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Saturday, November 30, 2024
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Citi Partners with Google Cloud on Tech Infrastructure, AI

By
Anna Lyudvig
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Tech infrastructure is a foundational component of delivering superior customer and employee experiences, according to Balaji Kumar, Citi’s Head of Global Technology Infrastructure. 

“Citi has been in this journey for the past few years where we have continued to modernize our applications in our data centers,” he told Traders Magazine.

Balaji Kumar

On Monday, October 28, Citi announced a multi-year agreement with Google Cloud that focuses on modernizing Citi’s technology and infrastructure with cloud technology and artificial intelligence (AI). 

“A partnership with Google Cloud is an extension of this strategy to the public cloud, where applications can take advantage of modern infrastructure components that provide standardization, scalability and security,” Kumar commented. 

“This in turn unlocks the ability to offer improved digital products, streamline employee workflows, and improve automated provisioning of underlying infrastructure,” he said.

Through the collaboration, Citi will migrate multiple workloads and applications to Google Cloud’s secure and scalable infrastructure.

By modernizing its technology infrastructure on Google Cloud, Citi will unlock the ability to offer improved digital products, streamline employee workflows, and run high-performance computing (HPC) and analytics platforms. 

This includes using advanced HPC capabilities to facilitate the execution of millions of computations daily in Citi’s Markets business.

As part of the agreement, Citi will also use Google Cloud’s Vertex AI platform to deliver generative AI capabilities across the company. 

With Google Cloud, Citi will be able to fuel its generative AI initiatives related to developer toolkits, document processing, and digitization capabilities to empower customer servicing teams.

“We believe that Gen AI has the potential to revolutionize the banking industry by enhancing efficiencies, automating repetitive tasks, and enabling better decision-making,” Kumar said.

“And at Citi, we are focused on ensuring that we use Gen AI to support initiatives that align with three important priorities: improving safety and soundness, enabling revenue growth and the client experience and driving efficiencies for the bank,” he added.

Google Cloud offers a powerful, fully integrated and optimized AI stack with its own planet-scale infrastructure, custom-built chips, generative AI models and development platform, as well as AI-powered applications, to help organizations transform. 

Customers in more than 200 countries and territories turn to Google Cloud as their trusted technology partner.

Google Cloud’s secure infrastructure empowers financial institutions to confidently embrace digital transformation while safeguarding sensitive data and meeting stringent regulatory, policy, and business requirements. 

This robust foundation is built with a defense-in-depth approach, incorporating multiple layers of security such as data encryption at rest, in transit, and in use with Confidential Computing.

Google Cloud also meets key industry standards through comprehensive compliance certifications like PCI DSS, ISO 27001, and SOC 2.

“Through the collaboration, we will migrate multiple workloads and applications to Google Cloud’s secure and scalable infrastructure,” Kumar said.

“As a global provider of financial products, a partnership with another global technology provider like Google Cloud enables Citi to meet our client’s local needs across the markets we operate in,” he said.

“Citi will unlock the ability to offer improved digital products and empower customer servicing teams,” Kumar concluded.

Digital Assets in Focus at FIX Americas Trading Conference

By
Editorial Staff
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Milena Kohlhofer, Ownera

One of the most important emerging technologies in the capital markets business was discussed at last week’s FIX Americas Trading Conference: digital assets. 

The Digital Assets Unveiled: Navigating the Future of Trading panel at the Oct. 16 New York event opened with a question for the audience: what has been the largest obstacle to adopting digital assets?

The most popular answer was “all of the above”, which included regulatory uncertainty (which was the second-most selected answer), limited understanding, and a lack of standards and interoperability. 

To the question of when the industry will fully embrace digital assets, which are recorded on a blockchain or distributed ledger, the answer is not anytime very soon – in about five years received 43% of the audience vote, followed by eight-plus years (32%), then three years and one year.  

Panelists said regulation should be good for digital assets by boosting market participants’ trust, but regulatory ambiguity in the US is a lingering issue and is a primary reason why market development in the US has lagged that of Europe. “We’re simply waiting” for regulatory clarity, one panelist noted.

