The firm writes that C8 Hedge offers corporate treasurers and investment professionals precise guidance for actively and optimally managing their foreign exchange exposures across multiple currencies, using intuitive and simple to use online tools.

Employing machine learning and statistical models to help predict future FX movements, the platform helps users quickly craft customized hedging solutions that align precisely with their needs.

Through its active approach, the platform allows users to potentially benefit from currency movements, boosting returns beyond those offered by passive FX hedging. It can also adapt to changing market conditions to quickly seize opportunities and mitigate risk, offering a dynamic hedging solution to shield portfolios against adverse currency movements.

In addition, C8 Hedge users can:

Calculate optimal FX hedge ratios for all their currency exposures, both assets and liabilities

Add risk weights for each currency exposure

Calculate optimal FX ratios for each currency within a portfolio risk limit

Use their existing FX execution implementation – no need for any integration work

Keep full control of all FX hedging

The C8 Hedge platform is managed by Jonathan Webb, formerly Head of FX Strategy at Jefferies, and previously a portfolio manager/ proprietary trader at major banks (including HSBC, Credit Suisse, RBS, Bank of America) and hedge funds (C-View, GLC).

“Managing FX exposure can be complex and easy to get wrong, a combination that provides treasurers and funds with an unwelcome problem every time they buy and sell overseas assets,” says Webb. “C8 Hedge makes the process much simpler and effective by automating the risk management process, offering users proactive strategies to optimise outcomes while freeing them to concentrate on their fundamental business activities”.

“Applying our systematic trading models to FX hedging through an intuitive platform that anyone can use allows corporates and funds avoid the complexities they would otherwise face when they buy an asset or sell products overseas” says Mattias Eriksson, CEO at C8.

“FX presents intricate risks that require a tailored approach, which is why we have designed the platform to allow users to easily craft customized FX hedging solutions that meet their exact requirements every time they need to handle foreign currency exposure”.

Bravura Solutions has announced that its Babel messaging microservice handled a record level of investor transactions for the month of March, processing orders totaling over GBP1 trillion. 
 

Nick Parsons, CEO at Bravura says: “Babel is trusted by leading financial institutions such as BNY Mellon, Legal & General, Ascentric and T Bailey to process their order flow, no matter how much market volatility or client on-boarding increases trade volumes. Babel’s ability to deliver consistent service while flexing and scaling to meet increasing demand is a key benefit delivered to our clients. 

“Making sure our clients’ customer orders are reliably processed regardless of volume is what makes Babel the leading messaging microservice. These latest figures demonstrate the scalability and resilience that enables our clients to deliver excellent service to their customers.”
 
In the month of March more than 1.3 million deals were processed through Bravura’s Babel microservice with a total value of over GBP1 trillion.
 

The new, digital UWC platform provides a paperless process for the delivery of CDs, increasing efficiency through automation, improving data quality, reducing risk, and providing greater transparency into the eligibility life cycle. It also represents an important step in bringing the industry closer to achieving full dematerialisation. With DTC’s new UWC platform, issuers can now streamline the underwriting process, seamlessly creating, signing, and delivering CDs within hours, instead of days or weeks.  
 
The new platform leverages electronic vaulting technology to transmit and store data, as well as an e-signature process to execute digital certificates, providing enhanced automation for CD eligibility and issuance processing, and ultimately providing more seamless delivery of these assets to the accounts of end clients. The launch of the new electronic CD platform comes following a successful pilot with nearly 30 underwriters, including BNY Mellon Capital Markets, LLC, Fidelity Capital Markets and Multi-Bank Securities, Inc, as well as more than 50 issuers from regional branches based across the US, including BLC Community Bank (Little Chute, WI) and Luana Savings Bank (Luana, IA).  

“The new electronic CD capability reduces the risk of potential disruptions in the physical transport and in-person delivery receipt of CDs, all challenges that were amplified during the shift to remote working as a result of the Covid-19 pandemic,” says Ann Marie Bria, DTCC Executive Director, Asset Services Business Management.  “This new paperless process eliminates shipping costs and manual processes and the risk of closing delays for the issuer.”  
 
