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Tuesday, March 18, 2025
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Retail Investors Keen on Alternative Investments

By
Press Release
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Eighty-six percent of private equity firms expect alternative investments to dominate retail portfolios in the next five years, says Apex Group

The latest research highlights growing retail demand for private markets and the role of technology in shaping the future of investment

Global, 25 February 2025

Apex Group, the leading global asset servicing provider, has launched a new report revealing 97% of asset managers see a strong retail interest in private markets, with private equity and real estate leading the demand.

The research paper called “Leading the shift: Transforming private markets in a retail-driven landscape,” was carried out by Global Custodian – an international securities services title. It is based on insights from senior leaders in funds with assets under management ranging from under $1bn to over $50bn; and explores how increasing retail investor engagement, technological advancements, and evolving industry strategies are reshaping the future of private markets.

Key findings of the report:

  • Retail demand on the rise: 97% of asset managers report strong or moderate retail interest in private markets, with private equity (67%) and real estate (55%) leading demand. Retail interest is expected to dominate alternative investments in retail portfolios within the next five years (86%).
  • Technology and innovation: The role of technology is critical in driving the retail shift. Almost 70% of asset managers see digital platforms as key enablers of retail participation, while 58% highlight blockchain and tokenisation as game-changing technologies for private market distribution.
  • Barriers to retail participation: Regulatory restrictions (59%) and liquidity concerns (43%) are identified as the top barriers to retail investor participation.
  • Outsourcing and lift-outs: 76% of firms have embraced outsourcing, with cost efficiency (70%) and time savings (71%) cited as the top benefits. Additionally, 65% of firms have engaged in lift-outs, transitioning in-house functions to third-party providers to drive better technology solutions and specialized talent.

Peter Hughes, founder and CEO of Apex Group, said: 

“These findings underscore the major shift we’re witnessing in private markets as retail investors are now driving significant demand across alternative asset classes such as private equity and real estate. Apex Group is at the forefront of this trend, helping alternative managers and retail investors interact digitally using innovative solutions that are also seamlessly linked to traditional asset servicing.”

The report is based on insights from 117 senior executives, including c-suite leaders, portfolio managers, and finance directors at global asset management firms. The study captures perspectives from major financial hubs, including the US, UK, Hong Kong, and Singapore, and offers a comprehensive analysis of the factors driving the transformation in private markets.

Newsroom

media@apexgroup.com

Notes to editors

About Apex Group

Apex Group is dedicated to driving positive change in financial services while supporting the growth and ambitions of asset managers, allocators, financial institutions, and family offices. Established in Bermuda in 2003, the Group has continually disrupted the industry through its investment in innovation and talent.
Today, Apex Group sets the pace in fund and asset servicing and stands out for its unique single-source solution and unified cross asset-class platform which supports the entire value chain, harnesses leading innovative technology, and benefits from cross-jurisdictional expertise delivered by a long-standing management team and over 13,000 highly integrated professionals.  

Apex Group leads the industry with a broad and unmatched range of services, including capital raising, business and corporate management, fund and investor administration, portfolio and investment administration, ESG, capital markets and transactions support. These services are tailored to each client and are delivered both at the Group level and via specialist subsidiary brands.

The Apex Foundation, a not-for-profit entity, is the Group’s passionate commitment to empower sustainable change.

www.apexgroup.com

SEC Announces Cyber and Emerging Technologies Unit to Protect Retail Investors

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Press Release
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Laura D’Allaird appointed chief of the new unit

Washington D.C., Feb. 20, 2025 —

The Securities and Exchange Commission today announced the creation of the Cyber and Emerging Technologies Unit (CETU) to focus on combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space. The CETU, led by Laura D’Allaird, replaces the Crypto Assets and Cyber Unit and is comprised of approximately 30 fraud specialists and attorneys across multiple SEC offices. 

“Under Laura’s leadership, this new unit will complement the work of the Crypto Task Force led by Commissioner Hester Peirce. Importantly, the new unit will also allow the SEC to deploy enforcement resources judiciously,” said Acting Chairman Mark T. Uyeda. “The unit will not only protect investors but will also facilitate capital formation and market efficiency by clearing the way for innovation to grow. It will root out those seeking to misuse innovation to harm investors and diminish confidence in new technologies.”

