Broker-Dealer Burnishes Brand With Buyside-Focused Technology Solutions

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BrokerDealer.com blog update courtesy of extract from 09 December story published in Markets Media and reported by Steve Marlin.

Agency Broker WallachBeth Raises Tech Bar

WallachBeth Capital, a provider of institutional execution for buy-side investment managers, recently appointed quantitative trading veteran Matthew Rowley to the newly created role of chief technology officer, signaling the firm’s commitment to delivering customized services that address specific and often complex order-execution and related business-process needs.

The company’s founders, Michael Wallach and David Beth, “have a vision of the industry becoming even more technologically driven,” Rowley told Markets Media.

matt rowley wallachbeth

Matt Rowley, Wallachbeth Capital’s new chief technology officer

Rowley joined WallachBeth from Crédit Agricole Cheuvreux, where he was credited with helping the firm attain a leadership position in the global electronic brokerage space.

“My main focus had been more on the algorithmic side — slicing and dicing of orders,” said Rowley, who holds an advanced degree in applied statistics from Oxford University. “Something that’s been really interesting to me throughout my whole career is artificial intelligence. I’ve been working on and off trying to integrate that into various firms I’ve been at, in different products. But it’s only in recent years that some of the cutting-edge techniques are such that you can get near-human performance in some aspects.”

Rowley’s background includes senior executive roles for several of the financial industry’s leading firms. Prior to joining Cheuvreux, he was global head of advanced trading products at financial software provider Fidessa. He began his career as a quantitative analyst in the strategic risk management advisory group at First Chicago Corp.

WallachBeth’s Tools Hope to Educate

Rowley’s current focus is on developing “trader intelligence” tools that filter information programmatically and algorithmically and put the information in the hands of capable traders who make decisions. These decision tools can be for traders on the buy side or sell side, or portfolio managers.trading tech

“Market participants are making decisions by relying on the tools they have,” he said. “A trader may have Bloomberg or another market-data terminal, and they have order management systems that give an idea of historical reports, clients order and history. Oftentimes, that information is disparate, and as a human being, you can’t quite process everything. You have to query and follow a nonlinear path to get the information you need and ask yourself questions.”

WallachBeth aims to educate clients about exchange-traded funds and provides “a very unique execution model around that,” said Rowley. “We’re looking to expand that across different asset classes as a one-stop shop. The quantitative tools we’re building are important to that whole process.”

 

To read the entire story from MarketsMedia, please click here.

BrokerDealer-Backed Consortium That Seeks to Boot Bloomberg Chat Adds to IT Arsenal via Sweet Sounding Acquisition by Supplanter Symphony Communications

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BrokerDealer.com blog update courtesy of prior reporting here and extract from Dec 1 WSJ story by Justin Baer.

chat serviceAn instant-messaging software company that has drawn investments from Goldman Sachs Group Inc. and other big banks signed a deal to buy a chat business from a potential rival.

Symphony Communication Services LLC acquired an arm of Markit Ltd., a financial-data firm that went public earlier this year, the companies said.

The purchase, Symphony’s first since a group of 14 banks and money managers helped start it in October, underlines how Wall Street has quickly coalesced around the Silicon Valley startup as a solution to one of the industry’s most pressing technology challenges: finding a way for employees to communicate with one another, instantly and securely.

It also represents an exit for Markit, which a year ago had launched its own messaging initiative for bankers and traders. The sale isn’t expected to have a material effect on Markit’s results. Fewer than 20 Markit employees are relocating to Symphony as part of the sale of the unit, known as Collaboration Services, a person familiar with the deal said. Terms aren’t expected to be disclosed when the deal is formally announced Tuesday.

David Gurle, Symphony’s chief executive, said in an interview that the company had considered building its own directory before reaching out to Markit in recent weeks to discuss a potential deal. In buying Markit’s business, Mr. Gurle said Symphony probably saved 18 months of development time. “They had a capability we would have ordinarily had to build ourselves,” Mr. Gurle said.

The transaction includes the software that powers Markit’s directory service, which functions as a centralized “phone book” for financial firms that can be customized to meet compliance rules.

Symphony’s emergence may help loosen Bloomberg LP’s grip on the securities industry. The financial-data company’s chat services remain ubiquitous on trading floors. But the price of a Bloomberg terminal, about $20,000 a year, has grated on some finance executives.

If Symphony’s platform spreads quickly through Wall Street, bank executives have said, it could pressure Bloomberg to relent. A Bloomberg spokesman didn’t immediately respond to a request for comment. Bloomberg’s news service competes with Dow Jones & Co., publisher of The Wall Street Journal.

On Monday, Mr. Gurle said the messaging platform is still on track to launch in July.

Led by Goldman, a group of financial firms invested $66 million in Symphony. The group, in turn, acquired Perzo Inc., a Palo Alto, Calif., company founded in 2012 by Mr. Gurle. Goldman, which led the investment among the financial firms, contributed its own internal messaging developments to the venture.

Founded more than a decade ago, Markit had drawn investments from financial firms such as J.P. Morgan Chase & Co., Bank of America Corp. , Deutsche Bank AG and Goldman. All four of those banks were among the firms that have backed Symphony.

Markit sought to allow financial firms’ in-house messaging platforms to communicate with one another, he said. Symphony and its backers are betting that financial-services firms need a better system than they could develop on their own.

To read the complete coverage, please visit the WSJ via this link.

