as Fast as Lightning, Nasdaq Chief Economist Phil Mackintosh noted how quotes and trades travel over microwaves, lasers, and fiber optics, with speed and reliability tradeoffs to each. 

The Nasdaq report cited an example of a trading route that would take 162 microseconds, or millionths of a second, via fiber, versus 89 microseconds via wireless. “That might not seem like much,” Mackintosh wrote. “But even in an Olympic race, a split second can be the difference between winning and second place – here, it might mean completing an arbitrage or being legged and exposed to losses.”

“In short, microseconds can matter,” Mackintosh added. “Just like for the past hundreds of years, it’s likely that the race for lower latency will continue.” 

In a recent X thread entitled From Chaos to Code: The Evolution of Trading, financial technology company Algocipher Quantitative chronicled the industry’s journey from open outcry to high-frequency trading.

“Trading today is faster, more precise, and far more scalable than the days of open outcry,” Algocipher wrote, citing quantum computing and artificial intelligence as possible market disruptors going forward. 

BlackRock Foundation, Commonwealth Partner on Retail Investor Research

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Press Release
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The BlackRock Foundation and Commonwealth Launch National Research Effort to Understand First-Time Investors Who Entered Capital Markets Since 2020

Supported by a $1MM grant from The BlackRock Foundation, “The Investor Diaries” will shed light on investors earning low to moderate incomes; pave the way for more sustainable wealth-building

January 14, 2025 (Boston, MA) – The BlackRock Foundation and national nonprofit Commonwealth launched “The Investor Diaries,” a research initiative designed to better understand the millions of new investors who entered retail capital markets in the U.S. since 2020, particularly those earning low to moderate incomes (LMI). By following these investors through voice diary entries, a national survey, and analysis of large transaction data sets representing millions of investment decisions by people earning LMI, the project shines a light on their unique financial circumstances, motivations, behaviors, needs, and the role that capital market investing plays in the overall financial wellness of LMI households.  The initiative aims to equip the investing industry, financial platforms, and policymakers with important insights to support and sustain this and future generations of new investors. 

During 2020-21 alone, 46 million(opens in a new tab) new brokerage accounts were opened by individual investors in the U.S., an 80% increase over a two-year period. Despite the prediction that this might be a temporary surge, more than 75% of these new investors(opens in a new tab) remain invested today. 

Partnering with Investing Platforms

The Investor Diaries will feature real-time research with people earning LMI ($30,000 to $80,000) who are currently investing, capturing their unique stories through their experiences and transaction data. The longitudinal research study will follow dozens of individual investors over 18 months, conducting observational diary-style interviews and tracking their transactional behavior on an ongoing basis. Many are among the first in their families to invest. 

Commonwealth has partnered with investment platforms Betterment and moomoo to capture participants’ experiences with both robo-advised and self-directed platforms: 

  • Betterment – For investors who don’t want to pick their own stocks, Betterment’s easy-to-use, automated investment technology offers diversified, expert-built portfolios and continually monitors the investments, rebalances the portfolios, and reinvests the dividends.
  • moomoo – Moomoo offers an accessible platform for self-directed investors of all levels to confidently make their own investment decisions with advanced tools and features to help guide their trades.

The Investor Diaries will also include a large National Perceptions and Habits Survey and a parallel study of macro-level investor transaction data to better understand the broad investing behaviors of this population.  

“The Investor Diaries will provide a groundbreaking holistic view of those living on modest incomes who are new to investing in the past five years,” says Timothy Flacke, CEO, Commonwealth. “Understanding the choices and actions of these new market participants, and where existing platforms and tools are serving these new investors well—and falling short—will inform the next wave of investing innovations and help ensure broader capital market participation is a sustainable, productive source of wealth creation.” 

Commonwealth’s past research has demonstrated an unmet appetite for investing among LMI households and the early positive impact of this type of market participation on financial stability and mobility.

“Measuring household investing behavior will help determine how supported these new market participants feel in their investing experience,” says Claire Chamberlain, President, The BlackRock Foundation. “The insights derived from The Investor Diaries can help inform product solutions, investor education, and outreach strategies to optimally support LMI households in building and sustaining wealth via the capital markets.”

For more information about The Investor Diaries, please visit  https://buildcommonwealth.org/research/investordiaries

About Commonwealth

Commonwealth is a national nonprofit building financial security and opportunity for people earning low- to moderate-income through innovation and partnerships. For over two decades, Commonwealth has designed effective innovations, products, and policies enabling over 2 million people to save nearly $8 billion. Commonwealth collaborates with consumers, the financial services industry, employers, and policymakers. Because Black, Latin, and women-led households disproportionately experience financial insecurity, we focus especially on these populations. The solutions we build are grounded in real life, based on our deep understanding of people who are financially vulnerable and how businesses can best serve them. To learn more, visit us at www.buildcommonwealth.org. 

