Paul Battams was named head of international equity trading at BlackRock following 23 years with the firm. He was most recently head of EMEA equity trading, overseeing a team of 14 traders covering the scope of equities and equity derivatives execution for the entirety of BlackRock’s investment teams. Prior to joining BlackRock as equity derivative trader in 2009, Battams was an equity trader at Barclays Global Investors for 11 years.

Following this, BlackRock appointed Nick Craze to take over from Battams as head of the EMEA equity trading desk.  Craze has been on the desk for more than 15 years and prior to this promotion oversaw the ‘model and derivatives group’ on the BlackRock EMEA equity desk since 2016. He will now manage the entire desk, made up of 14 traders, having previously managed a team of six. Craze joined the asset manager back in 2006, initially working in asset allocation and equity investments before becoming an equity trader.

Tourmaline Partners appointed Peter Murden as managing director – equity trading, as it seeks to further enhance its market reach, as revealed by The TRADE. In his new position, effective as of this month, Murden will be London-based and take on a client-facing role. Before the move to Tourmaline, Murden was a managing director at RBC Capital Markets and prior to this, spent 18 years at Redburn, most recently as a partner in equity trading, before departing following the Rothschild takeover in 2022. Murden has almost 30 years’ experience in the industry having worked several trading roles across the sell-side having begun his career at JP Morgan, then Flemings, back in 1994. His equity trading experience covers Asia, Europe, North America, and the UK.

Stephan Leithner has been appointed as the chief executive officer for Deutsche Börse, taking on the role from 1 October 2024. Leithner will take over the position from Theodor Weimer who has held the chief executive job since 2018. The two will operate as co-CEOs until the end of the year. Leithner has been a member of the executive board of Deutsche Börse AG since 2018, responsible for pre- & post-trading. Deutsche Borse said a decision on his succession will be made in due course. Weimer took over the chief executive role in 2018, moving over from his CEO position at HypoVereinsbank UniCredit Bank. During that time, he has overseen the acquisition of SimCorp and Axioma, among other initiatives such as a 10-year partnership with Google Cloud.

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Leithner will take over the position from Theodor Weimer who has held the CEO job since 2018. The two will operate as co-CEOs until the end of the year.

Leithner has been a member of the executive board of Deutsche Börse AG since 2018, responsible for pre- & post-trading. In the role he has been chairperson for Clearstream and covered Investment Management Solutions segment with ISS STOXX and SimCorp.

Deutsche Borse said a decision on his succession will be made in due course.

“I would like to thank the supervisory board for this vote of confidence and I am delighted to take on my new role,” said Leithner. “In recent years, we have successfully developed the business model and demonstrated the potential of this company and, in particular, its employees, who work in 56 locations around the world. The challenge now is to further realise this potential across the Group to shape the markets of the future.”

Weimer took over the CEO role in 2018, moving over from his CEO position at HypoVereinsbank UniCredit Bank.

During that time, he has overseen the acquisition of SimCorp and Axioma, among other initiatives such as a 10-year partnership with Google Cloud.

Martin Jetter, chairman of the supervisory board of Deutsche Börse AG, said: “Stephan Leithner is a proven and recognised expert in the capital markets to be CEO. He knows the global exchange landscape and understands the needs of our clients. In recent years, Stephan Leithner has played a significant role in the strategic development of the company. We are convinced that Stephan Leithner has all the prerequisites to continue Deutsche Börse’s successful development.”

Looking back on Theodor Weimer’s term of office, Jetter added: “In 2018, Theodor Weimer was faced with the challenge of leading Deutsche Börse out of a period of deep uncertainty. He and his team have accomplished this challenge with brilliance. The annualised growth in net revenue and EBITDA of 13 per cent during his term speaks for itself. Today, Deutsche Börse is once again a self-confident company that enjoys a high level of public trust. I would like to thank Theodor Weimer for leading Deutsche Börse to new strength.”