Milena Kohlhofer, Head of Sales, US & Latam at Ownera, which provides global distribution for tokenized assets, said U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 121 has been a hurdle for adoption of digital assets by restricting banks’ ability to provide custody for digital assets. “People aren’t going to be comfortable,” without big banks’ involvement, she said.  

The panel noted the upcoming presidential election in the US will be a turning point. “Regardless of who wins in November, there will be digital assets regulation in the next administration,” said Lee Saba, Co-Chair Global Steering Committee, FIX Trading Community, and Head of Market Structure at Rialto Markets.  

Regarding the tokenization of traditional assets, Stefano Dallavalle, Head of Product – Digital Assets at R3, said the trend will continue as more financial institutions succeed in tokenizing money market funds (MMFs), bonds, and other securities. 

“The technology brings efficiencies,” said Kohlhofer. “Investors don’t care if an asset is tokenized or not.”

Tokenization will likely expand to more assets, including music and art, providing an opportunity for the industry to provide custody and other market infrastructure.   

Panelists noted that digital assets market structure is evolving, and history has shown that market structure evolution starts slowly but then at some point accelerates.  

Use cases should remain a focal point, with the need to answer the question “Where are there inefficiencies that only blockchain can solve?” Just as mobile phone technology solved for some limitations of landline telephones, so can digital assets for traditional finance. 

Ultimately, panelists said blockchain should reduce costs and trading errors in securities markets, similar to how FIX connectivity did 30 years ago.

SEC Moves to Improve Risk Management, Resilience of Covered Clearing Agencies

By
SEC
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Gary Gensler, SEC

SEC Adopts Rule Amendments and New Rule to Improve Risk Management and Resilience of Covered Clearing Agencies

Washington D.C., Oct. 25, 2024 —

The Securities and Exchange Commission today adopted rule amendments and a new rule to improve the resilience and recovery and wind-down planning of covered clearing agencies. The rule amendments establish new requirements regarding a covered clearing agency’s collection of intraday margin as well as a covered clearing agency’s reliance on substantive inputs to its risk-based margin model. The new rule prescribes requirements for the contents of a covered clearing agency’s recovery and wind-down plan.

“Recovery and wind-down planning enhances the resiliency and continuity of our market plumbing,” said SEC Chair Gary Gensler. “I’m pleased that today’s amendments will benefit investors, issuers, and the markets alike.”

Specifically, regarding intraday margin collection, the rule amendments require that a covered clearing agency that provides central counterparty services has policies and procedures to establish a risk-based margin system that monitors intraday exposures on an ongoing basis, includes the authority and operational capacity to make intraday margin calls as frequently as circumstances warrant (including when risk thresholds specified by the covered clearing agency are breached or when the products cleared or markets served display elevated volatility), and documents when the covered clearing agency determines not to make an intraday call pursuant to its written policies and procedures.

The rule amendments regarding substantive inputs require that a covered clearing agency that provides central counterparty services has policies and procedures to establish a risk-based margin system that uses reliable sources of substantive inputs, uses procedures to address circumstances in which substantive inputs are not readily available or reliable (to ensure that the covered clearing agency can continue to meet its credit exposures to its participants), and that such procedures must include either the use of price data or substantive inputs from an alternate source or a risk-based margin system that does not rely on substantive inputs that are unavailable or unreliable.  

Existing rules require a covered clearing agency to have a recovery and wind-down plan, and the new rule requires such an entity to specify nine elements for its plan. The new rule’s required elements address: planning (e.g., the identification and use of scenarios, triggers, tools, staffing, and service providers); timing and implementation of the plans; and testing and board approval of the plans.

The Commission is adopting two compliance dates: (1) 150 days after publication in the Federal Register for a covered clearing agency to file any required proposed rule changes or advance notices with the Commission; and (2) 390 days after publication in the Federal Register for such proposed rule changes and advance notices to be effective.

