Financial Technologies Forum LLC News Feeds http://www.ftfnews.com/ Omgeo Replaces Chief Compliance OfficerPost-trade services provider Omgeo has hired industry veteran Jeannie Shanahan to be its new managing director of governance, risk management and compliance replacing Kara L. Hill, who left her post as chief compliance officer to be vice president and deputy general auditor for the DTCC, confirm Omgeo officials. Hill joined the DTCC in January after 13 years with Omgeo.Shanahan will focus on developing risk-based compliance programs that support Omgeo’s efforts to reduce operational and counterparty risk and promote regulatory compliance, say Omgeo officials. In particular, she will focus on compliance with anti-money laundering/OFAC mandates, insider trading, records retention and anti-bribery/corruption laws and regulation. Shanahan will also oversee Omgeo’s SSAE 16 compliance through control testing and reporting.Shanahan, who has 25 years of experience, most recently was a credit risk director for State Street Global Advisors, where she developed and executed global credit risk programs. Before State Street, Shanahan held senior management positions at Fidelity Investments and Bank of Boston.Nomura Research Institute Fills Division Manager PostTechnology solutions and services consultant provider Nomura Research Institute has promoted Yasuki Okai to the position of senior managing director and financial technology solution division manager, say NRI officials.Okai will focus on growing NRI’s business across the capital markets sector via solutions that help clients remain compliant with the changing regulatory landscape, say NRI officials. Okai will oversee the division and report to senior executive vice president and member of the board Keiichi Ishibashi.“Okai has worked with multiple departments at NRI with proven success, including in operations and risk management,” says Tadashi Shimamoto, president and CEO of NRI in a prepared statement.Okai joined NRI in 1988 and has held various senior roles at the firm, including his recent position as the head of the Financial Technology and Market Research Department and Investment Information Systems Business Department, NRI officials say.eFront Adds to Management Team To cope with the growth that comes with 70 new customers, eFront has added a chief operating officer, a vice president for services and support and an independent, non-executive director, say officials at the software vendor for managing alternative investments.The new executives are chief operating officer Paul Wheeler and vice president global services and support Richard Watrasiewicz, and for the board of directors Kirsten English, officials say. acquiring the market-leading investor portal platform, Investment Café, releasing a new version of FrontInvest, and continuing to expand throughout Asia, Europe and North America via new offices and clients.The new COO Wheeler will manage eFront’s global operations and corporate finance, marketing, R&D, IT and human resources, officials say. He has previously held senior leadership positions at Wall Street Systems, Trema, Geac, and Baan. Watrasiewicz, who is responsible for solution delivery and support operations globally, managed the professional services organizations at financial technology vendors Temenos, Misys and Odyssey.As a non-executive director, English will join the company’s board of directors, providing strategic thinking and guidance to the management and the board, officials say. With more than 25 years of experience in the industry, English has worked with several financial technology growth companies as a director including Birdstep Technology and Contis Group.Markit Acquires DTCC Unit and StaffFinancial data services vendor Markit has acquired the assets and staff of the DTCC’s Global Corporate Actions Validation Service, say Markit officials. The validation service team researches, validates and confirms corporate actions. Markit is using the acquisition to expand Markit’s reference data offering and the vendor’s ability to provide managed services to global financial markets.“The GCA team is coming to Markit and staff will be joining our London and NY offices,” says a Markit spokesperson, adding that current GCA customers will experience “no changes throughout the transition.”Brokerage firms, banks, hedge funds, investment managers and service providers use the outsourced GCA service to help them accurately process corporate actions, say Markit officials. More than 50 types of corporate action announcements in equities, bonds and structured products are accessible via the GCA service.The management and validation of corporate actions is intended to help firms achieve operational efficiencies, less risk and lower fixed costs, officials say. The current GCA product line is “very strong and is attractive to us based on its current merits,” the spokesperson adds. “Over time we will expand the service with new datasets and other enhancements.”The validation service will offer the @Source corporate actions data for North America from the DTCC. Data flows from incumbent suppliers IDC and Six Financial Information will also be offered, say Markit officials. In fact, Markit will add more data sources such as Euroclear Bank’s corporate actions data for Eurobonds to the GCA database. Markit has been distributing Euroclear Bank Eurobond data via a partnership the two companies established last year.