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Deutsche Börse entered into a binding agreement to acquire SimCorp in an all-cash public takeover in April, with the acquisition at the time expected to complete in Q3 2023.

SimCorp has been valued at $4.3 billion as part of the transaction. The minimum acceptance level is 50% plus one share of all SimCorp shares. SimCorp’s board of directors have previously unanimously recommended to shareholders that they accept the offer.

Once completed, Deutsche Börse has confirmed it will seek to have SimCorp shares removed from official listing on Nasdaq Copenhagen.

The company also plans to combine its existing data and analytics subsidiaries Qontigo and ISS. These are set to be grouped under a newly created investment management solutions segment.
 
Read more – SimCorp expands Dimension platform with Qontigo partnership

At the time the deal was announced, Theodor Weimer, chief executive of Deutsche Börse, said: “SimCorp A/S is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide.”

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The discussion delved into the key impacts of automation within fixed income, in particular, how it could shape the future role of traders themselves.

Among the panellists was Adrian Dacruz, vice president, strategic market development capital markets at Deutsche Börse who touched on the positive correlation between automated solutions and individuals being freed up to focus on higher value tasks, such as strategy and building client relationships – “working on managing the execution process rather than partaking in it”.

He added that, “Automation allows us to reduce the biases that exist in the investment sphere because of us as humans. Day to day behaviours, like herd behaviour, bias, and over confidence is reduced with an automated strategy. Humans act on emotion, but a system acts on what it’s told to do, which is a key factor.”

Andrew Kovacs, director of product management EMEA at Charles River Development agreed, suggesting that, “There is a need for technical expertise to evaluate the resulting trades that have been processed through this automation process”.

If everything is done manually, said Kovacs, “You have a very deep understanding of every trade you’ve actually executed as opposed to when you pass things through a machine. Looking for ways to improve or optimise the process on the trading desk requires new skills to make sure the quality of the trades remain high.”

He went on to say: “The skills that traders have today may not lend themselves particularly well to this exercise, so trade desks may have to bring in talent to complement the process.”

Other speakers included Lu Fu, managing director, head of eSales and digital transformation EMEA at Mizuho and James Bunting, global head of partnerships at Finsemble.

Interoperability is essential

The panel established that automation is a multi-faceted, dynamic problem to solve. A large portion of the discussion centred around interoperability, which the speakers agreed is vital to the future of the space.

Bunting said ensuring applications and services were working together cohesively was essential “even though they’ve never been designed to.”

For Fu, one of the most important considerations from a trading desk perspective was to ensure that users have a say in how they want their workspace to look and operate in order to increase efficiency.

“We need to upgrade the trading desk skill set in a way people feel comfortable in knowing how the systems work together now […] the majority of the time end-users struggle to see how systems interact. It’s a long journey and as Andrew pointed out a lot of time is [spent] training on the desk, and hiring more diverse types of talent on the desk to help with this,” Fu said.

Panellists also discussed what credit trade workflow could look like in the next two years, with Kovacs highlighting how the line between traders and PM roles is becoming increasingly blurred as the traders’ realm opens up.

“Years ago, traders had control over all the data related to trading activity, but now PMs have insight into a lot of information such as liquidity and pricing and they might use that to help inform their security selection process,” he noted. “Now more than ever, PMs are helping make decisions about which trades to automate” – a situation which he stated will only continue to be more prevalent as automation increases.

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The agreement specifically relates to Deutsche Börse and Clearstream’s recently co-developed new fixed income data service, Bond Liquidity Data.

Through this partnership, Overbond customers will be able to access settlement-level fixed-income transaction data derived from the 170 million transactions that Clearstream processes annually. This covers 60 domestic markets and includes 100 currencies.

With this move, Overbond AI plans to “generate a robust European fixed-income trading data set,” aimed at plugging the gap in the fixed income markets in Europe that continue to be challenges for traders.

Overbond uses six months of historical data to train its AI model. The firm said its combination with Clearstream transaction data would create “the most robust European AI training data set available for the benefit of a better informed fixed income in Europe”.