Brokerdealers Hold Fate of New Active ETFs

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Brokerdealer.com blog update courtesy of extract from Investment News.

NextShares is a product that some want to eventually replace mutual funds. NextShares combine characteristics of mutual and exchange-traded funds. Like mutual funds, investors purchase shares in the fund at a price equal to the value of their underlying securities, plus a transaction fee. Like ETFs, they trade on exchanges and could benefit from the tax and other cost efficiencies associated with those products.InvestmentNews

For years, backers of NextShares have been working to get approval and earlier this week, securities regulators finally granted approval. Now it will have to convince Brokerdealers and financial advisers that it is in their interest to supplant a product responsible for a healthy portion of their current revenue. The backers of NextShares want to cause the extinction of mutual funds, a lucrative product for broker-dealers.

“A lot of the firms we’ve spoken to are not really sure if they want to offer it at this stage,” said Bharat Sawhney of Gartland & Mellina Group, a consultant to broker-dealers on product offerings, strategy and technology platforms. “One of the bigger questions the firms have is if it will cannibalize their existing business.

Investors will need to be informed by broker-dealers of the unique qualities of the funds when they trade, and they will place exchange orders in a way that differs from stocks or ETFs.

In order to commit to NextShare and the changes it would bring, broker-dealers will need to see that consumers — both advisers and their clients — actually want the products, which are also known as exchange-traded managed funds. If they succeed in that regard, it wouldn’t be the first time client demand trumped the preferences of broker-dealers.

If you want a Brokerdealer that will commit to NextShare then now is the time let your Brokerdealer know this is what you want or find a Brokerdealer that will.

Fortune Cookie Says: Outlook Bright For Asia BrokerDealers

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Brokerdealer.com blog update with coverage of the Asian Market courtesy of ETF Trends’ Todd Shriber

Following some bullish data points that boosted sentiment during Tuesday’s Asian session, exchange traded funds offering access to China’s onshore A-shares markets are soaring Tuesday.

ETFTrends logoWith local investors warming to equities over property, Goldman Sachs forecasts an estimated 400 billion yuan will depart China’s property market next year with the destination being A-shares equities.

“The Shanghai Stock Exchange Composite Index(symbol: SHCOMP, +3.11%) is showing the largest positive risk adjusted return across regions and assets. In absolute terms, the SHCOMP increased by the most in 15-months and extended its YTD performance to over 30%,” said Rareview Macro founder Neil Azous in a research note out Tuesday.

News that home sales in China’s 54 largest metro areas surged nearly 9% last month is fueling gains for already high-flying U.S.-listed A-shares ETFs.

After ranking as one of November’s top-performing non-leveraged ETFs, the Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR), the largest U.S.-listed A-shares ETF, is higher by 5.5% today on volume that has already exceeded the daily average. Joining ASHR in the all-time high club is the KraneShares Bosera MSCI China A-Shares ETF (NYSEArca: KBA), which is higher by 4.7% on volume that is more than 30 times above the daily average.

ASHR and KBA are two of just 11 ETFs to hit all-time highs to this point in Tuesday’s session.

The Market Vectors ChinaAMC A-Share ETF (NYSEArca: PEK), the oldest U.S.-listed A-shares ETF, is soaring by 5.4% on heavy volume and is trading at its highest levels in nearly three and a half years. Although the A-shares ETFs do not feature the excessive financial services sector exposure found in the iShares China Large-Cap ETF (NYSEArca: FXI), the trio is still levered to investor sentiment to China’s largest financial services firms. The average weight to the financial services sector across ASHR, KBA and PEK is 38.7%.

“Trading values in the Shanghai Composite rose to a record 401.6 billion yuan ($65.3 billion) last week, boosting the profit outlook of brokerages relying on trading commissions as the main source of their revenue,” according to Azous.

For the entire article from ETFtrends.com please click here

Bitcoin and Brokerdealers

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Broker Dealer.com blog update courtesy of extract from CoinDesk

Bitcoin is a form of currency that is tied directly to the Internet and is the world’s first free market, decentralized global currency. It is operated through an open-source software so there is no central control unlike the US dollar or Euro. Similarly to gold, only 21,000,000 Bitcoins will ever be created so the value of the Bitcoin continues to rise as time goes on.Bitcoin Bitcoins can be exchanged for goods and services as well as currencies such as the US dollar and the Euro. As long as people trust that Bitcoin has value, people will continue to invest in it.

Bitcoin is still very small by market capitalization when compared to the traditional markets, and the need for more liquidity within exchanges is an ongoing issue in the industry. However, a number of startups are looking to attract the traditional investment sector to cryptocurrencies.

SecondMarket was expected to launch an institutional bitcoin exchange this year, but it still only offers the Bitcoin Investment Trust, its managed investment vehicle. Other companies looking to cater to larger investors include exchanges itBit and Coinsetter, which are both based in the finance hub of New York City.

Mirror, formally known as Vaurum, is an institutional-grade exchange platform for bitcoin investors.  The platform’s exchange is currently invitation-only but customers can sign up to request access. “We’re currently onboarding investors, market makers, over-the-counter (OTC) traders and bitcoin businesses,” said Bhama. “We evaluate each sign up on a case by case basis and will be sending out invites at an increasing rate as we prepare to open it up publicly.”

Find your own Brokerdealer that will help you understand the Bitcoin market and how to begin collecting your Bitcoins or invest in a platform such as Mirror.