“GCA will operate much like it does today. Over time, we will expand the service with new datasets and other enhancements,” says Markit’s spokesperson. Other Markit managed solutions include an outsourced service for portfolio management that specializes in syndicated loans, structured products and other assets with complex cash flows. http://www.ftfnews.com/News-more-5459.html FTF News recently spoke with Virginie O’Shea, an analyst with market research firm Aite Group, who covers data management and post-trade technology issues. In this Q&A, O’Shea focuses on the operational data management issues that are heating up as regulators apply pressure and margins tighten. She also references an upcoming Aite Group report on investment data management due out this week.Q: What do you see as the biggest operational data management problem for securities firms?A: The biggest operational data challenge is fitting separate data sets that are used to support the full range of a firm’s back, middle and front office functions into a common framework.Firms may have expended time, money and effort on improving data quality in areas such as securities master data (which is to be expected given its importance as the bedrock of a firm’s business) and pricing data (as a result of regulatory and client scrutiny) but there has been relatively little attention focused on supporting fundamentally important data sets for the business as a whole and any linkages between these data sets. This is why data aggregation for internal and external purposes is such a pain point - feeding data into business analytics, risk management and regulatory reporting systems is a painful process that requires a lot of reconciliation, which is often laborious and manual work.Our upcoming report on investment data management indicates that although data may be relatively high quality in native systems due to the high level of scrubbing and cleansing work that goes on, it is not easily manipulated or combined for downstream use.Q: Does the front office still dictate what systems will be purchased and tell the middle and back offices to fall in line? Or have firms evolved as far as reviewing systems and their impacts on operational data management?A: Firms are actually beginning to realize the problems they are faced with on the operational data front due to the high level of regulatory pressure and business attention being directed at better supporting analytics tools and areas such as enterprise risk and collateral management.Years of innovation in the front office have taken their toll on the overall system architecture of many firms, hence key operational data sets often reside in multiple, siloed end-user systems. Being able to extract, combine and turn this data into actionable information is currently far from trivial – it’s a slow, painful process that can actually damage competitive edge and scalability and growth of the business in the long term.Q: Will banks and securities firms need to make managerial changes so that there are executives and managers in place to drive the better management of operational data? Or would a chief operating officer and a senior level manger suffice although they may have to expand their oversight?A: There definitely needs to be a C-level executive heading the efforts to tackle this data – otherwise it can end up as pure tactical firefighting at the individual end-user level.Strategic direction needs to be led from the top and that can involve a chief operating officer or a specifically nominated data head, depending on the size of the financial institution in question.What is equally important is that the project is not viewed as something short term – data governance and management does not have an end point, it is something that must be perpetual and continually reviewed. Having a data governance framework also requires the engagement of the key functions across the business – specifically nominated data stewards must be selected and brought into the process at an early stage.Q: Are data silos giving way to data warehouses as many are suggesting? Also, what are the drawbacks of data warehouses?A: There is still a massive data silo problem – some firms may have consolidated their securities reference data into one warehouse (or a couple) but the rest of these data sets largely reside in end-user systems.This will remain the case for most firms and most data sets – what is more important in many cases is to introduce some form of data fabric or integration layer to be able to combine these data sets. The industry will never truly rid itself of silos, so coping with this environment is key.Q: What kind of role with cloud computing play in the management of operational data?A: Cloud technology certainly lends itself to providing a flexible and lower cost data hub in which to aggregate and cross-reference key data sets from across the business. Several hubs for different downstream purposes are likely to be desirable – such as for business analytics, risk management and compliance purposes – slicing, dicing and combining data for different end users is much easier if you have a flexible rather than rigid technology in place. http://www.ftfnews.com/News-more-5458.html I got a snapshot of where hedge funds stand as far as outsourcing key operations during a panel discussion at FTF’s HedgeOps New York conference last month. It appears that there are some key do’s and don’ts emerging for external providers such as fund administrators and IT outsourcers. Firms are also developing more nuanced strategies for farming out operations.Overall, hedge funds have to understand that they are outsourcing functions but not the responsibility for them, say panelists. It may not be a good idea to outsource shadow accounting, for instance, and then blame the provider for bad NAV numbers, for instance.“Most of the restatements we’ve seen have come from those guys that have outsourced [their shadow accounting],” the panelist says. “That doesn’t really fly.” The better strategy for many hedge funds large and small is to keep shadow accounting in house as a control over farmed out, primary accounting services.The panel also suggests that hedge funds should outsource IT when possible but verify.One panelist recalled a situation where a new fund manager a firm took a fresh look at the firm’s portfolio line by line and found five bonds had defaulted nine months earlier, which constitutes a material P&L difference that would require a restatement. The problematic bonds had been flagged by the external administrator but the internal accounting staff and an auditor failed to catch the bond defaults and take corrective action. This example is an anomaly, the panelist adds, as the firm had four chief financial officers in two years. Yet