The delivery of the UWC platform is part of DTCC’s larger effort to fully dematerialise all physical securities to create a more cost-effective, secure and efficient marketplace, as outlined in a whitepaper delivered to the industry last year.  
 
“Thanks to a significant collaborative effort with our clients, we are now one step closer to achieving full dematerialisation,” adds Ann Bergin, DTCC Managing Director and General Manager, Wealth Management Services and Asset Services. “Having a robust, automated process with fewer operational touchpoints is already introducing major benefits to our clients, including increased transparency, cost savings, improved resiliency, and lower risk.”  
 
In addition to this effort and in support of dematerialisation, DTCC is also working on efforts to address other paper-based asset classes at their issuance, such as Corporate Debt, as well as existing securities that are eligible at DTC. Today, less than 1 per cent of assets serviced through the depository are still in physical form, but they represent USD700 billion dollars in value.  

DLR provides a single platform where market participants can agree, execute and settle repo transactions. Furthermore, DLR allows for the immobilisation of the underlying securities in the repo transactions, while transferring ownership via smart contracts executed on the platform. The platform’s functionality significantly reduces the operating cost and risk of all repo activity, including intraday, overnight and term repos, both on a bilateral and an intracompany basis and also reduces counterparty risk while increasing auditability. In the first week since launch, DLR has executed USD31 billion in average daily volume. 

“This is the first step in the transformation of the USD10 trillion global bilateral repo market using smart contracts and distributed ledger technology,” says Vijay Mayadas, President of Capital Markets at Broadridge. “Co-innovating with market participants, we are able to bring solutions to our network of clients that create the next level of operational efficiencies. Within the repo market, distributed ledger technology and smart contracts have shown that they can play an instrumental role in driving efficiencies, reducing risk and enhancing liquidity while leveraging the existing legal and account frameworks.”  

Leveraging Broadridge’s leading fixed income trade processing platform, DLR utilises Daml smart contracts from Digital Asset as well as VMware Blockchain, a highly scalable distributed ledger platform. DLR reduces operational risk and settlement cost for repurchase, or repo, agreements by providing a secure record of repo trade details, reducing the need for reconciliation and removing obstacles to straight-through-processing.   

“By coupling emerging technologies like distributed ledger technology and smart contracts with existing operational account structure functionality, Broadridge has enabled real-time securities mobility in the repo market,” says Vinod Jain, Senior Analyst, Aite Group. “This is a powerful value proposition for firms, especially those looking to reduce risk and enhance operational efficiencies.” 

Liquidity conditions in the corporate bond market are expected to improve as electronic platforms gradually replace traditional over-the-phone trading, with new artificial intelligence tools helping to match dealers with buyers.

The fixed income market has historically relied on phone calls to arrange trades, but this is already being replaced by electronic trading at the more liquid end of the market, which includes government and sovereign bonds.

Meanwhile, the more illiquid corporate bond market is expanding rapidly as low interest rates across are adopted across many developed economies. However, some of these bonds can wind up “trapped” in portfolios due to the difficulty of finding buyers.

“The problem we’re trying to solve is…how do we make the outstanding supply of corporate bonds more tradable? How do we bring back some of these bonds that get trapped in a portfolio, and make it so that you can sell them?” says Bill Gartland, VP of fixed income data and analytics at Broadridge Financial Services.

“Particularly in credit, there’s still this perception that liquidity conditions are such that I can trade the newer bonds pretty actively but once they reach a certain age, after the issuer has put out other bonds in the market, the ones I have now are harder to trade,” says Gartland.

Broadridge is trying to improve liquidity in the market through the use of artificial intelligence. Its bond trading platform LTX uses AI to find and connect dealers with the right buyers.

The firm says it can suggest the right buyer for a bond “between three-quarters and 90 per cent of the time”, among a list of 25 names of clients to engage with. 

Broadridge uses a neural network based on transaction histories of its dealer-side and buy-side clients going back between six and 24 months, to find the most likely buyers for a particular bond.

“What this often does is it surfaces the names that are less ‘knee-jerk’. When BlackRock is high on your list of clients to engage with, it doesn’t shock anybody, but when a Midwest insurance company is high on the list, it makes you think ‘Oh, yeah, maybe I should call them’,” says Gartland.

