Robert Allen, president of FMX Futures Exchange

Having opened on 23 September, the FMX Futures Exchange is the first US interest rate futures exchange to launch with a fully operational, globally connected trading system, allowing for potential capital savings driven by clearing partner LCH’s cross-margin capabilities.

BGC Group and ten global investment banks and market-making firms announced a partnership in April 2024 to create FMX Holdings which includes the exchange, as well as a spot foreign exchange platform, and a US cash treasuries platform.

“We are pleased ION connected to the FMX Futures Exchange. The combination of the FMX Futures Exchange with LCH will provide clients with choice, innovative execution technology, and potentially significant cross-margin capabilities,” said Robert Allen, president of FMX Futures Exchange.

ION supports FMX across its cleared derivatives front-, middle-, and back-office platforms, allowing banks and brokers using ION’s technology stack to offer clients advanced execution capabilities and clearing services on the new exchange from day one.

Read more: Fireside Friday with… ION’s Edoardo Pacenti

“The joint effort with FMX Futures Exchange demonstrates once again the effectiveness of ION’s front-to-back product strategy: the powerful combination of modern, integrated solutions across execution and clearing removes the technical barriers often hindering market readiness and participation,” said Francesco Margini, chief product officer for cleared derivatives at ION Markets.

The post ION connects to FMX Futures Exchange to bolster execution and post-trade clearing appeared first on The TRADE.

Described as “the average positioning of IA member firms’ views”, the timeline put forward is one of the more aggressive, with most task forces and associations more on board with 2027.   

The IA did add however, that should one or more jurisdictions only be able to transition at a later date before the end of 2027, and can commit to this before the end of 2025, the others should move their transition date back to align.   

The trade body added In the event the UK opts to move to a T+1 security settlement cycle ahead of Europe, there should be a “safe-harbour” exemption on UK traded and settled exchange traded products – including ETFs, ETNs and ETCs – which should remain on a T+2 secondary market settlement cycle until the EU transitions, at which point the exemption should expire.   

Should the EU transition first, a similar “safe harbour” should apply. This should also apply to Eurobonds. 

“In the US, the 15 months set out in February 2023 for a May 2024 go-live was sufficient, with settlement rates achieved by the broader market being higher than prior to the transition,” the IA said in its paper.  

“Whilst the UK, EU and Swiss market infrastructure may be more complicated, it is our view that many of the lessons learnt, system upgrades and process changes that firms undertook for the US transition can be applied in a UK, EU and Swiss context, making T+1 transition achievable by Autumn 2026, 24 months from now.” 

The UK has all-but committed to 2027 now, with Europe’s top markets watchdog subsequently signalling its intentions for moving EU markets to a T+1 settlement cycle through a statement outlining both the urgency of acting and the preference for aligning with the UK and Switzerland. 

“In a period when jurisdictions are aiming to demonstrate and boost the competitiveness of their capital markets, the ecosystem’s ability to enact a fast but orderly transition to T+1 settlement is crucial,” the IA concluded. 

The paper outlines a range of considerations across the UK, EU and Switzerland. One other point was that there should be a recommendation, but not a regulatory requirement, to transition the mutual fund subscription and redemption settlement cycle to T+2 from the common T+3/4 in the UK and other popular EEA fund jurisdictions to coincide with the UK, EU and Swiss transition to T+1 in capital markets.

The post Asset management association pushes for Europe to switch to T+1 in 2026 appeared first on The TRADE.

The European Securities and Markets Authority (ESMA) acknowledged the benefits of reducing settlement times but highlighted how harmonisation, standardisation and modernisation will be needed and will require investments.

Harmonisation within Europe is a top regulatory priority at present as the continent looks to improve its competitiveness on the global stage. Subsequently, ESMA has concluded that in the context of needing an efficient and competitive market “it is urgent to act if the EU wants to avoid prolonging and amplifying the negative impacts of the misalignment with major jurisdictions internationally.”

ESMA noted that Europe would likely need to amend CSDR to mandate a harmonised shortening of the settlement cycle in the EU.