the example underscores the point that hedge funds need to maintain an active role in overseeing their external administrators and outsourcers — even after the due diligence phase.The upside to farming out a lot of the operational grunt work is that internal staff can focus on the industry issues and trends that are likely to determine the fate of the firm, another panelist comments. “By getting a lot of the grunt work, so to speak, out of our hands, we are able to build the strength and education of our people so they can think of things differently—more big picture,” the panelist says.Conversely, hedge funds can look to third parties for external expertise such as the ever-growing need for compliance consulting and legal help with new areas of securities trading and finance, according to the panel.While hedge funds are formulating major strategies, they have to keep in mind that they must never assign fund administration and IT management outsourcing charges to the fund, according to all members of the panel. “The key thing is that you can’t charge it to the fund,” a panelist warns. “Outsourcing is a management company issue so you’re going to pay for it yourself.”Paying for IT outsourcing is a given for hedge fund startups that may have an advantage over larger firms when it comes to cloud computing, the panel says.While the startups are already acclimated to the usage of third parties and are open to the cloud, larger firms have to contend with an incumbent IT infrastructure. Even though large firms are exploring the cloud and other outsourcing options, “larger managers won’t look to completely outsource [IT management],” says a panelist. The virtualization that is inherent in a cloud computing infrastructure is appealing because hedge funds can pay for the CPU cycles and platforms they need on an as-needed basis and yet move to a smaller IT footprint internally.“If you already have servers in your closet, now you’re thinking of the pros and cons of cons of converting to the cloud or not,” says a panelist. “How long are these servers going to be good for? When is the insurance no longer available on them? That’s the tougher decision.”Another consideration is that the relatively new field of cloud providers will require extra due diligence particularly as they are likely to provide disaster recovery services. “There definitely were cloud-based solutions that did not fare well during Sandy,” says a panelist. “There were people that weren’t really backing up in the way they said they were going to. And there were some that were fine.”Other challenging situations for IT outsourcing include the service level agreements required, especially for highly sensitive data about funds and clients, says a panelist. Hedge funds also have to foster the strictest accountability among their outsourcing providers via effective standard procedures, agreements and documentation.The panel also stresses that as they engage outsourcing and other external support, hedge funds should also consider:Letting their investors know about the outsourcers, administrators and prime brokers they are using or will be moving to;Moving to off-the-shelf solutions that are much more easily supported than proprietary order management systems and customer relationship management applications with complicated liquidity modules, for example;Rethinking their providers if they have a heavy reliance upon Microsoft Excel spreadsheets to communicate key data; hedge fund staff members should also move away from an over-reliance on spreadsheets;Understanding completely the corporate governance and stability of their external suppliers, including knowing liability caps, exclusions for gross negligence, access levels to clients’ data, and the policies and procedures for former employees privy to confidential information. http://www.ftfnews.com/News-more-5457.html ISDA Makes Board Chairmanship a Full-Time PostThe International Swaps and Derivatives Association’s board of directors has appointed Stephen O’Connor to an expanded, full-time chairmanship with a mandate to take a leading role in derivatives industry reform while “assuming a more active, hands-on involvement in driving ISDA’s strategic initiatives,” say ISDA officials.A full-time chairman is needed to devote “more time and energy” to leading the association, ISDA officials say.O’Connor takes on the full-time post after serving as a member of its board since 2008 and as the chairman of the board since April 2011, ISDA officials say. During this time, he was a managing director for Morgan Stanley, which he joined in 1988. During his 25-year career with Morgan Stanley, O’Connor held senior positions in regulatory reform strategy, clearing and counterparty risk management.ISE Adds Three to Its BoardU.S. options exchange the International Securities Exchange has added three members to its board of directors from the financial services industry and reelected Gary Katz, ISE’s current president and CEO to serve another one-year term on the board as a management director, say ISE officials.The ISE has added the following industry directors: Patrick Hickey, head of market structure for proprietary market maker Optiver U.S., who was elected to the board as a director representing ISE’s competitive market makers; Elizabeth Martin of Goldman Sachs & Co., who was elected to represent the exchange’s electronic access members; and Slade Winchester of Citigroup, who previously represented electronic access members and competitive market makers on the board, was elected to serve in a new capacity as director on behalf of primary market makers. Each ISE exchange membership type is represented by two directors on the board who serve two-year terms, ISE officials say. Dennis Medvedsek of Knight Capital Group was appointed as CMM director to fill a vacancy, say ISE officials.In addition, the ISE reelected to serve one-year terms as non-industry directors: Michael Monaco, senior managing director, Conway Del Genio Gries & Co.; Hauke Stars, chief information officer for Deutsche Börse; Joseph Stefanelli, retired; and Kenneth Vecchione, president