The fixed income markets have typically been heavily over the counter and manual in past years and for this reason the space lacks transparency. While Europe is on the cusp of implementing a consolidated tape for bonds, until regulators do so the industry remains reliant on data aggregation services such as these.

Vuk Magdelinic, chief executive of Overbond, said: “Complete and accurate data is a foundational tool for achieving consistent profitability in the bond markets. Incorporating Clearstream data into the training set for Overbond AI is a game-changer. It allows us to create a great tool for traders of European debt and enables them to automate up to 40% of their trades using Overbond.”

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To complete the deal, Deutsche Börse will launch an all-cash voluntary recommended public takeover offer for all SimCorp shares except for its treasury shares.

SimCorp has been valued at 3.9 billion euros ($4.3 billion) as part of the transaction that is expected to be completed by the third quarter of this year, subject to regulatory approvals and a minimum acceptance level of 50% plus one share of all SimCorp shares.

In a statement, the pair confirmed that SimCorp’s board of directors has already unanimously decided that it intends to recommend shareholders to accept the offer when published.

Once completed, Deutsche Börse has confirmed it will combine its existing data and analytics subsidiaries Qontigo and ISS, grouping them under a newly created investment management solutions segment.

The pair have an extensive existing partnership. In September 2021, SimCorp partnered with Qontigo to offer clients a portfolio optimisation, and risk management and modelling service via its buy-side front-to-back investment management system, SimCorp Dimension.

Read more – SimCorp expands Dimension platform with Qontigo partnership

“SimCorp A/S is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide,” said Theodor Weimer, chief executive officer at Deutsche Börse in a statement.

“Through our existing partnership we have come to know and appreciate the management of SimCorp A/S and the strategic transformation they have initiated, backed by a highly competent team of skilled employees. In addition to the SimCorp A/S transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase of our recurring revenues.”

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As part of the agreement, Deutsche Börse will utilise Google Cloud as its preferred partner for cloud consumption for the next 10 years, alongside receiving help from the platform to enhance its cloud adoption and efficiency.

Google Cloud’s infrastructure and data and analytics capabilities will be leveraged by Deutsche Börse to develop its digital securities platform D7, innovate its digital asset market operations, and enhance its data distribution and data use cases in the cloud.

“Innovation and technological advancements are at the core of Deutsche Börse Group’s DNA,” said Theodor Weimer, chief executive of Deutsche Börse.

“To trailblaze changing market environments and not only meet but anticipate customer demand, it is key to couple our financial services expertise with the technological prowess of a true market heavyweight. Our deep market infrastructure understanding, combined with Google Cloud’s technology expertise and scale, will drive tangible success for our business and broader financial markets.” 

The development of Deutsche Börse’s digital securities services platform, D7, will be accelerated through the partnership. Google Cloud’s scalable and secure infrastructure will underpin the D7 platform, with a data analytics layer powered by Google Cloud’s BigQuery and Analytics Hub, as well as Google’s data capabilities.

According to Deutsche Börse, its digital asset business will be innovated with an institutional-grade offering, including a digital assets business platform with a cloud-native market infrastructure, combining centralised and decentralised financial infrastructure to deliver crypto spot and derivatives products. These capabilities are expected to be expanded to additional asset classes over time.

A data mesh is also planned to be deployed by the two companies for Deutsche Börse’s various data distribution and data use cases in the cloud. The new platforms will be underpinned by Google Cloud’s infrastructure alongside its data and connectivity products.

Read more: LSEG to spend £2.3 billion on Microsoft cloud partnership as part of expansive 10-year deal with tech giant

“Exchanges sit at the epicenter of the financial ecosystem and have an increasingly important role to play to drive the future of market innovation and efficiencies,” said Thomas Kurian, chief executive of Google Cloud.

“Our partnership with Deutsche Börse Group underscores the wide range of opportunities and benefits that secure and reliable cloud technology, data analytics, and AI can have for all market participants.” 