Specifically, the CETU will utilize the staff’s substantial fintech and cyber-related experience to combat misconduct as it relates to securities transactions in the following priority areas:

  • Fraud committed using emerging technologies, such as artificial intelligence and machine learning
  • Use of social media, the dark web, or false websites to perpetrate fraud
  • Hacking to obtain material nonpublic information
  • Takeovers of retail brokerage accounts
  • Fraud involving blockchain technology and crypto assets
  • Regulated entities’ compliance with cybersecurity rules and regulations
  • Public issuer fraudulent disclosure relating to cybersecurity

ON THE MOVE: OCC Names Matt Rathbun; Isobel van Daesdonk, Scott Willard to Barclays

By
Anna Lyudvig
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Matt Rathbun

Matt Rathbun has joined OCC as Chief Security Officer-Elect and will succeed current CSO Mark Morrison following his upcoming retirement. Rathbun has more than 25 years of experience in information technology and systems engineering, most recently as CSO for Two Sigma. Once Rathbun officially takes over the CSO role, he will be responsible for OCC’s Cyber Operations, Security Governance, Cyber Risk, Security Business Operations, Security Architecture and Engineering, and Security Red teams.

Isobel van Daesdonk

Isobel van Daesdonk and Scott Willard have joined Barclays as Managing Directors within the Americas Financial Sponsors Group. Van Daesdonk is a seasoned Investment Banker with 25 years of experience. She joins Barclays from Guggenheim Securities, where she was a Senior Managing Director in Financial Sponsors Investment Banking. Willard has over 20 years of experience in Investment Banking. He has served the Private Equity and Alternative Asset Manager client base in Advisory, Capital Markets and Leveraged Finance roles at Deutsche Bank, UBS, and most recently Nomura Securities.

Rob Showers

Derivative Path has appointed Rob Showers as Chief Revenue Officer (CRO). Most recently, he served as Chief Revenue Officer at Coherent, where he led growth initiatives across their global capital markets and banking services division. His prior senior roles included BNP Paribas, SS&C, UBS, and Barclays.

Liquidnet has expanded its Multi-Asset Services team with the addition of Patric Okumi and Samuel Lowres to lead Multi-Asset Sales. Okumi has spent 11 years within TP ICAP Group, with a multi-faceted background in broking and trading. He was part of ICAP’s Equity Trading desk before building out the Single Stock Equity and ETF RFQ offering on Fusion, the firm’s market-leading electronic platform. Lowresjoined Liquidnet three years ago as part of the Liquidity Partnerships team.

BGC Group, a global brokerage and financial technology company, has named Stephen Merkel
as Chairman of the Board of Directors. Howard W. Lutnick, who was confirmed by the United States Senate as the 41st Secretary of Commerce, has stepped down as Chief Executive Officer and Chairman of the Board of BGC.

Brian Young will serve as Commodity Futures Trading Commission’s Director of Enforcement. Young has been serving in an acting capacity since January 22, and previously was the Director of the Whistleblower Office. He is a distinguished federal prosecutor with nearly 20 years of service at the Department of Justice, including Acting Director of Litigation for the Antitrust Division and Chief of the Litigation Unit for the Fraud Section of the Criminal Division, and has successfully tried some of the most high-profile criminal fraud and manipulation cases in the CFTC’s markets. 

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

DriveWealth Expands Overnight Coverage to Include Multiple Venues to Support 24-hour Trading Cycle

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Press Release
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Launch with OTC Markets MOON ATS™ will enable DriveWealth to review pricing from multiple overnight venues to determine best option for investor’s orders

NEW YORK – February 20, 2025 – DriveWealth, a leading financial technology platform providing Brokerage-as-a-Service, today announced the expansion of its overnight trading capabilities through a collaboration with OTC Markets Group Inc. (OTCQX: OTCM), an operator of regulated markets for U.S. equity securities. Set to roll out in March, this new offering will establish DriveWealth as a pioneer in multi-venue overnight trading, and meet increasing demand from retail and institutional investors. 

Leveraging its proprietary technology, DriveWealth will provide investors with improved routing across multiple overnight trading venues, taking real-time pricing and liquidity into account. Additionally, DriveWealth will manage the complexity of transitioning any unexecuted orders from overnight trading venues to traditional market centers when the U.S. pre-market session begins.

With this new capability, DriveWealth will offer an overnight trading experience for all NMS securities that is similar to daytime trading in the U.S.. With this collaboration, DriveWealth augments its current overnight market center access with connectivity to  OTC Markets MOON ATS™.