With regards to a timeline ESMA acknowledged the high level of interconnectedness between the EU capital markets and those in other jurisdictions in Europe, highlighting how a coordinated approach across Europe is “desirable”.

The regulator added that alongside other European groups, it considers it “necessary to accelerate every aspect of the technical work needed to pave the way to any future move to T+1 in the EU.” 

ESMA, in close coordination with national competent authorities, and sub-groups from the European Commission and European Central Bank, have therefore agreed to establish a governance structure, incorporating the EU financial industry, as soon as possible to oversee and support the technical preparations of any future move to T+1.  

“In order not to lose momentum, details of the governance structure will follow shortly. It will be important that this governance is inclusive and ensures balanced sectorial and geographical representation,” said ESMA in its statement.

ESMA’s public stance was revealed just a day after the European T+1 Industry Task Force voiced support for a co-ordinated move to T+1 in the EU, acknowledging the benefits of an aligned approach across the entire European region, including the EEA, the UK and Switzerland.   

The task force stated that this followed a range of views being expressed as to whether the date identified for the UK transition, H2 2027, could also be a feasible implementation date for the EU. 

The task force did, however, emphasise that depending on the exact definition of what regulatory, technical and operational changes will be required, a transition period of between 24 and 36 months will be required to accommodate the complexity of the market infrastructure in Europe.  

Established in 2023, the European T+1 Industry Task Force comprises of 21 trade associations involved in European capital markets, bringing together a range of industry stakeholders who would be impacted by a move to T+1 settlement for securities traded and settled in the EU.

The post All signs point towards Europe aligning T+1 move with UK and Switzerland appeared first on The TRADE.

In a new report, the task force stated that this followed a range of views being expressed as to whether the date identified for the UK transition, H2 2027, could also be a feasible implementation date for the EU.

Read more: Inside the UK’s blueprint for the move to T+1 settlement

The task force did, however, emphasise that depending on the exact definition of what regulatory, technical and operational changes will be required, a transition period of between 24 and 36 months will be required to accommodate the complexity of the market infrastructure in Europe.

“The task force is supportive of a move to T+1 in the EU, and recognises the potential benefits in terms of efficiency improvements and risk reduction,” said the task force in a report.

“It is clear that a move to T+1 would be a complex, multi-year undertaking, and requires the collaboration of all industry stakeholders to ensure that we do not introduce new risks or damage the existing efficiency, liquidity and functioning of EU securities markets.”

In the report, the task force also provided a range of further suggestions to ensure the industry can move to T+1 safely and efficiently, including a maximum possible notice period for transition.

For a successful transition, the task force highlighted that public authorities should consider a temporary suspension of cash penalties over the implementation period.

On the same topic, the group added that public authorities should avoid implementing complex changes to the CSDR cash penalty rules in advance of the transition to T+1.

Elsewhere, the task force stated that ESMA should consult as planned on “measures to reduce settlement fails” and make a determination as to whether further regulatory changes are necessary to support enhanced settlement efficiency, and which of these changes, if any, should be sequenced before a move to T+1.

Key findings also included that changes to the daily timetable for trading, clearing, settlement, and ancillary processes will be required to preserve current efficiencies.

In addition, pre-settlement matching was noted as being essential to identify and remediate potential issues as soon as possible.

Established in 2023, the European T+1 Industry Task Force comprises of 21 trade associations involved in European capital markets, bringing together a range of industry stakeholders who would be impacted by a move to T+1 settlement for securities traded and settled in the EU.

The post European T+1 Task Force acknowledges benefits of aligning with UK for transition in H2 2027 appeared first on The TRADE.

Andrew Douglas

In September the AST published its proposed recommendations for a transition to T+1 in the UK, calling for market feedback on its automation-heavy approach.

The report outlines 43 ‘principal recommendations’ and 14 ‘additional recommendations’ which are open for consultation from any and all participants in the UK equity market until the end of this month (October 2024).

Within the report are several ‘LEL’ markers – which Douglas interestingly revealed to a gathered roundtable this week is an acronym referring to ‘lessons learnt from the US’. 

