Nicholas Cunningham has been appointed as a senior banker in ECM. He will be focused on the industrial sector and financials sponsors.

Elsewhere, Ashish Sanghrajka has joined Soc Gen as senior banker in ECM, focused on healthcare and Thomas Feuerstein has relocated from the bank’s Parisian arm as senior banker in ECM focused on technology.

In addition to his sector focus, Feuerstein will also work to enhance connectivity for the bank’s European clients into the US equity capital markets, the memo confirmed.

David Getzler will remain in his current role as head of ECM US.

Cunningham, Sanghrajka, Feuerstein and Getzler will report to Jeff Mortara who joined Soc Gen in May from UBS as its global co-head of equity capital markets.

“Societe Generale Americas continues to enhance its equity value chain, combining top-tier equity research provided by Bernstein with industry leading execution, equity derivatives, prime brokerage and now, a considerably strengthened ECM capability,” said the memo.

“This offering provides our corporate, sponsors and private clients with important market insights and access to a broad range of equity, equity linked and derivatives markets.”

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Also appointed to join the rates trading team at Citi are Fiachra Harnett and Michele Beretta who join as a director and vice president respectively. In the US, Yun Zhou was appointed managing director in interest rate options trading based in New York. Zhou joins from Brevan Howard after a previous stint at Morgan Stanley in an interest rate trading focused role.

Societe Generale appointed Jeffrey Mortara as global co-head of equity capital markets, joining Luis Vas Pinto in leading the bank’s ECM objectives. Mortara joined from UBS, where he previously served as global co-head of equity capital markets, leading a team of equity and equity-linked individuals in the US, Europe and Asia. Before UBS, Mortara served at Deutsche Bank, where he built out the bank’s ECM practice in technology, media and telecoms (TMT) and financial institutions. While at Deutsche Bank, he also served as head of TMT banking, both in Silicon Valley and in Europe, based in London.

Dan Monckton, former EMEA head of program and electronic trading at Credit Suisse, joined Cantor Fitzgerald as co-head of EMEA electronic execution services. Prior to the move, Monckton spent two decades at Credit Suisse in a range of program trading related senior positions. His expertise includes managing algo, DMA and low latency cash and derivatives businesses as well as driving client coverage and product development. In his most recent position, he managed a total headcount of 30, including five managing directors, across four countries. Before this, he spent five and a half years at Morgan Stanley, working in program trading sales.

Former head of Asia Pacific at FactSet Research Systems, Vin Bhat, was appointed senior vice president and head of APAC at Charles River Development (CRD), a State Street company. In his new role, Bhat will be responsible for collaboration with front-to-back asset serving platform, State Street Alpha, as well as overseeing all business in the region. Prior to joining CRD, Bhat worked in various senior positions over 25 years, focused on sales, consulting, and engineering. Before joining FactSet, he spent a decade at Tata Consultancy Services.

Wematch.live appointed Grant Davies head of equities sales for the EMEA region, effective as of 15 May. Davies brings over two decades experience in securities finance to the firm, having held various leadership positions at EquiLend, JP Morgan and BlackRock. His expertise ranges across collateral management, ETF capital markets, securities lending, and total return swaps (TRS). Within the TRS space, Davies served as head of business development at Sunrise’s Matchbox, where he played a key role in launching and expanding the equity TRS platform.

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Based in New York, Mortara will report to Carl Bassili and Bruno Magnouat, co-heads of Societe Generale’s investment banking division within global banking and advisory, and regionally to Guido van Hauwermeiren, head of global bank and advisory for the Americas.

Mortara joins from UBS, where he previously served as global co-head of equity capital markets, leading a team of equity and equity-linked individuals in the US, Europe and Asia.

Before UBS, Mortara served at Deutsche Bank, where he built out the bank’s ECM practice in technology, media and telecoms (TMT) and financial institutions.

While at Deutsche Bank, he also served as head of TMT banking, both in Silicon Valley and in Europe, based London.

“Jeffrey’s appointment comes at an especially opportune time for Societe Generale following the launch of Bernstein and its top-ranked equity research and distribution capabilities which together with Societe Generale’s own strengths creates a powerful and fully integrated equities platform for our clients.” said Anne-Christine Champion, co-head of global banking and investor solutions.  

Read more: The new kid on the block – a closer look at ‘Bernstein’

“Together with their teams, Jeffrey and Luis will offer our clients a deeper and broader scope of equity capital markets advisory, leaning on our strong European footprint.”

