SEC Commissioner Hester Peirce delivered a thought-provoking speech on equity market structure at the 12th Annual Conference on Financial Market Regulation. At the outset, she highlighted the organic nature of market development and cautioned against the pitfalls of overly prescriptive regulation. She then posed a series of introspective questions that included:
“What would the market landscape look like without micromanagement by the SEC? Would the proliferation of exchanges be the same? How would off-exchange trading platforms, like ATSs, have evolved? Would trade internalization be as prevalent? Most importantly, would these changes benefit issuers, investors, and traders?”
In just over 3,000 words, Commissioner Peirce walks us through 75 years of equity market structure, culminating in astute observations on its nuanced and defining attributes. She examines critical aspects on areas where the Commission may consider making changes such as the Order Protection Rule, competitive constraints on exchanges, the expansive definition of an exchange’s “facility,” the SRO model, overlooked issues in options markets and more. She advocates for adaptive regulatory frameworks that accommodate technological advancements and market dynamics, while ensuring investor protection and market integrity.
Overall, Commissioner Peirce’s speech is balanced and insightful, underscoring a commitment to reevaluating regulatory approaches to better align with economic principles and market realities—ultimately aiming to foster competitive, transparent, and resilient financial markets. It is clear that the Commissioner known affectionately as “Crypto-Mom” is also an “Equity-Mom” and her speech serves as a strategic guide for potential regulatory changes. It is well worth the read.
Deutsche Börse Group offers integrated connectivity for the buy side with strategic partnership between SimCorp and Clearstream
Partnership will give investment managers on SimCorp One platform integrated access to Clearstream’s post-trade solutions
First live offering is a fund data management service to disseminate data, documents and regulatory reporting
Further combined product offerings will be centred around creating additional optionality for fund distribution and transfer agency software modules, collateral optimisation and management as well as tri-party repo services
Release date: May 22, 2025 | SimCorp, Clearstream
SimCorp, a global leader in financial technology, and Clearstream, the innovative and trusted post-trade business for the global markets, have launched a strategic partnership to incorporate Clearstream’s post-trade offering in SimCorp’s integrated, front-to-back investment platform SimCorp One. Both SimCorp and Clearstream are members of Deutsche Börse Group.
SimCorp’s clients are now able to enjoy integrated access to Clearstream’s fund data solutions via its Kneip platform to disseminate data, documents and regulatory reporting for their funds. It gives SimCorp clients the opportunity to outsource these tasks, which will enable them to achieve material cost savings and drive efficiency and scale.
In a next step, Clearstream and SimCorp will explore the inclusion of further fund and securities services, including fund distribution on the FundsDLT Software-as-a-Service (SaaS) transfer agency platform, as well as solutions for collateral management and tri-party repo.
This partnership marks a significant milestone in further developing Deutsche Börse Group’s comprehensive buy-side offering that aims to connect investment managers to the Group’s wider trade and post-trade ecosystem.
“With SimCorp One, we offer our clients the opportunity to leverage the world’s best financial technology and services,” said Georg Hetrodt, SimCorp Chief Executive Officer. “Adding Clearstream to our existing ecosystem gives investment managers additional ways to leverage investment management solutions based on access to market infrastructure solutions.”
“At Clearstream, we are thrilled to offer asset managers access to premier fund data and regulatory solutions as part of the SimCorp One ecosystem,” said Philippe Seyll, CEO Clearstream Fund Services. “By leveraging SimCorp as our partner within Deutsche Börse Group, we will make our offering even more readily accessible to the investment management industry. We are looking forward to a close collaboration and to expanding this partnership across Clearstream’s post-trade services for both securities and funds.”
To learn more about how SimCorp One clients can access Clearstream functionality and other services, visit here.
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.
Clearstream is the innovative and trusted post-trade business for the global markets. It runs the leading securities and funds servicing ecosystems of tomorrow.
The company operates the German and Luxembourg central securities depositories and an international central securities depository for the Eurobonds market. With 20 trillion Euros in assets under custody, it is one of the world’s largest settlement and custody firms for domestic and international securities.
It also delivers premier fund dealing, distribution, digital and data services, covering over 55 fund markets worldwide.
Clearstream is part of Deutsche Börse Group, an international exchange organisation and provider of innovative market infrastructures.
Capital Institutional Services (CAPIS), an institutional brokerage firm based in Dallas, has strategically strengthened its position within the commission recapture and commission management market by acquiring the Plan Sponsor Services business from TD Securities.
The deal, which became effective on April 1, 2025, represents a pivotal move in CAPIS’ expansion plans, furthering its capabilities in serving institutional clients such as pension funds, endowments, foundations, and mutual funds.
David Choate
By integrating TD Securities’ assets, CAPIS has solidified its role as a dominant player in the commission management space, bolstering its commitment to delivering exceptional services to asset owners across the globe, according to David Choate, Chief Operating Officer at CAPIS.