and CEO, Encore Capital Group.BNP Paribas Hires to Bolster OTC ClearingBNP Paribas Corporate and Investment Banking (CIB) has made seven appointments to bolster its over-the-counter derivatives client clearing and FX prime brokerage businesses in New York and London, say BNP Paribas officials.In London, BNP Paribas added to its fixed income client clearing sales team with Juha Sternberg from Morgan Stanley, where he was the senior salesperson on the FXPB team, say BNP Paribas officials. Prior to Morgan Stanley, Sternberg spent 11 years at JP Morgan in FXPB and OTC clearing. Giorgio Cali joins the London team from Barclays, where he spent three years as part of their sales effort across OTC clearing and FXPB, say BNP Paribas officials. These new staff members report to Marco Baggioli, head of client clearing sales in Europe and Asia.For its client solutions team, BNP Paribas has hired Emma McGinty from JPMorgan’s legal team to head the FXPB client documentation, say BNP Paribas officials. McGinty previously focused on OTC clearing and intermediation, mostly for FX. Prior to JPMorgan, she was at RBS for four years.BNP Paribas has also hired Muriel de la Fargue from JPMorgan to focus on supporting the firm’s client on-boarding efforts, say BNP Paribas officials. de la Fargue spent almost nine years in many middle office and client solutions roles across rates, credit and FX. McGinty and de la Fargue are based in London and report to Louisa Kwok, European head of client solutions.Diane Marsden joins BNP Paribas from JP Morgan to lead the newly formed fixed income clearing middle office, say BNP Paribas officials. Mardsen spent 12 years in various P&L and control roles and most recently headed up the rates PB and client clearing team. Mardsen reports to Christophe Mukerjee, Global Head of Credit & Interest Rate Operations.In addition, Grace Cole joins from Lamco Services, where she provided middle office support for the unwind of the Lehman Brothers derivatives portfolio, say BNP Paribas officials. Cole reports to Marsden. Prior to that, Cole had various middle offices roles at Deutsche Bank and Lehman Brothers.For its New York staff, BNP Paribas has moved Pierre-Emmanuel Pomes from the risk investments and markets team to the OTC clearing product management team, say officials at the firm. Pomes, who was with the risk team for six years, will work to enhance the firm’s OTC clearing offerings to meet client requirements and client counterparty clearinghouse services, say BNP Paribas officials. Pomes reports to Joe Buthorn, global co-head of fixed income clearing, based in New York.BI-SAM Expands in London BI-SAM — a data management, performance, attribution, risk, composites and reporting solutions vendor — is expanding operations in London and moving to a new location, say company officials.“Since the start of 2013, we have seen an increase of 33% in our UK customer base and we expect this trend to continue.” said Peter Ellis, general manager EMEA in a prepared statement. The vendor, which targets the global asset management industry, has doubled its UK-based account management team, and moved key product specialists from its head office to the expanded London office, Ellis says.SmartStream Reaches Out to Russia via Alliance FactorsSmartStream Technologies is reaching out to the Russian market through a partnership with Alliance Factors, a financial services solutions provider and Swift service bureau, based in Russia, say SmartStream officials.Alliance Factors specializes in business-to-business payments, back-office automation, compliance management and other STP-based solutions, say officials from both vendors. The collaboration is intended to help the Russian client base address STP-driven challenges in the back-office for reconciliations across all asset classes, cash and liquidity management, corporate actions and data management services. http://www.ftfnews.com/News-more-5456.html Commodity pools, private funds, banks and securities firms began the second phase of required clearing yesterday for Category 2 credit default and interest rate swaps and top U.S. clearing brokers serving as futures commission merchants are taking steps to help buy-side firms meet their requirements mandated by the CFTC.The CFTC has waived the clearing requirement for market participants eligible for and elect an exception from clearing because they are non-financial entities hedging commercial risk, say officials at the regulator. The commission also exempts certain swaps entered into by eligible corporate affiliates and certain treasury affiliates.The instrument classes that must meet the clearing requirement include various specifications of fixed-to-floating swaps; basis swaps; forward rate agreements; overnight index swaps; and swaps based on North American Untranched CDS Indices and European Untranched CDS Indices.The first phase of clearing started on March 11 this year when swap dealers and private funds began clearing swaps entered into on or after that date, say CFTC officials. All other parties, including accounts managed by third party investment managers and ERISA pension plans, that enter into swaps within the established classes must, by September 9, 2013, begin clearing those swaps or satisfy the terms of an applicable exception or exemption, CFTC officials add.U.S. Clearing Brokers Embrace CCSBofA Merrill Lynch, Barclays, J.P. Morgan and UBS have thrown their support behind the new OTC derivatives reporting standard, the Clearing Connectivity Standard (CCS) of the International Swaps and Derivatives Association, confirm officials from these firms. The CCS standard is intended to facilitate cost-effective connectivity among market participants and to drive post-trade efficiencies for asset managers, clearing brokers, custodians, and service providers.The CCS standardizes connectivity and reporting for central counterparty-eligible interest rate and credit default swap products through LCH.Clearnet, the CME Group, and Intercontinental Exchange, say ISDA and Sapient officials. In addition, the ISDA CCS Steering Committee is actively working with FCMs and custodians to include additional products, participants, and geographies. Sapient Global Markets provides PMO support for the standard.Future enhancements under consideration include conversion of the standard from a CSV template to FpML under the guidance of the ISDA CCS Steering Committee and the FpML Working Groups, add ISDA and Sapient officials.The brokers’ support follows ISDA’s endorsement last year of CCS. ISDA has been working with Sapient Global Markets to develop and promote the standard across the industry, say ISDA and Sapient officials. Custodian banks BNY Mellon, J.P. Morgan, Northern Trust and State Street are supporting the standard for reporting requirements.Backers of the standard are urging the clearing broker community to transmit information about cleared OTC derivatives trades and margins to their asset manager clients, custodians and service providers via CCS.