About The BlackRock Foundation

Helping people earn, save, and invest – earlier, more often and for their futures. Guided by BlackRock’s history of making saving and investing more accessible and affordable, The BlackRock Foundation funds and partners with organizations that elevate the voices and experiences of LMI households. With our partners, we aim to 1) support individuals in their efforts to build a financial safety net to protect against shocks that widen disparities and 2) make it easier to build wealth and support upward mobility. With Commonwealth and partners, BlackRock’s Emergency Savings Initiative(opens in a new tab) has provided access to more than 10 million people and led to $2 billion in new liquid savings between 2019 and 2022.

About Betterment

Betterment LLC (“Betterment”) is the largest independent digital financial advisor(opens in a new tab), using automated technology powered by human expertise to fulfill a singular mission: making people’s lives better. With easy-to-use saving, investing, and retirement solutions, Betterment is built to help people optimize their money, no matter their level of experience or how the market is doing. Launched in 2010, Betterment helps more than 900,000 customers manage over $50 billion with curated selections of low-cost, expert-built investing portfolios; personalized guidance; and tax-smart tools. The company has received multiple awards for its investing app, including Buy Side from WSJ (2024). Learn more and for additional disclosure on these awards, visit https://www.betterment.com/#award-disclosure(opens in a new tab).

About moomoo 

Moomoo is an investment and trading platform that empowers global investors with pro-grade, easy-to-use tools, data, and insights. It provides users with the necessary information and technology to make more informed investment decisions. Investors have access to advanced charting tools, technical analytics, and in-depth data. Moomoo grows with its users, cultivating a community where investors share, learn, and grow together in one place. Moomoo provides free access to investment courses, educational materials, and interactive events that any investor, at any level, can gain from. Users can join forum discussions, trending topics, and seminars to better their investment knowledge and insights. The moomoo app is offered by Moomoo Technologies Inc. (“MTI”) a company that is based in Jersey City, New Jersey. The app is used globally in countries including the U.S., Singapore, Australia, Japan, Malaysia and Canada. MTI is not a broker-dealer and does not provide investment advice or recommendations. In the U.S., securities products and services are offered by Moomoo Financial Inc. (“MFI”), an SEC-registered broker-dealer and member FINRA/SIPC. MTI and MFI are indirect, wholly-owned subsidiaries of Futu Holdings Limited (Nasdaq: FUTU). For more information, please visit Moomoo’s official website at www.moomoo.com/us(opens in a new tab).

U.S. Equity Trading Commissions Rebounded in 2024

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Press Release
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After two years of decline, U.S. equity trading commissions rebounded in 2024, reaching $6.2 billion.

This follows a drop from $7.4 billion in 2021 to $5.4 billion in 2023. The increase is attributed to strong equity market performance, according to annual research from Crisil Coalition Greenwich with hundreds of U.S. institutional equity investors.

“The buy side is cautiously optimistic about the future,” says Jesse Forster, Senior Analyst at Crisil Coalition Greenwich Market Structure & Technology and author of U.S. equity market trends hold steady in 2024. “The recent SEC reforms and the new SEC Chair’s focus on cooperation between regulators and market participants have created a sense of renewed possibility.”

Migration Toward Electronic Trading and Automation

The U.S. equity market continued its migration toward electronic trading last year, with 44% of overall trading volume executed electronically (including algorithmic strategies and crossing networks). Managers expect electronic trading to increase to nearly half of their flow within three years, at the expense of high-touch trading, which they anticipate will account for only 39% of their flow by then.

Across the market, traders are looking for a delicate balance between technology and human touch, with high-touch sales traders still playing a crucial role in finding hard-to-find liquidity and working complex orders.

“Buy-side traders remain resolute in their dual mandate of finding liquidity for their clients while exploring opportunities for automation within their firms,” says Jesse Forster.

What’s Driving Buy-Side Commission Allocation Among Brokers?

Buy-side traders prioritize sourcing natural liquidity when selecting a broker, with 29% of the buy side and 34% of hedge funds citing it as their top consideration. For electronic trading providers, ease of use, reliability and technical support are key, with over two-thirds of buy-side traders naming these as their primary criteria.