ON THE MOVE: OCC Adds Rachelle Keller and Mike West; Barb Morgan to Temenos

By
Anna Lyudvig
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Mike West & Rachelle Keller

The Options Clearing Corporation has added two members to its board of directors: Public Director Rachelle Keller, former financial executive, and Exchange Director Mike West, Head of Operations at the New York Stock Exchange (NYSE). Keller has more than 30 years of experience in the financial services industry. In addition to senior roles at Citibank, NA, Keller held senior roles at other market-leading firms, including Chief Financial Officer of Treasury and Securities Services at JPMorgan Chase & Co. West has more than 30 years of experience in U.S. equities operations and trading systems. In his current role, he leads business operations for the NYSE’s five equity and two options exchanges, in addition to the Global OTC, NYSE Bonds, FINRA-NYSE Trade Reporting Facility and Security Information Processor products.

Barb Morgan

Temenos has hired Barb Morgan as chief product and technology officer, replacing Prema Varadhan. Morgan has over 25 years leading digital transformation initiatives, with expertise spaning strategic growth and innovation across financial services, insurance, technology, healthcare, manufacturing, aerospace, and energy sectors. Morgan arrives at Temenos after a one-year stint as group head of product, data and analytics at the London Stock Exchange. Previous posts include CTO at InsurTech SaaS business Itel, and tech and product roles at FIS.

Trish Foshée, the longtime president and CEO of the Institute for Financial Markets (IFM), will retire at the end of 2024. Foshée has led the IFM for nearly 17 years and held successive positions within the organization for more than seven years prior. IFM is an affiliate of FIA and is its educational foundation. 

Morgan Stanley’s Chief Executive Officer Edward Pick was elected by the Board of Directors to the additional position of Chairman, effective January 1, 2025. James Gorman will step down as Chairman and leave the Board as expected at the end of 2024. Gorman will also retire from employment at Morgan Stanley and be named Chairman Emeritus at that time.

BlockFills, a digital assets technology and trading firm for institutions and professional traders, has announces the appointment of Amy Shelly as Chief Financial Officer and promotion of Neil Van Huis to Chief Strategy Officer. Shelly has more than three decades of financial services management experience, including recently serving for six years as CFO for the Options Clearing Corporation (OCC). Van Huis has been a Director of BlockFills since its 2018 inception.

Jason Dubinsky, Morningstar’s chief financial officer, will step down from his role at the end of the year to pursue other interests. Dubinsky joined Morningstar in 2017 and has been the firm’s chief financial officer for over seven years—a period in which the company’s value tripled and its revenue, operating profit, and cash flow have more than doubled.

EquiLend, a provider of technology, data, and analytics solutions for the securities finance industry, has appointed Rich Grossi as its new Chief Executive Officer. Most recently, Grossi served as the Chief Executive Officer of ION Corporates, a suite of trading, risk management, and workflow automation solutions. Prior to that, Grossi held various leadership positions at OpenLink, where he served as Chief Executive Officer, Chief Financial Officer, Chief Product and Technology Officer, and Executive Vice President of Global Operations.

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


NYSE Arca Equities to Extend Weekday Trading to 22 Hours

By
Press Release
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Kevin Tyrell, NYSE

Will support the global, exchange-based trading of all U.S.-listed equity products

Extended-hours trades to be cleared by DTCC

The New York Stock Exchange, part of Intercontinental Exchange, a leading global provider of technology and data, announced plans to extend weekday trading on its NYSE Arca equities exchange to 22 hours a day.

The extended trading would take place from 1:30 am to 11:30 pm Eastern Time on all weekdays, excluding holidays, subject to regulatory approval. The NYSE will also seek support for extended trading from the U.S. securities information processors. NYSE Group’s NYSE Arca is a fully electronic exchange that ranks as the top U.S. exchange for listing and trading exchange-traded funds. All U.S.-listed stocks, ETFs and closed-end funds would be available for trading on NYSE Arca during the 22-hour weekday sessions.

