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Saturday, March 15, 2025
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ON THE MOVE: TD Securities Makes Leadership Changes; Stifel Adds Brad Edgar

By
Anna Lyudvig
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Michael Breheney

Michael Breheney has recently joined TD Securities as the new Head of U.S. Equity Sales Trading. Breheney brings extensive experience from his time at Bank of America, where he served as Managing Director and Head of Sales and Trading. His deep knowledge of the equity trading landscape, combined with his proven track record at Bank of America, Morgan Stanley and Deutsche Bank, makes him a valuable addition to the team. In addition, Adam Lent, Managing Director, has been named Head of TD Securities newly formed Equity Client Risk Systematic Solutions (CRSS) team. Lent will report directly to Rhys Brooks and has been with TD Cowen for over seven years. In his new role, he will oversee block distributions and capital commitment on the desk. He will also work closely with ECM/Syndicate, using his insights to strengthen capabilities and deliver even more value to clients. In addition, as part of TD Securities growing U.S. Prime Brokerage strategy, they’ve introduced a new Markets Prime Services Leadership Team, comprised of Ron Chin, Mike McBrien and Matt Popkin.

Brad Edgar

Stifel Financial Corp. has hired Brad Edgar as Managing Director and Lead Healthcare Equity Trader. He is based in the firm’s New York office and reports directly to R.J. Grant, Head of Global Equity Trading at Stifel. Edgar joins Stifel from Seven Grand Managers, where he served as Partner, responsible for all risk execution and trading of the firm’s equity portfolio. He brings more than 20 years of healthcare equity trading experience to his new role, having held the position of Head of
Healthcare Equity Trading at firms including BMO, Evercore, and UBS. He began his career in healthcare equity trading at Merrill Lynch.

Melissa Gingrich

STP Investment Services (STP), a global provider of technology-enabled, end-to-end investment servicing solutions, has added several senior leaders across operations, fund administration, compliance, and investment performance. Melissa Gingrich has been appointed Chief Financial Officer and Chief Operating Officer; David Goldstein has joined as Director of Fund Services; Ben Jones joins STP as Vice President of Business Development – Fund Administration; Lori Weston has been appointed Head of Compliance, leading STP’s new ComplianceAdvisor practice; Cynthia Kelly has joined as a Senior Compliance Consultant specializing in registered investment adviser compliance; Steve Leydet has joined STP as Vice President of Investment Performance.

Kezar Markets, owner of Kezar Trading, LLC, the broker-dealer operator of the LeveL and Luminex Alternative Trading Systems, has announced that Chief Executive Officer, Whit Conary will retire from his role by year-end after 18 years as CEO. The organization’s Board of Directors also announced the appointment of Steve Miele, currently Kezar’s Chief Strategy Officer, as the new Chief Executive Officer of Kezar Markets, effective January, 2025. The appointment of Miele as CEO is a natural progression following his role overseeing strategy, sales, and product development at LeveL ATS and Kezar Markets for 17 years coupled with his trading and financial services background from organizations such as Fidelity Capital Markets and the Boston Stock Exchange.

The Securities and Exchange Commission has announced that its 33rd Chair, Gary Gensler, will step down from the Commission effective at 12:00 pm on January 20, 2025. Chair Gensler began his tenure on April 17, 2021, in the immediate aftermath of the GameStop market events. He led the agency through a robust rulemaking agenda to enhance efficiency, resiliency, and integrity in the U.S. capital markets. He also oversaw high-impact enforcement cases to hold wrongdoers accountable and return billions to harmed investors.

CDPQ, a global investor and one of Canada’s largest pension funds, has announced that Dame Sharon White is joining the group as Managing Director and Head of Europe. Her start date will be January 27, 2025. Until September 2024, Sharon was Chairman of the John Lewis Partnership – the largest employee- owned business in the UK – for a five-year term.

The World Federation of Exchanges, the global industry group for exchanges and CCPs, has elected seven directors to its Board for a three year term: Gilson Finkelsztain, CEO, B3; Korkmaz Ergun, CEO, Borsa Istanbul; Carlson Tong, Chairman, Hong Kong Exchanges & Clearing (HKEX); Julie Becker, CEO, Luxembourg Stock Exchange; Ed Knight, Executive Vice Chairman, Nasdaq; Ashishkumar Chauhan, Managing Director & CEO, National Stock Exchange of India Ltd; and Khalid Al Hussan, CEO, Saudi Tadawul Group (STG).

If you have a new job or promotion to report, let me know at alyudvig@marketsmedia.com

The Transformative Potential of AI in FIX Connectivity

By
Lab49
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By Jeremy Hamerman, Lab49’s Director for Digital Assets and Blockchain

FIX connectivity has been a cornerstone of the financial services industry since its inception in the early 1990s. Providing a standardized protocol for the exchange of information related to securities transactions, FIX has been integral to electronic trading, enabling real-time communication between brokers, exchanges and institutional investors. Although, despite its widespread use, FIX connectivity is often perceived as a widespread but outdated tool. It’s seen little innovation in recent years which is particularly problematic when you think about the technological advancements from the past decade.

Jeremy Hamerman, Lab49

Meanwhile, innovations in AI have been making waves across every sector. In particular, as financial institutions and vendors continue to invest heavily in the research, development and implementation of AI—enabled technology, excitement around its potential applications has only grown. The impact AI has had on the industry already is undeniable, from algorithmic trading and risk management to customer service and fraud detection. Now, there is increasing recognition that AI might have the potential to revitalize FIX Connectivity, transforming it into a forward-thinking solution fit for the demands of modern traders and institutions.

