The transaction is expected to close at the end of the year, pending regulatory approval and customary closing conditions.

The operations acquired will be rebranded as Marex Prime Services and Market Outsourced Trading, with both becoming part of the Marex Capital Markets business (formed last year following the acquisition of ED&F Man Capital Markets).

Following the acquisition, both businesses will continue to be led by Jack Seibald and Michael Rosen.

Speaking in an announcement Ian Lowitt, chief executive of Marex, said: “This transaction advances our strategy, increasing our capabilities to connect clients to markets in new ways across multiple geographies. Mike and Jack have built a terrific business, and its addition to Marex broadens the range of essential infrastructure we provide to clients, as well as creating opportunity for Marex to provide additional services to a new set of clients. Expanding our capital markets business also adds to our diversification and to the resilience of our franchise.” 

Read more: Fireside Friday… with Cowen’s James Baugh

The TD deal for Cowen was completed in March this year, but just months after their merger, it was announced that the prime brokerage and outsourced trading division would diverge from TD Bank Group on mutually agreed terms.

At the time, sources close to the matter revealed that the businesses had sent a communication to clients confirming the divestment, highlighting that it was “in the best interests of clients” if the prime brokerage and outsourced trading business were divested to a partner more “strategically and geographically aligned” to the platform.

TD Bank Group completed its all-cash $1.3 billion acquisition of Cowen in March – following an initial announcement in August 2022. The plan was to create an integrated North American dealer to significantly advance its growth strategy in the region, specifically through the addition of Cowen’s US equities sales trading, execution, and research offering. 

TD will continue to operate its own prime services business despite the Cowen spin-off. 

Earlier this year, TD also confirmed that Cowen Digital was shuttering two years after its launch. 

In a communication seen by The TRADE – signed off by 11 team members including managing directors – the importance of “trusted counterparties who understand the needs of institutional investors” was emphasised. The memo also highlighted that it was necessary for the unit operate from “a different home” going forward.

In an announcement today, Dan Charney, vice chair of TD Cowen and co-head of global markets, said: “The divestiture of Cowen Prime was planned as part of the acquisition of Cowen by TD earlier this year. As TD continues to focus its efforts on growing TD Securities Prime Services, we are pleased to have found a great home for Cowen’s legacy Prime Services business in Marex, bringing significant opportunities for both businesses.”

The post Marex to acquire Cowen’s prime brokerage and outsourced trading business from TD appeared first on The TRADE.

The note mentions that the inception of the unit came back in 2021, however the launch was made public in March 2022.

The platform offered institutions access to the digital asset ecosystem using trade execution and custody solutions and was launched in response rising demand for cryptocurrencies.

While the note did not cite the crypto winter as a reason, the environment has certainly taken its toll on the institutional digital asset space as a whole.

The communication was signed off by 11 team members, including managing directors Drew Forman, head of Cowen Digital; Eric Rose, head of execution; and Keith Coyne head of product and strategy.

The memo reemphasised the importance of “trusted counterparties who understand the needs of institutional investors” and expresses the unit’s need to operate from “a different home” going forward.

The decision comes just months after TD Bank Group completed its all-cash $1.3 billion acquisition of Cowen, following an initial announcement in August 2022. With the deal, TD added new capabilities in US equities to its remit.

Last year, TD was involved in a string of deals as it aimed to expand its operations into the US, which was understood to be partly linked to strict regulations regarding domestic mergers in Canada. Its bid to buy Tennessee-based First Horizon Bank was reported to have been put on ice just this month.

The post TD Cowen shuts digital asset unit two years after inception appeared first on The TRADE.

In the wake of last year’s crypto winter and the

In a statement released on 1 February, HM Treasury noted that: “The crypto sector continues to experience high levels of volatility and a number of recent failures have exposed the structural vulnerability of some business models in the sector.” 

A tried-and tested approach 

The government has now laid out plans regulate a broad suite of crypto-asset activities, in a manner consistent with its approach to traditional finance.  

These proposals will place responsibility on crypto trading venues for defining the detailed content requirements for admission and disclosure documents – ensuring crypto exchanges have fair and robust standards. 