“DriveWealth’s global partners, particularly in Asia, seek to invest in U.S. companies 24 hours a day, but need a solution that combines convenience and immediacy with simplicity and resiliency,” said Michael Blaugrund, CEO of DriveWealth. “Adding MOON ATS to our brokerage platform allows DriveWealth to facilitate access to multiple overnight execution venues and across trading sessions with a single order.”

This collaboration with OTC Markets represents a significant milestone that will position DriveWealth as a connected broker to multiple overnight venues. As a trusted and publicly traded company, OTC Markets Group serves individual users and firm clients, including all of the top U.S. and global brokerage firms, processing more than 100,000 trades and receiving 120 million quotes daily.

“The expansion of DriveWealth capabilities into the Asia-Pacific markets will unlock new opportunities for investors in this region,” said Cromwell Coulson, President and CEO of OTC Markets. “We are proud to partner with them to broaden access to America’s capital markets for global investors. The MOON ATS platform is designed to offer redundancy and system scalability, ensuring that investors can trade a diverse range of stocks at any time, from anywhere in the world.”

This latest innovation reflects DriveWealth’s dedication to delivering exceptional trading experiences while maintaining impartiality and flexibility in venue partnerships. DriveWealth will continue to add new venues to bolster connectivity, liquidity and resiliency. To learn more about how DriveWealth is breaking down the barriers to investing, visit www.drivewealth.com. 

About DriveWealth

DriveWealth is a global B2B financial technology platform. Our core business is providing Brokerage-as-a-Service, powering the investing and trading experiences for digital wallets, broker dealers, asset managers, and consumer brands. DriveWealth’s APIs provide our partners with a modern, extensible and flexible toolkit to develop everything from traditional investment workflows to more innovative techniques like rounding up purchases into fractional share ownership. For more information, visit www.drivewealth.com.

About OTC Markets Group Inc.

OTC Markets Group Inc. (OTCQX: OTCM) operates regulated markets for trading 12,000 U.S. and international securities. Our data-driven disclosure standards form the foundation of our three public markets: OTCQX® Best Market, OTCQB® Venture Market and Pink® Open Market. Our OTC Link® Alternative Trading Systems (ATSs) provide critical market infrastructure that broker-dealers rely on to facilitate trading. Our innovative model offers companies more efficient access to the U.S. financial markets. OTC Link ATS, OTC Link ECN and OTC Link NQB are each an SEC regulated ATS, operated by OTC Link LLC, a FINRA and SEC registered broker-dealer, member SIPC.

To learn more about how we create better informed and more efficient markets, visit www.otcmarkets.com.

KYC and Adverse Media Screening: What Risks are Lurking in the Shadows?

By
FinScan
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By Steve Marshall, Director, Advisory Services, FinScan, an Innovative Systems Solution

In the ever-evolving world of business risks, Know Your Customer (KYC) remains the cornerstone of uncovering reputational and financial harm that may occur in the future. But as information sources become increasingly diverse KYC verification methods might not be enough, and “set it and forget it” doesn’t work anymore. Enter adverse media screening—KYC’s secret weapon for uncovering hidden risks and bolstering your anti-money laundering (AML) defenses.

Adverse media screening is all about avoiding risky business relationships. But it’s not always easy. With the flood of information out there, not only can the initial process feel like finding a needle in a haystack, but continuous monitoring can be overwhelming. Luckily, technology is stepping in to make the process smoother and more effective.


Adverse media screening: shining a light on customer risk

Imagine a customer who passes all the standard KYC checks: ID verified, address confirmed, source of funds seemingly legitimate, etc. Yet, beneath the surface lurks a direct or indirect web of past financial or criminal misconduct documented only in news articles. Adverse media screening steps in, systematically scanning a vast array of sources—news websites, regulatory databases, public records—to unearth negative information that traditional KYC checks might not capture as customers don’t self-report. This may include:

  • Financial impropriety: Embezzlement, corruption, fraud, sanctions violations
  • Civil or criminal investigations: Links to organized crime, money laundering schemes, past incarcerations
  • Regulatory actions: Fines levied for non-compliance; licenses revoked
  • Reputational damage: Associations with PEPs, individuals or businesses involved in illegal activities

By uncovering such red flags, adverse media screening offers invaluable insights into a customer’s true risk profile, empowering firms to make informed decisions.