“As the industry moves to implement mandatory clearing, the absence of a formal standard for formatting and transmitting margin and position data was a significant hurdle to achieving efficient and cost effective connectivity between market participants,” says Andres Choussy, global co-head of OTC clearing at J.P. Morgan, in a prepared statement.Citi’s OpenCollateral Targets EuropeIn London, Citigroup has begun offering its OpenCollateral central clearing services for over-the-counter derivatives via collateral management and middle office services for asset managers in Europe, say Citi officials.The derivatives middle office solution via Citi's Securities and Fund Services unit is in use at “a major long-only asset manager” for clearing OTC derivative trades via its clearing brokers, officials say. The Citi services support the new margining processes required for OTC clearing. In addition, the offering targets European investors who want to address their collateral requirements prior to the European Market Infrastructure Regulation (EMIR) regulations.The OpenCollateral solutions are intended to help clients optimize the use of collateral and streamline operations for many collateral assets across multiple counterparties, Citi officials say.Buy Side Still Not ReadyIronically, a recent poll by investment management solutions vendor SimCorp reveals that more than half, 53%, of capital markets respondents are not ready to centrally clear interest rate and credit default swaps, say SimCorp officials. Less than half, 41% say they are ready for central clearing. The poll conducted in March surveyed nearly 60 executives from 34 capital market firms across the globe. http://www.ftfnews.com/News-more-5455.html All seriousness aside, we at FTF News are doing our part to have fun at next week’s Sifma Tech show, June 18-19, in New York.The good times begin at our Sifma booth, No. 1301, where we have created a customized, five foot, parody of a popular, old school electronic game, something we’re calling the interactive “Operations.” The giveaways are also customized — FTF boxer shorts for those Sifma Tech participants brave enough to play our game (Check out the photo.)We will be a little more formal at the FTF News Technology Innovation Awards dinner. The event will take place Monday, June 17, starting at 6 pm at the Dream Hotel downtown in the Chelsea neighborhood of Manhattan at 355 West 16th St. In addition to the awards presentation, the night will feature Lois Barth, a professional and motivational speaker who has more than 20 years of experience as a life coach, speaker, health care practitioner and storyteller/comedienne. Tickets are still available for what will be a very special awards show.On the second day of the show, Wednesday, June 19, we will break up the afternoon with customized cupcakes from the very successful “Baked by Melissa” cupcake-maker.You can discreetly carry away your boxers and cupcakes in our very fashionable bags that say, “Let us do the heavy lifting,” on one side and “You have it in the bag with FTF,” on the other.While FTF News is mostly an online news source, we will deliver print and digital editions intime for the Sifma show. We hope you will find that our latest edition breaks new ground via our focus on the “New Rule of Operational Data Management.”In our fourth magazine, we tackle the data-related problem areas for corporate actions data processing, products and services for the very successful legal entity identifier effort, the messy data gathering to come for over-the-counter instrument collateral management and margining, the data integration challenges of automating reconciliation and whether or not firms should build data warehouses.Our digital issue will be available via a touch-screen monitor at our Sifma booth and in a traditional print format.We may have some other surprises in store but you’ll just have to come by our booth or contact us to find out more. http://www.ftfnews.com/News-more-5454.html Tradeweb Founder Joins GFI GroupTradeweb Markets founder James W. Toffey has joined brokerage GFI Group as global head of electronic markets to oversee GFI’s services as a global operator of electronic marketplaces for professional traders and market makers of cash and derivative financial and commodity products, officials say.At Tradeweb, Toffey served as the CEO and president through 2008 of the joint venture that began in 1997 with four global banks. Toffey was responsible for developing electronic markets for fixed income and equities and for creating innovative workflow solutions for financial market professionals.