The government is also seekings to introduce new rules around financial intermediaries with regards to facilitating transactions, and custodians around the safe storage of customer assets. It hopes to create a “world-first regime” to strengthen the regulation of crypto-lending: a practice that contributed significantly not only to the downfall of FTX, but to the subsequent domino collapse of numerous other players in the crypto space that were tied into FTX and its sister company Alameda through a complex network of unsecured and often undeclared loans.  

Read More – FTX fallout: The contagion continues… 

The UK consultation will also seek views on improving market integrity and consumer protection, with plans to create a targeted crypto market abuse regime. 

Global fragmentation 

The move has been a long time coming. Regulation in the global crypto space is highly fragmented, with many leading finance markets (such as the UK, Europe and the US) still lagging behind when it comes to introducing and enforcing a coherent regulatory framework for digital assets. Others, such as Switzerland, the UAE, Singapore, Hong Kong and Japan have been more proactive on a regulatory level, while off-shore centres such as the Cayman Islands, Bermuda and Gibraltar have also attracted business by creating their own legal frameworks – meaning that much activity has been siphoned away from mainstream markets. 

The US, although it has made some progress (for example, with the release in March 2022 of its Executive Order outlining a government-wide approach to digital assets risk and regulation), has suffered from a fragmented approach, with its dual state and federal banking system often moving at different speeds, while Congress has been slow to make any final decisions and a comprehensive regulatory framework still looks to be some way off. 

Europe has got somewhat further – both France and Germany already have regulatory crypto frameworks in place, while the European Commission is currently in the advanced stages of finalising the EU-wide Markets in Crypto-Assets Regulation (MicA), originally proposed in 2020. The first cross-jurisdictional regulatory and supervisory framework for crypto-assets, MiCA is expected to come into force by 2024 and aims to ensure legal clarity, consumer and investor protection, market integrity and financial stability with a consistent approach across all member states.  

UK progress 

The UK’s previous approach to crypto regulation has been cautious – activity is currently not regulated by the Financial Conduct Authority (FCA), although providers can apply to register under its anti-money laundering and counter-terrorist financing regimes. The FCA has been highly reticent in approving applications, however – according to minutes from the a Treasury Committee meeting on 26 January, 85% of crypto firms applying for digital registration failed to meet the minimum standards. 

“We are in the middle of an inquiry into crypto regulation and these statistics have not disabused us of the impression that parts of this industry are a ‘Wild West’,” said Harriett Baldwin MP and chair of the Treasury Committee.  

Some market participants have complained that this heavy-handed approach has stifled innovation, although the FCA has hit back, pointing out that the majority of submissions are of poor quality, with only 5% progressing on the first attempt at 73% being withdrawn or failed – the most significant number ever seen when addressing a new remit.  

Some way to go 

Looking ahead, the latest proposals would seem to have been received as broadly positive. 

“We welcome the Treasury and FCA’s commitment to providing regulatory clarity for the digital asset space in the UK… It should help institutions gravitate towards the UK,” said Taylor Cable, managing director of Cowen Digital Europe, speaking to The TRADE.  

“It’s far and away the right move to approach it in a similar way to tradfi – the market has been begging for clarity.”  

However, those at the coalface are still cautious, and few are yet ready to put their money where their mouths are. According to the latest JP Morgan e-trading survey, released today, almost three quarters (72%) of traders surveyed have “no plans” to trade crypto, while just 15% expect to trade any digital assets within the next five years.  

Read More – Traders predict UK markets to have the worst inflation outlook for 2023, finds JP Morgan survey

The post UK government outlines plans for ‘tradfi’ crypto regulation appeared first on The TRADE.

Cowen Digital, the investment bank’s recently launched digital assets division, has appointed Taylor Cable as its new managing director for Cowen Digital Europe, based in London.

“In today’s climate, there is no better time to be joining a firm which has built its digital asset business with the needs of institutional investors in mind from the very outset,” Cable told The TRADE.

“Despite the current bear market, the building out of infrastructure at buy side firms shows no sign of slowing down. Cowen Digital is ideally placed to provide safe, secure access to this growing asset class for regulated firms looking to invest in digital assets and tokenisation as well as those wanting to invest in the innovative blockchain platform which are creating the companies of tomorrow.” 