“The buy side has long said they wish to reward brokers who consistently add real value to their day,” says Jesse Forster. “Now that the commission pool is growing again, they may finally have the means to do so.”

Source: Crisil Coalition Greenwich

Outlook 2025: Chris Isaacson, Cboe Global Markets

By
Anna Lyudvig
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Chris Isaacson is Chief Operating Officer at Cboe Global Markets.

Chris Isaacson

What were the key theme(s) for your business in 2024?

In 2024, Cboe was well-positioned to capture several long-term secular growth trends that we believe will continue well into 2025. Chief among these was the sustained growth in U.S. options trading, with the industry achieving record volumes for the fifth consecutive year in 2024. Simultaneously, we saw an increasing appetite for exposure to the U.S. markets from investors globally. In response to this demand, Cboe continued to grow its footprint across the U.S., Europe and APAC to better meet our customers where they are. We also continued to innovate and expanded our proprietary S&P 500 Index (SPX) and Cboe Volatility Index (VIX) product suites with new product launches, further enhancing the functionality and accessibility of our offerings for a wider range of customers.

As Cboe executed its business strategy throughout 2024, our leading-edge technology remained key to our success. Cboe’s technology powers every facet of our business, as evidenced by the incredible work delivered by our team this year – whether enhancing our market infrastructure to support the seamless rollout of multiple new products, features, and services, optimizing connectivity to facilitate greater access to our markets for investors outside the U.S., or strengthening the resiliency of our platforms to provide stable and efficient trading environments throughout all types of market conditions. Technology is key to how we meet customer demand and deliver on our business objectives.

What was the highlight of 2024?

One of the year’s achievements was our ability to navigate a volatile market environment while delivering record-breaking performance. Amid heightened volatility driven by ongoing geopolitical tensions, elections around the globe, and macroeconomic uncertainty, all Cboe’s markets continued to operate smoothly, maintaining greater than 99.9% uptime (with 25 of 27 markets at 100% uptime) while handling elevated trading volumes and record levels of message traffic. The resiliency of our markets, especially during the most volatile periods, is testament to the work and planning Cboe puts into business continuity.

At the same time, we executed a comprehensive slate of initiatives to further enhance the performance, resiliency, scalability and telemetry of our exchanges. In equities, we began deploying Dedicated Cores, beginning with our U.S. markets. Dedicated Cores was a standout success and exceeded even our own high expectations in improving performance for customers. In derivatives, we introduced a new architecture to access our options markets and deployed it one of our four options exchanges. This has given our customers a more consistent experience when quoting and accessing liquidity. On any given day, Cboe processes 100 billion quotes and orders across its four options markets, and this new enhancement has made messaging much more efficient. It’s also worth noting we improved the insights our customers have into their trading on our markets with the introduction of a new timestamping service which has been rolled out in our U.S. equity markets and is coming to our other global markets soon.

Expectations for 2025?

A key milestone in early 2025 will be our final technology migration in Canada, with Cboe Canada transitioning to Cboe’s proprietary technology platform. This migration marks the culmination of a multi-year effort to unify our markets under a single, globally consistent, yet locally optimized technology stack. Cboe is well-known for its capacity to release new software updates every week across our global exchanges – a capability we view as a major competitive differentiator. This capability, combined with having all of our equity, options, and futures exchanges now on a common tech platform, significantly benefits Cboe and our customers. We can develop and deploy changes with greater speed and flexibility, while maximizing opportunities for our clients to utilize new capabilities.

Beyond this, we will continue to harness our technology to expand the reach of our products, data and services into new markets, while delivering a state-of-the-art trading environment for our customers. This includes powering the newly rebranded Cboe Data Vantage business to new heights by delivering our data, access, analytics, and insights closer to customers. We’re also excited to introduce a new brand identity for our exchange technology platform: Cboe Titanium, or Cboe Ti for short. Much like its namesake, Cboe Ti represents lightweight strength, durability and exceptional resilience, offering a robust and future-proof foundation for our markets.

Trends underway that will be important?

We expect several emerging trends will continue to reshape the industry. The evolution of technology, increasingly globalized markets, 24-hour trading, and shifting investor behaviors will demand continuous innovation from exchanges. We see significant new opportunities with the democratization of data, continued smart adoption of cloud services, clearing, and data and analytics. Artificial intelligence will also play an increasingly transformative role in our business and operations. After numerous successful AI use cases were rolled out in 2024, we plan to launch even more new initiatives in 2025, empowered by our AI Center of Excellence, which fosters Cboe’s adoption of emerging technologies like generative AI. Cboe is extremely well-positioned to capitalize on many trends and we will continue to strengthen our global technology, team and capabilities to meet the evolving needs of our customers around the world.