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The new JV is set to enable Societe Generale to offer clients a suite of global services across the equities value-chain, ranging from equity and macro research to agency execution, equity derivatives, prime brokerage and equity capital markets offerings.

“With high-quality research on over 1,000 stocks, Bernstein is a pure-play provider of trusted research and execution that helps investors generate insight, alpha and exceptional value for their clients around the world,” explained Hatem Mustapha, co-head of global markets activities at Societe Generale in a social media post last week. 

The team

The JV, first reported back in November 2022, is set to operate across 16 countries, with key hubs in: Hong Kong, London, Mumbai, New York, and Paris. Due to the global scale, the new entity has understandably led to a rejig of the operational set up at Societe Generale and AllianceBernstein only where there was a duplication of offerings.

Read more: AllianceBernstein and Societe Generale to partner on cash equities push

Combining these two entities across Europe meant that potentially hard decisions were on the table when it came to bringing the similar platforms and offerings together.

This combination was a particular focus when it came to research and trading, and primarily the case for the UK team, The TRADE understands. However, on the trading side disruption was reportedly minimal. 

The JV now has one unique trading team covering both high touch and low touch per region – in the US, Europe, and Asia, respectively.

In the US, most of this team hails from Alliance Bernstein, The TRADE has learnt, whilst in Asia and in Europe the teams are a 50/50 split of both Societe Generale and Alliance Bernstein’s existing teams.

In a joint announcement earlier this month, the two firms stated that the ultimate objective is for Societe Generale to eventually own 100% of both entities after five years with AllianceBernstein exiting – an arrangement which had been on the table since day one, The TRADE understands. 

Senior executives for the JV have already been announced, with previous chief executive of Bernstein Research Services, Robert van Brugge, having been named chief executive of Bernstein and Stephane Loiseau, previously head of Societe Generale’s cash equities business, appointed deputy chief executive.

The priorities

Speaking to The TRADE about the main focus for the JV going forward, Loiseau says that from Bernstein’s perspective, the priority is equity prime brokerage.

“It is definitely the biggest wallet in equities. When you look at the global picture, cash equities is a small sliver in comparison and currently the two are connected so now we’ll finally be in a position where we can build that as a product globally.”

Loiseau added that the joint venture provides the opportunity to be relevant globally and across the bigger sway of the equity chain.

“Societe Generale has obviously very strong expertise in derivatives. So, once you put these two things together (research and cash equities with equity derivatives and prime services) you have the scope and expertise to offer world class content (e.g. research) and a leading global trading platform.”

Read more: When it comes to desk set-ups, buy-siders are readjusting how derivatives fit in

The combination of the two offerings poses an important question as to the migration of the back office and trading systems.

Quant trading and algos are the key focus for the new entity going forward, The TRADE understands. Bernstein’s setup is based on Societe Generale providing clearing and settlement services, however, both firms’ trading systems are set to be kept in place for the time being.

A review process is expected over the coming months and years.

“Certainly, operating two trading platforms is not necessarily the best from a cost perspective. But, with this approach, we’ll be able to do that with full knowledge about the advantages and disadvantages of each platform […] We feel that keeping the two IT stacks was the best option to minimise disruption for clients,” explains Loiseau.

In terms of the JV’s technological focus for the time being, algos are the key focal point. Bernstein is aiming to grow their footprint and reportedly plans are in place to launch two algo stacks in the next couple of months.

Furthermore, Loiseau tells The TRADE that one of the key strategic differentiators for Bernstein will be from the quant trading perspective. The firms intend to leverage their newly combined large team of quants and developers – “we’re much more relevant than each entity was separately”.

The clientele

While AllianceBernstein and Societe Generale had a previously extensive overlap in their offerings , when it comes to client-base, there is notably much less commonality between the two businesses.

While AllianceBernstein typically services long-only traditional funds, Societe Generale’s client base has historically focused more on the quantitative and hedge fund type firm. 

Speaking to the geographical reach, Loiseau shares that during the analysis stage, the firms did not see client overlaps in the same geography with some instances demonstrating that Societe Generale did European business with one client while AllianceBernstein covered the US and Asian business already: “We didn’t see a great deal of overlap from the client perspective and weren’t really sharing clients on the same product.” 

When it comes to the global footprint, geographically, the key areas of focus for expansion are Asia, The Middle East and North Africa, The TRADE understands.