Cable formerly held institutional positions at Blockchain.com including COO of BCAM (Blockchain.com Asset Management) and head of institutional client trading. Prior to Blockchain.com, he was COO and executive director at AiX and spent 16+ years at Moore Capital Management in a variety of positions including portfolio manager and senior trader.

In his new role, he will lead both the European and Asian activities for Cowen Digital.

“Expanding in Europe and Asia is a natural progression, and will ensure Cowen Digital can continue to service clients in person with the distinction and operational excellence it’s known for and provide the ‘follow the sun’ coverage institutions require.”

The Cowen Digital initiative, first announced in March, has been live trading with clients since the beginning of the year. Headed up by Drew Forman and Eric Rose, the platform is intended to offer a mirrored service to that which the bank offers in the traditional equities markets: including trading, research, sales, and investment banking services, among others.

“All of these services that we take for granted and where infrastructure is already built and is a well-established business across Wall Street in traditional finance, that’s what we’re trying to recreate here at Cowen Digital,” Forman told The TRADE earlier this year. “There is a hole in this space in terms of digital asset coverage for institutions.”

Speaking on the new appointment, he commented: “As Cowen Digital continues to grow, we are thrilled to have an executive of Taylor Cable’s calibre to head up our expansion into Europe and Asia. Taylor is an important addition to our growing team as we expand our range of products and services globally.”

The post Cowen Digital expands in Europe with new managing director appeared first on The TRADE.

Global head of execution services at Goldman Sachs, Michael Steliaros, left the investment bank to join the Abu Dhabi Investment Association (ADIA) as global head of equity portfolio engineering and trading. He joins the association after serving at Goldman Sachs for the last five years, departing the bank earlier this year. Prior to that, he spent seven years at Bank of America Merrill Lynch as its global head of scientific implementation and head of agency portfolio trading. Previously in his career, he served across Panta Capital, Winton Capital Management, FGS Capital and Barclays Global Investors in various research roles for six years collectively.

Liquidnet, now part of interdealer broker TP ICAP, appointed Nichola Hunter as its new global head of sales for fixed income. As part of the role, Hunter will be responsible for growing client relationships at the firm. Hunter joins Liquidnet from MarketAxess, where she operated as head of rates. Prior to that, she served as chief executive officer of LiquidityEdge which was acquired by MarketAxess in 2019. Before LiquidityEdge, she held various senior roles at ICAP, including co-head of EBS market, global head of product management for EBS and global head of client services for ICAP’s electronic broking business.

Hedge fund Citadel selected Roshan Rummun to replace retiring international equities trading head, Paul Donnelly. Rummun originally joined Citadel in 2007, spending two years as a trader before departing for a brief three-year period to serve as head of trading at LionRock Capital. He then returned to Citadel, where he has been a trader since 2012. He began his career in 2005 as a trader at JP Morgan. Also prepped to fill in the gap left by Donnelly is former Lombard Odier equity trader, Liam Stone, who will use his extensive European focused equities experience to serve Rummun in a senior capacity.

Fixed income platform provider Trumid appointed Daniel Swaby in an emerging markets sales role. Swaby joins Trumid from Liquidnet, where he operated in an emerging markets credit sales and trade execution role for nearly four years. Prior to that, he served as a vice president in emerging market credit sales at NatWest Markets. He also held an emerging market sales and product management position at MarketAxess for nearly six years. Earlier in his career, he operated in an equity and derivatives sales trading role at E*TRADE and was an execution trader at Sucden Financial.

Cowen Digital made a string of new executive appointments to expand its institutional sales team, drawing talent from various digital asset businesses. Among the new appointments is Jackie Rose, who joined Cowen Digital as director of institutional sales from Blockchain.com, where she served as head of institutional business development. Elsewhere, Chase Campbell has been appointed as vice president of digital asset sales. He joins Cowen Digital from Coinbase, where he served as an institutional sales associate.

The post People Moves Monday: A string of executive appointments appeared first on The TRADE.

Among the new appoints is Jackie Rose, who joins Cowen Digital as director of institutional sales, bringing a range of experience in investor relations, private equity and investment banking to the firm.

