Armando Diaz, chief executive of PureStream

The ATS claims to provide brokers and their institutional clients with improved bandwidth in order to access liquidity faster, more cost-effectively and with greater security.

At the time of the launch, PureStream claimed to enable institutional investors to execute up to 40 times faster without price impact on their portfolio implementations.

In Q3 2023, PureStream recorded 40,065,204 total trades up from 11,301,567 in the same period last year – marking a 254.51% increase year-on-year and showing significant promise for the ATS.

Two years since its go live date, The TRADE caught up with Armando Diaz, chief executive of PureStream, who noted that the electronification of equity markets has negatively impacted a trader’s ability to match directly with other institutional liquidity.

“When you think about the evolution, electronic trading originated as an aid to the trader – it wasn’t meant to replace people, it was an efficiency tool to automate the smaller orders,” highlighted Diaz.

“As a result of that, a mechanism for algorithms that complimented block trading was never created. There were no safe and efficient ways for an algorithm to indicate it has more or could do more. At PureStream, we invented the streaming block to address this gap, and improve direct matches between institutions that increase the bandwidth of liquidity transfer amongst liquidity seeking institutions.”

The ATS has gained support from across the street since its inception. In 2021, it received significant backing in a funding round led by Goldman Sachs, Nasdaq Ventures and Bank of America.

The funding was used to help support the launch of the ATS, while Nasdaq’s execution platform was later chosen to power the platform.

“We’ve all been used to sourcing on a point-in-time basis. PureStream has been one of the more disruptive ideas to the equities market structure that the market has seen in quite some time. The venue has helped to reduce signalling risk and drive better execution efficiency across our algos,” Pankil Patel, global head of electronic trading at Bank of America, told The TRADE.

“We were excited by the thought of how we could integrate this solution into our algos and ultimately what we thought would be a great improvement to the overall results of what we’re trying to achieve for our clients.”

PureStream uses percentage rate-based order types to match orders. The matched orders percentage rate is then applied to each of the stocks subsequent trade reported to the consolidated tape to create a stream of trades. This provides traders with an alternative to discovering prices purely from the national best bid and offer quote.

PureStream’s business model is described simply by the firm: Match with compatible liquidity. No selling data. No market makers. No payment for order flow.

“From an algo practitioner standpoint, we have leveraged this platform in a lot of different ways, across our different algorithms, to improve the performance for our clients,” added Bank of America’s Patel, speaking to The TRADE. “As it continues to grow, it becomes a source of liquidity that we’re finding other interesting ways to leverage.”

PureStream is exclusively available to broker dealers and does not connect directly with the buy-side. However, Diaz points out that “based on the orders that we’ve seen from our subscribers and our collective experience on the sell-side, we believe our order flow is from large institutional liquidity seekers.”

The largest use case of the platform is described by Diaz as a broker dealer algorithmic platform’s integrating streaming to improve their performance on their algo strategies that they provide the buy-side.

“Before streaming there was no way for algorithms with different strategies to match at the parent level,” added Diaz, speaking to The TRADE. “They’re each on a 1-way trip into the market and the market makers, and we are now creating a way or a language or a protocol where algorithms can match once, achieve their strategy better and never have to send any orders out because they’re in an open-ended batch with another algo.”

In terms of future expansion, the platform plans to explore the retail sphere with new order types and launches. While PureStream’s core service targets institutions, Diaz confirmed that retail investors are by no means excluded from its current offering. Institutions do, however, tend to be more able to meet the system’s high minimum order size requirement.

And given that retail orders and the continuous market today have unique market structure, streaming may not necessarily be a huge attraction for retail participants already able to get a price better than the national best bid and offer (NBBO).

“In the future, we will have order types that will address some of the pain points for retail trading,” Diaz emphasised. “Although institutional will always be our core, we would like to compete in that segment, or at least, have an opportunity for orders at PureStream to interact with retail orders. This would create a market that is more representative of all the market participants.”

The post PureStream: The disruptor venue determined to make waves in the institutional liquidity landscape appeared first on The TRADE.

CME Ventures, CTC Venture Capital, SC Ventures and Tribeca Early Stage Partners were additional investors in the funding round. Other major investors include Bain Capital Ventures, Barclays, DRW Venture Capital, HSBC, JP Morgan, NYCA Partners and Wells Fargo Strategic Capital.