US Enforcement Actions Hit Record High in 2024 as FCA Fines Tripled

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Press Release
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15 January 2025, London/New York: The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) reported record-breaking enforcement actions in 2024, while the value of fines issued by the Financial Conduct Authority (FCA) more than tripled year-on-year, according to SteelEye’s annual fine tracker.

To create its annual snapshot of financial services penalties for compliance failures, SteelEye analyzed enforcement actions published by the US’ SEC and CFTC; the UK’s FCA; France’s Autorité des Marchés Financiers (AMF); the Netherlands’ Authority for the Financial Markets (AFM); Germany’s Federal Financial Supervisory Authority (BaFin) and Federal Office of Justice (FOJ); Singapore’s Monetary Authority of Singapore (MAS); and the Australian Securities and Investments Commission (ASIC).

  • The SEC and CFTC reported a record $25.3bn in combined enforcement actions in 2024, including both fines and monetary relief.
  • The FCA imposed £176m worth of fines in 2024, up 230% year-on-year from the £53.4m issued in 2023.
  • Germany’s regulators, BaFin and FOJ, doled out €24.6m worth of fines in 2024, up dramatically from €8.1m the previous year. This is despite the number of penalties issued falling over 12% to 35.
  • France’s AMF issued just €13.9m worth of financial penalties in 2024, down 89% from €127.9m in the previous year.
  • The value of fines issued by the Netherlands also fell dramatically in 2024, dropping to €3.3m from €17.4m in 2023.
  • Singapore’s MAS issued five fines worth a total S$7.7m in 2024, equal to the value doled out in 2023.
  • Australia’s ASIC issued 20 financial penalties in the first half of 2024, worth a total A$32.2m, with H2 statistics yet to be released.

US regulators continue off-channel comms crackdown in record-breaking year

The SEC and CFTC reported a combined total of $25.3bn worth of enforcement actions in 2024 – the highest to date. The SEC filed 583 penalties worth a total $2.1bn, the second-highest amount on record, while the CFTC imposed $2.6bn. The remaining sum relates to monetary relief obtained via disgorgement and restitution, with settlements for landmark cases such as the FTX scandal finalized last year.

The SEC remained steadfast in its mission to crackdown on off-channel communications in 2024. The watchdog brought more than $600m in civil penalties against more than 70 firms, with 26 firms fined a total $390m in August alone for widespread record-keeping failures. The initiative has seen the regulator fine 100 firms a combined total of more than $2bn since December 2021.

FCA enforcements back with a bang

After the number of fines imposed by the FCA fell for the first time in seven years in 2023, last year saw the regulator pursue its crackdown on financial misconduct with renewed fervor. The watchdog issued a total 27 enforcement actions worth a combined £176m – up a considerable 230% from just £53.4m in 2023.

The lion’s share of the penalties related to breaches of Principles for Businesses (PRIN) three, with eight enforcements worth more than £100m in total citing this regulation. ‘PRIN 3’ relates to management and control, stating a firm must take reasonable care to organize and control its affairs responsibly and effectively, with adequate risk management systems.

While there was significant media coverage around the FCA investigating off-channel communications in 2024, the watchdog has yet to issue any fines related to the topic.

European regulators scale back fine issuance

Three of the most prominent European regulators scaled back fine issuance in 2024.

Germany’s markets authorities, BaFin and FOJ, imposed 35 penalties worth a combined €24.6m. While this figure represents a considerable uptick from the prior year’s total of €8.1m, the regulators actually issued over 12% fewer fines. The most notable was BaFin’s nearly €13m fine for Citigroup over control failures in its algorithmic-trading business, which triggered a flash crash in European equities in 2022.

In France, the AMF issued just 10 penalties worth a total €13.9m – an 89% decline from the previous year’s combined value of €127.9m. Despite the drop off, half of the fines related to either market manipulation or insider trading, with three citing the former and two the latter.

The value of fines issued by the Netherlands’ AFM also fell considerably in 2024, dropping to €3.3m from €17.4m in 2023. The regulator issued just four fines in 2024, down from six the year prior.

APAC combats money laundering, insider trading and market manipulation

Singapore’s MAS remained focused on identifying and curbing financial crime in 2024, with the regulator issuing five penalties worth a combined S$7.7m in 2024. The most significant fine was imposed on JPMorgan over misconduct by its relationship managers, while the other four fines related to anti-money laundering breaches and insider trading.