Rose joins from Blockchain.com, where she served as head of institutional business development.

Prior to that, she served as vice president of investor relations at Park Square Capital, responsible for managing fundraising processes across the firm’s private credit products.

Earlier in her career, Rose operated as an associate at The Carlyle Group as well as an investment banking analyst for JP Morgan.

“These new hires bolster our existing team as we continue to develop the business and expand into new growth areas.”

Elsewhere, Chase Campbell has been appointed as vice president of digital asset sales.

He joins Cowen Digital from Coinbase, where he served as an institutional sales associate, supporting US clients spanning traditional finance and crypto-native firms as they looked to trade digital assets. 

Rose and Campbell join Cowen Digital’s existing team which includes Keith Coyne, head of strategy and product, and Kyrill Firshein, senior salesperson.

“We are delighted to welcome Jackie Rose and Chase Campbell onto our team to harness the experience they bring from both the crypto-native and institutional sides of the industry,” said Drew Forman, head of Cowen Digital.

“These new hires bolster our existing team as we continue to develop the business and expand into new growth areas.”

Other recent hires at Cowen Digital include David Kroger as digital data scientist, Nolan Aibel as digital asset associate, and Juan Velez as an analyst.

“Cowen Digital is actively hiring and expanding our team in a strategic build over the next five years,” added Eric Rose, head of execution at Cowen Digital.

“Despite recent volatility in the sector, we continue to see growth and investment opportunities for the long-term.”

The post Cowen Digital taps crypto-native firms to expand institutional sales team appeared first on The TRADE.

The initiative has been live trading with clients since the beginning of the year but was only announced publicly in March.

“We wanted to save the press release until we had a real product. That’s why you hadn’t heard of us until we were live trading with clients in physical tokens,” Drew Forman, head of Cowen Digital, told The TRADE.

Cowen Digital currently offers trading in 15 tokens, as well as USD stable coins. Forman and Eric Rose, head of execution at Cowen Digital, confirmed this should increase to 30 or 40 by the end of this year.

Mirroring traditional finance

The new trading and custody division at Cowen is intended to offer a mirrored service to that which it offers in the traditional equities markets including trading, research, sales, and investment banking services, among others.

“All of these services that we take for granted and where infrastructure is already built and is a well-established business across Wall Street in traditional finance, that’s what we’re trying to recreate here at Cowen Digital,” said Forman.

Institutional interest in digital assets has continued to creep up in the last year, however, infrastructure and regulation – or the lack thereof  – in this space remains a hurdle to a large portion of the traditional buy-side looking to begin trading in this market.

“There is a hole in this space in terms of digital asset coverage for institutions,” Forman added.

“The infrastructure to trade, settle, track, or source data is still very much in its infancy and our goal is to educate our customers on digital assets and also bring them into the investing environment and show them that they can invest in digital assets with a trusted partner.”

The division aims to offer institutional investors everything they would typically be offered in the traditional markets including corporate events and hosted dinners. It offers both high touch and low touch execution with anonymity available for those who want it.

“That’s a feature the equity markets have had for years. Our other work-streams are borrow and lend so the prime brokerage aspect of our business which we’re trying to roll out where customers who have Bitcoin and want to earn some extra yield on it can do so by lending it out,” said Rose. “We have customers who want to short Bitcoin and they need to borrow it. Again, the whole borrow and lend ecosystem for institutional digital assets is still in its nascence.”

Cowen Digital externally connects to buy-side order management systems (OMS). The team has also built out an OMS internally to control the flow of funds and manage other elements of the business including compliance, settlement and trade allocations for its internal order routing.

“Our goal is to not change anyone’s workflow in other asset classes for customers be able to trade crypto.”

Risk

Another key traditional element implemented by Cowen in a bid to mimic institutional workflows is its management of risk.

Typically to minimise risk, investors trading digital assets will need to have money on the digital asset exchange prior to doing a trade in a process called pre-funding.

“That’s not an institutional workflow that is a retail workflow,” said Forman. “What’s differentiated about Cowen Digital both in the high touch and display in the algos is that the only counterparty that you’ll be facing is Cowen Digital. There are no pre-funding requirements for trading so the workflow is very similar to trading equities where a client can route through their OMS.”

