Friday, November 1, 2024

BlackRock Launches eFront Provider

Tarek Chouman, BlackRock

BlackRock announces the launch of eFront Provider, designed to enable asset servicers to offer asset managers a modern fund servicing experience, complete with real-time views into their private markets investor, fund and investment data.

eFront Provider complements BlackRock’s widely used fund administration, investor servicing and data management capabilities for private markets asset servicers.

Global financial service provider Apex Group (“Apex”) has been onboarded as the first eFront Provider client. The eFront Provider product establishes an interconnected, two-way data flow between Apex and its private markets clients. Through a single solution, Apex provides an expansive range of services to asset managers, financial institutions, private clients, and family offices. With over $3.1tn assets on platform serviced across custody, administration and depositary worldwide, Apex were looking for a solution that advanced client collaboration and data sharing, giving their asset manager clients direct access to their data.

Asset managers and asset servicers have faced technology and data challenges when collaborating across different participants within the private markets ecosystem. Legacy private markets systems are often characterised by manual processes, which can lead to inefficiencies and delays when exchanging information.

With a view to solving these challenges, BlackRock has created eFront Provider, an innovative solution to enable asset servicers to collaborate efficiently and effectively, reduce operational risk, and differentiate their service offerings, while giving asset managers better access, transparency, and control over their data.

eFront Provider streamlines processes for Apex by digitizing highly manual tasks, freeing up valuable resources, and allowing users to focus on business growth. By providing a single, integrated view of documents and data, the platform enhances transparency across all parties involved in the fund administration process and improve the end-client experience as they conduct their oversight duty.

Tarek Chouman, BlackRock’s Global Head of Aladdin Client Business said, “Within private markets, access to streamlined shared workflows based on a consistent data set is a key challenge for asset servicers and asset managers. With eFront Provider, we are helping asset servicers navigate the complexities—and empowering them to scale, reduce operational risk, and collaborate seamlessly with their general partner clients.”

eFront is a recognized technology platform for alternative investment management, covering the needs of alternative investment professionals end-to-end, and used by over 850 clients worldwide across all major alternative asset classes. As a part of BlackRock, the eFront® and Aladdin® investment management technology platforms unify public and private asset classes to create a multi-asset technology solution for investment professionals globally.

Peter Hughes, founder and CEO of Apex Group, said: “We are pleased to collaborate with BlackRock on the launch of this product. Their strong track record of delivering for clients mirrors our dedication to ensuring a seamless and continually innovative client experience. Through this great offering, clients will have enhanced access to data between private market fund stakeholders and can use technology to unlock scale and improve service levels. We look forward to continuing our relationship with BlackRock – furthering innovation together.”

Source: BlackRock

Franklin Templeton Integrates Canvas with Envestnet Platform

Roger Paradiso, Franklin Templeton

Franklin Templeton announces an expanded partnership with Envestnet, to deliver tax-managed, personalized strategies at scale through its Canvas Custom Indexing platform, as a component of the previously announced strategic partnership between the firms. Canvas, will be available to Envestnet’s extensive client base of advisors across banks, wealth management and brokerage firms, as well as RIAs.

“This marks another milestone for Franklin Templeton, furthering our position as a top SMA provider,” said Roger Paradiso, Head of Product Solutions for Franklin Templeton. “The integration of Canvas on to the Envestnet platform is an exciting partnership that allows us to jointly bring more high-net-worth capabilities to the mass affluent investing community. Advisors using Envestnet will now have access to Canvas’ differentiated digital solutions and operational assurance to strengthen client relationships by further personalizing investment management.”

Canvas’ web-based platform empowers advisors to easily create personalized and diversified portfolios with a focus on tax management. Venturing beyond traditional Direct Indexing, Canvas is a holistic technology focused on giving advisors more investment solutions, increased control, and the tools and efficiency to scale their businesses. It’s an example of Franklin Templeton’s commitment to providing differentiated outcomes and real customization to the broader investment community.