“This acquisition significantly enhances our ability to provide commission management services to asset owners, such as pension funds and mutual funds,” he told Traders Magazine.
“By adding TD Securities’ Plan Sponsor Services business to our portfolio, we not only expand our client base but also gain valuable operational knowledge and long-term relationships built by TD. This strengthens CAPIS’ legacy as a leading provider in this space,” he stressed.
The strategic importance of the acquisition lies in its ability to extend CAPIS’ reach to a wider and more diverse institutional client base.
CAPIS will now administer all of TD Securities’ existing commission recapture programs, which positions the company as an even stronger contender in a market where commission management is crucial for institutional investors.
The acquisition amplifies CAPIS’ ability to offer a comprehensive suite of services to clients, while providing a foundation for sustained growth and innovation within the commission recapture space.
One of CAPIS’ foremost priorities has been ensuring a smooth and seamless transition for the clients previously served by TD Securities.
To meet these expectations, CAPIS has taken significant steps to ensure that the integration process is as smooth as possible. This includes retaining a substantial portion of TD Securities’ Plan Sponsor Services team, whose expertise and deep institutional knowledge provide a seamless link between CAPIS and the new clients coming on board.
Tim Conway, the former Managing Director of Plan Sponsor Services at TD Securities, now serves as Director of Plan Sponsor Services at CAPIS. Conway’s leadership and wealth of industry experience have proven to be invaluable during the transition, bringing continuity for both clients and staff.
“We are pleased to join CAPIS, a firm that shares our commitment to exceptional client service and execution,” said Conway.
“This transition ensures that our Plan Sponsor Services clients continue to receive best-in-class commission recapture solutions while allowing TD Securities to remain a key broker within the CAPIS Global Trading Network.”
Alongside Conway, the majority of TD Securities’ Plan Sponsor Services team has joined CAPIS. Choate elaborated on this, stating: “With their extensive industry expertise, we’ve been able to onboard all clients smoothly and begin offering expanded services to meet their evolving needs. This approach not only ensures continuity but also allows us to build upon the strong foundation TD Securities has established.”
A key component of this acquisition is CAPIS’ decision to maintain a strong partnership with TD Securities, which will continue to act as a key executing broker within the CAPIS Global Trading Network.
This arrangement guarantees that clients who have relied on TD Securities for trade execution will continue to benefit from uninterrupted access to high-quality execution services.
For institutional clients, the ability to leverage a trusted broker while enjoying the expanded services from CAPIS ensures that they are well-supported in all aspects of commission management.
“The continued partnership with TD Securities as an executing broker is crucial for maintaining stability and trust among our plan sponsor and asset manager clients,” Choate noted. “This ensures that our clients can continue to leverage TD’s execution capabilities, ensuring a seamless experience as we grow our global trading network.”
Beyond operational continuity, the acquisition represents a strategic alignment with CAPIS’ broader long-term growth strategy. For CAPIS, the integration of TD Securities’ Plan Sponsor Services business is more than just a transactional deal—it’s a critical part of the company’s vision to expand its commission management offerings and solidify its leadership in the institutional market, Choate said.
“This acquisition is a direct extension of CAPIS’ strategic vision to expand its service offerings and enhance its leadership position in commission management services,” Choate stated.
“It reflects the firm’s long-term goal of growing through targeted expansion, particularly in areas where CAPIS has long been a pioneer, such as recapture for sub-advised funds and plan sponsors,” he said.
“This acquisition is part of our broader plan to continue building on our foundation of industry leadership and expand our reach to a wider institutional client base. As we look ahead, we see tremendous opportunities for growth and innovation in the commission management space,” he concluded.
Most institutional asset owners currently are using passive investments or have leveraged passive investments in the past. However, they remain split on whether active or passive management offers the best risk/return profile for public market exposure, according to the latest Cerulli Edge—U.S. Institutional Edition.
Cerulli’s research shows more than half of institutional asset owners (57%) say they will use investment strategies that can offer the best risk/return profile regardless of whether it is an active or passive approach. Meanwhile, 30% of asset owners prefer active strategies, while another 29% prefer passive strategies.
For those that prefer passive strategies, cost is often a reason why, with 25% saying they invest in active only in certain asset classes because of their higher cost. Asset owners tell Cerulli they have sought out passive in public equity markets to minimize their risk exposures in that portion of the portfolio and to maximize their risk budgets for higher-cost alternative strategies. Others use the more predictable, pure-play exposures that indices can provide for tactical purposes in their portfolios, such as addressing gaps in portfolio allocations and making directional bets.
Across all institutional channels, the majority (75%) of asset owners report using passive equity exchange-traded funds (ETFs), with that percentage exceeding 90% for public and corporate defined benefit plans and nearly 90% for endowments and Taft-Hartley plans (89%). Looking ahead, nearly 40% of asset owners tell Cerulli they plan to increase their use of the ETF vehicle, the highest percentage of any vehicle in Cerulli’s survey.