“Jim will provide critical leadership to our eCommerce team at this crucial time when we are launching our regulated trading platforms in the US and Europe,” says Colin Heffron, CEO of GFI Group in a statement. GFI provides wholesale brokerage services, clearing, electronic execution and trading support products for global financial markets.R.J. O’Brien Names Managing Director for Asset ManagementChicago-based futures broker R.J. O’Brien & Associates reports that Julie M. DeMatteo has joined the firm to serve as managing director, asset management from Barclays Capital, where she served as director, prime Services since 2010, officials say.At RJO, DeMatteo will help the firm leverage its managed futures offering and infrastructure by broadening product partnerships, establishing specialized products and lining up new distribution arms for the investment vehicles, says chairman and CEO Gerald Corcoran.At Barclays Capital, DeMatteo was responsible for establishing and expanding the firm’s footprint in the managed futures sector, officials say. She also worked with the structured products group to create and market futures-linked products. She also worked as executive director of business development at AlphaMetrix from 2008 to 2010.DeMatteo served as president and CEO of UBS Managed Fund Services from 2005 to 2008, and from 1991 to 2005, she held senior legal and compliance positions with bank futures commission merchants, including UBS Securities; ING (U.S.) Securities; and Bank of America Futures.CME Group Mulls Sale of Nymex BuildingGlobal derivatives marketplace CME Group is exploring the sale of the headquarters of the New York Mercantile Exchange, officials say. The CME Group, in partnership with its global real estate advisor Holly Duran Real Estate Partners of Chicago, has retained Newmark Grubb Knight Frank for the potential sale.The 16-story, LEED-certified Nymex building is located at One North End Avenue, immediately west of Brookfield Place (formerly the World Financial Center) and Goldman Sachs Tower, officials say.The company will continue operation of its Nymex trading floor in New York whether or not the Nymex building is sold, officials say. In the event of the sale, CME may lease back a portion of the building, including the trading floor and the possibility of relocating Nymex to other properties in Lower Manhattan."CME Group remains committed to our floor based membership and open outcry trading services in New York, which continue to be a profitable part of our business and serve our customers well," says Jamie Parisi, CME Group CFO in a statement. “The sale of the Nymex building will help us continue to reinvest in our core derivatives business, just as we did following the sale and lease-back of office space in the CBOT building in Chicago last year.”CME Group acquired the NYMEX Building, along with the exchange, in 2008. Nymex has occupied the building since 1997. CME Group owns the building on a ground lease from New York's Battery Park City Authority that expires in June 2069.Black River Hires from BNY MellonBlack River Asset Management has named James Gruver from BNY Mellon Investment Management to lead global investor relations, officials say.Gruver will report to Gary Jarrett, CEO and managing principal at Black River, and will be responsible for expanding Black River’s global brand footprint, developing new business and overseeing strategic relationships with institutional investors, investment consultants and intermediaries, say officials at the firm.“We believe James is uniquely suited to deliver Black River’s entire suite of hedge fund and private equity solutions,” says Jarrett in a statement.Gruver has more than 20 years of marketing, client service, product management and business development experience, officials say. At BNY Mellon, he held senior roles in EMEA, Asia Pacific and North America, overseeing corporate defined benefit and defined contribution plans; endowments and foundations; financial institutions; intermediaries; and sovereign institutions. He also served on BNY Mellon Investment Management’s Operating Committee and the New England Leadership team. He also worked at Delaware Investments, Morley Capital Management and SEI Investments.BI-SAM Names APAC Executive DirectorTechnology provider to asset managers BI-SAM has promoted Ian Thompson to executive regional director APAC as the vendor expands its teams in Hong Kong and Sydney, and opens a new office in Singapore, officials report.Thompson has held leadership positions in product management and client services at BI-SAM for more than seven years, officials say. He will be based in BI-SAM’s Hong Kong office.“The APAC region has been a key growth area for BI-SAM,” says Alexandre Harkous, CEO of BI-SAM, which provides data management, performance, attribution, risk, composites and reporting solutions for asset managers.Gores Group Acquires Etrali from France Telecom OrangePrivate equity firm the Gores Group has acquired trading turret and voice services provider Etrali, Orange Business Services – Trading Solutions, a subsidiary of telecom operator France Telecom Orange, officials say. As a result of the acquisition, the vendor will be rebranded Etrali Trading Solutions. Headquartered in Paris, Etrali offers voice and electronic trading infrastructure and services for the trading communities, officials say. Etrali also operates a voice and data network dedicated to the trading industry. The Gores Group was founded in 1987 by Alec E. Gores and is headquartered in Los Angeles. Etrali Trading Solutions employs more than 450 people in major financial centers. http://www.ftfnews.com/News-more-5453.html The CFTC has today published the final rules for swap execution facilities (SEFs) with the Federal Register, giving swaps dealers and other firms two months to register with the CFTC for approval of their venues for cleared and executed over-the-counter transactions.Most of the new rules will become effective August 5, 2013 and the official compliance date is Oct. 2, 2013.With the pieces falling into place for the Dodd-Frank reforms for the OTC derivatives industry, firms that will be using SEFs have about six months to finalize the overhaul of their operational data infrastructures as clearing and execution could begin as early as December, depending upon the ongoing actions of the regulators.The Big Issue: Credit AuthorizationSean Owens, director, fixed income research, consultancy Woodbine AssociateAs the rules begin to take effect, firms have been moving to assess and prepare for the many operational data needs of SEF execution, namely “the big issue” of credit authorization for participants, says Sean Owens, director, fixed income