The investment will be used to help accelerate the adoption of OpenFin OS across the financial industry. The software is currently used at more than 3,800 banks, wealth and asset management firms in over 60 countries.

Launched in 2021, OpenFin WorkSpace includes an app launcher, notification centre, universal search, an enterprise browser with default interoperability and app store capabilities – which help unify the end user experience across both internal and third-party apps, which the firm claims enhances productivity and reduces operational risk.

“OpenFin Workspace is empowering financial institutions to transform experience for their employees and their customers, replacing traditional browsers with an enterprise browser designed for work,” said Mazy Dar, chief executive of OpenFin. 

“We’re delighted to welcome Bank of America as our newest strategic investor and we’re grateful for the continued support from Pivot Investment Partners and so many other existing investors.”

This latest funding round follows a $10 million investment from ING Ventures, the venture capital arm of ING, in July last year.

“OpenFin provides the financial industry with a truly open workspace platform that is unrivalled when it comes to app distribution, security, interoperability, scale and governance,” said Dinkar Jetley, co-founder and managing partner at Pivot Investment Partners.

“We have backed OpenFin’s vision since 2015 and are delighted to support the company as they expand across the financial sector and beyond.”

The post Bank of America leads $35 million Series D funding round for OpenFin appeared first on The TRADE.

Bank of America promoted from within for two senior equities roles covering emerging markets and South Africa as part of efforts to build out its EMEA division. Neil McDermott was appointed as head of equities distribution for emerging markets after serving for 15 years with Bank of America, most recently as its head of Asia Pacific and emerging market equity distribution. Elsewhere, Alex Saffy was promoted to head of equities for South Africa, based in Johannesburg and reporting to McDermott. Saffy joined Bank of America two years ago from JP Morgan and was promoted to managing director in January.

Independent investment bank Raymond James added Rowley Aird to its global equity trading division. As part of the new role, Aird will help set up global trading from Europe, reporting to global heads in the US. Aird joined Raymond James from outsourced trading firm Tourmaline Partners, where he most recently served as managing director for Europe. Before that, he spent five years at CLSA, initially as head of electronic trading for Europe, before eventually becoming head of trading and execution services – a position he held for nearly four and a half years. Earlier in his career, Aird held an algo sales position at UBS for three years. Before joining UBS, he served as sales director and sales manager at Liquidnet and Bloomberg LP, respectively.

The post People Moves Monday: Your weekly update appeared first on The TRADE.

Goldman Sachs reported a $12.2 billion net revenue for the first quarter of 2023, a decline by 5% compared to the same period last year. The decrease in revenue compared to Q1 2022 reflected lower net revenues in Goldman Sachs’ global banking & markets division.

Fixed Income, Currency and Commodities (FICC) revenues came in at $3.9 billion, a decrease by 17% compared to the same quarter last year. Similarly, net revenues in equities declined to $3 billion, down 7% compared to Q1 2022. Elsewhere, Goldman Sachs’ investment banking fee income was down by just over a quarter (26%) compared to Q1 2022. 

Despite declines in revenue within Goldman Sachs’ global banking & markets division, chairman and chief executive officer, David Solomon, spoke positively about the quarter: “The events of the first quarter acted as another real-life stress test, demonstrating the resilience of Goldman Sachs and the nation’s largest financial institutions. We are operating from a position of strength and remain focused on executing our strategy to further grow our leading global banking & markets and asset & wealth management franchises.”

Bank of America had a more promising start to the year, reporting revenue of $26.3 billion, up 13% compared to the same period last year. Net income rose 15% to $8.2 billion compared to $7.1 billion in Q1 2022.

The bank’s global markets division reported a revenue of $5.6 billion, up 6% compared to the same period last year – which the bank attributed to higher sales and trading revenue, partially offset by lower investment banking fees. Net income within the division increased by 6% to $1.7 billion.

FICC revenues reached $3.4 billion, an increase by just over a quarter (27%) compared to the same period last year. However, equities revenue was less positive, decreasing by 19% to $1.6 billion, driven by weaker trading performance and lower client activity in derivatives and cash.