Adverse media screening also helps organizations comply with international sanctions regimes, as they may assist in identifying individuals or entities that are in some way related to the customer or transaction.  Those individuals or entities may be sanctioned and, therefore, may impact the risk associated with the customer or transaction. Both the Financial Action Task Force (FATF) and the Office of Foreign Assets Control (OFAC) advocate for these searches as an effective approach to managing risks in this domain.

The challenges of adverse media screening

Adverse media screening sounds simple, right? Just check the news for anything shady about a client or a company during onboarding. But in reality, it’s much more complicated. Customers are living organisms, and what might seem fine during initial checks can change as questionable dealings could surface months later.

Here are a few hurdles organizations face:

  • Information overload: There’s a never-ending stream of news, blogs, social media, and other sources. Sorting through this mountain of information to find relevant details on an ongoing basis can be overwhelming.
  • False positives: Organizations regularly encounter irrelevant information, casual news mentions, or worse, poor contextual mentions identified as red flags. False positives waste time and slow down the process, making it harder for compliance teams to focus on real risks.
  • Language and local differences: News comes from all corners of the world, in many languages, and at different frequencies. If tools aren’t set up to handle multiple languages or regional news on a continuous basis, important information can slip through the cracks.
  • Changing risks: Business risks are always evolving. Keeping adverse media screening up to date with the latest global developments can be tough, especially against the backdrop of rising geopolitical tensions and a complex regulatory landscape.


How adverse media screening strengthens business practices

Addressing these challenges with a strong adverse media screening solution can help organizations spot risks early on, enabling them to proactively detect red flags before they become major problems, as well as facilitating continuous monitoring of clients to catch any emerging risks. Companies are also aided in their compliance efforts, with global regulators expecting firms to do more than just basic background checks. Going beyond compliance, adverse media screening helps companies protect their reputation by steering clear of risky business partners—even if regulations allow them to do business.

Adverse media screening should integrate seamlessly with KYC processes that unveil hidden risks byexposing associations with criminal activity or terrorist financing, allowing organizations to take necessary precautions. These processes should enhance due diligence by providing information that clients themselves don’t provide for KYC verification, ensuring a more comprehensive customer profile. And of course, they should also meet regulatory requirements by emphasizing the need for ongoing monitoring of customers.

Elevate KYC by building trust

A strong KYC program is no longer just about ticking boxes. By incorporating adverse media screening into AML and KYC frameworks, firms gain a powerful tool to proactively identify risks, enhance due diligence, and ultimately, safeguard institutions from financial crime. A robust KYC program with adverse media screening at its core is not just about AML compliance—it’s about building trust and protecting the integrity of the financial system.

EDS Launches Nexus: A Next-Generation Risk and Portfolio Management Solution

By
Press Release
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February 20, 2025 09:00 AM Eastern Standard Time

NEW YORK–(BUSINESS WIRE)–Equity Data Science, Inc. (“EDS”), a leading investment process management (IPM) software provider, today announced the launch of Nexus, a risk and portfolio management solution that integrates Factor Risk, Internal Research, and Performance Attribution workflows into a single, seamless interface. Building on EDS’s existing capabilities, Nexus enhances how investment teams interact with critical data, creating a more efficient and streamlined experience.

Nexus leverages real-time, aggregated data from the EDS platform to provide investment teams with a centralized, configurable dashboard of portfolio risk and opportunities. Developed in collaboration with clients and industry leaders, it addresses common challenges in risk management by seamlessly incorporating fundamental and market data, internal research insights, and valuation metrics into decision-making.

“Nexus brings together the most critical aspects of risk, research, and performance analysis—allowing investment teams to analyze exposures, optimize strategies, and gain a holistic view of their portfolios,” said Sandeep Varma, CEO and Co-founder at EDS. “While our workflow solutions have been utilized for years, Nexus transforms how clients interact with aggregated data, delivering a modern, highly efficient experience designed for today’s investment teams.”

Key features include:

  • Integrated Risk and Performance Analysis – Combines factor risk, expected returns, and fundamental data, including valuation and growth metrics, into a unified view.
  • Trade Simulation and Optimization – Models portfolio adjustments in real time, optimizing for idiosyncratic risk and Sharpe ratio, with or without a factor model.
  • Exposures and Performance Tracking – Provides visibility into risk drivers, portfolio sensitivities, and historical performance trends.
  • Consensus Comparison – Enables users to view fund positioning relative to market consensus for better decision-making.
  • Research Integration – Incorporates internal research, including price target scenarios, IRR, DCF, and other valuation methodologies.