research, for consultancy Woodbine Associates.Firms are grappling with how credit is going to be authorized at an SEF via the futures commission merchants that oversee orders to buy or sell swaps. “The data behind that is more of getting an aggregated view of the credit extended from the FCMs to their customers,” Owens says. “Firms are going to be handling a lot more information in real time.” Credit limits and valuations for positions, for instance, will have to be monitored in real time and at the FCM level, he adds.The data challenges of monitoring and managing intraday levels for margins and positions will become more complicated, as these will cross traditional barriers within a firm, Owens adds. “Firms are going to need to have live data pumped in and then also have it available to their front, middle and back offices. That’s just one area where you are beginning to see the lines becoming a lot more blurred,” he says.“In particular, with a lot of the post-trade processing needs around cleared swaps, there’s a further blurring because the front office is going to be impacted by the amount of initial margins they need to post,” Owens says. “It’s going to translate into a firm’s funding needs.”If a firm does not have the collateral on hand, it will to have to find ways via up-to-the-minute information to fund the collateral, Owens says. “It’s going to be a secondary or tertiary consideration but still one that a front-office trader is going to look at when he’s putting on a new position,” he says.‘Competitive Advantage’Ultimately, how firms manage collateral for their cleared and executed OTC derivatives will become the “top competitive advantage” as buy-side firms go to market, according to a recent survey from market research firm Celent.To improve operational efficiency in this area, a majority of participants — 62% — say that they will have to eliminate manual systems or nonproductive measures such as “unstructured email and faxes for communication of margin calls” such as ad hoc, spreadsheet-based valuation calculators These error-prone activities must go because they are “a drag on resources and limit a firm’s ability to scale up when call volumes increase,” according to the survey.Cubillas Ding,a research director,Celent“The high degree of emphasis (above other factors) on both collateral efficiency and operational efficiency strongly suggests the urgent need to improve efficiency drags ‘at the core’ around margining processes while at least optimizing deal-level collateral usage and margins ‘in the front,’ ” says the report’s author, Cubillas Ding, a research director with Celent.In addition, one-quarter of survey participants identified data management and quality as a near-term priority for collateral operations in 2013. They will be focusing on improving the consistency of “golden” data source systems, collateral, risk and finance data, according to the survey.These operational data management concerns likely will be part of the $53 billion price tag that firms are expected to pay in infrastructure and information technology investments to make their systems more efficient, according to the Celent report, which is titled “Maximizing Collateral Advantage: A Survey of Buy Side Business and Operational Strategies.” http://www.ftfnews.com/News-more-5452.html The CFTC’s new rules for swap execution facilities have spurred controversy and Kenneth E. Bentsen, Jr., acting president and CEO of securities industry advocacy group Sifma, has recently voiced his opposition to key provisions of the final rules.In mid-May, the CFTC gave the initial green light to the rules governing the exchange-like SEFs. With the publication of the final rules in the Federal Register today, the regulator requires the following:After industry participants register their SEFs with the CFTC, they have another two months after the CFTC’s approval to operate their nascent SEFs until they are fully compliant.Organizations that enable multiple OTC participants to interact with many bids and offers via multiple parties to register as an SEF. However, systems that facilitate one participant trading with only one other participant are excluded from the SEF registration requirement.Requests for quotes (RFQs) are to be sent to at least two dealers during an initial one-year trial. After that first year, firms will be required to send RFQs to at least three dealers.Most of the new rules will become effective August 5, 2013 and although there are exceptions the official compliance date is Oct. 2, 2013.The CFTC rules that specify bid requirements and minimum block sizes for interest rate, credit, equity and foreign exchange swaps have caused Sifma its greatest concern.Kenneth E. Bentsen, Jr., acting president and CEO,  Sifma“The CFTC’s decision to impose a minimum bid requirement for certain swap transactions executed on SEFs will impair market liquidity at the expense of all market participants, ultimately harming the everyday investors that the rule aims to protect,” Bentsen said in a prepared statement. Bentsen added that Sifma is “equally troubled” by the CFTC rule for determining block sizes.“SIFMA believes that the CFTC’s methodology in determining block sizes is flawed and results in arbitrary outcomes that are not based on observable market data. Although the determination in the first year is an improvement on what had been proposed, we believe that it is too restrictive and not adequately justified,” Bentsen said.Anticipating the opposition, Gary Gensler, CFTC chairman, said in his statement of support for the new SEF rules for block trades that the final block rule for swaps is critical to promoting transparency in a previously opaque market.“With this rule, the public will benefit from seeing the price and volume of the majority of swaps transactions in real time—as soon as technologically practicable—after a trade is executed,” Gensler said. “Further, with this rule the public will benefit from the competition that will arise as buyers and sellers must transact on transparent trading platforms.”The methodology for determining block sizes is “appropriately tailored to vary by asset class and by underlying referenced product or rate,” Gensler argued.