Read more: AllianceBernstein becomes latest buy-side to set up shop in the Dubai International Financial Centre

“The two client bases are very complementary in terms of where we want to grow. First and foremost, it is about making sure that we cross sell to these various client bases,” concluded Loiseau.

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Val Wotton

The introduction of CTM’s new workflow aims to streamline trade communications among hedge funds, prime brokers and executing brokers. By integrating CTM’s tri-party matching functionalities, the platform standardises and automates the delivery of hedge fund trade files, supporting real-time communication of trade details and fostering smooth trade processing flows.

“Right from the start we were excited to be part of the initiative. CTM’s tri-party matching workflow provides a much-needed solution in the prime brokerage space that improves post-trade processing workflows,” said Andrew Daponte at Societe Generale.

“The service integrates CTM into the prime broker environment, which increases efficiency, capacity and the client experience on the platform.”

The new workflow utilises CTM’s automated central matching functionality to furnish prime brokers with a definitive record of transaction details upon a trade match between a hedge fund and an executing broker, introducing real-time standardisation and automation to the trade allocation process.

Other key features include synchronising automation of the trade communication to all prime brokers, automating real-time trade notifications, identifying prime broker recipients via a golden source SSI database, and enhancing transactions in CTM with ALERT SSIs, promoting increased settlement instruction transparency. Additionally, the workflow provides a golden trade copy that has been pre-matched by the hedge fund and executing broker.

Val Wotton, managing director and general manager of DTCC institutional trade processing, said: “It is exciting to see Societe Generale’s adoption of CTM tri-party workflow capabilities, a critical enabler of accelerating settlement as it automates the communication of golden trade copy to prime brokers as soon as a match between the hedge fund and executing broker takes place within the CTM platform.”

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Named Bernstein, the move follows the original announcement to form the joint venture in November 2022.

Read more – AllianceBernstein and Societe Generale to partner on cash equities push

Bernstein will provide institutional investors, corporates and financial institutions with investment insights into North America, European and Asia Pacific equity markets, alongside liquidity access and global trading technology.

The joint venture will enable Societe Generale to offer its clients a suite of global services across the equities value-chain, ranging from equity and macro research to agency execution, equity derivatives, prime brokerage and equity capital markets offerings.

With over 750 employees serving clients worldwide, Bernstein is organised under two separate legal vehicles with a head office in New York which will cover North America, as well as a head office in London, covering Europe and Asia. This will also be complemented by major hubs in Paris and Hong Kong, and various regional offices.

In a joint statement the two firms stated that the ultimate objective is for Societe Generale to eventually own 100% of both entities after five years.

“With Bernstein, a new leader is emerging in cash equities,” said Slawomir Krupa, chief executive of Societe Generale.

“This joint venture illustrates Societe Generale’s capability to develop innovative pathways to further expand our client offering as we increase our value proposition for the benefit of our investor and issuer clients, leverage synergies within our Group, and grow our revenues sustainably.”

Previous chief executive of Bernstein Research Services, Robert van Brugge, has been appointed chief executive of Bernstein.

Elsewhere, Stephane Loiseau, previously head of Societe Generale’s cash equities business, has been appointed deputy CEO of Bernstein.

“Bernstein’s mission has a foundation rooted in servicing clients with best-in-class research and insights,” said Seth Bernstein, chief executive of AllianceBernstein.

“Through this joint venture, Bernstein can continue to build out a cash equities and research business that seeks to set the standard for delivering global investment expertise and an even stronger set of products and services for global clients.”

The closing of the transaction has been approved by the relevant regulatory and antitrust authorities.

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The financial services provider has retired the PAREL brand – which was a fully owned subsidiary of Societe Generale offering clearing services – and created a ‘one-stop-shop’ through SGSS. 

By hosting the service through a single entity, SGSS is looking to boost its service to financial intermediaries and boost its position against rivals in the space such as BNP Paribas, Citi and BNY Mellon Pershing.

The harmonised offering will provide clients access to eight CCPs in Europe, settlement in the same value chain, global settlement leveraging on SGSS’ technology on settlement and global access to 85 markets. The firm said the markets are mostly European, but SGSS can offer clients access to across the world through its network of sub-custodians. 

“It’s part of our global transformation, to be far more efficient and integrated,” said Gildas Le Treut, global head of coverage at Societe Generale Securities Services, speaking with The TRADE’s sister title, Global Custodian. “And now we’re re-entering into the space of servicing large financial intermediaries that went through severe consolidation post-Mifid. They now need to rely on larger service providers that have critical mass, very efficient processes and access to multiple markets, in addition to a strong balance sheet.”