The Current State of FIX connectivity

While robust, the FIX protocol is not inherently designed to handle the complexities that can come with modern trading environments which demand greater speed, transparency and adaptability. As a result, communication between market participants in this digital age can be cumbersome and prone to inefficiencies.

One of the main drawbacks of traditional FIX connectivity is its rigidity – operating on predefined message types and fields, these can be difficult to modify or expand without significant time and effort. As firms increasingly rely on fast data-driven insights, FIX’s architecture often struggles to keep pace. The vast amount of data generated by modern trading can overwhelm legacy FIX systems, resulting in bottlenecks and increased latency.

Despite these challenges, there’s been little innovation in FIX connectivity to address them. As a result, the FIX protocol is not traditionally associated with innovation, growth and differentiation although, through the integration of AI this perception could be changed. By integrating AI into FIX connectivity, the protocol can be reimagined as a forward-thinking, adaptable solution, capable of meeting the modern demands of financial markets. It could help FIX break out of its rigid framework and open new avenues for automation, efficiency, and enhanced user experiences.

The Role of AI in Enhancing FIX Connectivity

In the fast-paced trading environments of today, actionable date is crucial to making informed decisions. While FIX does not naturally lend itself to this type of analysis without significant investment in time and resources. AI provides the potential to process and analyze vast amounts of data in real time. Integrating AI with FIX connectivity can make it easier for firms to garner meaningful and actionable insights from the large amount of data extracted through the protocol. By enabling more sophisticated data processing and analysis, AI can not only improve the quality of information available to traders but also streamline the entire trading process.

At the same time, as trading platforms become more complex, there is a growing need for simplified, intuitive interfaces that allow traders to interact with data and execute trades seamlessly. In particular, when it comes to the tools and technology they use in the workplace every day, today’s traders have high expectations. Seeking simplicity, transparency and control – especially in how data is presented – it’s important that firms employ technology that can keep up with their traders’ modern requirements.

One of the main pain points faced by operations teams revolves around understanding and analyzing failed trades.

Trade failures can occur for a variety of reasons—mismatched trade details, incorrect counterparty information, or network issues. Typically, resolving these failures requires manual intervention, which is time-consuming and prone to human error.

AI, however, can swiftly analyze the logs from FIX messages and pinpoint the root cause of the failure. By using machine learning algorithms trained on historical data, AI can provide detailed insights into why the trade failed, whether due to incorrect trade details or systemic issues in the connectivity process. It can also suggest corrective actions and preventative measures to avoid similar failures in the future. This adaptive approach not only speeds up the resolution process but also improves operational resilience.

In addition to operational fixes, AI can help institutions understand key market dynamics—specifically, where trading volume is flowing from and who their most valuable counterparties are. By continuously analyzing trade data across various market participants, AI can highlight trends in counterparty behavior and trading patterns. This lets Sales Traders know who their most valuable counterparties are based on trade flow, which is invaluable for institutions aiming to optimize their execution strategies, identify potential risks, and strengthen relationships with key trading partners.

Another key area for AI is improving the user experience (UX). Traditionally, interacting with FIX has been complex, requiring a deep understanding of messaging protocols and workflows. AI can simplify these interactions by intuitive dashboards, natural language processing, and other user-friendly interfaces, allowing traders and operators to focus more on strategy and decision-making rather than technical details. In this way traders can ask a chatbot simple question or ask it to perform complex data analysis all from a single chatbot.

By automating routine tasks, streamlining workflows, and personalizing user experiences based on individual preferences and behavior, AI can help revolutionize FIX connectivity and achieve the required level of UX needed to stay competitive. By making FIX connectivity more user-friendly, AI can help reduce the cognitive load on traders and improve their overall productivity.

The Future of FIX connectivity

AI has the potential to revolutionize FIX connectivity, transforming it from a legacy system into a forward-thinking solution that meets the demands of modern traders and institutions. By focusing on addressing the current challenges associated with traditional FIX connectivity, AI can enhance data processing and simplify UX, ultimately leading to more efficient and effective trading.

As the financial services industry continues to evolve, it is crucial for firms to prioritize AI-driven technology strategies. By doing so, they can unlock new opportunities for growth and differentiation, ensuring that FIX connectivity remains a vital component of the trading ecosystem in the digital age and future-ready trading infrastructure.

SEC Charges Three Broker-Dealers with Filing Deficient Suspicious Activity Reports

By
Editorial Staff
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The Securities and Exchange Commission has announced that broker-dealers Webull Financial LLC, Lightspeed Financial Services Group LLC, and Paulson Investment Company, LLC have agreed to settle charges that they filed with law enforcement suspicious activity reports (SARs) that failed to include important, required information. The three broker-dealers agreed to pay $275,000 combined in civil penalties to settle the SEC’s charges.

Federal law requires broker-dealers to file SARs to report transactions that the broker-dealer has reason to suspect involve, among other things, funds derived from illegal activity or activity that has no apparent lawful purpose. The SARs must contain “a clear, complete, and concise description of the activity, including what was unusual or irregular that caused suspicion.”

According to the SEC orders, each of the three broker-dealers filed multiple deficient SARs over a four-year period beginning in 2018.

Jason Burt

“Suspicious activity reports play a vital role in keeping our markets safe, and the failure of broker-dealers to include necessary information to explain suspicious transactions deprives law enforcement and regulatory agencies of valuable and timely intelligence, undermining the very purpose of the SARs,” said Jason Burt, Director of the SEC’s Denver Regional Office. “Today’s cases reinforce the importance of complying with the applicable regulations and guidance surrounding the filing of SARs.”