Nexus optimizes workflow by reducing reliance on multiple applications and data sources, providing configurable workflows and scalable architecture to support diverse investment strategies.

About Equity Data Science
Equity Data Science (EDS) provides investment process management (IPM) solutions that empowers leading hedge funds and asset managers through greater insights and productivity for decision-making. Trusted since 2012, EDS integrates proprietary and third-party data and research on a modern platform configured to each client’s unique investment vision. The EDS platform supports idea generation, research management, portfolio construction and analytics, risk management, performance attribution and ESG. Visit www.equitydatascience.com.

Contacts

Contact: Theresa Elamparo, Equity Data Science
Phone: +1.908.510.0412
Email: theresa@equitydatascience.com

FLASH FRIDAY: Nick Leeson and Barings Bank, 30 Years On

By
Editorial Staff
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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.)

On February 24, 1995, Barings Bank received a fax from fugitive trader Nick Leeson. In the fax, Leeson apologized for his trading losses that would ultimately bring down the 223-year-old bank and offered his resignation.

That account, from This Day in Stock Market History, cited an important day in an incredible trading saga from 30 years ago.

By way of background, Leeson, as a Singapore-based derivatives trader for Barings, made a series of fraudulent, unauthorized and speculative trades starting in 1992. He managed to hide losses on some transactions and recoup losses on others by doubling down, but the charade stopped on January 17, 1995 when an earthquake in Japan cratered markets and brought large and irrevocable losses to Leeson’s final series of illicit bets. 

Losses for Barings eventually reached $1.4 billion, more than twice its trading capital, and the bank was declared insolvent in late February 1995.

Hollywood found the sordid affair interesting enough to make a movie about it, Rogue Trader, released in 1999 (fair warning: it’s rated just 30% fresh on Rotten Tomatoes). And after spending six and a half years in prison in Singapore, Leeson seems to be long-rehabilitated and is now a family man and business writer and speaker.

But bigger-picture, three decades out, the burning question remains: can a similarly catastrophic trading fraud happen again?

First we asked our generative AI overlords what they think.

“Yes, trading fraud similar to Nick Leeson’s could happen again if there are lapses in internal controls or employee misconduct,” was the response. “No system is foolproof and risk management failures can occur.”  

“The banking difficulties of the late 1980s and early 1990s were partly due to inadequate credit risk management systems…While supervision can help reduce the possibility of bank problems, it can’t guarantee against them,” AI said. “Similar trading fraud could happen if employees abuse internal controls or if there are weaknesses in an organization’s internal controls.” 

To be sure, financial regulation has tightened over the years, in response to the Barings collapse as well as other tectonic market events such as the global financial crisis of 2008-2009. 

Johan Sandblom, Lime Trading
Johan Sandblom, Lime Trading

Johan Sandblom, President and Head of Business Development at agency broker Lime Trading, cited US Securities and Exchange Commission Rule 15c3-5 as providing some measure of security and reliability and a safeguard against rogue trading. The rule, adopted in 2010, requires brokers and dealers to have risk controls in connection with their market access.  

“The market access rule makes sure there are controls in place to reduce the risk of something like Barings from happening again,” Sandblom told Traders Magazine. “It is the pre-trade risk check that does the fat finger checks and buying power controls before the order goes out into the market.”  

Ultimately, while tighter regulation deters, and advanced technology detects, rogue trading better than in 1995, there remains the risk that an individual with nefarious intent can find a way around the system, or that an honest mistake cascades into a big problem.      

“A Nick Leeson–type scenario can absolutely happen again,” said Joe Schifano, Global Head of Regulatory Affairs at enterprise trade surveillance provider Eventus. “The question is not if, but where.”

Joe Schifano, Eventus
Joe Schifano, Eventus

“With the increasing reliance on advanced technologies – for example, AI-based tools and blockchain functionality – there can be a heightened risk of blind spots emerging,” Schifano continued. “These new tools, while powerful, can obscure human oversight or amplify errors if they’re not properly understood or supervised. We see frequent reminders – from the 2008 financial crisis to sudden market dislocations to early digital assets blowups – that a single individual or group with unchecked authority and insufficient oversight can cause tremendous harm. Strong gatekeepers with the right tools, authority, and direct lines to senior leadership are paramount in spotting red flags early and preventing catastrophe.” 