“The NYSE’s initiative to extend U.S. equity trading to 22 hours a day, 5 days a week underscores the strength of our U.S. capital markets and growing demand for our listed securities around the world,” said Kevin Tyrrell, Head of Markets, New York Stock Exchange. “As the steward of the U.S. capital markets, the NYSE is pleased to lead the way in enabling exchange-based trading for our U.S.-listed companies and funds to investors in time zones across the globe.”

The NYSE plans to file updated rules with the Securities and Exchange Commission for the extended trading. Trades taking place on NYSE Arca during these additional extended hours will continue to be cleared by the Depository Trust & Clearing Corporation, which recently announced plans to extend its hours of operation.

Source: ICE

T. Rowe Price Offers its First Thematic Actively Managed ETF

By
Press Release
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Dominic Rizzo, T. Rowe Price

T. Rowe Price, a global investment management firm, announced the launch of its first thematic actively managed exchange-traded fund, T. Rowe Price Technology ETF (Ticker: TTEQ). The new ETF began trading on the NASDAQ exchange today.

The T. Rowe Price Technology ETF focuses on the technology sector, applying an active and opportunistic approach to a global technology universe. With a portfolio of 40-50 high-conviction investments, the ETF centers on the most innovative and fastest-growing subsectors of the market that are powered by technology over a full market cycle.

T. Rowe Price Technology ETF is managed by Dominic Rizzo, who has ten years of investment expertise at T. Rowe Price and serves as the portfolio manager of the Global Technology Equity strategy, which has assets under management that total $9.4 billion, as of June 30, 2024. The Technology ETF is a new strategy distinct from existing T. Rowe Price mutual funds.

T. Rowe Price Technology ETF (Ticker: TTEQ)

  • Seeks to provide long-term capital growth, investing at least 80% of its net assets in securities of companies it expects to generate a majority of their revenue from technology or those whose competitive edge and/or market share are largely based on their technology capabilities.
  • Net expense ratio is 0.63%

T. Rowe Price introduced its first active ETFs in August 2020, and the launch expands the firm’s active ETF lineup to 17, including five semi-transparent ETFs, six transparent fixed income ETFs and six transparent equity ETFs. The active ETFs complement the firm’s traditional mutual fund offerings and deliver key features associated with ETFs that some investors may prefer, such as tax efficiency, more competitive expense ratios, and the flexibility to buy and sell shares throughout the trading day.

QUOTES
Dominic Rizzo, CFA®, Portfolio Manager
“Leveraging our deep industry expertise and commitment to rigorous research, TTEQ targets mission-critical, linchpin technologies from companies innovating in secular growth markets. We look to navigate different market environments responsibly by tactically allocating to these enduring technology companies when they exhibit improving fundamentals and are trading at reasonable valuations. In a rapidly advancing technology landscape, we believe this strategy offers an appealing option to investors who favor the ETF format and are seeking to invest in attractive opportunities globally.”

Tim Coyne, Global Head of Exchange-Traded Funds
“The launch of the Technology ETF underscores our commitment to providing innovative offerings that meet our clients’ evolving needs in the ETF wrapper. As our ETF roster grows, our expansion into thematic offerings enables investors to tap into specific sectors and trends, like technology, and access the best of our active management expertise paired with the benefits of the ETF vehicle.”

Source: T. Rowe Price

Nasdaq Migrates ISE Options Market to Fusion

By
Shanny Basar
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Brenda Hoffman, Nasdaq

Nasdaq said it has migrated International Securities Exchange (ISE) to Fusion, so that four out of six of its US options markets and one European equity derivatives market are now running on Fusion, its next-generation derivatives platform.

Adena Friedman, chair and chief executive, said on the third quarter results call on 24 October:  “Four of our US options markets are running on Fusion, resulting in lower latency, higher throughput and overall increased productivity.”