Insight into liquidity conditions is becoming more important as the corporate bond market continues to grow at breakneck pace. According to Gartland, the US market is already 15 per cent bigger than it was last year.

US companies went on a borrowing spree in 2020, with many firms issuing bonds to tide themselves over in the face of shrinking revenues due to Covid-19. Investment-grade companies issued a record USD1.7 trillion of bonds, a 60 per cent increase on the previous year’s total, according to ratings agency S&P.

Daily corporate bond trading volumes in the US are on the rise, having climbed 16.2 per cent year-on-year to USD41 billion in 2020, according to research from SIFMA. This shot up another 15 per cent in the first quarter of 2021 alone.

Nevertheless, the bonds that are being traded still represent a small fraction of the total size of the US corporate debt market, which is estimated to be worth almost USD10 trillion. Of the bonds that do trade, fewer than 25 per cent are traded electronically, with the majority still trading over the phone.

This figure is expected to grow. According to a recent survey by JPMorgan, asset managers predict that 40 per cent of all their corporate bond trading will be electronic by 2022. Around half of government bond trading is already electronic, and this is predicted to rise to two thirds by 2022.

A larger outstanding supply of bonds makes liquidity a critical issue for dealers and asset managers, who need to be able to buy and sell these assets quickly. In particular, buyers and sellers of bonds are often faced with issues when trying to trade older debt.

This is an issue for asset managers as they attempt to build, optimise and rebalance their portfolios. 

Gartland explains: “Portfolio managers will often get the result of their portfolio optimisation tool saying, ‘Sell these, buy those’, and the first thing that the traders do is they say, ‘I can’t sell those, I’ll never get a good price for it, so I’ll sell something else’. Or, ‘I can’t buy those, because they’re never available, so I’ll buy these instead’.” 

Gartland says that improving liquidity conditions will also make it easier for portfolio managers to match an index, as they can get better index tracking results if they have more choices of what they can buy.

Asset managers attempting to sell large blocks of bonds at once may also benefit from electronic trading. Broadridge has developed a separate protocol to allow dealers and buyers to aggregate liquidity across multiple buyers, called RFX.

AllianceBernstein recently became the first buy-side firm to receive aggregated liquidity from multiple buyers on the same block trade.

“A challenge facing many asset managers is how to trade blocks of bonds more efficiently,” said Tim Kurpis, head of investment grade trading at AllianceBernstein. “Most electronic solutions focus on smaller sizes and liquid bonds, but 70-75 per cent of the corporate bond market still trades over the phone.”

Over 10 dealers and 40 asset managers representing a significant liquidity pool have joined the LTX platform, with an additional 50 firms in the pipeline to join at midyear, according to Broadridge.

Escrow is the service of retaining funds securely in escrow accounts as underlying transaction is facilitated. Clients use Titanium Escrow to retain funds for commercial purposes such as Payment Retentions, M&A and Escrow for Indemnification Obligations, Contracting and Real Estate, or the purchase and/or transfer of large assets. 

As the first dedicated and licensed Escrow provider based in the UAE, Titanium Escrow is a landmark solution that uses best in class controls and procedures to facilitate global escrow services for Cash and Non-Cash Property. By using Titanium Escrow’s streamlined Escrow system, clients will reduce risk, save time, and increase efficiencies via a streamlined process delivered by dedicated relationship managers. Titanium Escrow, established in the Abu Dhabi Global Market (ADGM) is regulated, supervised, and authorized by the Abu Dhabi Global Markets Financial Services Regulatory Authority (ADGM FSRA). 

This announcement is the further evidence of Apex’s growing operations in the Abu Dhabi Global Market (ADGM), enabling it to deliver its single-source solution to both new and existing clients in the UAE. Last year, Apex announced the launch of Compliance Services in the ADGM following the acquisition of risk and compliance consultancy Praesidium, the creation of LRI Middle East to offer third-party Management Company services, and the establishment of its Corporate Solutions business via subsidiary Throgmorton in the ADGM. 