In addition, SGSS has enhanced its risk model to offer optimised collateral management to help them cover the margins from the CCPs, plus collateral for back-to-back settlement.

“Intermediaries that are trading with large counterparties with sound credit rating will benefit from a reduced collateral number,” added Le Treut. “So we optimise not only the collateral at CCPs, but also the settlement based on counterparty risk. And I think that’s quite unique. That’s what has been told to us and we will never try to compete just on the collateral numbers, but we want to secure the overall risk of our service. We consider that clients that trade with sound counterparties will benefit from this specific model.”

The process has taken a year to reintegrate SGSS’s existing clients and the asset servicer will now be pushing the offering out to prospective new clients in 2024.

Steve Gutowski, head of financial intermediaries and banks coverage, SGSS, said: “The single point of contact is the overriding benefit versus having two points of entry from a client into the organisation.

“If I look at a client who historically required clearing, settlement and custody services, they would have a relationship with Parel contract, fee schedule, client service groups, technology integration, and then they also would have an equivalent on the custody side of our business.

“Now, the harmonised offering means that you go into one entity, one technological setup, one contract, one pricing, one client service team, and then be able to leverage that single point of entry. By having one approach versus different technology setups, differing operating models, we ourselves are able to offer economies of scale and realise synergies.”

SGSS has certainly been proactive in its service approach over the past year, seemingly shifting back onto the front foot through a new transformation plan. Le Treut explained this to Global Custodian in August 2023, pointing to consolidation of the post-trading activities, alongside aggressive growth ambitions for its private markets segment and a strong focus on asset manager and asset owner client segments. 

The new-look Clearing to Custody solution is a major part of these plans as SGSS bids to enable clients to realise operational efficiency, reduce costs, manage risk and avoid the complexity of regulation, Gutowski added.

“The trading desk now must be looking at post-trade – post-CSDR with T+1 on the horizon – as a cost to them. And because of these kinds of regulations, I’m seeing that trading desks are more interested in who back-offices are using as the providers,” he continued.

“Therefore, by having another strong alternative in this space, that does demonstrate that our commitment to the market in this space and we’re seeing interest from clients because we are another voice.”

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Societe Generale – FORGE’s CoinVertible (EURCV) stablecoins were used as part of the transaction, which is an effort from AXA IM and Societe Generale to adapt to technological developments to benefit their client base.

This initiative was carried out in two phases. Firstly, AXA IM, on behalf of AXA France, purchased €5 million of CoinVertible stablecoins (EURCV) from Societe Generale – FORGE, a digital asset deployed on the Ethereum public blockchain, pegged to the Euro.

A €5 million investment was then made by AXA IM in a green bond issued by Societe Generale in the form of security tokens on the Ethereum public blockchain, using the acquired CoinVertible (EURCV) stablecoins.

The green bond provides access to the reporting on carbon footprint impact of the security issuance chain infrastructure.

“Following our previous experiments with blockchain technology, we are delighted to have successfully completed our first market transaction using stablecoins,” said Laurence Arnold, head of innovation and strategic initiatives at AXA IM.

“The aim of this initiative, carried out in collaboration with Societe Generale – FORGE, was to enable us to experiment with the use of a stablecoin as a settlement asset to purchase a digital bond. Our ultimate objective is to optimise our existing processes by adopting the most advanced technologies, so we can offer the best possible services to our clients.”

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The two leading US capital markets watchdogs have come down on almost a dozen organisations over recordkeeping failures with their combined penalties totalling nearly $550 million.

The SEC has charged 11 Wall Street firms $289 million for widespread recordkeeping failures, while in a parallel case, the CFTC has issued orders to four bank-affiliated swap dealers and/or futures commission merchants (FCMs), totalling $260 million.

The SEC handed out a range of penalties: $125 million to Wells Fargo, Wells Fargo Clearing Services, and Wells Fargo Advisors Financial Network; $35 million to BNP Paribas Securities and SG Americas; $25 million to BMO Capital Markets and Mizuho Securities USA; $15 million to Houlihan Lokey Capital; $10 million to Moelis & Company and Wedbush Securities; and $9 million to SMBC Nikko Securities America.

All 11 firms had been found to have been using longstanding “off-channel” communications following an investigation by the SEC.

The SEC specifically highlighted electronic communications and the widespread and longstanding failures by firms and their employees to maintain and preserve these.