“Investors are increasingly seeking customized solutions, and their advisors are looking to deliver on that expectation by providing personalization at scale across their business,” said Dana D’Auria, Co-CIO and Group President, Envestnet Solutions. “This partnership showcases Envestnet’s commitment to solving this need in the market by providing greater choice and access for Direct Indexing with a tool from a trusted provider. Direct Indexing empowers advisors to tailor a portfolio that better aligns with their client’s personal values, tax goals, and long-term objectives, and we’re providing the level of customization and choice that today’s market demands.”

Canvas will be introduced to the Envestnet platform in phases starting with passive equity models and advancing to a more holistic offering and experience with time.

Franklin Templeton is a leading provider in the fast-growing SMA industry, with approximately $140 billion in SMA assets under management as of June 30, 2024, including $9 billion on the Canvas platform. These offerings are core to Franklin Templeton’s investment in its Custom Wealth Solutions group that is focused on delivering innovative and custom investment and practice management solutions to advisors serving the high-net-worth community.

Source: Franklin Templeton

Precidian to List First ADRhedged Securities in the U.S. on Cboe

Rob Marrocco, Cboe Global Markets

Precidian to List First ADRhedged Securities in the U.S. on Cboe, Providing Exposure to Individual International Companies with an Embedded Currency Hedge  

·   ADRhedgedTM securities (ADRHs) are designed to provide U.S. investors simple, cost-effective exposure to the share price of individual international companies with the added benefit of an embedded currency hedge

·   New offering in the U.S. builds on success of currency-hedged Canadian Depositary Receipts (CDRs) listed on Cboe Canada    

·   ADRHs are sponsored by Precidian Investments (“Precidian”), currency hedged by Canadian Imperial Bank of Commerce (“CIBC”), custodied with Bank of New York Mellon (“BNY Mellon”) and listed exclusively on Cboe BZX Exchange, Inc. (“Cboe U.S.”)    

CHICAGO – OCTOBER 7, 2024 – Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading securities and derivatives exchange network, announced the listing of new ADRhedgedTM securities (ADRH) on Cboe U.S. beginning today. The new ADRHs are sponsored by Precidian Investments, an industry leader in the creation of innovative financial products. To provide the currency hedge for each ADRH, Precidian has engaged CIBC, a leading North American financial institution who pioneered CDRs in Canada in 2021. There are now 65 CDRs listed on Cboe Canada with more than $50 billion CAD in trading volume since launch and $6 billion CAD in assets under management.     

  

American Depositary Receipts (ADRs) are a 100-year-old financial product that provide a way for U.S. investors to access shares of global companies. Although ADRs trade in U.S. dollars, they come with an additional risk – fluctuations in foreign currency. When the U.S. dollar experiences dramatic appreciation against global currencies, as has been the case in recent years, ADR investors may underperform in U.S. dollar terms.  

Precidian’s new ADRHs are designed to provide U.S. investors with simple, cost-effective exposure to individual international companies, with the added benefit of an embedded currency hedge. Each ADRH consists of an ADR on an underlying international company priced at approximately $50 USD per share, combined with a currency hedge designed to help mitigate the currency risk resulting from fluctuating foreign exchange rates between the international company’s local currency and the U.S. dollar. By coupling both the share ownership and currency hedge in a single security, ADRHs are designed to give all investors access to a strategy that was, by and large, previously only available to sophisticated institutional investors. ADRHs can be bought or sold like any other exchange traded security. 

“Cboe is the exchange for innovative products, and we are proud to work with Precidian as the exclusive listings exchange for these first-of-their-kind products in the U.S.,” said Rob Marrocco, Vice President, Global Head of ETF Listings, Cboe Global Markets. “Leveraging our vast global network of listings exchanges, issuer partners and diverse products, we are able to import product innovation and market structure best practices from one region to another to benefit investors. The currency-hedged CDRs have proven incredibly popular with Canadian investors, and we believe U.S. investors will find similar appeal in the global access and diversification that new ADRHs can provide.”   