Meanwhile, Australia’s ASIC had a busy start to 2024, issuing 20 financial penalties worth a total A$32.2m in the first six months of the year. Five penalties related to market manipulation, while two cited insider trading.

Commenting on the findings, Matt Smith, CEO and co-founder of SteelEye, said: “In many ways, 2024 was quite exceptional from a regulatory standpoint. Not only did US watchdogs report record-breaking enforcement actions, but their British counterpart shifted up a gear with regards doling out penalties – perhaps a sign of what’s to come in 2025 if the FCA’s instant messaging investigation intensifies.

“There were also interesting surprises, with European regulators appearing to take their foot off the gas somewhat with regards fine issuance. But rather than suggest a change of regulatory focus, this may be evidence that European firms have implemented more sophisticated compliance systems over recent years.

“Looking ahead, the question many firms will be pondering – particularly those with global operations – is whether Trump’s election victory will see US regulators take a more relaxed approach to enforcing issues like off-channel communications. While the intensity of enforcement action may subside in the US in 2025, we don’t expect firms will reverse any of the initiatives already put in motion. In fact, we are more likely to see increased investment on a global basis in monitoring tools to address growing risks from overlooked platforms.”

Coverage Gaps, Data Delays Vex Investment Research Industry

By
Anna Lyudvig
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Data coverage, timeliness, and quality issues with historical data was cited as the top challenge in the investment research industry, with nearly two-fifths (37%) of respondents selecting this option, according to a research from Bloomberg. 

This was followed by normalizing and wrangling data from multiple data providers (26%), and identifying which datasets to evaluate and research (15%).

Source: Bloomberg’s Investment Research Data Trends Survey

Angana Jacob, Global Head of Research Data, Bloomberg Enterprise Data, said these findings are reflective of what they’re seeing in the industry and through many conversations with their investment research and quant clients. 

“A main theme that comes through is the challenge clients have with wrangling with and normalizing traditional research and alternative datasets given their sheer size and fast-changing nature,” she told Traders Magazine.

Additionally, she said in order to derive insights or backtest trading strategies, clients have to map and integrate the datasets into existing models and systems. 

Angana Jacob

“Harnessing the value and potential alpha of a dataset can only happen after these foundational blocks are painstakingly stitched together, and this requires a big lift from quants, developers, data scientists and data engineers,” she commented.

Bloomberg’s Investment Research Data Trends Survey found that 72% of respondents could evaluate only three or fewer datasets at a time, despite the need from quants and research teams to continually harness more alpha-generating data in today’s data deluge.

The findings also show that the typical time it takes to evaluate a single dataset is one month or longer for more than half of respondents (65%).

According to Jacob, the desire to constantly test and incorporate new datasets is strong but, in line with the findings, typically clients can only evaluate a relatively low number at one time (three or fewer at a time for most respondents of this survey). 

Additionally, more than half of respondents typically take one month or longer to evaluate a single dataset, she added.

“To gain a competitive edge in different markets, investors continuously need granular, timely, interconnected data with deep history, and it’s unsurprising that this remains the biggest research data challenge to our survey respondents,” she stressed. 

More than six in ten (62%) of respondents prefer their research data to be made available in the cloud.

According to Jacob, the investing landscape has had rapid technology changes and the possibilities for quant investing and alpha generation today are completely different to what existed 5 years ago. 

As an example, she said: a few years back, intraday systematic strategies required significant hardware investment and time to backtest and deploy, whereas now with scalable cloud infrastructure, strategies can be faster while markedly more powerful, incorporating more data.

“In today’s environment, customers need seamless access to market information and the ability to handle increasingly vast volumes of data for computationally-intensive investment processes such as backtesting, signal generation, optimizing portfolios, scenario analysis, hypothesis testing and so on,” she said. 

“Quantitative analysis and systematic strategies are generally on the cutting edge of technology and we are seeing that with their cloud adoption,” she said. 

“Cloud is a critical enabler for providing the scale, elasticity and cost efficiency to run increasingly complex investment research and trading processes,” she added.

Additionally, Jacob said that clients’ integration of Machine Learning and AI into their investment process is well-supported by cloud capabilities, enabling rapid prototyping of new trading strategies and faster simulations with unprecedented volumes of financial and non-financial data. 

“Cloud platforms provide the necessary infrastructure spanning cost-effective storage, specialized hardware and elastic computational resources for intensive calculations,” she said.

According to the findings, 50% of respondents reported they currently manage the data centrally with proprietary solutions versus outsourcing to third party providers (8%), with more than six in ten (62%) of respondents preferring their research data to be made available in the cloud. Notably, 35% of respondents also would like their data to be made available via more traditional access methods such as REST API, On premise and SFTP, indicating they prefer flexibility in the choice of data delivery channels.