Brenda Hoffman, Nasdaq

Brenda Hoffman, chief technology officer of financial technology and market services, said at Nasdaq’s investor day this year that it was the first global exchange operator to migrate a major regulated market to cloud technology. Nasdaq’s MRX Options Exchange and Nasdaq Bond Exchange (NBE) moved to AWS in 2022 and it subsequently migrated GEMX, another options exchange. Performance improved after the migration according to Hoffman with a 10% improvement in latency and tighter determinism.

US equity derivatives achieved record quarterly net revenue in the third quarter of $107m. As a result, net revenue in the market services division grew by 13% from a year ago to a record $266m in the third quarter.

“The growth was driven by higher volumes across US and European cash equities, as well as record revenue for US multi-listed options and proprietary index options in US equities,” added Friedman.

Source: Nasdaq

Index business

Friedman described the index franchise as a “true innovation engine” within Nasdaq. The business achieved a fourth consecutive quarter of record average exchange-trade product assets under management of $575bn, and reached $600bn at quarter-end.

The index business had $62bn in net inflows over the trailing 12 months, with $14bn in the third quarter of this year. Index derivatives trading linked to the Nasdaq-100 Index also grew 24% year-over-year.

In the third quarter the index business partnered with clients to bring 35 new investment products to market, including seven insurance annuity vehicles and eight options overlay products. 20 of these new product launches were international.

Adena Friedman, Nasdaq

“We remain focused on international expansion with 57% of new products launched outside the United States,” said Friedman.

In addition, US index options had a record quarter with revenue doubling year over year. Friedman said there are opportunities to expand the trading of index options on US retail platforms and that a lot of demand is also coming from international broker dealers.

In terms of international growth, Friedman highlighted Latin America as one of the regional economies where Nasdaq has been helping financial institutions better navigate regulatory complexity and the modernization of market infrastructure over the last 10 years. In Latin America there are  over 10 market operators, and about 50 bank and broker-dealer clients that use Nasdaq technology.

For example, in September this year Nasdaq said it would provide its AxiomSL regulatory reporting solution to Nubank, a digital bank with over 100 million customers across Brazil, Mexico, and Colombia. Nasdaq has over 50 banking and payment services clients in Latin America. 

“We look forward to our continued international expansion,” added Friedman.

Artificial intelligence

Nasdaq completed a major milestone during the third quarter with the rollout of AI co-pilot tools to all of its developers, according to Friedman.

The firm also launched an internal generative AI platform that features custom-built skills designed to enhance productivity and efficiency. In less than two months, Nasdaq has deployed about 400 unique skills, with nearly 50% of employees engaging with the platform.

For customers, Nasdaq also launched new AI-enabled products. Nasdaq Verafin, which  provides crime fighting technology, enhanced its AI-based Targeted Typology Analytics with new detection capabilities for terrorist financing and drug trafficking activity. The Calypso platform has developed an innovative new methodology to conduct investment portfolio risk calculations and produce predictive analytics, based on advanced machine learning capability.

Nasdaq’s machine learning technology is combined with a sophisticated form of mathematical modelling that can significantly improve the efficiency of conducting the most complex trading and regulatory risk calculations. The new functionality can price financial instruments across millions of scenarios up to 100 times faster while significantly reducing the amount of physical infrastructure required to run those calculations.

Gil Guillaumey, head of capital markets technology at Nasdaq, said in a statement that all financial institutions trading over-the-counter derivatives are required to perform increasingly complex calculations to meet internal risk controls and regulatory mandates. The scale of required computing is driving a rethink about using AI to reduce the cost of compliance.

 Source: Nasdaq

Financials

Sarah Youngwood, chief financial officer, said on the call that Nasdaq delivered its fourth consecutive quarter of double-digit growth.

Sarah Youngwood, Nasdaq

“Nasdaq’s performance continues to reflect the quality and diversity of our platforms, driving strong growth across the business with particular strength in index and financial technology,” Youngwood added. “We are continuing to deliver ahead on deleveraging and synergies and are benefiting from significant operating leverage.”