  

“Precidian is proud to work with Cboe, CIBC, and BNY Mellon to bring ADRHs to market. This represents another U.S. market first by Precidian and demonstrates our expertise in creating unique, innovative products that address the needs of investors,” said Dan McCabe, CEO of Precidian Investments. 

“CIBC is committed to working with its clients to execute market-based solutions that address investor needs,” added Christian Exshaw, Managing Director and Head, Global Markets and Direct Financial Services at CIBC Capital Markets. “We are excited to see the U.S. market response to this innovative product.” 

The launch of ADRhedged products will occur in phases, with the first three companies – AstraZeneca, HSBC, and Shell – listed on October 7. Cboe anticipates listing 14 additional ADRHs in short order. The ADRHs to be listed include:   

  

Name  Ticker Symbol  
Anheuser-Busch InBev SA/NV ADRhedged™  BUDH  
AstraZeneca PLC ADRhedged™  AZNH  
Banco Santander S.A. ADRhedged™  SANH  
BP p.l.c. ADRhedged™  BPH  
British American Tobacco p.l.c. ADRhedged™  BTIH  
Diageo plc ADRhedged™  DEOH  
GSK plc ADRhedged™  GSKH  
HSBC Holdings plc ADRhedged™  HSBH  
Mitsubishi UFJ Financial Group, Inc. ADRhedged™  MUFH  
Novartis AG ADRhedged™  NVSH  
Novo Nordisk A/S (B Shares) ADRhedged™  NVOH  
Shell plc ADRhedged™  SHEH  
Sanofi ADRhedged™  SNYH  
SAP SE ADRhedged™  SAPH  
TotalEnergies SE ADRhedged™  TTEH  
Toyota Motor Corporation ADRhedged™  TMH  
Vodafone Group Plc ADRhedged™  VODH  

  

Cboe is currently the second largest ETF listing venue in the U.S. with more than 825 ETF listings. Cboe Europe is the first pan-European listing venue for ETFs, and currently offers approximately 125 listings. Cboe Canada is home to more than 320 listings including public companies, ETFs, and CDRs. There are more than 25 ETFs and 1,200 other investment products quoted on Cboe Australia.  

ON THE MOVE: Walt Bettinger to Retire from Schwab; Jacek Bugaj Joins Prometheum

Walt Bettinger

Walt Bettinger has notified the Board of Directors of the The Charles Schwab Corporation of his intention to retire as Chief Executive Officer effective December 31, 2024. Rick Wurster, President of Schwab since 2021, will be named President and CEO and will join the Schwab Board of Directors, effective January 1, 2025. Bettinger will continue to serve as Executive Co-Chairman of the Board of Directors, along with founder Charles R. Schwab. Bettinger has successfully led Schwab as CEO since late 2008.

Jacek Bugaj

Jacek Bugaj has been appointed Head of Product at Prometheum. With over two decades of experience in capital markets and fintech, Bugaj most recently served as Head of Macro Product Management at Two Sigma, where he led the creation of advanced financial systems supporting systematic and discretionary trading strategies. He also spent over eight years at IHS Markit and OSTTRA, where he designed and implemented financial infrastructure and workflows that supported a significant portion of global financial transactions.

Gurbir S. Grewal

The Securities and Exchange Commission (SEC) has announced that Gurbir S. Grewal, Director of the Division of Enforcement, will depart the agency, effective October 11, 2024. Upon his departure, Sanjay Wadhwa, the Division’s Deputy Director, will serve as Acting Director, and Sam Waldon, the Division’s Chief Counsel, will serve as Acting Deputy Director. Wadhwa has served as Deputy Director of the Enforcement Division since August 2021. Waldon has served as Chief Counsel for the Division of Enforcement since March 2022. 

Trading Technologies International, a global capital markets technology platform provider, has created a Platform Services business unit, bringing together the company’s global Product Development and Services teams into a single group. Jason Shaffer has assumed the new role of Chief Platform Officer with responsibility for leading the newly integrated unit. Vasco Sousa, who has served as Chief Services Officer for nearly two years, helping develop the services team and processes, left TT at the end of September to pursue new opportunities.