Technology is the Backbone of Modern Trading

By
Anna Lyudvig
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Artificial Intelligence (AI) and Machine Learning (ML) were recognized as the most influential technology for trading for the third year in a row, according to J.P. Morgan’s E-Trading Edit survey.

According to Patrick Whelan, head of FICC Digital Markets, AI and machine learning topped the list of technological advancements expected to impact the industry in 2025. “AI and machine learning came out on top once again,” he said, underscoring the pivotal role these technologies will play in automating processes, improving efficiencies, and driving innovation across the financial sector.

Source: J.P. Morgan

In the latest episode of Market Matters on J.P. Morgan’s Making Sense podcast, Patrick Whelan and Gergana Thiel, global co-head of Macro Sales, discussed this year’s survey findings.

The conversation centered around how technology, particularly advancements in AI, ML, and e-trading, is reshaping the trading landscape and influencing market participants’ strategies and predictions.

J.P. Morgan has been at the forefront of investing in these technologies, as Whelan noted. “We’ve already invested a lot in that space, and we continue to do so. We’re looking to leverage the data we have to drive more efficiencies and automate more of our processes,” he explained. While the firm continues to explore how to create commercial value from AI, the long-term potential for AI to revolutionize trading is clear. “I think we’re still learning about how we can create commercial value through the use of LLM and large-scale AI efforts, but by 2025, we’re going to see more of that coming into the day-to-day of both our sales traders and clients.”

Another key insight from the survey was the unanimous agreement among respondents that e-trading will continue to grow in 2025. “It was the only part of the survey where we had 100% agreement,” Whelan revealed. This signals a strong industry-wide shift toward digital platforms and highlights the need for firms to continue innovating in e-trading solutions.

As Whelan pointed out, areas such as emerging market rates and credit will experience significant electronification in the coming years. “They were pointing to EM rates and credit as being two of the areas that will continue to grow in terms of electronification in 2025,” he said. For J.P. Morgan, this represents a key investment focus, and the firm is committed to expanding its e-trading offering worldwide.

In line with growing demands for seamless digital trading experiences, J.P. Morgan is looking to develop new solutions that integrate technology more effectively with client needs. Whelan emphasized the importance of offering robust direct API solutions across asset classes. These solutions enable better connectivity with clients, making it easier for them to access liquidity and data in real-time.

“These types of solutions allow us to provide more competitive pricing, better analytics, and ultimately reduce information leakage,” Whelan explained. By continuing to enhance their single dealer platform, Execute, J.P. Morgan aims to help clients achieve more efficient trading while reducing costs. “Reducing brokerage and execution costs is an important focus area for 2025,” he added, noting how technology will continue to play a critical role in meeting this objective.

Gergana Thiel

A critical aspect of technological advancement discussed in the podcast was the increasing demand for real-time data and analytics. Thiel noted that clients are increasingly relying on instant access to large data sets to make informed trading decisions. “Real-time data and analytics has become central to the investment process and the way clients engage with the market,” she remarked.

Whelan agreed, emphasizing that J.P. Morgan is focused on delivering better analytics and more innovative solutions to meet client needs. “Working with large data sets and providing real-time data both to our sales and traders as well as to our clients is a continued focus,” he said. However, he also acknowledged the challenges in some asset classes that are still transitioning toward full electronification. “In certain asset classes, it’s much more highly developed, but in others, we have to come up with more innovative analytics that clients are looking for,” he explained.

As the trading world moves toward more sophisticated data consumption methods, Whelan noted the need for both visual and API-based delivery systems to ensure that clients have access to the information they need when they need it.

As the conversation drew to a close, Whelan and Thiel shared their predictions for 2025 in three words. Whelan’s key terms were “data, connectivity, and growth.” “Data” reflects its crucial role in decision-making, while “connectivity” highlights the firm’s commitment to enhancing digital platforms and fostering better connections between clients and markets. “Growth” encapsulates the ongoing expansion of e-trading solutions across various asset classes.

Thiel, on the other hand, chose “tariffs, technology, and the U.S. dollar.” She highlighted how tariffs will continue to shape the global market outlook, while technology remains at the core of the trading transformation. Thiel also pointed to the U.S. dollar’s significance in signaling market sentiment.