Having the advantage of an example has been useful, agreed panellists, with support from the regulatory community pinpointed as a principal key to success across the board.

In addition, Douglas explained, moving second has allowed for a range of cautionary tales: “For example, FX wasn’t really considered in the US but we have a work group specifically looking at FX and what the impact on that would be, and we also had the advantage of seeing what the impact of T+1 has been on stock lending so we can be smart after the event and do things differently.”

The US’ shift is demonstrably helping to pave a way, identifying where things could be done differently.

Notably, Douglas highlighted the weight of advice from US Securities Exchange Commission chair Gary Gensler who advised that other regions should “pick a date and stick to it” – an approach the UK’s Taskforce is embracing seriously. 

Speaking to potential roadblocks for a UK shift, Thomas Hansen, vice-chair of the European repo and collateral committee at the International Capital Market Association (ICMA), said: “It’s a plumbing issue akin to the UK’s current problems with its water supply – the plumbing is old but [it has to be done], you have to start somewhere.” 

He added: “The industry as a whole has had to become more efficient in its settlement process, front-to-back but it’s been very different the way we’ve solved this in different segments of the market […] overall it’s a massive challenge and obviously not everyone is going to be positioned the same way.” 

Read more: UK settlement taskforce pencils in October 2027 for T+1 switch

Once the AST’s recommendations are finalised in December, the report states that it is expected that “the recommendations, and their compliance, will be treated as a post-trade code of conduct setting expectations of behaviour of all UK market participants and as such, could be used for supervisory purposes”.
 
When it comes to striking the right balance as to how many so-called ‘rules’ the market must adhere to, Douglas emphasised that the key issue lies in “over regulation versus over reliance on market practices”. 

In essence, when it comes to motivations to adhere, Douglas was succinct, explaining “if you don’t do these things, you won’t be fit for purpose”. 

Read more: Transition to T+1 ‘harder than expected’ finds Citi report

Despite major trepidation, the shift to T+1 in the US was largely hailed a success as the industry saw affirmation rates remain comfortably high and fail rates stay reasonably low.

This success has been largely pinned down to one key factor – the big push made by the industry to pre-emptively adapt workflows and future-proof processes, as well as the implementation of highly alert, round-the-clock ‘war rooms’ and ‘command centres’.

When asked about the notion of a safety net in the UK following the shift, the panel confirmed that there are no ‘press in case of emergency’ buttons available, and rather it will become a case of learning on the job, with those who prepare to fail bearing the brunt. 

“Markets are nimble, they do sort things out, they do find a way to function,” asserted Corinna Mitchell, General Counsel at Symphony.

The post Inside the UK’s blueprint for the move to T+1 settlement appeared first on The TRADE.

The report outlines 43 ‘principal recommendations’, covering critical post-trade activities that firms must be able to complete efficiently in a T+1 environment. They cover the areas of success criteria, settlement, FMIs, static data, corporate actions, securities financing and FX.  

There is also 14 ‘additional recommendations’, which assess environmental issues that need to be addressed if the UK is to maximise the efficiency gains that T+1 could deliver – but are not essential to successful implementation.  

The TBT stresses the need for automation ahead of the implementation process, urging market participants to begin automating as soon as possible, or begin working with outsourcing partners to digitise their processes.  

The report stated: “To prepare adequately, the market requires clarity and certainty. Clarity about what needs to be done at the level of the individual market participant and certainty about when it needs to be done. This document aims to address the former, whilst our final report at year end will provide the latter in the form of implementation dates per recommendation, typically no later than the end of 2025, 2026 or up to the actual transition date in 2027.” 

Andrew Douglas, chair of the T+1 Technical Group, said: “This interim report is a key milestone in the UK’s journey to T+1 settlement and I’d like to extend my gratitude to all those involved in crafting this report and providing the depth of industry expertise needed to shape these draft recommendations. 

“As an independent, inclusive working group, supported by the public authorities, I’m calling on all market participants to engage in this consultation so that together we can ensure the final recommendations for implementation reflect the full spectrum of industry needs.” 