The SEC’s orders find that the broker-dealers violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder. Without admitting or denying the findings, the firms agreed to be censured, cease and desist from violating the charged provisions, and pay civil penalties listed below. Further, Webull Financial LLC and Paulson Investment Company, LLC agreed to undertake a review of their anti-money-laundering programs by compliance consultants. The resolutions reflect each of the firms’ cooperation after being contacted by Commission staff, as well as certain remedial measures taken by Lightspeed: 

  • Webull Financial LLC, of New York, N.Y., agreed to pay a $125,000 civil penalty.
  • Lightspeed Financial Services Group LLC, of Morristown, N.J., agreed to pay a $75,000 civil penalty.
  • Paulson Investment Company, LLC, of Lake Oswego, Ore., agreed to pay a $75,000 civil penalty.

The SEC’s investigation was led by Kimberly Steckling, with assistance from Kenneth Stalzer and Jacqueline Moessner of the Denver Regional Office; Daniel Goldberg, Andrae Eccles, Damon Reed, David Cohen, Susan Schneider, and Naomi Sevilla of the Office of Market Intelligence’s (OMI) Bank Secrecy Act Review Group; and Giz Tariku of OMI’s DATA and Analytics Group. The investigation was supervised by Ian Karpel, Nicholas Heinke, and Jason Burt of the Denver Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority (FINRA).

SEC Chair Gensler to Depart Agency on January 20

By
Press Release
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Washington D.C., Nov. 21, 2024 — The Securities and Exchange Commission today announced that its 33rd Chair, Gary Gensler, will step down from the Commission effective at 12:00 pm on January 20, 2025. Chair Gensler began his tenure on April 17, 2021, in the immediate aftermath of the GameStop market events. He led the agency through a robust rulemaking agenda to enhance efficiency, resiliency, and integrity in the U.S. capital markets. He also oversaw high-impact enforcement cases to hold wrongdoers accountable and return billions to harmed investors.

Gary Gensler, SEC
Gary Gensler

“The Securities and Exchange Commission is a remarkable agency,” said Chair Gensler. “The staff and the Commission are deeply mission-driven, focused on protecting investors, facilitating capital formation, and ensuring that the markets work for investors and issuers alike. The staff comprises true public servants. It has been an honor of a lifetime to serve with them on behalf of everyday Americans and ensure that our capital markets remain the best in the world.

“I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favor. I’ve greatly enjoyed working with my fellow Commissioners, Allison Herren Lee, Elad Roisman, Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga. I also thank Congress, my colleagues across the U.S. government, and fellow regulators around the world.”

Treasury Markets

During Chair Gensler’s tenure, the SEC adopted critical enhancements to the $28 trillion U.S. Treasury markets. To lower cost and risk in the Treasury markets, the agency adopted rules to promote central clearing and narrow circumstances in which broker-dealers are exempt from national securities association registration. These reforms will lower risk and enhance efficiency throughout the entirety of the U.S. capital markets.

Equity Markets

Under Chair Gensler, the SEC made the first significant updates to the $55 trillion U.S. equity market in nearly 20 years. The agency unanimously made updates to the National Market System so that stocks can be traded more efficiently with narrower spreads and lower fees. Improvements also include shortening the settlement cycle to one day, which is good for investors and lowers risk in the market. Further, the agency unanimously adopted rules to update information regarding brokers’ execution quality. These reforms benefit investors by making equity markets more efficient.

Resiliency

The Commission adopted amendments during Chair Gensler’s tenure regarding Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds. The amended rules require that large hedge fund and private equity fund advisers make current reports on certain events to the Commission. The SEC further amended Form PF jointly with the Commodity Futures Trading Commission to improve the quality of the information the agencies receive from all Form PF filers, and those changes will be implemented next year. Finally, the Commission adopted reforms to money market funds to make them more resilient, liquid, and transparent, including in times of stress.

Corporate Governance

To better promote trust in the capital markets, the SEC under Chair Gensler adopted a number of changes regarding corporate governance, including updating the rules for when corporate insiders can sell their shares, for when executives have to give back compensation based on erroneously reported financials, and for disclosure of executive pay versus performance. The agency also adopted new rules to allow shareholders to vote their preferred mix of board candidates on universal proxy cards in contested director elections. Additionally, the Commission adopted rules requiring more timely disclosure by those who are seeking control and buy more than a 5 percent stake in a company.

Disclosure

Since April 2021, the Commission has adopted several rules to ensure that investors get the disclosure they need from public companies and companies seeking to go public, broker-dealers, and investment advisors.

First, the Commission adopted rules to enhance disclosure around public company issuers’ cyber and climate risks, as well as for those companies seeking to go public via a special purpose acquisition company. The rules are grounded in materiality, as investors need this information to make buying, selling, holding, and voting decisions.

Second, the Commission adopted rules requiring certain broker-dealers and investment advisers to notify customers of data breaches that might put personal information at risk.

Finally, the Commission enhanced transparency to the markets by regularly publishing aggregate, anonymized data regarding registered investment funds, private funds, and investment advisers.

Accounting and Auditing

During Chair Gensler’s tenure, the Public Company Accounting Oversight Board (PCAOB), overseen by the SEC, successfully negotiated a Statement of Protocol with Chinese market authorities to allow the PCAOB to fully inspect and investigate, for the first time, the auditors of China-related companies listed in the United States. For the last two years, the PCAOB has been able to fulfill its inspection and enforcement-related responsibilities as it relates to audit firms in China and Hong Kong.