State Street Corporation has appointed Vanessa Fernandes as head of Digital Asset Solutions. Fernandes, who will be based in New Jersey, will report directly to Donna Milrod, chief product officer at State Street. She has more than 25 years of financial services experience in technology and operations. Prior to joining State Street, Fernandes was Managing Director and Global Head of Digital Experience at BNY Mellon, where she developed a digital-first strategy to transform the bank’s products and platforms. She also held several senior leadership roles at Itaú Unibanco, including Chief Information Officer, Chief Technology Officer for Emerging Technologies, Global Head of Corporate Architecture, and Chief Executive Officer of Digital Assets.

The Depository Trust & Clearing Corporation (DTCC) has appointed Andrea Gibbons as Managing Director, Chief Human Resources Officer. Gibbons will join the DTCC Executive Committee and report to Francis (Frank) La Salla, DTCC’s President, Chief Executive Officer and Director. She replaces Anthony Portannese, who will serve as a strategic advisor to DTCC’s President and CEO, Frank La Salla, until he retires at the end of the year. Gibbons has served as a key member of DTCC’s HR leadership team for the past decade, where she consistently demonstrated the qualities of an enterprise leader and brought experience and a deep understanding of the firm’s organizational culture and values.

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

MEMX Options Market Share Tops 3%

Jonathan Kellner, MEMX

MEMX, a technology-driven exchange operator founded by members to benefit all investors, reached over 3% total options market share and 6.1% regular electronic options market share in September 2024, coinciding with the one-year anniversary of the exchange.

Underscoring the strength of the offering, MEMX Option’s market share more than doubled since May of 2024 in the continuous trading single-leg equity and ETF options category in which the exchange operates.

“Since its launch, MEMX Options has redefined trading dynamics, offering unprecedented opportunities and efficiencies for participants,” said MEMX CEO Jonathan Kellner. “We are proud to celebrate this pivotal moment with our partners, clients, and dedicated team members who have been integral to this journey. We look forward to continuing to collaborate with our diverse group of options and equities member firms to find new ways to grow and improve participant experiences on MEMX exchanges.”

MEMX Options first year of operation milestones for September 2024 include:

  • 33 member firms contributing diverse customer and non-customer order flow.
  • SPY regular electronic market share of 5.8%. Ranked #2 out of 18 exchanges in quote performance. SPY consistently accounts for ~18% of total options contract volume.
  • Regular electronic market share of 5.8% in penny underlyings. Ranked #3 out of 18 exchanges in quote performance.
  • Regular electronic market share of 9.9% in non-penny underlyings. Ranked #3 out of 18 exchanges in quote performance.

The decision to launch MEMX Options was driven by MEMX’s successful track record of delivering value to market participants through its equities exchange. MEMX is committed to continuing to evolve and grow over the coming years to meet the demand across the trading community by leveraging the strengths of MEMX’s state-of-the-art trading technology.

Source: MEMX

Team Players: STA Women in Finance Symposium Celebrates Mentorship, Collaboration and Paying It Forward

Christine Lee, Liquidnet

By Christine Lee, Liquidnet

2024 STA WIF Vice Chair

Thank you to all who attended the 9th Annual STA Women in Finance Symposium in Orlando! Taking place immediately ahead of STA’s 91st Annual Market Structure Conference, it was an ideal way to kick off three days of great discussion and meaningful networking opportunities. Attendees had a chance to reflect on the challenges and opportunities women face in financial services and hear from industry trailblazers who have set an example for all who will follow.

First, we celebrated the importance of mentorship with a presentation of STA’s 2024 Woman Mentor of the Year Award to Patty Schuler, Senior Vice President of Business Development at BOX Options Market. Patty was introduced by her longtime STA Chicago colleague Lauren Arbid, Director, U.S. Head of Relationship Management at ABN AMRO Clearing. As we heard during her talk, Patty has long made it a priority to advocate for and share her knowledge with other women in the workplace – a result of lessons learned early in her career.