The draft recommendations will be open for consultation with all participants in the UK equity market until 31 October 2024. 

Once finalised in December, the report states that it is expected that “the recommendations, and their compliance, will be treated as a Post-trade Code of Conduct setting expectations of behaviour of all UK market participants and as such, could be used for supervisory purposes”. 

A full copy of the report can be found here.  

The post UK T+1 taskforce publishes recommendations ahead of proposed 2027 switch appeared first on The TRADE.

The trading event of the year is set to return once again at The Savoy on 7 November, bringing together our industry for a glittering evening of celebration and jubilation.

Today we are announcing our survey awards, bestowed on the back of a record number of responses to the TRADE’s Algorithmic Trading and Execution Management Surveys for 2024.

Alongside these, The TRADE is excited to reveal the Editors’ Choice Awards for 2024, recognising excellence from all corners of the capital markets industry, including exchanges, trading venues, technology and data vendor services and more.

Buy-side, Industry Person of the Year and Innovation Awards will follow in the coming weeks.

A huge congratulations to all of our shortlisted nominees, see you in November! 

Algorithmic Trading Awards shortlists:

Best Trading Performance

Berenberg

BNP Paribas

Jefferies

Redburn Atlantic

Best Access to Market

Berenberg

BNP Paribas

Redburn Atlantic

Virtu Financial

Best Price Improvement Capabilities

Berenberg

BNP Paribas

Citi

Redburn Atlantic

Best Client Service

Berenberg

Jefferies

Redburn Atlantic

Stifel Europe

Best Dark Pool Capabilities

Berenberg

Jefferies

Redburn Atlantic

Virtu Financial

Best User Experience – Large Clients

Citi

Goldman Sachs

Morgan Stanley

UBS

Best Provider – Hedge Funds

BNP Paribas

Citi

Jefferies

RBC Capital Markets

Best Provider – Multi-User Clients

Citi

Goldman Sachs

Jefferies

Morgan Stanley

Best Provider – Large Clients

Citi

Goldman Sachs

JP Morgan

UBS

Execution Management Systems Awards shortlists:

Best Market Access

LSEG TORA

Instinet Newport

Neovest

Virtu Triton

Best Platform Reliability

LSEG TORA

Instinet Newport

Neovest

Virtu Triton

Best User Experience

LSEG TORA

Instinet Newport

Neovest

Virtu Triton

Best Multi-Asset Capabilities

FactSet’s Portware

LSEG TORA

Neovest

Virtu Triton

Best Provider – Large Clients

FactSet’s Portware

FlexTrade

Instinet Newport

Virtu Triton

Best Provider – UK & Europe

Charles River

FlexTrade

TS Imagine TradeSmart

Virtu Triton

Editors’ Choice Awards shortlists:

Outstanding Exchange Group

Cboe Europe

Deutsche Börse

London Stock Exchange Group (LSEG)

SIX Group

Outstanding Dark Trading Venue

Liquidnet

POSIT – Virtu Financial

SwissAtMid

Sigma X – Goldman Sachs

Outstanding Fixed Income Trading Venue

Bloomberg

ICE BondPoint

MarketAxess

Tradeweb

Outstanding FX Trading Venue

Bloomberg FXGO

FXall

LMAX Exchange 

SGX FX Systems

Outstanding Derivatives Trading Venue

Cboe Europe Derivatives (CEDX)

EBS UK MTF – CME Group

Eurex

Euronext

Block Trading Venue of the Year

BlockMatch – Instinet

Cboe BIDS Europe

Liquidnet

Luminex

Clearing House of the Year

Cboe Clear Europe

Euronext Clearing

ICE Clear Europe

LCH

TCA Provider of the Year

BestX

IHS Markit – S&P Global

ISS LiquidMetrix

Virtu Financial

Outstanding Market Data Services Provider – Equities

big xyt

Deutsche Börse Xetra

FactSet

LSEG Data & Analytics

Outstanding Market Data Services Provider – Fixed income

AxeTrading

BondCliQ

Neptune Networks

Tradefeedr

Outstanding Non-Bank Liquidity Provider

DRW

Hudson River Trading

Optiver

XTX Markets

Outstanding Trading Technology Provider

360T

Edgewater Markets

FlexTrade

Trading Technologies

Sell-Side Market Structure Excellence

Anish Puaar, head of European equity market structure, Optiver

Hayley McDowell, EU equity electronic sales trader and EU market structure consultant, RBC Capital Markets

John Fruen, head of EMEA market structure and liquidity strategy, UBS

Belinda Mar, equities, market structure and product development, Bank of America

The post The TRADE announces Leaders in Trading awards shortlists for London event appeared first on The TRADE.