Further, in April 2021, the PCAOB had only updated five of the standards it adopted on an interim basis when it was created 20 years ago. The interim standards had been carried over from existing American Institute of Certified Public Accountants standards, and the Sarbanes-Oxley Act envisioned that the PCAOB would update them soon after its creation. Since Chair Gensler was sworn in, the PCAOB has updated 18 interim standards and two other standards to reflect the current oversight needs in accounting and auditing.

Examinations and Enforcement

The Divisions of Enforcement and Examinations, which make up about half of the agency, have been steadfast cops on the beat during Chair Gensler’s tenure. The agency received more than 145,000 tips, complaints, and referrals and awarded approximately $1.5 billion to whistleblowers. The Commission filed more than 2,700 enforcement actions and obtained approximately $21 billion in penalties and disgorgement orders. Between fiscal years 2021 and 2024, the agency returned more than $2.7 billion to harmed investors as a result of enforcement actions.

Further, the SEC recovered more than $250 million for harmed investors through examination of investment advisors, investment companies, and broker dealers, among others. The Division of Examinations also enhanced communication with registrants by sharing more timely information about its annual priorities and observations and proactively engaging with industry and other regulators.

Under Chair Gensler, the Commission continued the work Chair Jay Clayton began to protect investors in the crypto markets. During Chair Gensler’s tenure, the agency brought actions against crypto intermediaries for fraud, wash trading, registration violations, and other misconduct.

In the last full fiscal year, according to the SEC’s Office of the Inspector General, 18 percent of the SEC’s tips, complaints, and referrals were crypto-related, despite the crypto markets comprising less than 1 percent of the U.S. capital markets. Court after court agreed with the Commission’s actions to protect investors and rejected all arguments that the SEC cannot enforce the law when securities are being offered—whatever their form.

About Chair Gensler

Chair Gensler was formerly Chair of the U.S. Commodity Futures Trading Commission, leading the Obama Administration’s reform of the $400 trillion swaps market. He also was senior advisor to U.S. Senator Paul Sarbanes in writing the Sarbanes-Oxley Act (2002) and was undersecretary of the Treasury for Domestic Finance and assistant secretary of the Treasury from 1997-2001.

In recognition for his service, Chair Gensler was awarded the Alexander Hamilton Award, the U.S. Treasury’s highest honor. He is a recipient of the 2014 Frankel Fiduciary Prize.

Before joining the SEC, Chair Gensler was professor of the Practice of Global Economics and Management at the MIT Sloan School of Management, co-director of MIT’s Fintech@CSAIL, and senior advisor to the MIT Media Lab Digital Currency Initiative. From 2017-2019, he served as chair of the Maryland Financial Consumer Protection Commission.

Earlier in his career, Chair Gensler worked at Goldman Sachs, where he became a partner in the Mergers & Acquisition department, headed the firm’s Media Group, led fixed income & currency trading in Asia, and was co-head of Finance, responsible for the firm’s worldwide Controllers and Treasury efforts.

A native of Baltimore, Md., Chair Gensler earned his undergraduate degree in economics in 1978 and his MBA from The Wharton School, University of Pennsylvania, in 1979. He has three daughters.

FLASH FRIDAY: Overnight Trading Gains Momentum

By
Anna Lyudvig
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FLASH FRIDAY is a weekly content series looking at the past, present and future of capital markets trading and technology. FLASH FRIDAY is sponsored by Instinet, a Nomura company.

Technological advancements, changing regulations, and the increased accessibility of financial markets have made it possible for individual traders to access trading platforms 24/7, leading to an explosion in after-hours and overnight trading.

The democratization of trading platforms through technology has played a key role in making overnight trading more accessible. Online brokerages and mobile trading apps like Robinhood, Firstrade, E*TRADE and Webull have made it possible for retail traders to trade anytime, anywhere, even in off-market hours.

These platforms offer features such as real-time data feeds, algorithmic trading, and fractional shares, which empower individuals to participate in markets that were once reserved for institutional investors.

Anthony Denier

Anthony Denier, Group President and US CEO of Webull, confirmed that demand for overnight trading is rising among retail investors, as markets have become more globalized and trading platforms offer greater accessibility and investment opportunities.

The demand is fueled by retail investors wanting to capitalize on market movements outside of traditional trading hours, such as those driven by geopolitical events, earnings reports, or breaking news, he said.

“The flexibility that overnight trading provides is also appealing to retail investors who might have limited availability during traditional trading hours to actively manage their portfolios,” he added.

Arguably, the greatest beneficiaries of overnight trading will be retail investors –  people who, in the past, may have found the process mysterious or intimidating, Stephen Callahan, Trading Behavior Specialist at Firstrade, told Traders Magazine.

“They may have thought that only large institutional investors were able to take advantage of increased volatility or off hours news,” he said.  

“Over night trading will show the “little guy” that the markets are more fair, and less prone to manipulation,” he added.

“Although overnight trading is not new, the recent spike in interest is an extension of life in the twenty-first century,” Callahan said.

News cycles are 24/7, sports viewing ( and betting) are no longer solely local, it makes sense that Stock and ETF trading should be offered in extended hours, he said. 

“Most people have access to market research and stats at their finger tips. Why not take advantage of an event that can move the market in real-time, instead of waiting for the following morning’s open,” he added. 