While allocations to passive investments may fluctuate, institutional asset owners view them as a critical tool for achieving their investment objectives.
“For asset managers offering passive strategies, a clear opportunity exists to continue to capitalize on their use by emphasizing the low-cost nature of passive strategies relative to active strategies,” says Brendan Powers, director. “While significant demand still exists for active managers, they need to be best of breed if in an asset class in which passive will be sought after (e.g., large-cap equities); otherwise, they may be in an uphill battle to find winnable mandates,” he concludes.
By Kelvin To, Founder and President of Data Boiler Technologies
Kelvin To
While international trade, tariffs and dollar dominance may now be preoccupying risk managers and strategists, let us not lose sight of financial market matters: the U.S. Market Data Infrastructure Rules (MDIR); Minimum Pricing Increments (a.k.a. Tick Size), Access Fees, and Transparency of Better Priced Orders (TBPO) that are set to be implemented in November 2025; and Odd Lot information to be included by May 2026. Risk and compliance managers should not procrastinate in understanding changes that will affect their risk controls, volatility management, surveillance, duties to fulfill Rule 605 best execution and Rule 606 order routing disclosure requirements, and more.
Like throttle and brakes, controls ought to be embedded in the design, system and operational adjustments. They should correctly process the expanded contents and cater to latency improvement. The definition of “core data” will be expanded to include: quotation sizes; aggregate quotation sizes; best bid and best offer; national best bid and national best offer; protected bid and protected offer; transaction reports; last sale data; odd-lot; depth of book data; and auction information.
Most investment firms (IFs) are enthusiastic to get “five levels of depth” from the Securities Information Processors/ Competing Consolidators (SIPs/CCs). Yet, a thoughtful and precise compilation is easier said than done.
Notable changes include a “40 shares” tier to the total four-tiered definition of “round lot.” Quotation sizes will be represented by the number of round lots. Core data elements will instead be disseminated by SIPs/CCs in share sizes, rounded down to the nearest round-lot multiple.
The new definition of round lot under MDIR and the amended tick size under TBPO will complicate the computations of best bids and offers (BBOs). The SEC acknowledged the national BBO implications, while expecting benefits such as narrower spreads on National Market System (NMS) stocks with an average closing price over $250 per share.
Why the Upheaval?
Risk and compliance managers may question the regulatory purpose of such cumbersome changes to market data and market structure, causing the industry to scramble with process and system upgrades.
First, let’s remember the SIPs and data vendors, who plan to register as CCs under MDIR, are charged with having to provide a truly reliable source of trade sequence to best represent supply and demand. Improving market integrity and transparency is an honorable goal.
There is no denying that risk limits and other parameters will need to be adjusted. Many nuances have been reviewed and thoroughly considered by the SEC to prevent potential exploitation and balancing different stakeholders’ needs (e.g. institutional versus retail, lit versus other trading venues, etc.) in the markets. For example, TBPO requires that odd-lot information to include a best odd-lot-orders (BOLO) to buy and sell (BOLO).
Regarding tick size, implementation of TBPO will permit self-regulatory organizations (SROs), alternative trading systems (ATS), vendors and broker-dealers to display, rank and/or accept from any person a bid or offer, an order, or an indication of interest in an increment no less than $0.005 if the NMS stocks have a narrow time-weighted average quoted spread (TWAQS =< $0.015) during the evaluation period: “TWAQS means the average dollar value difference between the NBB and NBO during regular trading hours where each instance of a unique NBB and a unique NBO is weighted by the length of time that the quote prevailed as the NBB or NBO.”
The three-month evaluation period (e.g., January-March, July-September) has a one-month lag for tick and round-lot tier assignment; thus the six-month operative period from May to October, and from November to April.
The SEC expects spreads will be reduced for these NMS stocks (approx. 58% of daily trading volume, or 43% in dollar volume). If the TWAQS exceeds $0.015, the minimum tick size remains at $0.01.
Retail Liquidity Programs (RLP) under SEC exemptions would not be affected, where sub-penny price improvement will continue to be permitted to allow exchanges to compete with OTC markets. That being said, “quotes in RLP are not displayed . . . market participants do not see the full liquidity available in RLP.”
Order Protection
With respect to the Order Protection Rule, the new round-lot NBBO will be protected, other order protection requirements in Rule 611 and the prohibitions on locked, and crossed markets in Rule 610(d) will be expanded under the MDIR and TBPO. The SEC has a partial stay of the amendments that require “the primary listing exchange to provide an indicator . . . of the applicable minimum pricing increment . . . under the definition of regulatory data” and reduction in access-fee cap.
The SEC did anticipate the need for “distinct product changes” affecting “literally hundreds of exchanges, vendors and subscribers, each with different development priorities and system capabilities” along with the need for customer and investor education – hence the BOLO compliance date is pushed to May 2026.