Jacob commented that typically, quantitative and systematic clients prefer more control and customizability over their investment research and execution process, and therefore would prefer to not outsource their entire tech stack -hence what we see in the survey results.

“However in recent years, we do see greater interest and comfort from these clients in outsourcing vertical slices of their research-to-production lifecycle to specialized providers,” she said. 

“Managing the entire tech stack in-house can often detract from the primary goal of generating alpha and outsourcing could bring benefits of reduced operational burden, lower total costs and domain-specific expertise,” she added.

AI Must be Better Integrated into Investment Process

By
Press Release
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AI must be better integrated into investment process, new buy-side survey shows

Key findings in the 2025 InvestOps report:

  • A new report surveying 200 global buy-side operations leaders reveals that the majority (75%) understand the potential benefits of integrating AI, but need more information to integrate it into their investment processes.
  • The respondents qualitatively highlighted a need for AI to support with investment analysis, decision making, risk management, data management and client engagement.
  • The buy-side organizations plan to build more standardized data modeling (67%) and to consolidate systems for a common data layer (65%) to overcome challenges with their data infrastructure.
  • ESG investing continues to be the business area respondents see the greatest opportunity for technological innovation (58%), particularly in North America (81%).

New York, London, Copenhagen, January 14, 2025 – Buy-side organizations worldwide require more information on how to integrate AI into the investment processes, reveals the InvestOps Report, “Investment Management 2025”, commissioned by financial technology company SimCorp.

Based on a survey of 200 buy-side executives conducted by WBR Insights in Q4 of 2024, the report provides insights into the buy side’s challenges and priorities entering into 2025. 

The survey shows that 75 percent of respondents understand the potential benefits of AI but need more information on how to apply it effectively to the investment processes, such as investment analysis, decision making, risk management, data management and client engagement. When asked which areas that would benefit most from the use of an AI tool, one respondent noted “An AI tool can be used to uncover risks that might have remained unknown to us”. Additionally, 16 percent feel unprepared to leverage AI, while 9 percent feel very prepared. 

“AI is not about replacing jobs but augmenting human capabilities, enhancing decision-making processes, and increasing efficiency. However, the advancements in AI can deliver true value for investment professionals when supported by a unified data layer where all investment data is in one place, moving away from data siloes,” said Georg Hetrodt, Chief Executive Officer at SimCorp.

When asked how to measure the success of an AI tool in the investment process, the buy-side leaders prioritize increased efficiency in data cleaning (46%), followed by enhanced data visualization (42%) and accelerated time to insights (41%). 

Addressing data challenges

The report also found that nearly half of respondents (47%) say their current data infrastructure is a combination of in-house and third-party solutions, leading to data challenges. The top three priorities for addressing these in the near term are building more standardized data models (67%), consolidating systems for a common data layer (65%), and utilizing AI tools for better insights and data predictability (65%). 


 “Data is the “key” to the front office, yet many firms struggle with fragmented and inconsistent data sources,” said Laura Kayrouz, Senior Partner & Global Co-Head of Investments at Alpha FMC and one of the report’s contributors. “The first step to overcoming this challenge is a thorough data audit to identify gaps and redundancies. Once completed, firms should implement a robust data governance framework to ensure data accuracy, consistency, and compliance. This framework will form the foundation for a centralized data management solution, capable of breaking down silos and enabling unified data access across teams.” 

When asked about technology and operations, improving data and operations for multi-asset investment strategies (40%) ranked as the top initiative that the buy-side organizations are planning to implement. The main challenge for front office teams is the inability to manage multi-assets in one view (60%). 

To effectively manage a multi-asset class portfolio — the primary challenge in supporting the front office – investment managers need a system architecture with a unified data layer that provides a total portfolio view in real time, with any changes made in one area of the business instantly reflected throughout the entire investment lifecycle for public and private markets. This is shown in the survey, where respondents plan to consolidate systems for a real time total portfolio view (64%) to address this challenge. 

“What we see from this research is that investment managers increasingly need to invest in data strategies to support their goals and decision-making capabilities,” said Marc Schröter, Chief Product Officer at SimCorp. “Otherwise, when firms diversify their portfolios across more asset types, they risk adding complexity to their system landscape. This could lead to disparate silos of investment positions across the business, which slows the velocity of information and impacts the ability to scale. There’s a strong business case for data initiatives.”