Andrew Douglas

Speaking at the InvestOps Europe conference in London, Andrew Douglas, chair of the technical group, said that the dates were narrowed down via the process of elimination – excluding key public holiday, dividends and rebalancing dates.  

The technical group will be publishing its full report for a UK switch to T+1 later this week – which will include 59 recommendations across the settlement and investment value chain.  

Following the publication of that report, there will be a period of consultation until the end of the year, before the UK government is expected to formally adopt the proposals.  

Regarding potential alignment with Europe, Douglas explained that the ball is now in the court of the EU, with the UK now set on its course.  

“I want to reframe that dialogue [around the UK aligning with the EU],” said Douglas. “The UK has decided when it’s going to go. The choice now is with Europe and Switzerland to align with the UK – that is what we are waiting for. We’ll wait for the much-publicised report from ESMA, but I know their headspace is ‘how can we create a solution that would align with the UK?”. 

“I’m confident that things are heading in the right direction and heading towards convergence – but convergence is not a prerequisite for the UK to adopt T+1.” 

ESMA’s report is scheduled to be published by 17 January 2025, though that date could potentially be expedited, with a view to providing market participants with as much time as possible to prepare for its outcomes.  

On what potential misalignment would mean, Valentino Wotton, managing director and general manager of Institutional Trade Processing (ITP) at DTCC, said: “Misalignment when it comes to ETFs, funding, corporate actions, recall, will be painful. What’s very clear is that the entire industry, whichever segment you’re in, has that desire is for alignment. The mood does seem to be positive around trying to do that, but there’s complexities in Europe given the number of CSDs and CCPs involved.” 

The post UK settlement taskforce pencils in October 2027 for T+1 switch appeared first on The TRADE.

The transaction remains subject to closing conditions and is expected to complete in the fourth quarter.

Amongst the new technology acquired by LSEG is Axoni’s Veris network, a post-trade lifecycle and reconciliation management platform for equity swaps that launched in 2020.

Veris streamlines the post-trade data reconciliation process and prevents cash flow breaks by enabling counterparties to share data associated with equity swap deals, positions, trades, and related cash flows, Axoni said.

Following the transaction, LSEG will own and operate the Veris network after a transition period.

“This acquisition represents a significant step forward in our efforts to modernise OTC derivative post-trade infrastructure,” said Greg Schvey, chief executive at Axoni.

“In recent years, we’ve partnered closely with LSEG to develop our trade processing applications and are confident they are the right party to help realise its growth potential.”

The deal follows LSEG’s acquisition of Acadia in 2022 in a bid to build out its multi-asset post-trade capabilities. Acadia provides risk management, margining and collateral services for the uncleared derivatives markets. LSEG had held a minority stake in the firm since 2018.

In the same year, the exchange group also received regulatory approval for its Quantile acquisition, also building out its post-trade division.

The post LSEG acquires Axoni post-trade technology appeared first on The TRADE.

“Our inaugural New York-based event is set to take place on 19 November at Chelsea Piers and we couldn’t be more excited to be bringing the magic of Leaders in Trading over to the US for the first time in The TRADE’s 20-year history,” said The TRADE’s editor Annabel Smith.

Today we are announcing our survey awards, bestowed on the back of a record number of responses to the TRADE’s Algorithmic Trading, Execution Management and Outsourced Trading Surveys for 2024.

Alongside these, The TRADE is excited to reveal the Editors’ Choice Awards for 2024, recognising excellence from all corners of the capital markets industry, including exchanges, trading venues, technology and data vendor services and more.