There are a few caveats. “BOLO may serve as the benchmark execution price for execution quality statistics in rule 605 reports,” while the TBPO footnote also states, “the Commission . . . is NOT setting forth minimum data elements needed to achieve best execution,” described as “a supplement to, rather than a replacement for, price improvement statistics.”
In addition, “non-automated quotation” is excluded in core data with respect to protected bid or offer. Auction information will be included in core data under MDIR; IFs are not obligated to consume it, i.e. subscription is optional.
The SEC believes that “order imbalances and indicative prices help market participants determine whether to participate in auctions,” where a high concentration of trading in closing auctions is a phenomenon related to the growth of passive, index-tracking investment strategies through mutual funds, ETFs and similar products.
Number of Price Points
Overall, the changes are comprehensive around a single theme – increasing NBBO refresh rates with tighter spreads. I have said in the past, artificially altering the queue, the equal of a waiting line at checkout counters), may affect the “apparent,” not the real, supply and demand for securities.
Hubert DeJesus of BlackRock shared this insight during a 2022 SIFMA roundtable: When the number of price points is reduced, more liquidity aggregates at those price points. “But when the number of price points is increased, then it is essentially fragmenting the quote and dispersing liquidity across multiple prices.”
Broker-dealers will have the choice to use the exchanges’ proprietary products (PPs), the SIPs, CCs, or a mix of these as their benchmark execution policy standards. Depending on the SIPs/CCs increasing their bandwidth to cater for the additional data, some degree of data fragmentation will happen under a decentralized consolidation model, and benchmark reference-price arbitrage will persist due to multiple-NBBOs.
How Speed Matters
The SEC did consider the outbound message traffic. CCs will “only be required to generate and offer one or more consolidated market data products, which can contain some or all of the elements of consolidated market data” Going fast by traveling light is how the SIPs can catch up to the PPs.
To curb exchanges from optimally restricted access to price information, MDIR “requires SRO to provide . . . to all CCs and self-aggregators in the same manner and using the same methods . . . as such SRO makes available any information to any other person.”
Nevertheless, risk managers should observe the excessive intermediation phenomenon. High-frequency, proprietary traders are generally better able to obtain priority to profit off spread when the marketable orders filled are small, and consequently investors may have less opportunity to profitably fill their trades using limit orders. Meanwhile, data centers rent-seek 24×7, exchanges maximizemoney-makinghours and make strategic location moves that present new opportunities and challenges.
The impending changes are humongous, despite downplaying by the SEC (“only” 134 stocks priced over $250 will be assigned to a round lot size less than 100). Do not delay in conducting a thorough risk assessment to be on top of these new market dynamics as a result of regulatory changes, plus related system and operational adjustments.
There is a quiet but inevitable divide forming among financial markets’ participants.
Medan Gabbay
On one side are those firms that are clinging onto their familiar, manual workflows. Old screens and legacy systems that haven’t changed meaningfully in decades. These firms often reassure themselves with phrases like “but, it still works” or “well, we’re just not ready for AI yet.” For many, that comfort is enough. Perhaps these folks are nearing retirement. Perhaps they believe they can manage just a few more laps around the trading racetrack, before someone else must deal with the inevitable changes facing all of us in this industry.
But on the other side is a newer, very different breed of firm built from the ground up around code, data, and automation. Firms like Qube and others are reshaping the very fabric of trading. Not through marginal upgrades, but through fundamental architectural redesign. They’re not just trading more efficiently, they are redefining what it actually means to trade.
And in between? Most of the industry. Stuck. Waiting. Watching. Hoping.
The Illusion of Stability
Legacy technology has become a prison for many institutions. Not just because the systems are outdated—but because the vendors who run them have little motivation to modernize. In some cases, integration with new technologies is treated as a threat. APIs are restricted, data models are closed, and innovation is deferred unless clients can make enough noise.
But here’s the problem: the clients often don’t push. Whether due to internal complexity, regulatory fears, or plain inertia, many firms have settled into a cycle of stagnation. The result is a dangerous doom loop: low internal momentum meets low vendor ambition, and the outcome is predictable—nothing.
In the meantime, firms who were once dominant are being acquired or slowly phased out. They’re not failing spectacularly. They’re being quietly outpaced by those who move faster, who build natively in the cloud, who treat trading architecture as a competitive advantage rather than an operational necessity.
Hybrid Is the Bridge
The future isn’t fully manual but it isn’t fully autonomous either.
The future is hybrid.
Hybrid trading infrastructure combines the reality of today’s workflows—manual bookings, RFQs, high-touch / care—with the potential of tomorrow: accessible APIs, AI-driven suggestions, automated data capture, and intelligent routing.
This is the only practical way forward for all firms. It allows them to preserve and leverage their institutional knowledge while still opening the door to innovation. And it’s only possible if your core trading system is both mature and open.
That’s a rare combination. Most “modern” platforms lack the depth of functionality required to support global, production-grade trading across asset classes. Most “legacy” platforms were never built for open data access or flexible integration.