Canadian Markets: Insights from Dan Kessous, CEO of Nasdaq Canada

By
Anna Lyudvig
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As the Canadian markets moved through 2024, various factors influenced trading patterns, market policy and investment activity. According to Dan Kessous, CEO of Nasdaq Canada, a combination of macroeconomic factors, regulatory changes and product innovation drove notable developments.

Kessous is responsible for the Nasdaq Canada Exchange’s strategy and oversight of its business and operational functions. He joined Nasdaq in 2016 through the acquisition of Chi-X Canada ATS where he worked since its inception and became CEO in 2011. In a conversation reflecting on the past year and looking forward to 2025, Kessous outlined key trends that shaped the market environment and what lies ahead for Nasdaq Canada.

Macroeconomic Backdrop and Market Activity

Dan Kessous

From a broader economic perspective, 2024 marked a year of transition. The backdrop was shaped by high inflation levels and subsequent actions by central banks, including the Bank of Canada.

Central banks, across the globe, began adjusting their strategies to address inflation. “This was the year of a pivot in terms of trying to fight inflation from all the central banks, not just the Fed in the U.S., but London, Europe and Canada,” said Kessous. A significant aspect of this effort was the policy around interest rates, where central banks moved towards decreasing rates. This had a strong impact on market activity, as it fostered optimism in the markets and led to increased trading volumes.

For Nasdaq Canada, the results were promising. The exchange saw a 12% increase in overall volumes year-over-year, a positive trend considering the high trading levels of previous years. Several events contributed to this uptick, including key actions by central banks and strong results from major tech companies; “in August, we saw an uptick in volume and volatility driven by results for the FANGs, the big tech companies,” Kessous shared. Additionally, the decision by the Bank of Japan to raise rates and the Federal Reserve’s stance on interest rates had ripple effects in global financial markets.

Regulatory Landscape in Canada

In 2024, Canadian regulators focused on maintaining a competitive and transparent marketplace. The year saw regulatory attention on both market structure and market data. Kessous pointed out key developments on the regulatory front, particularly in the context of cross-border trade between Canada and the U.S.

A significant regulatory theme was the U.S. Securities and Exchange Commission (SEC)’s proposed market reforms, especially around tick sizes and fee caps. “There are a lot of stocks that are dual-listed and trade cross-border. It’s a big portion of what’s happening in Canada, and those are also important names that trade in the U.S.,” Kessous explained. Canadian regulators aimed to align their policies with U.S. regulations to ensure the competitiveness of Canadian markets.

Another major focus for Canadian regulators was market data. Kessous acknowledged the growing interest in how market data is priced and accessed, particularly for retail investors. “There’s been a lot of work done in Canada by our regulators to improve how market data is distributed and how it’s

priced,” he said. A consultation paper on the matter received diverse feedback from market participants, and as a result, regulators decided to push the consultation further. “They created a couple of working groups with industry people that would participate in that group and try and resolve it in a gently managed manner.”

Nasdaq Canada’s Product Innovation: A Focus on PureStream and Block Trading

A major highlight of Nasdaq Canada’s achievements in 2024 was the growth of its PureStream product. This order type, introduced on Nasdaq Canada’s dark pool, CXD, was designed to offer market participants a more passive way to execute trades based on a trajectory of market volume.

The PureStream product has been successful in attracting users, growing steadily since its launch. Kessous noted that Nasdaq Canada spent considerable time gathering feedback from customers to refine the product. “We spent the first part of last year engaging with customers, taking the feedback… and towards the second part of the year, we made further adjustments to the product.” The results from these improvements were promising, with significant volume growth in early 2025.

PureStream is part of a broader strategic initiative for Nasdaq Canada to expand block trading in Canada. Nasdaq has been working on connecting various liquidity pools within its CXD dark book. “We are launching a project to connect all these pools of liquidity together… PureStream Connect, that connects the conditional orders to PureStream,” Kessous elaborated. By enabling participants to interact across different liquidity pools, Nasdaq Canada is enhancing its offering in block trading.

In addition to product innovation, Nasdaq Canada placed a strong emphasis on performance and resiliency. The rise in volume and volatility over the past few years prompted significant upgrades to Nasdaq Canada’s technology and infrastructure. “We continue to invest in performance. It’s hardware, but it’s also software,” Kessous emphasized. In response to increased traffic, Nasdaq Canada has also launched a new recovery server for market data to ensure quick snapshots of market conditions.