Third quarter net revenue was $1.1bn, 22% more than the prior year period, including a $146m benefit related to the acquisition of Adenza. In June 2023 Nasdaq announced the $10.5bn acquisition of Adenza, a provider of mission-critical risk management and regulatory software to the financial services industry, from private equity firm Thoma Bravo. Adenza consisted of Calypso, which provides capital markets participants with end-to-end treasury, risk, and collateral management workflows, and AxiomSL, which provides regulatory and compliance software.

Friedman said that as Nasdaq approaches the one -year anniversary of the completion of the Adenza acquisition, she is “extremely pleased” with the progress to date.

“The integration continues seamlessly, and we are delivering ahead of plan on net expense synergies and deleveraging,” Friedman added. “Nasdaq is in the early innings of unleashing the power of our financial technology division, and we look forward to building on this momentum.”

FLASH FRIDAY: Retail Traders Eye Futures

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

With growing retail investor awareness of, and education about available alternative products, active investors are looking to expand their self-directed trading into market sectors beyond traditional equities.

Adam Hickerson

Last week, Robinhood announced they will begin offering futures and index options trading for retail investors across their platform.

“Futures were highly requested by our more active and advanced traders, and we’ve built them with an intuitive, easy to use experience,” commented Adam Hickerson, Senior Director of Futures at Robinhood.

“They allow you to trade broad based indices, virtually 24-five, around the clock in a very liquid and robust marketplace – we fundamentally believe in opening up access to products like these, so that everyone can trade or manage their risk around the clock,” he told Traders Magazine.

Robinhood is one of many new entrants into the futures market, according to Martin Franchi, CEO of NinjaTrader: “With each new player, we’ve seen greater collaboration and advocacy for an under-served community.”

“We welcome new participants to help modernize regulations, develop innovative exchange products, and shine a bright light on this exciting asset class,” he added.

Robinhood’s active trader announcement was a strategic move to retain investors who might otherwise transition to multi-asset class platforms geared toward active traders, Franchi said. 

“It’s a smart decision to protect their core business, which has likely seen its most active customers seeking advanced tools elsewhere,” he added.

The futures markets have shown an increase in retail participation, especially in micro-sized contracts, according to FIA’s President and CEO Walt Lukken. “Better technology and lower commissions are a big reason for that trend, but more importantly, there seems to be a generational shift in customer behavior,” he wrote in a blog.

“The Millennials, Gen Z and now Gen Alpha aren’t satisfied with owning index funds and the classic “buy and hold” strategies. They want to be more directly engaged with markets and they are seeking out brokers that offer the best tools for their trading. They may be young, but this trading segment is here to stay,” he added.

However, according to Jay T Vanerstrom, FVP – Director Derivatives Trading, Capis, many retail investors are not currently using futures, or doing so mainly through a more passive investment in professionally managed commodity funds. 

Futures trading requires a higher level of investor sophistication (knowledge of product construction and dynamics; risk tolerance; active trade re-evaluation monitoring) that is usually attractive to only active, well-funded retail investors, he told Traders Magazine.

“For someone wanting invest in energy, currencies, metals or non-dollar stock indices, futures give an avenue of direct investment into these products,” he said. 

With futures and equity index options, one can also get exposure to market reversals (downward market action) that is easily duplicated using stocks, Vanerstrom said.

“As with other “hot new things”, jumping in too quickly without proper research can lead to unwanted results,” he said.

“To borrow an analogy from the construct industry: Dynamite can be a highly useful tool to get some jobs done; however, when employed by the untrained or careless user, it’s likely to blow up in their face,” he added. 

Vanerstrom thinks that Robinhood’s model of low-cost trading, combined with easier market access through their trading app, is likely to create an opportunity for retail interest not currently available through traditional futures and index options brokers.

“With the nature of such markets providing a level of leverage and open-ended risk in some products that require a higher level of market insight, futures and index option products will be appropriate for only a small sub-set of Robinhood’s most sophisticated customers,” he said.

For the brokerage firm, the expanded move into futures will also translate into a need to educate (and monitor) the new clients on potential risks they likely have not faced in previous investing experiences, he added. 