Other key findings from the 2025 Global InvestOps report include: 

  • Improving operational efficiency is the top strategic priority guiding technology and operations investments for 2025.
  • Inability to get a total firm-wide view of investments, risk and performance and launching new products in a timely manner are the key challenges for the buy-side firms’ existing current models. 
  • ESG investing is the business area with the greatest opportunity for technological innovation in the next few years, particularly in North America and APAC.
  • Greater transparency in outsourced operations data tops the list for how the firms want to enhance their operating models in the next 24 months.   
  • Focus on core business is the most desired outcome by using an external service provider for non-core business processes. 

Survey Methodology

In Q4 of 2024, WBR Insights surveyed 200 Directors of Investment Operations and similar across APAC, EMEA, and North America, to find out about the challenges they are facing in 2024. 

The report itself will be split in four, looking at how respondents are balancing their strategic priorities, the impact of data, the evolution of operating models and technological innovations being brought to the table. The survey was conducted by appointment over the telephone. 

The results were compiled and anonymized by WBR Insights and are presented here with analysis and commentary by SimCorp and the InvestOps community.


About SimCorp

SimCorp is a provider of industry-leading integrated investment management solutions for the global buy side.

Founded in 1971, with more than 3,500 employees across five continents, SimCorp is a truly global technology leader that empowers more than half of the world’s top 100 financial companies through its integrated platform, services, and partner ecosystem.  

SimCorp is a subsidiary of Deutsche Börse Group. As of 2024, SimCorp includes Axioma, the leading provider of risk and management and portfolio optimization solutions for the global buy side.  

About WBR Insights

We use research-based content to drive conversations, share insights and deliver results. Connect with our audience of high-level decision-makers in Europe and Asia from industries including Retail & eCommerce, Supply Chain & Procurement, Finance, as well as many more. From whitepapers focused on your priorities, to benchmarking reports, infographics, and webinars, we can help you to inform and educate your readers and reach your marketing goals at the same time.

The Call for Automation to Enhance Compliance and the Investor Experience is Here – Will Asset Managers Respond?

By
Fenergo
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By Terry Flynn, Managing Director – Asset Management and Insurance, Fenergo

Asset managers are at a critical juncture. Following years of fee compression and ever-increasing competition, they face heightened regulatory scrutiny, pressure to expand into new asset classes such as private markets and investors’ clamoring for frictionless, digital engagement. Changes call for new strategies and approaches, and while the asset management sector has been exploring avenues to meet both investor and regulatory demands, a prominent blind spot lies in its traditional and outdated paper-filled, Excel-based and manual processes. However, as 2025 progresses, outdated processes will fade, and firms leaning into digital transformation will ultimately lead the industry.

The regulatory landscape is ever-changing

To set the scene, regulators have made their intent to increase oversight in the asset management sector known. The US Securities and Exchange Commission (SEC) 2025 exam priorities suggest that asset managers may be kept on their toes – from a strict look at the practices around fiduciary duties, AI, private funds, anti-money laundering (AML), and more; 2025 may be the year of intense scrutiny. Likewise, effective March 12, 2025, the expanded reporting requirements of Form PF will further challenge asset managers and compliance teams, demanding additional time and resources to meet these obligations.

Not to be outdone, the Financial Crimes Enforcement Network (FinCEN) finalized new rules for the industry,, mandating significant updates to firms’ AML/CFT programs. These updates require a risk-based and reasonably designed approach to align US standards more closely with international AML regulations. It will be very challenging, if not impossible, for firms to comply with these new rules utilizing manual processes, based on spreadsheets and static reports. Automated, digital solutions will be the rule not the exception going forward. Firms that continue to try to manage this process manually will see increases in operational costs, while leaving them vulnerable to the regulatory and reputational risk of suspicious activity falling through the manual cracks.

While each looming regulatory shift may have its nuances, there is a key underlying necessity to meet them: accurate, real-time data, feeding reporting and analytics is at the center of compliance processes. The call for digitization to ease compliance burdens, enhance operational efficiency and provide better investor experience can no longer be neglected. Automating reporting can significantly improve accuracy, streamline operations, and help firms effectively manage and keep pace with evolving regulatory requirements and expectations.

Old habits die hard, but die they must

According to a recent Accenture survey, 95% of asset managers believe “technology, data, and digital capabilities will be differentiators in 2025.” Yet, 72% admit that they “do not view themselves as leading firms when assessing their digital maturity.” This highlights a significant gap between where the industry knows it needs to be and its preparedness to reach that goal.