Venki Subramanian, Managing Director, Abu Dhabi, at Apex Group, comments: “We have been delivering services locally to clients in the UAE for 15 years and we are excited to provide support to Titanium Escrow, a pioneering platform which we see as a real value-add for our clients in the ADGM. Traditionally, Escrow was most often associated with M&A transactions, however, we now see its popularity growing rapidly as a straightforward and efficient solution in a multitude of different scenarios including supply chain disruption and dispute resolution. The ADGM continues to provide a highly supportive and attractive environment for international businesses looking to grow and access key investor markets and we look forward to working with Titanium to bring innovative and scalable solutions to these clients.” 

Ibrahim Kamalmaz, Founder and Chief Executive Officer, Titanium Financial Ltd, adds: “We are pleased to appoint a partner of Apex’s quality and reputation as a global financial services provider to support Titanium Escrow through the provision of reconciliation, payments and recordkeeping services. Collaborating with Apex will ensure that we implement robust oversight and efficient operational processes to support the Titanium Escrow platform. We have been impressed by Apex team’s growing local presence in the ADGM alongside a global reach and we will look to leverage their experience to deliver an enhanced service to our own clients.” 

Designed to offer BNPP AM clients best-in-class third party manager strategies, it will integrate BNPP AM’s investment guidelines and sustainability requirements. AMSelect is expected to launch in June, subject to regulatory approval.

Growing interest from distributors, managers and advisors has led to an acceleration of open architecture, specifically for sub-advisory which is set to be one of the key themes shaping the asset management industry in the coming years. Sub-advisory platforms create benefits across the value chain, offering investors high conviction alpha strategies, cost efficiencies and ease of use.

AMSelect will provide clients with access to best-in-class strategies from third party managers, incorporating investment guidelines set by BNPP AM, while adhering to BNPP AM’s global sustainability strategy. It also aims to offer improved operational efficiency through the concentration of assets, and strong risk management and sustainability reporting through transparency of investments. AMSelect will be overseen by BNPP AM’s Multi-Asset, Quantitative & Solutions (‘MAQS’) investment division.

At launch, AMSelect will offer 10 funds investing in European, Eurozone, US and emerging market equities, together with European fixed income. Each will be managed externally by managers carefully selected using a rigorous process with input from FundQuest Advisor, BNPP AM’s dedicated third party manager selector. Selection criteria include quality of team and investment process, performance and risk management, together with commitment to sustainable investing.  For each of the initial 10 funds BNPP AM has selected a manager considered to be among the very best in their field. This selection will be key to the success of AMSelect.

AMSelect will initially be available to BNPP AM clients whose assets are currently partly allocated to third party managers, with availability expected to be broadened out at a later stage within the BNP Paribas Group.  BNPP AM is currently engaged in regulatory approval and manager on-boarding.  BNPP AM expects to partner with additional third party managers as the range of funds grows.

Denis Panel, Head of MAQS at BNP Paribas Asset Management, says: “Technology is key to how we operate and we are always looking for new developments to enhance our operational efficiency and improve the quality of service that we provide to our clients. We are convinced that sub-advisory platforms such as AMSelect will become a major trend within the asset management industry.  AMSelect is a natural development of our outsourced investment capability, made possible by investment in our digital capabilities, our long-standing experience of providing multi-asset solutions and our considerable expertise within external manager selection. AMSelect also allows us to extend our rigorous responsible investment requirements to the asset management companies that have been selected.”

The ten strategies and managers at launch will be:

European equity – growth: Allianz Global Investors
European equity – value: Amundi Asset Management
European equity – blend: LGT Capital Partners
Eurozone equity – growth: Sycomore Asset Management
Eurozone equity – value: HSBC Asset Management
Eurozone equity – blend: Blackrock
US equity – growth: AllianceBernstein
US equity – value: Harris Associates (an affiliate of Natixis Inv Mgrs)
EM equity – blend: Vontobel Asset Management
Euro fixed income – aggregate: Bluebay Asset Management

The announcement follows the landmark ruling by the UK’s High Court in October 2018 requiring all UK DB pensions schemes to equalise for GMP benefits between men and women. It has taken nearly two years for the industry to agree how to address this complex issue and develop member-level solutions.

Adding this new feature to its solution allows RiskFirst to help clients address the requirements of GMP equalisation. UK employee benefit consultants using the PFaroeDB solution are now able to access member-level GMP equalisation capabilities within a fully integrated valuation system, alongside a suite of DB pension scheme analytics tools that enables daily valuations, hedging, measurement of risk exposure and asset and liability management.