According to Callahan, there is no particular demographic responsible for the surge of overnight trading, but at Firstrade we have seen more new accounts opened, and more speculative trading from people under the age of forty.  We actively track clients requests and suggestions via phone and e mail, so we’re pleased to offer a service that customers want.

Benjamin Schiffrin

Meanwhile, according to Benjamin Schiffrin, Director of Securities Policy for Better Markets, it’s not clear that there is growing demand for overnight trading.

“There seems to be a desire to extend trading hours on the part of the exchanges, but that is not the same thing as investors being unable to trade during normal trading hours and seeking to have trading sessions extend around-the-clock as a result,” he commented.

To the extent there is growing demand for overnight trading on the part of investors, it seems to be coming from traders in Asia, he said.

“It is entirely unclear that there is a growing demand for overnight trading from retail investors in the United States. Instead, the push seems to be driven by the exchanges,” he argued.  

Risks

Lower liquidity is one risk of overnight trading, as there is less buying and selling activity during extended hours, Denier said.

“This can potentially lead to wider bid-ask spreads and price fluctuations,” he told Traders Magazine.

He said that overnight trading provides opportunities for global investing strategies and enhanced market efficiency.

“However, it is essential that retail investors have access to the necessary tools and information to hedge against risks, as institutional investors do,” he stressed.

In order to manage against the risks associated with thin liquidity, retail investors can submit LIMIT orders for whole-share amounts, specifying the price and duration at which a trader’s order will be executed, Denier argued.

Schiffrin also said that one risk of overnight trading is a lack of liquidity, adding that there just would not be the same volume during overnight trading. 

“So retail investors taking part in extended sessions would be trading in a market where prices are bound to be more volatile and less favorable than during normal trading hours,” he said.

“This would provide another avenue for sophisticated market participants such as high-frequency traders to take advantage of retail investors,” he commented.

Another risk of overnight trading, according to Schiffrin, is the fact that it is human nature to engage in riskier behaviors at night.

“As we’ve seen with legalized sports betting, the combination of technology fueled by artificial intelligence that entices fans to place bets and the ability to place bets 24 hours a day has led to a gambling addiction crisis,” he noted.

“It is easy to envision the financial industry using the same combination of inducements to trade and the ability to trade at any time to get retail investors hooked on trading, with potentially disastrous consequences,” Schiffrin said.

“There is also the risk of allowing trading at a time when regulators will literally be asleep at the switch,” he added.

Fewer market makers, less volume can mean wider spreads and volatile moves in the market, according to Callahan.

“We also feel that the  more participants, the better. Informed, knowledgeable traders will bring greater transparency and add liquidity to overnight trading. When there’s additional focus on trading off hours, we’ll also have more confident traders. Overall a net positive, despite any additional risks,” he said.  

Meanwhile, according to Schiffrin, our securities markets are already extremely fragmented.

“The consequence, and too often the goal, of this complexity and fragmentation has been the transformation of our financial markets from a wealth creation system for the many into a wealth extraction system for the few,” he argued.

According to Schiffrin, market fragmentation has created opportunities for predatory market participants, such as high-frequency trading firms, to take advantage of retail investors.

He believes that overnight trading would only exacerbate the problems that already exist in light of our fragmented securities markets and introduce new risks for retail investors. 

“Liquidity will further deteriorate with the advent of overnight trading, and predatory market participants will have a new avenue for extracting wealth from retail investors,” he said.

“Retail investors would have the ability to make a trade in the middle of the night with just the click of a button but likely without a real understanding of the potential disadvantages of trading overnight,” he added.

“Retail investors would be trading at a time when the bid-ask spread is likely to be greater than it would be during normal trading hours, so they would not get the best prices,” Schiffrin said.

Going forward

The question retail investors need to ask is whether overnight trading is good for them: “It may be good for the platforms that can make money through overnight trading,” Schiffrin said.

Nevertheless, according to Denier, as brokerage platforms become more advanced, retail investors are expecting increased accessibility to offerings that are traditionally only available to institutional investors.

“Extended hours trading accessibility helps unlock investment opportunities, but will also increase the need for sophisticated tools, offerings, and education to help retail investors hedge against risk and better manage their portfolios,” he noted.

Callahan added: “Going forward we believe the retail community will, in time, incorporate over night trading into their investment strategy.” 

The rapid improvements in technology and the wealth of information will make this style of trading the new normal, he said. 

“Stocks that trade off of momentum rather than technical or fundamental analysis are even more subject to timing. And, there’s no time like the present, even if that happens to be in the middle of the night,” he said.

The Basel Committee Pushes for Stronger Global Banking Standards

By
Anna Lyudvig
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The Basel Committee on Banking Supervision has unanimously reaffirmed their expectation of implementing all aspects of the Basel III framework, an international set of banking standards aimed at improving resilience, without further delay.

In its latest meeting in Switzerland this week (November 19-20), members unanimously agreed that consistent implementation is critical, a stance echoed by G20 leaders.

As part of this push, the Committee reviewed Korea’s adherence to key aspects of Basel III, including exposure limits and liquidity management.

Alex Knight

According to Alex Knight, Head of EMEA at Baton Systems, the Basel Committee’s call underscores that intraday liquidity risk is not just a side issue, but the foundation of financial stability and investor confidence.

“Banks must urgently transition from outdated legacy systems to modern, robust intraday liquidity management tools,” he said.

“Real-time, high-quality data enables financial institutions to precisely monitor and predict liquidity needs and intelligently sequence payments, minimizing risks of shortfalls. In turn, this improves the resilience of individual banks and strengthens the stability of the global financial system, especially during periods of stress,” he added.