The sector is hindered by manual processes and fragmented, siloed data sets, leaving significant potential growth opportunities untapped. Without adopting digital-led tools and solutions, managers face challenges in establishing a reliable single source of truth for data and will find it difficult to access the real-time insights they need. Furthermore, with inconsistent data, a manager looking to onboard a new asset class or strategy will likely fall into quicksand. Every attempt to move forward will be challenging as they are met with incomplete workflows, error-prone processes, and limited visibility. These inefficiencies not only burden managers but also spark investor dissatisfaction as the client experience is subpar, marred by delays, duplicative requests and an overall lack of transparency.

Enhancing data management and implementing better tactics to the client lifecycle

Automation is a game-changer; however, firms must ensure their data is in tip-top shape before jumping into and reaping the benefits of this technology. Asset managers maintain huge, but often disparate, data sets which means that checking and aligning data into a single source of truth cannot happen overnight. It takes time, coordination, and a strategic approach to ensure that all data stored is accurate and valid and that the data lives in a central repository. Data governance measures must also be implemented to ensure proper data control, quality, privacy, and compliance. Once this is created, firms are better positioned to leverage automation and other digital-first solutions, such as generative AI.

The benefits of automation can be vast. For example, cross-selling can be a challenge without reliable, well-organized data, but having a robust data infrastructure enables seamless cross-selling opportunities. Plus, leveraging predictive analytics can provide managers with insights to deliver more personalized approaches – a requisite that investors increasingly seek.  

Automation can be a strong ally for compliance teams within financial institutions, creating a proactive rather than reactive environment. Teams can use solutions that automate the transaction monitoring process and transform the AML process. Automated systems can flag real-time suspicious activities and generate alerts according to specific thresholds, allowing compliance teams to focus on other areas and ensuring no mistakes occur.

First impressions matter

Unfortunately, onboarding inefficiencies have deep roots that significantly impact organizations. In the Global KYC Trends in 2024 Asset Management report, 74% of surveyed firms have reported losing an investor due to poor onboarding experiences. This number is too large to be ignored, especially when automation can support an effective onboarding process. When diving into the data, the top grievances uncovered included repeated documentation requests (40%), complex processes (38%), and onboarding delays (36%). For investors, first impressions leave lasting thoughts, and given that the asset management sector is about building and fostering relationships, one poor investor experience can impact a firm’s ability to grow, as word of mouth can be a powerful method in shaping perceptions.

Meeting diversification needs requires more than just the basics

Diversification across asset classes is at the top of investors’ agendas. As a result, asset managers who want to succeed need to oblige or they will fall short of client expectations. However, this brings about an onslaught of new considerations. From reporting on a broader range of investment and fund structures to more detailed data gathering, and stricter oversight of investment and counterparty exposure to name a few.  

The current protocols asset managers deal with are ineffective. Manuel’s inefficiencies limit managers and, in many cases, will be a bottleneck in collecting, analyzing, and providing the required data to make informed decisions.

In line with a greater demand for diversification, many investors are looking for investments to expand across borders, specifically for a global approach to achieve optimal returns and cushion against any regional market volatility. To keep up, asset management firms need to harness the power of digital transformation to seamlessly traverse the onboarding demands of new and frequently complex jurisdictions. By integrating automated Know Your Customer (KYC) solutions, firms can efficiently conduct comprehensive risk and compliance checks and robust risk assessments, allowing for reliable and accurate decisions. Utilizing predictive analysis and machine learning for diversification strategies can provide asset managers with advanced insights further mitigating potential risks.

Is AI and KYC a match made in heaven?

KYC processes can significantly benefit from AI implementation. Not only does it offer better fraud detection measures, enhanced due diligence, and streamlined onboarding, but it also provides scalability. Firms can take in large quantities of data without burdening the compliance teams. Moreover, the ability to offer better illicit finance detection allows teams to use their time for more strategic and personalized investor relations insights, cross-selling, and beyond.

It’s important to note that using AI and machine learning technology effectively requires proper implementation and high-quality data. Taking it a step further, while AI regulations have not yet been enacted, that does not mean they aren’t around the corner. With that in mind, when implementing AI, understanding the regulatory risks and ensuring you are thinking ahead of potential reporting measures is paramount.

The need for change is here and those who adapt are primed for success

The push for transformation is here, and managers that harness the power of automation will be miles ahead of the pack. By embracing automation, streamlining processes and centralizing data, firms can enhance the investor experience, reduce costs and stay ahead of regulatory demands. Not only does this have the potential to help with profitability but it leads to an enhanced and potentially personalized experience for the investors – a win-win.

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