“That is part of the package that we’re trying to deliver so we will use our credit lines and our partnership and our liquidity venues to provide that liquidity for customers so they don’t have to wire us funds in the morning. It’s a very nuanced aspect of what we do but it really is materially different from the existing digital asset ecosystem.”

However, the division – targeted at Cowen’s 2,500 strong institutional client base – does not run a large book of risk, instead managing it through a risk committee, assigning credit risks to its clients and managing its limits across exchanges.

Organic and inorganic growth

Since its official go-live at the start of this year, Cowen Digital has expanded its remit significantly both through third party partnerships and through building out its technology inhouse.

It partnered with buy-side OMS provider, SS&C Eze, becoming its first institutional route into the cryptocurrency markets. The partnership meant clients using the Eze OEMS could connect through APIs to Cowen Digital and route orders, much like the workflow seen in equities.

Cowen Digital also partnered with PolySign as its custody partner, going on to lead a Series C financing in the company alongside Brevan Howard, Soros and GSR.

In-house, the firm has decided to build an OMS internally as it found the range of sell-side OMS providers available in the market fell short of its “unique” needs.

“We decided to build rather than buy which has allowed us the flexibility to add a tremendous amount of digital asset unique infrastructure needs whether that’s settlement or middle office but also allowing us to connect outside and manage our own internal order flow and our liquidity providers,” said Forman.

Looking forward

The pair confirmed that most institutional digital asset interest is currently concentrated on Bitcoin and Ethereum, with some interest in Solana and Avalanche.

The firm intends to launch a lending product in September, leveraging an investment it recently made in Digital Prime, a lending software company. It also intends to roll out its swaps and derivatives products in the fourth quarter.

Recent runs on cryptocurrencies and ongoing volatility across the digital assets markets have led several participants to urge regulators to step in before the ‘crypto winter’ sets in.  Since November, Bitcoin has lost 70% of its value while the high-profile, catastrophic collapse of stablecoins like Terra have resulted in a loss of faith in the settlement process. However, Rose and Forman remained optimistic that institutional interest would remain high despite the turbulence.

“It’s a six to 12-month lead time for getting people to buy into this as an asset. These are conversations that we’ve been having for the better part of a year now with many of the large asset managers and none of the work has been deterred. I think most people are excited to be able to get into the space with asset prices where they are now as opposed to where they were three to six months ago,” they said.

“We really believe that that digital assets will be the future of finance and that institutional investors will need to have some form of digital assets in their portfolios going forward.”

The post Cowen Digital serves up crypto with a side of tradition appeared first on The TRADE.

Launched earlier this year, Cowen Digital aims to accommodate the rising demand for digital assets from institutional investors, offering full trade execution and custody services.

The move makes Cowen the first traditional investment bank to provide an institutional digital asset solution through Eze’s institutional OEMS platform.

“Our clients are already accessing 16 of the leading tokens through our high-touch trading desk,” said Eric Rose, head of execution at Cowen Digital. “Adding the Eze OEMS to our robust institutional-grade platform further extends our access to liquidity alongside the most relevant market data and enhances our clients’ ability to connect seamlessly with the digital asset market.”

The institutional digital asset trading platform from SS&C Eze offers improved broker-agnostic access to institutional liquidity throughout the market.

The platform provides market data from more than 35 sources spanning 100+ tokens and 500+ pairs, allowing users to customise order details and obtain buy/sell quotes for selected token pairs.

Clients who have access to Eze’s integrated OEMS capabilities can also generate crypto orders in their order management blotter and send them to Cowen for execution.

“Our digital asset trading network allows our clients and partners to fully integrate their crypto and other digital assets into their investment operations,” said Frank Matarese, senior director of product management at SS&C Eze. “This integration enables the same controls and workflows for the other instruments they trade today and provides access to liquidity on a global scale.”

Earlier this month, specialist fund manager Liontrust extended its relationship with SS&C to help manage the majority of its £38.5 billion in assets under management and advice (AuMa). The move builds on the support that SS&C has provided to Liontrust via its OEMS system since 2016.

The post SS&C provides Cowen Digital’s institutional digital assets platform with OEMS access appeared first on The TRADE.