“Back when I was on the floor, it was a heavily male-dominated industry,” Patty said. “I had to fight to make a place for myself. I listened to the wisdom of the women around me – ‘Do your best, treat others with respect and prove yourself when it matters most.’ I carry that with me to this day.”

Patty also encouraged her fellow female professionals, particularly those who have benefited from mentorship in their careers, to pass on the legacy. We can all do our part to continue the industry’s progress in becoming more diverse and inclusive – and engaging closely with those who are following in our footsteps is one of the most meaningful ways.

“I truly believe that mentoring is about passing on your knowledge and legacy to the next generation,” Patty said. “The best way to thank a mentor is to pay it forward and become a mentor yourself. We must all remember to thank those who have made a difference in our lives.”

Next, attendees heard from Ashley Banfield, Co-Head, Global Execution Strategy at Fidelity Investments, who served as the Symposium’s keynote speaker, and was interviewed by Rebecca Lahar, Vice President, Equity Trader at T. Rowe Price. Ashley’s story was a great example of what it looks like to absorb every lesson life has to offer and take advantage of every opportunity to forge a successful career. In particular, she highlighted how her parents helped define her approach to work and life.

“My parents taught me that education was going to be my life’s greatest equalizer,” Ashley said. “They also taught me to surround myself will people that were better than me. The only way you get better is by playing with better people – and that is true everywhere. When I look across our team, I think we’ve done that really well.”

Ashley also stressed the importance of sports in her upbringing, sharing how they informed her perspective on teamwork, preparation and focus.

“While it’s not a necessary part of being successful, there’s so much you learn from playing sports and being part of a team,” she said. “When my dad brought my brother and I to play hockey and they said that my brother could play but I couldn’t, my dad said, ‘We can do this the easy way or the hard way.’ It was my first mini women’s march, and it was alongside the two most important men in my life: my dad and my brother.”

These perspectives were exactly what we needed to hear heading into the conference – and they align perfectly with the goals of STA Women in Finance. Of course, many of us in attendance compete with one another, and the many issues discussed during the conference program can be complex and stressful. But at the same time, we are all on the same team, and on the same mission to leave this industry better than we found it. In this shifting landscape, Patty and Ashley remind us of what it really means to be a team player.

FactSet Launches Data as a Service

John Costigan, FactSet

FACTSET LAUNCHES DATA AS A SERVICE TO STREAMLINE DATA MANAGEMENT IN FINANCIAL SERVICES

NORWALK, Conn., October 3, 2024 – FactSet, a global financial digital platform and enterprise solutions provider, today announced the launch of its new Data as a Service (DaaS) solution that provides data collection, management, and integration to data management teams at financial institutions.

FactSet DaaS is a suite of services that empowers data operations, architecture, and governance professionals to efficiently source and manage data in a way that powers critical firm objectives, delivers high-quality data to internal stakeholders, and manages associated costs across the data management process.

Data professionals spend a significant amount of time ingesting, quality-checking, mapping, transforming, enriching, delivering, and monitoring data across the data pipeline. Often collecting data from disparate datasets using different identifiers, companies face challenges making that data work together and moving it quickly through the pipeline to the final user.

Connecting, manipulating, and transforming these disparate datasets into the appropriate formats using FactSet DaaS allows data teams to cost-effectively manage and simplify this time and resource-intensive process.

“Our clients, ranging from institutional asset managers to data providers, spend a considerable amount of effort and expense configuring data to drive decision-making and achieve their strategic business objectives,” said John Costigan, FactSet’s Chief Data Officer. “FactSet DaaS allow data professionals to centralize all types of datasets on a single platform, removing friction, accelerating data flow, and reducing error risk, so that businesses can realize maximum ROI for their stakeholders.”