In addition, the Committee discussed banks’ interconnections with non-bank financial intermediation (NBFI).

NBFI, often dubbed the “shadow banking sector,” continues to grow and evolve in ways that could present risks and vulnerabilities to the global banking system.

Banks are connected to NBFI through a wide range of direct and indirect activities and services.

Data gaps hinder the effective measurement and management of risks to banks from their NBFI interconnections.

Banks and supervisors must continue to be vigilant to these risks and to better gauge the range and materiality of interconnections.

The Committee reviewed the comments received to its consultation on guidelines for counterparty credit risk management.

Building on the feedback received, it approved a final set of guidelines that seek to address weaknesses in banks’ counterparty credit risk management exposed in recent episodes of NBFI distress. The finalised guidelines will be published in December.

Cédric Cajet, investment management strategy director at NeoXam, said: “The committee has identified several gaps that make it extremely difficult to fully assess the vulnerabilities associated with non-bank leverage.When it comes to liquidity risk, these institutions have never been held to the same standards as the banks, in spite of their increasingly integral role in the effective functioning of global markets.”

“Pension funds, asset managers, hedge funds, insurers, and other non-banking financial institutions need to ensure they capture positions, valuations and exposures based upon all of their investment information,” he commented.

As part of its efforts to strengthen supervisory effectiveness in light of the lessons learned from last year’s banking turmoil, the Committee discussed its work to develop a suite of practical tools to support supervisors in their day-to-day work.

This work covers the supervision of liquidity risk and interest rate risk in the banking book, the assessment of the sustainability of banks’ business models, and the importance of effective supervisory judgment. An update on this work will be published in early 2025.

Exegy Expands Ultra-Low Latency, Tick-To-Trade Support To Include All Canadian Equity Exchanges

By
Editorial Staff
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Exegy, a trading technology provider across the latency spectrum, has announced the expansion of market data and execution coverage for nxAccess, its FPGA-based tick-to-trade solution, now supporting all Canadian equity exchanges.

This enhancement enables seamless, ultra-low latency trading for a wide range of trading strategies in Canadian and US markets.

It is the only off-the-shelf, FPGA tick-to-trade solution that enables clients to achieve operational consistency and efficiency across North American markets.

Building on its robust Canadian market data offering, Exegy now extends nxAccess coverage to support both market data and order execution across all Canadian equities venues.

This enhancement empowers traders in Canada to achieve rapid time-to-market and benefit from high-performance, deterministic tick-to-trade capabilities, enabling them to focus on optimizing their core trading strategies without additional complexity.

David Taylor

ETF market makers in the region will benefit significantly, as Canadian and US banks can now leverage Exegy’s FPGA technology for seamless, cross-border trading across North American markets. With ultra-low latency solutions, ETF trading desks gain the precision and performance critical to their operations.

This expansion enhances Exegy’s full FPGA trading solutions, offering clients unparalleled speed, reliability, and scalability across global markets.

David Taylor, CEO of Exegy, said: “By enhancing our ultra-low latency product suite, Exegy reaffirms its leadership in the Canadian market and commitment to supporting clients as they navigate increasingly complex and competitive trading environments. We worked closely with a strategic client to deliver this cutting-edge solution, and it has proven to be a game-changer that can position savvy firms for success in an evolving marketplace.”

Clients will gain access to the following key benefits:

  • Comprehensive Market Coverage: Seamless access to market data and order execution protocols across all Canadian equity venues, including Montréal, Toronto, Chi-X Canada, Aequitas, Omega, and CSE.
  • Effortless Deployment: Leverage the latest FPGA-based trading technology with minimal internal resources, enabling clients to focus on refining their trading strategies.
  • Scalable Ultra-Low Latency Solutions: Benefit from nanosecond-level tick-to-trade capabilities that support trading across North America.
  • Dedicated Support for Canadian Clients: Enhanced resources and expertise to ensure reliable access to all critical Canadian trading venues and meet evolving market demands.

Exegy continues to lead the global market in innovative, ultra-low latency trading solutions, trusted by top-tier buy-side and sell-side firms across North America, including many Canadian clients. By enhancing its Canadian coverage, Exegy strengthens its position as the go-to partner for firms seeking high-performance, end-to-end trading solutions. Driven by close collaboration with clients, Exegy remains committed to delivering cutting-edge products that anticipate and meet the demands of an evolving trading landscape.

2024 U.S. Women in Finance Award Winners Announced

By
Markets Media
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Markets Media Group’s tenth-annual U.S. Women in Finance Awards event was held Nov. 21 at the Hard Rock Hotel in New York City.

A sincere thank you to all sponsors, finalists, and attendees, and of course, a hearty congratulations to the winners.