Quod’s Position in This Shift
Quod Financial is one of the few remaining independent technology providers still innovating at both ends of this spectrum.
We provide a full-stack, production-ready OEMS for high-touch and low-touch trading, algo execution, middle-office workflows, and regulatory controls. But critically, we’ve designed Quod to be modular, API-first, and data-centric from day one.
This is not accidental. It’s the result of choosing to remain agile, free from the weight of outside investors or platform entrenchment. Our infrastructure is built not just to deliver today’s workflows, but to unlock tomorrow’s innovation—from AI-driven analytics to adaptive order strategies.
We’re not here to replace humans. We’re here to give them better tools, faster information, and a smarter decision-making environment.
The Legacy You Leave
Not every firm will survive this transition. And that’s okay. Some are comfortable fading out quietly, doing things as they always have, with no desire to reinvent. But others—especially those with next gen traders, quants, and technologists—are looking for more.
They want to build, evolve, and lead.
If you are in a position of leadership—whether on the desk, in IT, or at the executive table—you have a choice. You can resist change, or you can embrace it. You can settle for “good enough,” or you can lay the foundation for a firm that thrives in the next era.
As one trader recently told us: “I’m not afraid of change because I’m too old to care if I get fired.” That’s the kind of freedom we need. Not fear-based decision-making—but bold, entrepreneurial thinking.
Let’s stop trying to preserve old structures and start building new ones—modular, flexible, hybrid, and open.
By Merlin Rajah, Head: Equities Electronic Product, Absa CIB
Merlin Rajah
High-Frequency Trading Firms Eye South Africa: What’s Driving the Shift?
So, what exactly are High-Frequency Trading (HFT) firms, and why have they become critical to today’s financial ecosystem? More commonly referred to today as proprietary trading or quantitative trading firms, these entities specialise in executing algorithmic strategies powered by advanced mathematics and cutting-edge technology. They operate at ultra-high speeds, submitting thousands of orders per second—with the aim of exploiting price movements within extremely short timeframes, often ranging from microseconds to a few seconds. The goal is to capture “alpha” and close out most, if not all, positions before the end of the trading day.
Typical strategies include statistical arbitrage, index arbitrage, dual-listed arbitrage, and market making (simultaneous bid and offer placements to profit from the spread).
South Africa’s highly liquid markets, unique blend of advanced market infrastructure, regulatory frameworks, competitive dynamics, and its role as a financial gateway to Africa makes it a compelling destination for high-frequency and quantitative trading firms.
Infrastructure Evolution: JSE’s Leap Forward
For exchanges, HFT firms are a significant revenue driver—generating income through execution, clearing, settlement, colocation, and market data services. Sell-side firms benefit as well, gaining a steady revenue stream and an increased market share.
A major turning point came in 2012 when the Johannesburg Stock Exchange (JSE) migrated to the Millennium IT platform (owned by the London Stock Exchange Group). Two years later, the JSE introduced its colocation facility, offering traders ultra-low-latency access.
The Millennium platform supports both Native and FIX protocols for order entry, post-trade processing, and drop copies, along with market data feeds via the MITCH (Millennium ITCH) and FIX/FAST protocols. Many firms prefer native binary protocols for their speed and unthrottled MITCH feeds to capture every possible microsecond advantage in market data processing.
For firms trading in South Africa, opting for the unthrottled feed over the throttled version is essential. The JSE has continuously enhanced their platform to meet the needs of both institutional investors and HFT players. A key upgrade came in 2024 with the implementation of self-match prevention—designed to prevent internal teams from inadvertently trading against themselves, a costly mistake both in fees and regulatory scrutiny. On the other side of the spectrum, tools like pegged hidden orders, central order book crossing for client/prop flows, and spread-sensitive execution features have been rolled out to support institutional and sell-side players in navigating fast-paced, HFT-dominated markets.
Colocation 2.0: World-Class Access at Lower Costs
Though compact, the JSE’s colocation facility is a Tier 3 data center meeting global standards. It’s equipped with robust battery and generator backup—critical in a country where power outages remain a challenge. The 2023 launch of Colocation 2.0, in partnership with Beeks and IPC, introduced cloud-based access options. This provides a lower-barrier entry point for firms wanting to explore Africa’s most sophisticated exchange. Starting at under $200 per month
(excluding data costs), firms can connect to the JSE’s test environment, market data, and reference data feeds from within the colocated ecosystem. These infrastructure upgrades have laid the groundwork for international quant and HFT firms to target South Africa, with a noticeable uptick in trading volume and order flow to show for it.
The Rise of Retail
Retail equity trading in South Africa has seen a notable uptick in recent years, driven by greater accessibility to online trading platforms, the rise of fintech, and an increasingly financially literate population. Low-cost brokers and app-based trading platforms have played a significant role in democratising access to the JSE, enabling everyday South Africans to invest in local stocks with minimal capital. This shift has been particularly pronounced among younger investors, who are more digitally savvy and inclined toward self-directed investment strategies.