FactSet is committed to solving the challenges faced by data management teams by seamlessly integrating not only FactSet-owned and sourced data, but also clients’ proprietary and third-party data.

FactSet DaaS includes:

  • Data Quality & Completeness Service: Prevents downstream data issues by conducting a series of quality checks to verify completeness before data moves through the pipeline.
  • Managed Cross-Reference Service: Maps all identifiers from various datasets to a unified symbology model, allowing data to be called upon effectively and verifying different datasets can be connected to power downstream processes and applications.
  • Managed Custom Query Service: Transforms data to meet its intended end use case by defining the desired data output with automated processes.

FactSet DaaS solution sources and ingests data on a clients’ behalf, executing processes, and delivering the data precisely according to each firms’ requirements. This comprehensive, end-to-end approach enhances efficiency and streamlines the entire data pipeline for users, enabling them to focus on more strategic, high-value initiatives that drive business growth.

With more than four decades of industry-leading data expertise, FactSet’s open ecosystem and deep understanding of the data pipeline enable users to continuously integrate data into critical workflow applications, such as Order Management Systems (OMS), Enterprise Data Management Platforms (EDM), and Risk and Accounting Systems to further enhance their own solutions and optimize workflows.

FactSet DaaS is part of the growing Managed Services by FactSet. To learn more about FactSet DaaS solutions, please visit: https://www.factset.com/marketplace/catalog/product/factset-data-as-a-service-daas

About FactSet

FactSet (NYSE:FDS | NASDAQ:FDS) helps the financial community to see more, think bigger, and work better. Our digital platform and enterprise solutions deliver financial data, analytics, and open technology to nearly 8,200 global clients, including over 216,000 individual users. Clients across the buy-side and sell-side as well as wealth managers, private equity firms, and corporations achieve more every day with our comprehensive and connected content, flexible next-generation workflow solutions, and client-centric specialized support. As a member of the S&P 500, we are committed to sustainable growth and have been recognized amongst the Best Places to Work in 2023 by Glassdoor as a Glassdoor Employees’ Choice Award winner. Learn more at www.factset.com and follow us on X and LinkedIn.

FLASH FRIDAY: SEC Takes Page from Corporate Marketing Playbook

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.

Industry conferences are an opportune time for attending companies to announce news.

Lots of clients and prospective clients are gathered under the same roof — with good vibes, a nice venue, and cocktails — to talk shop. So why not shoehorn your new product, splashy hire or latest M&A transaction into that shop talk? 

At Traders Magazine and other Markets Media Group publications, we often see this dynamic at play with sponsored content, as brokerage firms and technology providers want the extra visibility of publishing on the first or second day of an industry conference. 

It may have been just happenstance, but it sure seemed that the U.S. Securities and Exchange Commission took a page from this corporate marketing playbook when it dropped its long-awaited second shoe on tick sizes and access fee caps early on Wednesday, Sept. 18 – which just happened to be opening day of the Security Traders Association’s annual market structure conference, probably the year’s biggest US equity and options gathering.

[You could almost hear SEC Chair Gary Gensler over the intercom at the JW Marriott Grande Lakes: “Gooooooood morning Orlando!”]

The SEC’s announcement changed the tenor of the conference, at least from a content perspective. While regulation figured to be a prominent topic of discussion going in, it became even more front/center.  

For example, a Sept. 18 afternoon panel that was meant to be about the impact of innovation and regulation generally on exchanges, alternative trading systems and broker-dealers, pivoted on the fly to a discussion exclusively about the SEC’s new rules. 

In what the panel called a seminal and historic day for market structure, the SEC reduced the minimum tick size for certain NMS stocks from 1 cent to 0.5 cents; reduced the maximum exchange access fee from $0.003 per share to $0.001 per share; increased transparency requirements of exchange fees and rebates; and expedited the reduction of round-lot sizes for high-priced stocks. 

Panelists expressed concerns that the new rules will damage liquidity, which ultimately would be costly for the end user investors the SEC is tasked to protect. They said the reduction in access fees amounts to unwarranted price controls that will fragment liquidity; and the new rules in aggregate add up to more than the sum of their parts.