Positive Impact AwardMariko BoswellPIMCO
STEM ChampionKathryn ZhaoCantor
Excellence in Diversity & InclusionErica SeremetaBlackRock
Excellence in Corporate CultureJacqueline WIlhelmyAllianceBernstein
Excellence in Artificial Intelligence / Machine LearningOlga Czabaj-ShettyBank of America
Excellence in Human ResourcesMarta BezoariPIMCO
Excellence in ComplianceApril DennisSociete Generale
Excellence in Fixed IncomeNatalya RasmussenMizuho Americas
Excellence in Asset ManagementMelissa Anderson & Rosalie Candido LouwAllianceBernstein
Excellence in ExchangesLouise CurbishleyMembers Exchange
Excellence in Risk ManagementAnn Marie HalterNorthern Trust
Excellence in Trading PlatformsVinisha MinochaLiquidnet
Excellence in LegalAngela Saccomandi DunnNasdaq
Excellence in OperationsAngela GilsonScotiabank
Excellence in Prime ServicesLisa LewinBNY Pershing
Excellence in RegulationBarbara ComlyMIAX
Excellence in ResearchErin LyonsCreditSights
Excellence in Service ProvidersRachele PrinciottoVirtu Financial
Excellence in Wealth ManagementCarly MaherPark Avenue Securities
LeadershipJulie AndressKeyBanc Capital Markets
LeadershipKatie PriesNorthern Trust Canada
TrailblazerSusie RobertsDeutsche Bank
AmbassadorJamie KopsachilisSociete Generale
Excellence in InnovationEva SehicLime Trading
Rising StarHayley FlemingLiquidnet
Rising StarNancy FollonSociete Generale
Rising StarAbigail GlerumGoldenTree Asset Management
Rising StarSerena KishinchandaniNasdaq
Rising StarJackie MendezAllianceBernstein
Rising StarEmilie MenghinPIMCO
Rising StarLisha QiuVirtu Financial
Rising StarJennifer ShermanBNY
Rising StarBridget SilverTradeweb
Rising StarNikki TucciWells Fargo
Rising StarMelissa WeatherDeutsche Bank
Rising StarFallon WintersBlackRock
Rising StarPreeti YadavIntelligentCross
Rising StarHannah ZeitlinMizuho Americas
Excellence in Marketing & CommunicationsKelli AnnequinMIAX
Excellence in Marketing & CommunicationsMeaghan Fitzpatrick TravisInstinet
Excellence in Trading – EquitiesNataliya BershovaTruist
Excellence in Trading – EquitiesRie MasuiBlackRock
Excellence in Trading – EquitiesTammy WiggsT. Rowe Price
Excellence in Trading – Fixed IncomeBritni IhleCiti
Excellence in Trading – Fixed IncomeSerena LinMizuho Americas
Excellence in Trading – Fixed IncomeSophie NguyenAllianceBernstein
Excellence in Trading – DerivativesGeralyn EndoMEMX
Excellence in Trading – FXRekha NairSociete Generale
Excellence in Hedge FundsLinda YeD. E. Shaw Group
Excellence in FICCRashaan ‘Rash’ ReidBank of America
Excellence in Data StrategyOlga SudvargInvesco
Excellence in Digital AssetsNadine ChakarDTCC
Excellence in RepoLeslie HillsamerScotiabank
Excellence in RiskTechDharrini Bala GadiyaramBloomberg
Excellence in Structured SolutionsJee-Won YangMizuho Americas
Excellence in SustainabilityEmily KrepsDeutsche Bank
Individual AchievementMartina CheungS&P Global
Crystal LadderJennifer PyrkaInstinet
COO of the YearRosalia BelliaBank of America
CIO of the YearKara MurphyKestra Investment Management
CFO of the YearSara FurberTradeweb
CEO of the YearKathy SutherlandGoldenTree Asset Management
Lifetime AchievementLiliane AnconaBlackRock

Broadridge Significantly Enhances Structured Product Trading Capabilities

By
Press Release
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NEW YORK and LONDON, November 21, 2024 – Broadridge Financial Solutions, Inc. (NYSE:BR), a global Fintech leader, today announced transformative enhancements to Tbricks, its high-performance multi-asset trading and market making solution. Broadridge’s latest Structured Products Market Making enhancements are set to transform global trading operations, enabling trading desks to quote hundreds of thousands of structured products across multiple markets and distribution channels simultaneously.

“This transformative development marks a significant leap forward in simplifying and optimizing trading for structured products,” stated Konstantin Romanov, Global Head of Principal Trading Products, Broadridge Trading and Connectivity Solutions. “Banks and broker/dealers have long struggled with the complexity and scale of structured product quotations, which span multiple markets and various quoting modes. Tbricks directly addresses this critical issue, empowering banks and broker/dealers globally to quote at unprecedented scales and unlock new efficiencies through an intuitive, consolidated user interface.”

Mehdi Mlaiki

“We have found Tbricks to be a reliable and flexible Market Making tool with low latency capabilities, combining safety and speed. The enhancements to the platform have enabled us to better serve our clients with our Marex-issued Structured Products in a dynamic market condition,” said Mehdi Mlaiki, Head of Trading, Marex Solutions. “These developments have significantly enhanced our ability to provide investors with accurate and competitive quotes,” continued Joost Burgerhout, Head of Marex Financial Products. “We believe this has contributed to the increase of our market share and consistent ranking among the top issuers in regard to trading volume on the Italian exchange Cert-X.”

Broadridge has several European tier 1 clients that benefit from the solution and worked closely with them to better understand their challenges with quoting trading instruments at scale and to identify new ways to drive automation and improve usability, while enhancing the solution.

The enhanced Tbricks solution reaffirms Broadridge’s commitment to providing the critical infrastructure that powers trading and operations across markets – with global, multi-asset, modular solutions – across the trade lifecycle.

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 process and generate over 7 billion communications per year and underpin the daily trading of more than $10 trillion of 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, please visit www.broadridge.com.  