As part of the development process, RiskFirst sought feedback from existing clients of the PFaroeDB solution about various modelling approaches to determine the GMP valuation methodologies that are required to address consultants’ needs.

“When developing a GMP solution we recognised that to resolve the equalisation challenge, consultants would require a holistic view of GMP valuations and in-depth DB pension scheme analytics in order to provide the best service to their clients,” says Matthew Seymour, CEO of RiskFirst.

Jonathan Conway, head of Customer Success at RiskFirst, adds: “GMP equalisation is complex, and needs to be done right. DB pension schemes across the UK will be reassessing their methodologies and looking for advice on how to navigate this challenge. This provides PFaroeDB users with an excellent opportunity to consult with their own clients and support them through this change.”

Fenergo will work initially with Aviva Investors and later with Aviva UK Insurance, to rapidly onboard all legal entities associated with investors and clients across all jurisdictions, transforming the investor and client onboarding experience. 

Aviva selected Fenergo to deliver an end-to-end solution to streamline the management of multi-jurisdictional KYC, CDD, and AML regulatory processes, while improving the customer journey and driving efficiencies by replacing manual processes. Fenergo will enable Aviva Investors to achieve a single client view through a central data repository which will also serve as a golden source for all KYC data. The centralisation of data will reduce the number of information outreach requests to new and existing customers and will allow resources to focus on more value-add and revenue generating tasks within the business.

“Aviva Investors has continued to focus heavily on improving our clients’ onboarding process, as we strive to provide the seamless experience that our clients expect and deserve,” says Michelle Calcutt, head of Client Experience. “Implementing the Fenergo solution will be a great step forward, as it will enable us to make best use of publicly available data and streamline the process further. In reality this will mean less onerous documentation requests to our clients, resulting in a faster and smoother onboarding experience.”

With Fenergo’s solution, Aviva Investors will be able to easily identify and trace Ultimate Beneficial Owners (UBO) and better understand complex legal entity hierarchies and ownership relationships. Fenergo’s solution ensures accurate regulatory classifications and reporting across multiple jurisdictions and provides increased transparency required by third parties such as auditors and regulators. In addition, Fenergo’s solution will automate all periodic and ongoing KYC reviews and maintenance requests as well as requisite risk assessments within a secure platform.

Kevin O’Neill, global head of Asset Management and Asset Servicing at Fenergo, says: “We are delighted to partner with Aviva Investors, one of the world’s leading Asset Management businesses. In today’s competitive and challenging climate, the Asset Management industry has recognised the need to digitalise the onboarding process and streamline compliance amid the various regulatory headwinds. Our solution will help Aviva Investors to optimise client experiences while ensuring that all AML, KYC and CDD requirements are automated in a rules-based secure environment.”

“In working with Aviva Investors, we also look forward to expanding our services into Aviva Insurance and in time, extending our CLM solution into the Global Insurance industry,” continues Kevin. 

Aviva, an international savings, retirement, and insurance business serving 33.4 million customers globally, joins Fenergo’s growing roster of Asset Management and buy-side financial institutions. 

The SEI Master Trust offers a fully bundled solution for employers delivering defined contribution schemes, helping clients meet financial objectives, reduce business risk, and fulfil their due diligence requirements through implemented strategies. 

Anthony Rafferty, managing director at Origo, says: “Origo Transfer Service is a tried, tested and trusted service delivering for customers year on year. It is a natural fit with Master Trusts, and we are delighted that the SEI Master Trust has joined the Origo Transfer Service community. 

“By automating transfers the service is fundamental in helping providers deliver faster and better service and outcomes to their members and clients.”

David Snowdon, director of DC Solutions in SEI’s Institutional Group, says: “The SEI Master Trust has been constantly evolving to meet member needs since its launch in 2007, so the decision to partner with Origo and utilise its Transfer Service was taken as part of this continuous improvement programme.

“It is hugely important to both SEI and the Trustee that our members receive excellent service. With an increasing number of members wanting to consolidate legacy pensions swiftly and securely into the Master Trust and SEI’s clear focus on efficient use of lean process technology, implementing the Origo Transfer Service was the logical decision.”