When asked about possible positive outcomes that may come from the new rules, the panel offered that tick sizes are important, and if they’re set at the correct level that can improve trading efficiency. Also, there will be innovation as market participants and infrastructure providers adapt to the new rules.

Overall, despite the nearly 90-degree sunny, humid weather in Orlando, the SEC’s new rules received a decidedly cold welcome at STA. At times it felt a bit one-notey – this was corroborated by one brokerage veteran, who on a Sept. 20 flight back to Newark, said there was “too much blasting of the SEC” in the panel sessions.

But the SEC knows it isn’t winning any popularity contests. If the regulator’s goal was to capture the most industry eyeballs and eardrums two weeks ago, that mission was accomplished.     

BestEx Research Launches Order Aggregation Functionality 

Multiple orders for the same symbol and side sent at different times for different accounts or portfolios is a common challenge across firms globally, according to Nigam Saraiya, Chief Product Officer at BestEx Research Group.

Nigam Saraiya

“It is not unique to any one region, market, or firm,” he told Traders Magazine.

To address this issue, BestEx Research Group, an independent provider of high-performance algorithmic execution and measurement solutions for equities and futures trading, has recently launched Order Aggregation functionality within its execution algorithms. 

“Order aggregation tackles this seamlessly for the customer with zero disruption to their workflow,” commented Saraiya.

“Every element of our product design is intended to improve either trading costs or the workflow–or both–as in the case of order aggregation,” he said.

Saraiya said that order aggregation increases the efficiency of algorithms’ scheduling, order placement, and liquidity-seeking behavior by combining parent orders on the same symbol and side, which ultimately reduces clients’ trading costs. 

Execution of multiple parent orders for the same instrument–sent at the same time or different times–often results in higher trading costs due to faster than optimal execution speeds, suboptimal limit order placement, and missed block trading opportunities in fragmented markets, he added. 

BestEx Research’s Order Aggregation addresses this challenge by consolidating orders on the same side of the market, optimizing algorithm performance and reducing trading costs. 

According to Saraiya, clients can opt in to this feature without altering their workflow, and fills will be allocated back to each parent order in real time–even though BestEx Research algorithms are trading them as a single block order. 

Additionally, institutions managing parent orders from different portfolios arriving at various times can use this functionality to meet regulatory and compliance requirements, ensuring fair and equitable fills across all portfolios without the need to develop complex order aggregation capabilities within their OMS. 

BestEx Research’s pro-rata fill allocation ensures that each parent order, even those belonging to different accounts, is fairly treated. 

Order aggregation functionality is particularly relevant for trading desks that deal with large, complex orders and want to ensure fair allocation without disrupting compliance workflows.

Nordea Asset Management was among the first to put the new functionality into action.

Eugene Seo

“For us, order aggregation is an absolutely essential feature,” Eugene Seo, Head of Equity Trading at Nordea Asset Management, said.

“It is necessary that multiple orders in the same security do not compete against each other but instead are aggregated and represented as a singular order in the market. Aggregating them helps us reduce signaling risk and ensures fair volume distribution across working orders,” he told Traders Magazine. 

Additionally, aggregation functionality ensures that volumes are distributed on a pro-rata basis across working orders so that their investment teams are being represented fairly, he said.

“It ensures volumes are distributed on a pro-rata basis, so our investment teams are represented fairly,” Seo added.

Seo believes that Order Aggregation is important not just for reducing impact but also for seeking block liquidity, since aggregated orders can become eligible to trade against larger orders with significant minimum quantities. 

“Given our large average order size, our reliance is on conditional order types to achieve volume through larger and less predictable fills,” he said.

Order Aggregation can be configured upon request to meet the specific needs of BestEx Research clients. 

Both the eligibility requirements for aggregation and the fill attribution process are customizable to suit different workflows and preferences. Sell-side firms utilizing BestEx Research’s AMS can selectively offer this functionality to their buy-side clients, tailoring the criteria to meet each client’s needs.