So, without further a due, it gives The TRADE great pleasure to announce the following awards shortlists for Leaders in Trading New York 2024!

Algorithmic Trading Awards shortlists:

Best Trading Performance

Berenberg

Jefferies

RBC Capital Markets

UBS

Best Price Improvement Capabilities

BofA Securities

Liquidnet

RBC Capital Markets

Virtu Financial

Best Customer Support & Consulting

BofA Securities

Instinet

RBC Capital Markets

Virtu Financial

Best Dark Pool Capabilities

Goldman Sachs

Liquidnet

RBC Capital Markets

Virtu Financial

Best Provider – Large Clients

Jefferies

JP Morgan

Liquidnet

UBS

Best Provider – Multi-User Clients

Jefferies

JP Morgan

Morgan Stanley

UBS

Best Provider

BofA Securities

Goldman Sachs

RBC Capital Markets

Virtu Financial

Execution Management Systems Awards shortlists:

Best Market Access

FlexTrade

Instinet Newport

Neovest

Virtu Triton

Best Platform Reliability

FlexTrade

Instinet Newport

Neovest

Virtu Triton

Best User Experience

FlexTrade

Instinet Newport

Neovest

Virtu Triton

Best Product Adaptability

FlexTrade

Instinet Newport

Neovest

Virtu Triton

Best Multi-Asset Capabilities

Bloomberg

FlexTrade

Neovest

Virtu Triton

Best Provider – Large Clients

Bloomberg

Charles River

Instinet Newport

Virtu Triton

Outsourced Trading Awards shortlists:

Outsourced Trading Provider of the Year

CAPIS

JonesTrading

Meraki

StoneX

Coverage

CAPIS

JonesTrading

Meraki

StoneX

Execution

CAPIS

Marex

Meraki

StoneX

Operations and Post-Trade

CAPIS

JonesTrading

Marex

State Street

Client Service and Relationship Management

CAPIS

Marex

Meraki

StoneX

Editors’ Choice Awards shortlists:

Outstanding Exchange Group

Cboe Global Markets

Investors Exchange (IEX)

Intercontinental Exchange (ICE)

Nasdaq

Outstanding Fixed Income Trading Venue

Bloomberg

BrokerTec, CME Group

MarketAxess

Tradeweb Markets

Outstanding Futures and Options Trading Venue

Cboe Global Markets

CME Group

 Intercontinental Exchange (ICE)

Miami International Securities Exchange (MIAX)

Crossing Network of the Year

IntelligentCross

LeveL ATS

OneChronos

PureStream

Outstanding Post-Trade Services Provider

Baton Systems

Broadridge

S&P Global

The Depository Trust & Clearing Corporation (DTCC)

TCA Provider of the Year

Abel Noser Solutions

FactSet

OneTick

Virtu Financial

Outstanding Market Data Services Provider – Equities

BMLL

Exegy

FactSet

QUODD Financial

Outstanding Market Data Services Provider – Fixed Income

Bloomberg

ICE Data Services

MarketAxess

S&P Global Market Intelligence

Outstanding Innovation in Fixed Income

Bondway.ai

Investortools

OpenYield

Trumid

Outstanding Trading Technology Provider

Aladdin by BlackRock

Bloomberg

Charles River

SS&C Moxy

Sell-side Market Structure Excellence

Citi – Michael Masone, director and head of North America market structure

Jefferies – Anthony Pallone, managing director

Morgan Stanley – Sapna Patel, head of Americas market structure and liquidity strategy

Rosenblatt Securities – Justin Schack, managing director and partner

Agency Broker of the Year

BTIG

Cantor Fitzgerald

Instinet

Redburn Atlantic

Congratulations to all of our shortlisted nominees. Winners will be announced on 19 November at Leaders in Trading New York.

Please contact Patrick Wright at patrick.wright@thetradenews.com for sponsorship opportunities or to book a table for Leaders in Trading New York.

The post The TRADE announces Leaders in Trading New York awards shortlists appeared first on The TRADE.