Marty Franchi

“Overall effect on the futures and index markets is not likely to be a huge boost to trading volumes, as this market is mostly driven by the activity of large institutional investors,” Vanerstrom said. 

“A more likely result to the futures industry will be to create some competition from traditional futures brokers to provide lower cost and more open access for the retail client sector,” he added.

Meanwhile, Franchi thinks that “we’re at a pivotal moment, similar to the rise of self-directed equities trading led by platforms like eTrade, which was followed by the growth of retail equity options trading championed by Think-or-Swim, OptionsHouse, and OptionsXpress”. 

“Futures represent the pinnacle of the trader journey, which typically starts with a mobile experience in simpler asset classes,” he said.

Franchi added that as platforms begin to modernize retail futures experiences, and as exchanges continue to prioritize new product development, “the exponential rise of this asset class shows no signs of slowing down”.

Baird Research Models Are Now Available on the Bloomberg Terminal

By
Press Release
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David Tarantino, Baird

Bank’s buy-side clients can easily access models within their research workflow solutions

New York, October 24, 2024 – Baird and Bloomberg today announced research models from Baird are now available on the Bloomberg Terminal, enabling the bank’s buy-side clients to further incorporate the proprietary content into their research workflow for more informed and timely business decisions. The models complement additional research content and market reports already provided by Baird on the Bloomberg Terminal.

Baird is now able to better support its buy-side clients including hedge funds and asset managers that are using the Bloomberg Terminal’s leading analytical tools to support investment idea generation and an efficient research process. Bloomberg Terminal customers have access to Baird’s research models, which cover more than 700 stocks across Consumer Retail, Financial Services, Healthcare, Industrials, Real Estate and Technology sectors.

David Tarantino, Director of Equity Research at Baird, said: “Baird’s research team has a long history of providing differentiated insights to institutional investors. We are delighted to partner with Bloomberg to offer some of our clients a convenient way to access our proprietary models.”

Baird’s research models are accessible via Company Financials {MODL<GO>}, the solution on the Bloomberg Terminal that enables buy-side analysts and portfolio managers to absorb key company metrics within minutes of earnings announcements and differentiate their investment research process with a quick and easy comparison of company-reported actuals to forward-looking estimates. The bank’s models are included in the Bloomberg solution that offers fundamental data for nearly 200,000 listed and private securities, with deep fundamental coverage for over 8,000 companies. 

The additional research content complements the market commentary and trade ideas that Baird already provides to their buy-side clients via Document Search {DS<GO>}, the research tool that provides access to 200 million company documents and allows Bloomberg Terminal users to quickly spot shifts in company discussions with topic overviews.

Andrew Skala, Global Head of Companies and Research Product at Bloomberg, said: “Institutional investors are looking for ways to transform their business with technology that helps their research teams save time and work more efficiently. Baird’s move to incorporate their research models on the Bloomberg Terminal helps the bank’s content creators expand their reach to buy-side portfolio managers and traders that are using sophisticated workflow solutions and high-quality datasets to discover new investment ideas.”

Baird is consistently ranked as a top US research firm by Coalition Greenwich and, according to Bloomberg Intelligence’s 2024 US Institutional Equity Trading Study that surveyed 110 head and senior traders, the company grew its estimated equity wallet capture by 114% last year, more than any other equity broker. The bank joins over 100 institutions contributing models that feed Bloomberg consensus estimates, which is also supplemented by other research providers. 

Bloomberg’s Data group acquires and models high-quality datasets from both traditional and alternative sources, and collaborates across the industry with content partners like Baird. Utilizing deep knowledge and advanced technology, the Bloomberg Data team enriches data, at scale, to be interconnected and ready-to-use, so users can focus on critical business decisions.

Brokers looking to get their data in front of their buy-side customers and potential partners on the Bloomberg Terminal can contact researchsupp@bloomberg.net for more information.