Interactive Brokers Introduces Forecast Contracts on Election Outcomes

Thomas Peterffy, Interactive Brokers


Empowering Investors to Hedge Against Political Volatility

GREENWICH, CT, October 3, 2024 —  Interactive Brokers (Nasdaq: IBKR), an automated global electronic broker, today announced the planned launch of Forecast Contracts on upcoming US election results. This innovative addition allows US investors to trade their predictions on US political outcomes, alongside contracts on economic data releases and climate indicators, through the ForecastEx exchange. Forecast Contracts on US election results will begin trading on October 3 at 5:15 pm ET.

With the introduction of election-focused contracts, investors now have a powerful tool to manage portfolio risks tied to political uncertainty, while also expressing their views on key global events. By trading Forecast Contracts, investors can protect their portfolios from election-driven market movements or capitalize on their political insights.

The following Forecast Contracts on US election results will be available at launch:

  • Will Kamala Harris win the US Presidential Election in 2024?
  • Will Donald Trump win the US Presidential Election in 2024?
  • Will the Democratic Party win a majority in the United States House of Representatives in the 2024 general election?
  • Will the Democratic Party win a majority in the United States Senate during the 2024 general election?
  • Will Kari Lake (R) win Arizona’s United States Senate election in 2024?
  • Will Mike Rogers (R) win Michigan’s United States Senate election in 2024?
  • Will Tim Sheehy (R) win Montana’s United States Senate election in 2024?
  • Will Sam Brown (R) win Nevada’s United States Senate election in 2024?
  • Will Bernie Moreno (R) win Ohio’s United States Senate election in 2024?
  • Will Dave McCormick (R) win Pennsylvania’s United States Senate election in 2024?
  • Will Eric Hovde (R) win Wisconsin’s United States Senate election in 2024?

These contracts offer investors an easy way to take a position on key political events. For example, if an investor believes the United States Senate will be under Democrat control in 2025, they can purchase a “yes” contract. Conversely, if they believe the event will not occur, they can buy a “no” contract. Contract prices range from $0.02 to $0.99, reflecting the market’s evolving consensus on the likelihood of each outcome. E.g. $0.35 corresponds to 35% probability.

Thomas Peterffy, Founder and Chairman of Interactive Brokers, remarked, “Forecast Contracts allow investors to act on the most crucial issues shaping our future. These contracts give traders a direct line to market sentiment on elections, helping them manage risk or express views on political events.”

Benefits of Forecast Contracts:

  • Hedging Against Uncertainty: Safeguarding portfolios from election-related volatility.
  • Profiting from Insights: Turning political knowledge into financial opportunity.
  • Trading with Ease: Accessing these new contracts through IBKR ForecastTrader, using an existing Interactive Brokers login.
  • Earning an Incentive: Earn an incentive coupon, paid monthly, on the daily closing value of a position. Currently 4.33% APY.

Forecast Contracts settle at a predefined value based on the event’s outcome — $1 for a correct prediction and $0 for an incorrect one — offering investors a simple, transparent way to engage with political and economic events. Forecast Contracts on US election results are only available to eligible US residents.

Interactive Brokers plans to expand ForecastEx globally, covering a broader range of election events and other major issues. This strategic offering strengthens Interactive Brokers’ position as a leader in innovative financial products, giving investors a new edge in navigating politically uncertain markets. The CFTC-regulated ForecastEx LLC is a wholly-owned subsidiary of Interactive Brokers.

To learn more, visit IBKR ForecastTrader to start trading political predictions and protect portfolios from market swings tied to election outcomes.

About Interactive Brokers Group, Inc.:
Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, and foreign exchange around the clock on over 150 markets in numerous countries and currencies, from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron’s, Investopedia, Stockbrokers.com, and many others.

Contacts for Interactive Brokers Group, Inc. Media: Katherine Ewert, media@ibkr.com 

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