Source: Broadridge Financial Solutions

The Rise of Retail – The US Perspective: The Full Picture of On-Exchange Retail Trading 

By
BMLL
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By Nazed Mannan, Senior Product Manager, BMLL 

When trading equity markets, one of the challenges is understanding the breadth and variety of participant types. Within any equity market there is a wide range of participants, from proprietary trading firms to asset managers, with holding periods from seconds to years. Understanding how these different firms trade, and what participants are trading a given stock, is essential for anyone trying to optimise execution and transaction quality. 

Nazed Mannan

An increasingly important market participant in the stock market is the retail investor. These non-professional investors have grown considerably in recent years since Covid, especially in the US equity market, fuelled by a combination of online brokerage platforms (for example, Robinhood) and the explosion of zero day options. Retail investors often show characteristics that are quite different to institutional investors, such as high momentum and contrarian habits, exemplified by the Gamestop explosion. Knowing whether a stock has a high level of retail activity is critical for investors, whether seeking alpha or improving execution. 

US retail trading today 

Unlike other properties of trading, such as the price or size of an order in the market, the exact nature of market participants is not disclosed. Instead, firms have often relied solely on very rough heuristics or delayed data to understand participant makeup. In this article, we show how leveraging messages from Level 3 historical data can considerably improve understanding of retail trading in the US markets. 

Firstly, it is important to understand how retail trading works in the US equity market. Retail trading is typically done by payment for order flow (PFOF), in the following way: 

  •  An investor places a trade through a broker 
  • The broker sends the order to a market maker 
  • The market maker executes the trade on behalf of the investor. This is typically internalised OTC, rather than on exchange 
  • The market maker pays the broker a fee for handling the trades 

Execution has been historically dominated by the largest wholesale brokers, with most executions occurring off exchange. Looking at the two-week delayed FINRA OTC data, we can see that the makeup of these largest brokers typically includes Citadel Securities, Virtu Americas, and Susquehanna (G1 Execution), which respectively account for 26%, 19%, and 12% of OTC volumes. The chart below shows the total weekly OTC shares traded by broker. 

Fig 1: Weekly U.S. OTC Volume by Broker

Whilst the FINRA data behind Fig 1 provides much sought after transparency, there are other considerations. Firstly, FINRA data is two weeks-delayed and aggregated at the weekly level, meaning that important changes can get missed. Secondly, it doesn’t show important details such as when retail trades, or if a stock is becoming more retail. 

Instead of using delayed, aggregated FINRA data, a trade-by-trade approximation is often done using the SIP feed. By taking odd-lot trades inside NBBO (since retail normally gets price improvement), you can start to build a picture of retail trading (as seen in BMLL liquidity maps). For example, here we can see the growth in retail using SIP data in Gamestop this year: 

Fig 2: U.S. Retail Volume by Ticker (Shares)

Fig 3: U.S. Retail Volume by Ticker (% Shares) 

The race with retail: moving on exchange 

While the majority of retail trading is OTC, a percentage does end up traded on exchange (between 2% and 10% based on SIP data). Exchanges compete for this flow, with different mechanisms and venues. For example, CBOE EDGX offers queue priority for trades explicitly tagged as retail, while other exchanges (such as NYSE) have retail price improvement programs, allowing retail execution inside NBBO via non-displayed trades. Importantly, we are seeing the race for retail increasing, for example with the recent launch of retail flags on Miami Pearl Equities which explicitly identify trades where participants are retail. 

Taking a deeper look 

Now we can turn to see what Level 3 historical data reveals. While each exchange is different, we can use a combination of order book flags, retail interest indicators and trade types (unlike the SIP, Level 3 data differentiates displayed and non-displayed trades) to build a full picture of retail on exchange. 

We see that EDGX, with retail priority as well as rebates, is heavily skewed as a retail venue, with an average of 20% retail volume from January to early August in 2024. 

Fig 4: U.S Retail Volume on Cboe EDGX

Let’s take a look at Gamestop (GME), which attracted significant interest between May to June 2024. On EDGX, we see that between April and May, the proportion of retail activity increased (from 23% to 32%) ahead of an increase in retail volumes (jumping from 1 to almost 25 million shares). Interestingly this suggests that institutional volumes were declining ahead of the retail jump in May, signaling contrarian drivers. Subsequently, the retail proportion in GameStop remained steady before a second jump in retail volumes in June. This is shown in Fig 5.

Fig 5: GameStop Retail Volume and Proportion on Cboe EDGX 

Whilst EDGX provides explicit flags in the Level 3 data, for other venues with retail price improvement (RPI) programs (such as CBOE, Nasdaq and NYSE exchange), we can estimate retail volumes through a combination of RPI flags and non-displayed trades. 

There is a clear correlation between retail volumes on these venues and EDGX. Importantly though, on-exchange retail volumes are not evenly distributed across venues. In contrast to the 20% retail proportion observed on EDGX, based upon an estimation approach, we observe a significantly smaller proportion of other exchange volumes being retail. This is seen in figures 6 and 7.

Fig 6: EDGX Retail Volume and Estimated RPI Volume by MIC

Fig 7: EDGX Retail Proportion and Estimated RPI Proportion by MIC 

What is the true picture of on-exchange retail trading? 

Understanding US retail is one of the holy grails for most investors, especially with continued growth in US retail trading. This is critical across all parts of the trading lifecycle, from creating alpha strategies to optimizing execution algorithms. 

While either aggregated data from FINRA or anonymized data from the SIP can give some information, it doesn’t tell the whole story. By using retail flags and indicators only available in Level 3 data, you can build a much fuller picture of on-exchange retail trading. This is available trade by trade and order by order, giving a clearer and deeper understanding into how and where retail is trading.

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