Gurbir Grewal, director of the SEC’s division of enforcement underscored the lessons that must be learnt from the action, highlighting that the commission has now brought 30 enforcement actions and fined more than $1.5 billion to date.

“While some broker-dealers and investment advisers have heeded this message, self-reported violations, or improved internal policies and procedures, today’s actions remind us that many still have not. So here are three takeaways for those firms who haven’t yet done so: self-report, cooperate and remediate. If you adopt that playbook, you’ll have a better outcome than if you wait for us to come calling,” he advised.

All firms admitted wrongdoing, confirming the facts set out in the SEC orders and acknowledged their violations of the recordkeeping provisions of the federal securities laws. A statement from the SEC confirmed that improvements have already begun to be implemented in the firm’s respective compliance policies and procedures.

In addition to recordkeeping faults, the CFTC also highlighted supervision failures related to the widespread use of unapproved communication methods.

The regulator has landed BNP, Société Générale and Wells Fargo with $75 million penalties each, while the Bank of Montreal has been handed a lesser $35 million.

Additionally, the CFTC has also confirmed that the settlements also require an admission of wrongdoing from the banks.

Ian McGinley, director of enforcement at CFTC, said: “With today’s actions, the CFTC has now brought enforcement actions against 18 financial institutions, and imposed over $1 billion in penalties, for violations of the CFTC’s recordkeeping and supervision requirements involving the use of unapproved communication methods. 

“The Commission’s message could not be more clear—recordkeeping and supervision requirements are fundamental, and registrants that fail to comply with these core regulatory obligations do so at their own peril.”

The CFTC order found that over a period of years, the firms failed to stop employees – including at the senior level – from communicating using unapproved methods, including via WhatsApp.

In a statement, the CFTC explained that as the written communications were on the whole not maintained and preserved by the firms, they would not have been able to provide them to the CFTC promptly upon request.

Earlier today, Christy Goldsmith Romero, the CFTC Commissioner released a statement in which she strongly backed the ruling and emphasised a zero-tolerance approach: “[…] Wall Street institutions do not get to keep regulators in the dark while enjoying all of the benefits of being a regulated entity in U.S. financial markets.  Those choosing to participate in U.S. financial markets are on notice—The era of evasive communications practices is over.

“The CFTC will hold you accountable. It’s time for Wall Street to stop waiting for an enforcement action before it changes its practices.  Tone at the top must change on Wall Street.  Change can only happen if the banks’ C-suite establishes a culture of compliance over evasion.”

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Euronext has appointed Roberto Pecora as chief executive officer and general manager of its clearing house, effective from 3 July.

Pecora joins the firm from Société Générale Group, where he most recently served as chief executive and general manager of SGSS SpA, the Italian bank specialising in securities services, and member of the global executive committee of the SGSS division.

He brings broad international experience in financial markets, having held various managerial positions in securities services, global markets, and passive and alternative asset management.

As part of the new role, Pecora will be based in Rome. He replaces Marco Polito who, following the general assembly on 27 April, stepped down from his position as chief executive of multi-asset clearing house CC&G, which Euronext acquired through its takeover of Borsa Italiana. Polito will now pursue other professional projects.

“I am delighted to join Euronext Clearing at a turning point in its European expansion,” said Pecora. 

“I look forward to supporting Euronext Growth for Impact 2024 strategy within Euronext’s post-trade leadership team to further enhance the strong relationship with the Italian ecosystem and create a European leader in clearing services.”

Pecora will oversee the day-to-day management of the central clearing counterparty (CCP), including engagement with regulators and with clearing members.

In addition, as a member of Euronext’s post-trade leadership team led by Anthony Attia, global head of primary markets and post-trade, Pecora will be in the forefront of the Euronext Clearing’s European expansion plan.

The expansion of Euronext Clearing to all Euronext markets, initially with equities from Q4, will bolster the single and multi-asset clearinghouse for all Euronext markets – the exchange operator said – while also improving efficiencies for clients.

“I’m happy to welcome Roberto Pecora as CEO and general manager of Euronext Clearing. As Euronext Clearing expansion is progressing according to plan, by 2024 we will offer a unique post trade platform in the European landscape,” said Attia.

“On behalf of the board of Euronext Clearing and of our chairman, Renato Tarantola, I would like to thank Marco Polito for his significant contribution to the development of CC&G and for his commitment to the Euronext Clearing ambition since the beginning of the migration project. Together with Roberto, we will continue focusing on delivering the best services to our clients and to grow the Euronext clearing business in Italy and all over Europe.”

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