Although individual (retail) investors still trade less than big institutions and high-frequency traders, their increasing involvement in the market is having a real impact. As a result, brokers are responding by improving their platforms—making them easier to use, reducing trading fees, and providing more educational resources and tools to help these newer investors make informed decisions.
Much more can be done in this space to provide retail with live pricing.
This has also been a contributing factor as HFT firms want to trade with retail participants who trade through the spread.
A2X and Market Competition: Fueling Sophistication
The local trading landscape has also become more competitive, due to alternative venues like A2X.
Offering advanced technology and competitive fees, A2X has carved out a decent market share by attracting both local and global trading firms. With no admit-to-trade model however, or a stance on an MTF framework, it has been a difficult journey for A2X to onboard new issuers but have done exceptionally well in terms of onboarding 180+ listings with a market capitalization of R9 trillion. This is a boon for HFT firms, who benefit from increased liquidity and more arbitrage opportunities across exchanges.
The emergence of multiple trading venues has pushed sell-side firms to enhance their technological capabilities—implementing smart order routers, upgrading sell side algorithms, robust settlement solutions and offering low-latency access to enable both institutional clients and HFTs to execute efficiently. This growing sophistication reflects the broader maturation of South Africa’s capital markets.
A Market of Strategic Importance
As these firms deepen their presence, they’re contributing to the ongoing evolution of the market and the continent—driving innovation, improving efficiency, and expanding participation. Absa has positioned itself as a key enabler in this transformation, offering HFT firms ultra-low-latency access, deep market infrastructure expertise, a robust stock loan pool, and a strong balance sheet to support advanced trading strategies. As the rest of Africa opens
to these possibilities, Absa remains ready to unlock these opportunities for our clients with by already having presence in several African countries.
Institutional FX trading firms are accelerating investment in advanced technologies as they prepare for rising volumes and increasingly fragmented liquidity, according to a new report by Acuiti in partnership with Avelacom.
The report, based on a survey of senior executives at 68 proprietary trading and sell-side firms, outlines how firms are prioritizing technology investments to adapt to these shifts and maintain a competitive edge in a rapidly evolving marketplace.
Artificial intelligence and machine learning are emerging as the most transformative technologies within institutional FX trading with 51% of survey respondents anticipating that AI and ML will drive the market’s technological advancements.
Survey respondents consistently ranked AI as the technology expected to have the greatest impact on the market over the next three years, particularly in non-trading operations. The growing array of AI use cases—ranging from real-time data analytics and anomaly detection to smarter algorithmic execution—has shifted AI from a future-looking concept to a current strategic imperative. Nearly one in five participants in the study described AI’s potential as “game-changing,” reflecting the fast pace of adoption and the increasingly clear ROI associated with these technologies.
AI is being deployed to reduce inefficiencies, particularly in areas that continue to strain under the pressure of high trade volumes. Straight-Through Processing (STP), while now widely adopted across the industry, still buckles during periods of intense activity, prompting firms to invest in more powerful and intelligent systems to ensure smooth trade lifecycle management. By embedding AI into middle- and back-office functions, firms are seeking to streamline compliance checks, accelerate reconciliation, and optimize settlement workflows—key pain points as the scale and complexity of trading operations continue to grow.
Parallel to the adoption of AI is a significant trend toward enhanced control over connectivity infrastructure. The study found that over a quarter of firms currently reliant on third-party platforms for liquidity sourcing are planning to invest in direct market access and establish proprietary connectivity to trading venues. This shift is motivated by a desire for lower latency, improved execution quality, and greater control over routing decisions—especially critical in an environment where liquidity is becoming more fragmented and the window for execution is narrowing.
Ross Lancaster
“FX markets have seen considerable growth in recent years, and expectations of a sustained increase in volatility, driven by geopolitical tensions and uncertainty around tariffs, are fuelling anticipation of a new boost for trading volumes,” said Ross Lancaster, Head of Research at Acuiti. “Our survey found that firms are looking to capitalise on the opportunities that growth brings by taking greater control of their trading infrastructure leveraging advances in technology from AI to the cloud.”
The rise of direct connectivity—often via APIs and in-house systems—is particularly pronounced among high-frequency trading firms but is also gaining traction among brokers and market makers aiming to reduce their dependency on intermediary platforms. This approach enables faster execution and increased flexibility in how firms interact with liquidity sources. “Given the volatility in global FX markets, it makes sense that FX traders are looking to have more control over their connectivity,” said Alexey Larichev, CEO of Avelacom. “Direct connectivity, with low latencies, will also allow them to take advantage of the further growth they expect to see in FX volumes.”