About Baird
Baird is an employee-owned, international wealth management, asset management, investment banking/capital markets and private equity firm with offices in the United States, Europe and Asia. Established in 1919, Baird has approximately 5,100 associates serving the needs of individual, corporate, institutional and municipal clients. Baird has more than $455 billion in client assets as of June 30, 2024. Committed to being a great workplace, Baird ranked No. 34 on the 2024 Fortune 100 Best Companies to Work For® list – its 21st consecutive year on the list. Baird is the marketing name of Baird Financial Group. Baird’s principal operating subsidiaries are Robert W. Baird & Co. Incorporated and Baird Trust Company in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s investment banking and private equity operations. For more information, please visit Baird’s website at www.rwbaird.com.

About Bloomberg
Bloomberg is a global leader in business and financial information, delivering trusted data, news, and insights that bring transparency, efficiency, and fairness to markets. The company helps connect influential communities across the global financial ecosystem via reliable technology solutions that enable our customers to make more informed decisions and foster better collaboration.

For more information, visit Bloomberg.com/company or request a demo.

Morgan Stanley Research Launches AskResearchGPT

By
Press Release
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Katy Huberty, Morgan Stanley

The generative AI-powered assistant for Investment Banking, Sales & Trading and Research supports staff in efficiently surfacing and distilling high-quality insights from the expansive body of Morgan Stanley Research

Morgan Stanley Research announced the launch of AskResearchGPT, a unique generative AI-based assistant that addresses the needs of the bank’s Investment Banking, Sales & Trading and Research staff. AskResearchGPT can be leveraged to look for data, obtain insights and summarize information from the firm’s expansive body of Research – more than 70,000 proprietary reports published annually. With convenient, one-click access within their day-to-day workflow, the generative AI tool gives staff a more comprehensive, in-depth view of the most current Research information, so they can provide the firm’s institutional clients with higher quality service in a more effective manner.

“AskResearchGPT is emblematic of our tech-forward philosophy in Institutional Securities,” said Katy Huberty, Global Director of Research and Co-Chair of the Morgan Stanley AI Steering Committee. “Our most important objective is to provide our clients with world class analysis and information to help them generate alpha. AskResearchGPT boosts our employees’ ability to support our clients with just that – better and at scale.”

AskResearchGPT is a generative AI-based augmentation to the already popular AskResearch application, a chatbot that helps pinpoint data, key findings and analyst ratings from the vast library of Morgan Stanley Research reports. In AskResearchGPT, OpenAI’s GPT-4 model is supercharging the capabilities of the original tool by synthesizing unstructured data, empowering users to address more complex questions by drawing comprehensive insights and summaries from multiple research products. AskResearchGPT is conveniently accessible across the suite of productivity and communication tools used every day, facilitating seamless access to research whenever needed.

Additionally, the assistant is paired with a workflow solution, patented by Morgan Stanley, which gives staff a single-click option to transfer findings of their queries into an email draft ready to be modified and customized before sharing with their clients. Findings include hyperlinks to citations of relevant research materials providing staff and clients with the ability to dive deeper into the original research.

“AskResearchGPT gives our client-facing teams a leg up, freeing capacity to more deeply engage with clients while providing better than ever service. It is an important step in delivering a firmwide Research platform that is not only omnipresent across our tools but will ultimately extend its capabilities with other information sources, skills and languages,” said Eden Kidner, Head of Technology Strategy for Morgan Stanley Research. “We continue to experiment with the most recent generative AI improvements, identifying other opportunities to enhance our employee and client engagement.”

Morgan Stanley has leveraged AI and machine learning for over a decade to boost productivity and client service. The firm pioneered the use of generative AI on Wall Street with its unique partnership with Open AI, which was announced in spring of 2023. AskResearchGPT is the first use case in the Institutional Securities arena, joining a continuously growing suite of generative AI powered tools including the AI @ Morgan Stanley Assistant and AI @ Morgan Stanley Debrief, which were successfully rolled out to the firm’s Wealth Management financial advisors and staff over the course of the past year.

Source: Morgan Stanley

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