“The commission also has established a phased-in approach for setting and implementingGary Gensler,chairman,CFTCappropriate minimum block sizes. During an initial one-year period, block sizes in the interest rate and credit asset classes will be set such that 50 percent of the notional amount of a particular swap category will benefit from pre-trade and post-trade transparency,” Gensler said.“Also during this initial period, the block sizes for foreign exchange and other commodity asset classes will be based upon the block sizes that designated contract markets have set for economically related futures contracts,” Gensler said. After the initial period, the CFTC will determine block sizes using a methodology that relies on the data collected by swap data repositories.Block sizes will be set “such that 67 percent of the notional amount of a particular swap category will benefit from pre-trade transparency and enhanced post-trade transparency.” The rule will cover measures to protect the identities, market positions and business transactions of swap counterparties when their swap transactions and pricing are reported to the public, Gensler added.Sifma, however, has vowed to stay focused on the block-trade sizing issue. “We urge the CFTC to reconsider the methodology for determining block trades after the initial phase-in period,” Bentsen added.Sifma “strongly supports” the efforts of CFTC commissioner Scott D. O’Malia who proposed amendments that “would have injected credibility and objectivity to the process,” Bentsen said.In short, O’Malia said that the CFTC requirement to send RFQs to three market participants is not supported by law and that the new rules should have provided more clarity regarding voice execution.O’Malia also said the new rules should offer more clarity “regarding exchange of swaps for related position transactions.”Scott D. O’Malia,commissioner,CFTCThe SEF rules prohibit “trades involving an Exchange of Swaps for Related Positions (ESRPs),” O’Malia said in a prepared statement. “Yet again, such ban would have caused the pendulum of the commission’s regulations to continue its swing toward futures trading as the Commodity Exchange Act (CEA) expressly allows for bone fide Exchange of Futures for Related Positions transactions,” O’Malia added.“The commission sought to ban ESRP transactions because they were not expressly allowed by the CEA. Just because these transactions are not mentioned in the statute, they don’t have to be banned by the commission’s rules,” said O’Malia, who ultimately voted for the new SEF rules on May 16. http://www.ftfnews.com/News-more-5451.html Paul Tudor Jones, founder of the highly successful Tudor Investment Corp., said a month ago during a symposium that motherhood causes women who are macro traders to lose focus. To say the least, he has set off a firestorm or two. He has since apologized for his ridiculous remarks. Yet there might be an upside to the brouhaha because he has inadvertently re-focused attention on women’s potential in the realm of trading and by extension operations.First, let’s explore Jones’ logic.If it’s true that front office trading should be run only by white, straight men—a logical conclusion from what Jones said in a candid moment—then does that mean women should be relegated to the middle and back offices as those are the realms for women’s work? Or does he imply something darker—that women should not be in the trading world at all—that their real roles are as mothers and wives only?Sadly, he wasn’t asked to dig deeper when he spoke at an event at the University of Virginia on April 26. Given the strong reactions he has engendered, I suspect he will be very guarded in his future responses on the subject. My guess is that he heavily relies upon very talented people in the trading room and middle and back offices, regardless of their sex. Talent, intelligence and the killer instinct and not someone’s sex should be the overriding concerns for those firms that want to do their best for investors.An upside to the widespread attention given to Jones’ response to a question is that he has caused people to review a growing body of evidence that women may have certain strengths over men in the trading realm. First, there is no evidence of any analytical difference between male and female traders. In addition, other studies have shown that while men demonstrate more testosterone-infused risk taking that may or may not pan out, women have the potential to be more successful in the long term because they tend to be more rational and more practical about taking risks.It’s also true that mothers who work on the trading floor (and elsewhere) have to develop time management and juggling skills that single male traders may not yet have. By necessity, the mothers have to be more efficient, more decisive about their time and—to Jones’ point—intensely focused. To be fair, an argument can be made that married male traders also have to develop these same time-management and juggling skills to improve their focus and stay on top of ever-more complex lives.It’s a shame that Jones fell back on a stereotype about motherhood and working that has little relevance for the present. It would have been better if he had made the point that men and women who trade on the front lines and those that support them in operations and post-trade processing are actually three dimensional. You can be a parent, a trader, a spouse, a middle office senior manager, a back office managing director, a compliance executive and have a full life—regardless of your sex. It’s not a black-and-white, either-or world and never was. (The wonderful series Mad Men, which focuses on the Sixties, is making that point every week.)While some may deny it, we are in the 21st Century and the world is a big, increasingly perplexing place. So is the trading room. Talent, experience and results will win out on the trading floor and I predict that we will see more women there over the coming years. http://www.ftfnews.com/News-more-5450.html