“Our results demonstrate how our company’s decade-long commitment to responsible growth helped to provide stability in changing economic environments,” said Brian Moynihan, chair and chief executive of Bank of America.

Elsewhere, Morgan Stanley reported net revenues of $14.5 billion for Q1 2023, down from $14.8 billion in the same period last year. Similarly, net income was down from $3.7 billion in Q1 2022 to $3 billion in Q1 2023.

Investment banking revenues at Morgan Stanley reached $1.2 billion, down by nearly a quarter (24%) from the same period last year. Equity net revenues also saw a decline, totalling $2.7 billion (down 14% compared to Q1 2022). The bank attributed the decrease in revenues to lower volumes and declines in global equity markets compared to a year ago.

The post Goldman Sachs, Bank of America and Morgan Stanley latest to report decline in equities appeared first on The TRADE.

The strategic investment follows a successful $200 million Series C funding round achieved by Genesis in February.

Genesis has been utilised by financial markets companies to accelerate the application development process, allowing for an increase in the pace of technology innovation alongside operating and upgrading complex legacy systems.

“Our clients and environment demand more innovation and productivity in terms of IT output,” said David Trepanier, head of structured products, global credit and special situations at Bank of America. 

“The low-code solution provided by Genesis accelerates the development process and allow us to more quickly build out and launch new trading protocols and processes.”

Financial services firms have made digital transformation a priority as they seek to differentiate themselves, reduce the cost and complexity of existing systems, innovate and to adapt better to changing regulation. 

Genesis is being used by firms across the software value chain to automate spreadsheet processes, enhance existing systems, replace legacy technology and to develop new, more robust, first-time applications.

“Our investment in and collaboration with Genesis allows us to create applications and solutions faster to meet the increasing demands of our clients,” said Avi Shua, CIO, head of investment management, wealth management and pershing technology at BNY Mellon. 

“The ability to develop, customise and integrate applications with speed is critical, and provides our developers a toolset to make robust and flexible platforms that can scale.”

Genesis has experienced significant growth over the past year, tripling its revenue and the size of its team in 2021. With increased interest from clients in adopting Genesis’ buy-to-build model for IT transformation, the firm’s growth is expected to continue this year.

“The Genesis platform is built for financial markets,” said Nikhil Joshi, North America head of markets technology at Citi. 

“The platform eliminates repetitive, non-differentiating work core to many financial industry applications, freeing developers to focus on innovative work and making technology departments more productive and more strategic.”  

The post Genesis Global receives backing from Bank of America, BNY Mellon and Citi through $20 million strategic investment appeared first on The TRADE.

Just 15% of investment firms are monitoring communication on the social media channel while just 9% monitor Slack and 3% monitor Signal, a Compliance Health Check report by SteelEye has found.

Around 40% of firms monitor incumbent platforms such as Teams and Bloomberg Chat, while only a quarter monitor Zoom.

“When it comes to email and desk phones – or traditional methods of communication – record keeping and supervision rules are relatively straightforward. The emergence of new communications channels like WhatsApp, and the vast volume of data they produce, have complicated manners,” SteelEye chief executive Matt Smith, told The TRADE.

“Post-pandemic, the rise of home and hybrid working has forced regulators to prioritise the growing problem of off-channel communication. Complicating things further, digital communications monitoring also brings with it the challenge of carefully balancing compliance and employee privacy.”

Bank of America became the latest major institution to be served with a $200 million fine from the Securities and Exchanges Commission (SEC) in the last few days relating to its use of “unapproved personal devices”, joining JP Morgan and Morgan Stanley who both also received multi-million-dollar fines from the regulator in the last week.

In light of this, over two thirds of firms now rank surveillance as one of their two main investment priorities for the coming year, SteelEye found, with 41% focusing specifically on communications surveillance as a priority.

Communication channels have increasingly come under the spotlight in recent years due to increased dependence on them during the global pandemic, which saw the industry forced into remote working conditions for prolonged periods.

“Monitoring off-channel communication will undoubtedly be a priority for both regulators and compliance teams in the coming years. Electronic communications channels are constantly changing, and new platforms pose a big risk to firms, as new places where unmonitored conversations between regulated representatives can take place,” added Smith.