Cloud technology is also playing a central role in this infrastructure overhaul. Among firms currently investing in infrastructure, 88% reported they are pursuing cloud-based solutions over traditional on-premise setups. The appeal of the cloud lies in its scalability and agility—enabling firms to dynamically adjust their computing power and storage capacity based on market demands. Cloud environments also support faster deployment of new tools and reduce the overhead associated with maintaining physical hardware.
That said, adoption patterns are still mixed. While cloud-first strategies dominate among firms building new systems, a significant portion of the broader market continues to rely on hybrid architectures that combine cloud capabilities with legacy on-premise infrastructure. This hybrid approach reflects ongoing challenges related to regulatory compliance, data sovereignty, and the need to maintain compatibility with older systems. However, the report notes a clear directional trend toward cloud adoption as firms become more comfortable with its reliability and security, especially given the increasing involvement of major cloud providers like AWS, Google Cloud, and Microsoft Azure in financial markets infrastructure.
Automation, AI, and cloud are not only enhancing core trading operations but also addressing some of the biggest structural challenges facing FX firms today. High operational costs remain the top concern, particularly among proprietary trading firms and institutional brokers with more limited budgets. Liquidity constraints, especially among brokers, were also identified as a major challenge, underscoring the importance of smarter execution models and adaptive connectivity strategies. For multinational banks, the most pressing issue was competition from non-bank liquidity providers, who have gained significant market share through aggressive use of technology and efficient pricing models.
The study makes it clear that even in a highly electronified market like FX, the drive for innovation is far from over. Technology is no longer a supportive function—it is the foundation of strategy and competitive differentiation. With the volume and complexity of global trading set to expand further, firms that invest in AI, direct connectivity, and scalable infrastructure today will be the ones best positioned to lead tomorrow.
As Lancaster concluded: “Whether through AI, direct connectivity, or the cloud, the future of FX trading will be defined by those who can innovate while navigating growing complexity.”
London – May 20th 2025: Firms active in institutional FX markets are preparing for increased volumes by investing in connectivity, aiming to gain a competitive edge and better navigate evolving liquidity fragmentation, a new report from Acuiti has found.
The study found that over eight in 10 respondents expect FX volumes to increase over the next 12 months. This anticipated increase in volumes comes as disruptive technologies are changing the landscape for firms in the market, creating both opportunities and challenges.
FX Trading in 2025: Growth Amid Fragmentation, AI and the Shift to Direct Connectivity, which was released today in association with Avelacom, is based on a survey of senior executives at 68 proprietary trading and sell-side firms that are active in FX markets.
The report explores the key trends that are currently driving change in institutional FX markets from the growing adoption of artificial intelligence to digital assets and ETFs.
AI and machine learning were expected to have the biggest impact on FX trading, bringing innovation to a range of areas from data analytics to algorithmic execution. Firms are also automating workflows and processes to mitigate the challenge of rising operational costs.
This innovation comes in the wake of the increased electronification of FX markets over the past five years, which is driving increased volumes and also changing approaches to connectivity.
The study found that cloud adoption for trading and connectivity infrastructure was gaining in popularity among institutional FX trading firms as they look to improve their processing power and scalability.
Another trend was firms taking greater ownership of their connectivity infrastructure. Over a quarter of firms that currently rely on third party platforms for liquidity sourcing are planning to take more control of connectivity and establish more direct access to venues, bypassing brokerage-led execution.
“FX markets have seen considerable growth in recent years and expectations of a sustained increase in volatility, driven by geopolitical tensions and uncertainty around tariffs, are fuelling anticipation of a new boost for trading volumes,” says Ross Lancaster, head of research at Acuiti. “Our survey found that firms are looking to capitalise on the opportunities that growth brings by taking greater control of their trading infrastructure leveraging advances in technology from AI to the cloud.”
“Given the volatility in global FX markets, it makes sense that FX traders are looking to have more control over their connectivity,” says Alexsey Larichev, CEO of Avelacom. “Direct connectivity, with low latencies, will also allow them to take advantage of the further growth they expect to see in FX volumes.”
For more information, contact Will Mitting at Acuiti
Tel.: +44 (0) 203 998 9190
Email: willmitting@acuiti.io
About Acuiti
Acuiti is a management intelligence platform designed to provide Senior Industry Professionals in the Derivatives Industry with high-value insight into industry-wide performance and business operations. Acuiti provides a platform through which our exclusive network of Senior Industry Executives can share and source information on day-to-day operational challenges, providing them and their management teams with increased transparency and in-depth analysis to make more informed decisions and benchmark company performance. Financial Institutions benefiting from our services include Banks, Non-bank FCMs, Brokers, Proprietary Trading Firms, Hedge Funds and Asset Managers.
About Avelacom
Avelacom provides solutions designed for high-performance trading, including arbitrage and market making, across traditional and crypto exchanges. We operate a global network spanning 200,000 miles, connecting 90+ data centers across 20+ global markets, with 40+ cloud on-ramps. Our comprehensive suite of carrier and enterprise services covers the U.S., Europe, Middle East and Africa, Asia-Pacific, and Latin America. Our products include wavelengths, Ethernet, VPLS, and dark fiber at the metro level. We offer best-in-class fiber and microwave ultra-low-latency routes, all protected by fully diverse backup paths.