Looking Ahead: Trends and Priorities for 2025

Looking into 2025, Kessous anticipates that many of the same regulatory and market-driven trends will continue. One key issue for the year ahead will be the ongoing discussions surrounding the SEC’s proposal to alter market structure, including changes to tick sizes and fee caps. “Our regulators want to be ready, should it go forward… and try to do it in sync with the U.S.,” Kessous shared.

Other anticipated regulatory changes in 2025 include proposals to adjust Canada’s short sale regime and further efforts to adapt market data distribution systems. Kessous also highlighted the growing role of artificial intelligence (AI) in market surveillance and product development. “AI has been a big focus for Nasdaq,” Kessous noted, adding that the firm is working to incorporate AI into various aspects of its operations, from fraud detection to enhancing internal productivity.

From a product standpoint, Nasdaq Canada will continue to prioritize the growth of PureStream and work on improving its block trading capabilities. Furthermore, the company aims to enhance its smarter router technology, which is responsible for a significant portion of the trading volume in Canada.

Nasdaq Canada’s Position in the Global Marketplace

As for the competitive landscape, Kessous highlighted that Canada’s financial market remains competitive but faces challenges, particularly from the U.S. “Canada is already a very competitive market, locally, we have probably 15 marketplaces all competing for the same pie,” Kessous said. However, he also noted the increasing challenge posed by the dual listing of stocks between Canada and the U.S., where U.S. exchanges have seen a rise in market share.

To remain competitive, Kessous emphasized that innovation is key. “We need to keep innovating and keep listening to clients,” he asserted. For Nasdaq Canada, staying competitive means building a robust infrastructure, expanding product offerings and maintaining a focus on fairness, transparency and resiliency in all its operations. Looking forward, the company is well-positioned to continue its momentum in 2025, with a sharp focus on emerging technologies like AI, block trading and maintaining a resilient, competitive marketplace. “As the financial landscape continues to evolve, Nasdaq Canada’s ability to adapt and innovate will be critical in ensuring its ongoing success.”

STAC’s Lauren Arbid Named to Security Traders Association Board of Governors

By
Press Release
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CHICAGO, IL, Feb. 19, 2025: The Security Traders Association of Chicago (STAC), a membership organization for individual professionals in the securities industry in Chicago and an affiliate of The Security Traders Association (STA), today announced that 2024-2025 STAC President Lauren Arbid has been named to the STA Board of Governors. The prestigious appointment reflects Arbid’s long-term commitment to the securities industry and her leadership role within STAC and the broader community.

The STA Board of Governors is comprised entirely of volunteers serving from different regional affiliates and aims to represent the diverse perspectives from multiple regions and market segments within the financial services industry. The Board is responsible for overseeing STA’s direction, policies, and decision-making at the national level and advocating for the interests of its members within the industry, particularly regarding market structure issues and regulations. 

A 10-year member of STAC, Arbid has played a critical role in advancing STAC’s mission of education, professional networking and philanthropy. Her extensive experience and commitment to the industry make her a valuable addition to the STA Board of Governors, where she will contribute to shaping policies and initiatives that impact security traders nationwide.

“I am honored to join the STA Board of Governors and have the opportunity to collaborate with these amazing industry leaders to help drive meaningful progress across the STA community,” said Arbid. “I look forward to advocating for the interests of our members and working toward solutions that enhance market integrity and efficiency.”

STA is a bipartisan organization that serves individuals employed in the financial services industry. Comprised of more than 15 affiliate organizations across the United States and Canada, STA advocates on behalf of and fosters collaboration among its members, while also representing their interests with legislators, regulators and other industry organizations.

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About Security Traders Association of Chicago

Established in 1925, the Security Traders Association of Chicago (STAC) is comprised of 600+ professional trade industry members who are engaged in the buying, selling and trading of securities. It is an affiliate of The Security Traders Association (STA), a leading trade organization for individual professionals in the securities industry that works to improve the ethics, business standards and working environment for its members. With a mission of education, professional networking and philanthropy, STAC hosts conferences and events that promote professional development, serve as a platform for influential leaders in the industry and offer an unmatched forum for networking. To learn more about STAC, please visit www.stachicago.org.

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