“The regulator is already putting pressure on firms to prioritise communications surveillance. In the short term, we anticipate more fines for failures to monitor off-channel communications, and the impact will be felt beyond tier one banks. Smaller firms and asset managers must also be aware of the risks of communications surveillance gaps, and the fines that can be issued as a consequence.”

The post Firms are failing to effectively monitor communications as fines roll in, research finds appeared first on The TRADE.

The platform is for syndicated loans and collateralised loan obligations (CLOs), launching with the former originally with plans to add CLOs and credit products later down the line. It will offer straight through processing (STP) for trade booking and data and analytics provided by Moody’s.

Octaura was originally cooked up by Bank of America and Citi inspired by the pair’s eBidding platform and Instinct Loan Match Platform.

“Octaura was ideated, incubated, and executed through active collaboration with Citi’s traders to effectively build a solution that addresses the myriad challenges endemic to current market structures,” said Mickey Bhatia, head of global spread products at Citi.

Brian Bejile – formerly at Citi for almost two decades including as its global head of CLO issuer management – has been appointed as chief executive officer of the new entity.

The launch comes at a time of ongoing growth in the CLO and syndicated loans market, the institutions said, doubling in the last 10 years to $1 trillion and $1.4 trillion in outstanding notionals.

“With the launch of Octaura, we are proud to be moving our industry in a direction that will bring greater liquidity, efficiency and ultimately attract a broader investor base to the syndicated loan and structured credit markets,” said Brian Carosielli, co-head of global credit trading at Bank of America.

The post Major banks and analytics provider launch Octaura electronic trading platform appeared first on The TRADE.

Sources familiar with the matter informed The TRADE that Newton Investment Management has appointed buy-side veteran, Jason Reeve, in an unconfirmed title. Reeve joins Newton Investment Management from Sloane Robinson, where he spent 21 and a half years as a partner and head of trading. The appointment marks the second major buy-side move in the last weeks, following Millennium’s appointment of Staskus.

In an effort to aid the expansion of its ecosystem, FactSet has appointed Joel Kornblum to work with its partnerships and alliances team. Joining FactSet from BNY Mellon, Kornblum brings a wealth of experience across the end-to-end investment operational process to the role: including experience in investment data management, performance measurement and investment accounting.

Bank of America has appointed Robert Mackenzie Smith as vice president of electronic trading and market structure for its fixed income, currency and commodities (FICC) business. Smith joins Bank of America from Bloomberg, where he spent the last 10 months as a senior research analyst for financial market structure, based in New York.

Adding to the ongoing trend which has seen numerous senior figures entering the crypto space from the conventional markets, crypto financial services provider Babel Finance has appointed Yang Song as head of treasury. Song joins from Commerzbank, where he spent 12 years, most recently as vice president of treasury. The newly created treasury role is designed to help the company expand the scope of its services to more diverse client groups.

Following a successful $110 million Series D funding round, foreign exchange novation platform provider, Capitolis, confirmed that it has expanded its employee base by 50% compared to the same period last year. Capitolis has welcomed a number of major strategic recruits and notable promotions across its New York and Tel Aviv offices as part of its expansion. Among the additions, Lindsey Baptise was promoted to chief financial officer. Meanwhile, Leon Leviner joined the company as head of FX engineering, responsible for the delivery of the FX compression products. Elsewhere, Ben Townson joined the product team as vice president, head of product management for compression; Milos Marinkovic joins as vice president, engineering; Sofiane Nait-Saidi joined the Capitolis capital labs team as vice president, quantitative strategy; and finally, Stephen Fanale joined as algorithm team lead.

The post People Moves Monday – A busy week for the buy-side appeared first on The TRADE.

Robert Mackenzie Smith joined the bank in April to lead its market structure and electronic trading content for FICC, according to his social media page.

He joins from Bloomberg where he spent the last 10 months as a senior research analyst for financial market structure, based in New York.

Bank of America declined to comment on the move.

Previously in his career, he spent nearly nine years as a financial journalist across Risk Magazine and FX Week across various roles including US markets editor and US asset management editor. He began his financial career at NatWest in 2010 as an advisor.

The post Bank of America appoints new FICC e-trading and market structure lead appeared first on The TRADE.