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The transaction involves a bond with a volume of €20 million, a term of two years and a coupon of 2.381%. Deutsche Bank acted as lead manager for this transaction, and Hengeler Mueller as legal advisor.

Melanie Kehr, member of the executive board of KfW Group, said: “Digitalisation is a central component of our KfWplus strategy adopted in April. It is therefore remarkable that KfW’s treasury and transaction management have implemented this pioneering electronic transaction via the D7 platform. Innovation in the area of our refinancing is important to us in order to improve efficiency and reduce operating risks and transaction costs.”

Clearstream said it plans to enhance D7 with decentral capabilities and to offer it in further jurisdictions, including Luxembourg, in line with the respective regulations and market interest.

Jens Hachmeister, head of issuer services and new digital markets at Clearstream, added: “With the digital post-trading platform D7, we offer our clients a significantly quicker and scalable solution for securities issuance. Following the successful launch of our structured products offering, we are now enhancing D7 to include the digital issuance of debt securities, such as Frankfurt, 8 December 2022 Media Release Internal commercial papers and straight bonds.”

Earlier this month, Clearstream migrated asset manager DWS’s range of ETFs ad ETCs listed across 11 exchanges globally to an international issuance and settlement structure. 

In a statement, Clearstream said: “Regardless of whether a product issuer uses local CSDs or the centralised ICSD, seamless connectivity is crucial to the user experience, and Clearstream is proud to provide this system alongside our own domestic issuance models.”

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DTCC

Earlier this year, the Depository Trust & Clearing Corporation’s (DTCC) went live with its distributed ledger technology (DLT) based settlement platform in a parallel production environment, processing up to 160,000 transactions per day. Named Project Ion, the platform has been in the works since May 2020, with a view to support a netted T+0 settlement cycle, as well as T+2, T+1 and extended cycles.

Going live in parallel to existing settlement infrastructure, the project is processing an average of over 100,000 bilateral equity transactions per day, and almost 160,000 transactions on peak days. The Depository Trust Company’s (DTC) classic settlement systems remaining the authoritative record. Project ION has been developed in collaboration with the likes of BNY Mellon, Citi and JP Morgan.

Elsewhere, DTCC Institutional Trade Processing (ITP) provides an open, post-trade infrastructure that aims to remove redundancies and manual processing across asset classes in an effort to create a place where users can manage the entire trade lifecycle, from post-execution to settlement, on one platform.

Deutsche Börse

Deutsche Börse Group’s clearing houses, Eurex Clearing AG and European Commodity Clearing AG, act as central counterparties, i.e. as buyer to each seller and as seller to each buyer, to minimise credit default risk. The clearing houses offer efficient clearing of a wide range of transaction types, both on-exchange and over-the-counter (OTC).

Deutsche Börse recently acquired the North American Nodal Exchange by the EEX Group, adding a third clearing house, Nodal Clear, to its roster.

 Towards the end of last year, Deutsche Börse rolled out a major technology overhaul with the launch of digital post-trade platform. The fully digital post-trade platform provides same-day-issuance and paperless, automated straight-through processing for the entire value chain of issuance, custody, settlement, and asset servicing for digital securities.

Working with distributed ledger technology (DLT) specialist, Digital Asset, as a partner on the project, the German exchange group’s new initiative uses a cloud-backed and DLT-ready platform to enable the digitisation of financial products with continuing access to both existing central and distributed infrastructures and markets.  

Euronext

Euronext serves as the largest pan-European exchange and market infrastructure, connecting seven markets across the continent. The last year has proved fruitful for the exchange with surging trading volumes alongside a series of successful acquisitions.  

In August, Euronext reported a particularly ‘solid’ Q2 driven by the sustained dynamism of non-volume activities and of trading operations. The exchange reported a 14% increase in revenue and income in Q2 of this year, compared to the same period last year, which reached €374.7 million – driven by the growth of non-volume related business and trading activities.