CHICAGO, May 20, 2025 – Trading Technologies International, Inc. (TT), a global capital markets technology platform services provider, today announced that it has integrated with the EBS Market central limit order book (CLOB), a regulated, anonymous all-to-all matching platform. It also plans to offer EBS Direct, a relationship based disclosed platform, and CME Group’s new FX Spot+ platform. With this new connectivity, TT is substantially expanding its FX liquidity alongside its award-winning futures and options offering.
Using the TT execution management system (EMS), market participants can now connect directly to EBS Market, where they can tap into one of the largest primary pools of liquidity, view prices, and trade spot FX and precious metals, and non-deliverable forwards (NDFs). As a leading EMS for trading CME Group’s listed derivatives, and with other integrations underway, TT will be the first to offer the full complement of CME Group FX futures, options and cash over-the-counter (OTC) markets.
Tomo Tokuyama, TT’s EVP & Managing Director, FX, said: “This integration is an important part of our TT FX build-out and gives our clients access to another Tier 1 venue with the ability to trade seamlessly across asset classes. EBS Market has long been the go-to venue for market-making banks to hedge their FX risk, and for other large FX market participants to access firm liquidity in an all-to-all CLOB. TT will give market participants the ability to trade CME Group FX futures and options, EBS Market, EBS Direct, FX Link and the recently launched FX Spot+, all side by side in one EMS.”
“Recent market conditions have reinforced the importance of EBS’ firm, no last look pricing, which provides foundational liquidity for spot FX and metals, as well as NDFs,” said Paul Houston, Global Head FX Products at CME Group. “We are pleased that TT clients will now be able to access new trading opportunities across the full suite of CME Group FX cash, futures and options – all on a single platform.”
TT has seen significant demand from both sell-side and buy-side clients looking to consolidate their platforms in order to streamline their trading and trade life cycle processes, as well as traders looking to use TT tools such as Autospreader® and ADL® across both futures and cash markets.
FX is the largest financial market in the world by trading volume and continues to grow, amplified even further by issues related to tariffs and global trade. As the “electronification” of FX markets continues and market participants increasingly look to leverage automation and algorithmic trading tools, TT FX is building on the venues and functionality available to clients to create new cross-trading opportunities and exposure across futures, spot and OTC markets.
About Trading Technologies
Trading Technologies (www.tradingtechnologies.com) is a global capital markets platform services company providing market-leading technology for the end-to-end trading operations of Tier 1 banks, brokerages, money managers, hedge funds, proprietary traders, Commodity Trading Advisors (CTAs), commercial hedgers and risk managers. With its roots in listed derivatives, the Software-as-a-Service (SaaS) company delivers “multi-X” solutions, with “X” representing asset classes, functions, workflows and geographies. This multi-X approach features trade execution services across futures and options, fixed income, foreign exchange (FX) and cryptocurrencies augmented by solutions for data and analytics, including transaction cost analysis (TCA); quantitative trading; compliance and trade surveillance; clearing and post-trade allocation; and infrastructure services. The award-winning TT platform ecosystem also helps exchanges deliver innovative solutions to their market participants, and technology companies to distribute their complementary offerings to Trading Technologies’ clients.
Equity Mom
by Jim Toes, President & CEO, STA
SEC Commissioner Hester Peirce delivered a thought-provoking speech on equity market structure at the 12th Annual Conference on Financial Market Regulation. At the outset, she highlighted the organic nature of market development and cautioned against the pitfalls of overly prescriptive regulation. She then posed a series of introspective questions that included:
“What would the market landscape look like without micromanagement by the SEC? Would the proliferation of exchanges be the same? How would off-exchange trading platforms, like ATSs, have evolved? Would trade internalization be as prevalent? Most importantly, would these changes benefit issuers, investors, and traders?”
In just over 3,000 words, Commissioner Peirce walks us through 75 years of equity market structure, culminating in astute observations on its nuanced and defining attributes. She examines critical aspects on areas where the Commission may consider making changes such as the Order Protection Rule, competitive constraints on exchanges, the expansive definition of an exchange’s “facility,” the SRO model, overlooked issues in options markets and more. She advocates for adaptive regulatory frameworks that accommodate technological advancements and market dynamics, while ensuring investor protection and market integrity.
Overall, Commissioner Peirce’s speech is balanced and insightful, underscoring a commitment to reevaluating regulatory approaches to better align with economic principles and market realities—ultimately aiming to foster competitive, transparent, and resilient financial markets. It is clear that the Commissioner known affectionately as “Crypto-Mom” is also an “Equity-Mom” and her speech serves as a strategic guide for potential regulatory changes. It is well worth the read.