Institutions have leveraged trading to offset market volatility caused by the Ukrainian conflict and the global pandemic combined with a slowdown in IPO and merger related activity, which many predicted would heavily impact revenues in the first quarter.

Wall Street had a sterling first quarter, with its leading players reporting better-than-expected results compared to Q4 on the back of increased trading activity. Goldman Sachs reported a 21% jump in FICC revenues on the year prior, Bank of America reported a 10% rise in equity revenues and Citi reported a huge 77% and 66% increase in fixed income and equities revenues in comparison with the fourth quarter.

Goldman Sachs reported revenues of $12.93 billion in the first three months of the year, down 27% on the first quarter last year due to losses in asset management and investment banking. However, the first quarter marked a 2% increase on the bank’s Q4 2021 results, driven by its global markets businesses, which accounted for 61% of its total revenues – 4% higher than the same period last year and notably 98% higher than the fourth quarter.

Equities generated $3.15 billion for Goldman – down 15% from the year prior – however it was ongoing market volatility exhibited in increased FICC revenues that proved to be the bank’s saving grace, generating $4.72 billion, up 21% from the same period last year, thanks to strong activity in currencies and commodities.

“It was a turbulent quarter dominated by the devastating invasion of Ukraine. The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill,” said David Solomon, chairman and chief executive officer at Goldman Sachs.

“Despite the environment, our results in the quarter show we continued to effectively support our clients and I am encouraged that our more resilient and diversified franchise can generate solid returns in uncertain markets.”

Morgan Stanley reported net revenues of $14.8 billion for the first quarter, compared with $15.7 billion in the same period last year. While investment banking revenues slumped 37% in comparison with last year, the bank saw a 10% increase on equity net revenues at $3.2 billion. Fixed income revenue totalled $2.9 billion, marking a marginal decrease.

“The quarter’s results affirm our sustainable business model is well positioned to drive growth over the long term,” said James P Gorman, chairman and chief executive officer at Morgan Stanley.

Trading revenues also seemed to carry Citigroup across the line after it also reported a drop in revenue of 2% to $19.19 billion in comparison with the first quarter of last year. This figure marks a 13% increase on revenues generated in the fourth quarter of last year.

Revenues from the bank’s institutional clients group, which includes both trading and investment banking, fell 2% year on year to $11.16 billion. However, in comparison with the fourth quarter it rose by 25%, driven by a 77% and 66% increase in fixed income and equities, which generated $4.3 and $1.5 billion respectively.

Citigroup also confirmed last week that it had set aside $1.9 billion for potential losses caused by its exposure to Russia and the Ukraine conflict.

“In markets, our traders navigated the environment quite well, aided by our mix, with strong gains in FX and commodities,” said Citi chief executive Jane Fraser. “However, the current macro backdrop impacted investment banking as we saw a contraction in capital market activity. This remains a key area of investment for us.”

Unlike its peers, Bank of America reported a 2% increase in total revenues to $23.2 billion, driven by net interest income which saw a 13% increase in the first quarter thanks to loans reaching pre-pandemic levels, strong deposit growth and investment of excess liquidity.

“Net interest income increased by $1.4 billion versus the year-ago quarter supported by strong loan and deposit growth. Going forward, and with the forward curve expectation of rising interest rates, we anticipate realising more of the benefit of our deposit franchise,” said BofA’s chief financial officer, Alastair Borthwick.

Sales and trading were down 7% to $4.7 billion at Bank of America, including Fixed Income Currencies and Commodities (FICC) revenue of $2.7 billion and equities revenue of $2 billion.

JP Morgan Chase & Co also reported losses in markets revenues, down 3% to $8.8 billion with equity revenue seeing a drop of 7% and fixed income seeing a drop of 1%.

The bank sunk $524 million worth of losses in Credit Adjustments & Other under its corporate and investment banking division driven by widened spreads and credit valuation adjustments relating to both increases in commodities exposures and markdowns of derivatives receivables from counterparties associated with Russia.

“We remain optimistic on the economy, at least for the short term – consumer and business balance sheets as well as consumer spending remain at healthy levels – but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine,” said Jamie Dimon, chairman and chief executive officer at JP Morgan.

The post Strong trading revenues see major banks squash predictions this earning season appeared first on The TRADE.