Non-volume related revenue accounted for 59% of Euronext’s Q2 total revenue this year, while trading revenue grew to €129.2 million, a 15.6% increase compared to the same period last year – a result linked to robust performance across all asset classes in a volatile market environment. Growth was also driven by the recent Borsa Italiana acquisition, which also bumped up the exchange’s strong Q1 results.

Elsewhere, Euronext reported that net income, share of the parent company shareholders was up 37.2% to €118.9 million, an increase by €32.2 million compared to the same period last year.

LCH

Global clearing house LCH, which is part of the post-trade division of London Stock Exchange Group (LSEG), has had an impressive year with several revenue increases across its business. LCH continues to partner with market participants globally to offer clearing services and provide risk management capabilities across a range of asset classes, including OTC and listed interest rates, fixed income, FX, CDS, equities and commodities.

The clearing house has helped reduce systemic risk and strengthen stability in financial markets alongside allowing participants to benefit from capital and operational efficiencies. In 2021, LSEG post-trade experienced improved revenue figures, with total income rising to £483 million, which was an increase by 8.5% compared to 2022. This comprised of £191m for OTC derivatives; £122m for securities and repo; £49m for non-cash collateral and £121m for net trade income (NTI). Elsewhere, LCH has seen growth across its services and record clearing activity in H1 2022.

OSTTRA

OSTTRA was formed in 2021 through the combination of four businesses that have been involved in the post-trade for over 20 years, namely MarkitServ, Traiana, TriOptima and Reset. The combination of these businesses allows OSTTRA to play a role in supporting global financial markets, connecting thousands of counterparties via its multi-asset networks that support the post-trade lifecycle from trade capture, through portfolio optimisation, to clearing and settlement services.

OSTTRA boasts over 9,000 connections on its network, including major banks, investment managers and clearing houses. The firm processes over 80 million trades monthly, including matching, confirming and booking transactions, managing credit limits and reconciling portfolios. Every second, OSTTRA performs over 10 trillion calculations, optimising counterparty risk, margin and capital efficiency.

As a company, OSTTRA looks to keep pace with market reforms. Through ongoing dialogue with regulators and market participants, OSTTRA responds to new regulatory mandates with standardised solutions and workflows that minimise costs and compliance risks for its customers. 

Elsewhere, to manage market volatility, OSTTRA continually works with its client base to automate and streamline new steps in post trade workflows to improve efficiency and reduce operational risk during peak market volumes. 

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Deutsche Börse Group has invested $3 million into Caplight Technologies, a platform designed to enable institutional investors to hedge, generate income or take long and short positions on private company stock using structured products and synthetics.

The company, founded by Javier Avalos and Justin Moore in 2021, aims to bring public equity market-like transaction data, execution, and settlement mechanics to the private markets, thus allowing many large institutional investors to access the private markets for the first time.  

Venture capital-backed private companies represent over $3.8 trillion in value across over 1,000 companies, according to CB Insights. Caplight’s platform offers investors the ability to make long and short directional investments on Venture-backed private company stock using proprietary financial products and unique price discovery tools. Investors utilise the Caplight platform for the purpose of hedging, income generation, shorting, or investment strategies on private company stock. 

“Until now, the VC asset class has existed ‘long only’, meaning no ability to hedge or make directional investments. Caplight gives investors the tools to actively manage their risk across illiquid assets. We’re incredibly excited to be turning the hedging of private company stock into a product,” said CEO Avalos.  

Earlier this year, Caplight completed the first ever call option on private company stock, and is currently working on plans to explore collaboration opportunities with global derivatives exchange Eurex, a wholly owned subsidiary of Deutsche Börse, to bring structured pre-IPO investment products to the global financial markets. 

The latest raise from Deutsche Börse brings Caplight’s funding to $10 million, including a $5 million seed round led by Better Tomorrow Ventures that was completed in January 2022. Other investors include Fin Capital, Susquehanna Private Equity Investments, LLLP, and Clocktower Ventures. 

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