Our free fintech update also includes news from Smarsh, Pershing, BondWave, Foreside, CME Group, and Exablaze.
Regulators Focus on Digital Assets & AML/CFT
The leadership of the CFTC, Financial Crimes Enforcement Network (FinCEN) and the SEC is reminding the industry that activities involving digital assets must comply with anti-money laundering (AML) and anti-terrorism financing laws covered by the Bank Secrecy Act (BSA).
The AML and Combating the Financing of Terrorism (CFT) obligations “apply to entities that the BSA defines as ‘financial institutions,’ such as futures commission merchants and introducing brokers obligated to register with the CFTC, money services businesses (MSBs) as defined by FinCEN, and broker-dealers and mutual funds obligated to register with the SEC,” according to a joint statement from the regulatory agencies.
The AML/CFT requirement include establishing an “effective” AML program and recordkeeping and reporting requirements, “including suspicious activity reporting (SAR) requirements,” officials say. For the joint statement, digital assets include instruments that “may qualify under applicable U.S. laws as securities, commodities, and security- or commodity-based instruments such as futures or swaps.”
The regulators acknowledge that “the label or terminology used to describe a digital asset or a person engaging in or providing financial activities or services involving a digital asset … may not necessarily align with how that asset, activity or service is defined under the BSA, or under the laws and rules administered by the CFTC and the SEC,” officials say.
“For example, something referred to as an ‘exchange’ in a market for digital assets may or may not also qualify as an ‘exchange’ as that term is used under the federal securities laws. As such, regardless of the label or terminology that market participants may use, or the level or type of technology employed, it is the facts and circumstances underlying an asset, activity or service, including its economic reality and use (whether intended or organically developed or repurposed), that determines the general categorization of an asset, the specific regulatory treatment of the activity involving the asset, and whether the persons involved are ‘financial institutions’ for purposes of the BSA,” according to the joint statement.
The joint statement was issues by Heath Tarbert, chairman of the CFTC, Kenneth A. Blanco, director, Financial Crimes Enforcement Network (FinCEN) and Jay Clayton, chairman of the SEC
Hires and Promotions for Smarsh’s Executive Team
Smarsh, an electronic communications management vendor, has expanded its executive team with the hiring of Rohit Khanna as chief customer officer (CCO), Chris Morton as chief marketing officer (CMO), and the promotion of Tricia Juettemeyer to general counsel, officials say. The three new executives report directly to Smarsh CEO Brian Cramer.
Khanna will direct the Smarsh professional services, technical support and customer success teams. Before Smarsh, he was responsible for driving the customer experience at SecureAuth, officials say.
Morton joins Smarsh after more than 20 years of general management experience in building information and software businesses. Most recently, he led marketing and corporate development efforts for ethics and compliance software provider NAVEX Global. He also worked at Thomson Reuters (TR), where he ran the company’s first governance, risk and compliance (GRC) venture.
Before becoming general counsel, Juettemeyer had served for the past 18 months as Smarsh’s assistant general counsel and senior corporate counsel.
She leads the Smarsh legal and information security teams, with a focus on evaluating and advising on risk across the organization, officials say.
Pershing Unveils ‘Manager Gateway’ for Investment Managers
BNY Mellon’s Pershing has launched its Manager Gateway, a consolidated digital solution offering a centralized portal with simplified account access and a model delivery process, officials say.
“A successor to the Manager Workstation, Pershing’s Manager Gateway helps asset managers act on service requests and orders,” officials say. The new offering helps reduce “duplicative efforts and automatically collects and processes information on behalf of their clients.”
The Manager Gateway offers an intuitive user interface, and includes an enhanced workstation application to streamline day-to-day processes for investment managers, and a workflow tool that allows model providers to efficiently create, manage and deliver models to investment professionals, officials say.
“Demand for model portfolios continues to rise, as advisors increasingly look to scale their business and focus on delivering added value to clients,” says Sarah Chain, director of global strategy and product management at Pershing, in a prepared statement.
“Approximately 400 asset managers who deliver advisory investment solutions to Pershing clients are expected to have access to Manager Gateway enhanced workstation by the end of Q4 2019,” according to officials. “A phased migration to the new model workflow functionality will begin in Q4 2019, with completion also expected by midyear 2020.”
BondWave Enhances Fixed Income Platform
BondWave LLC, a financial technology vendor that focuses on fixed-income data, procedures and processes, reports several enhancements intended to expand both the content and the functionality of its platform for users.
The enhancements offer users “new levels of transparency and insights underpinned by objective data science and emerging technology,” the vendor says in a statement.
The firm’s platform “enables fixed income traders, advisors and investors to evaluate transaction costs, service and monitor accounts, as well as identify and communicate targeted trade ideas,” according to the statement.
The newest features “help drive more informed client interactions, while enhancing firms’ abilities to analyze, manage, and grow their bond business,” BondWave, founded in 2001, adds.
Foreside Acquires Compliance Advisory Services
Foreside Financial Group, LLC, a provider of regulatory and compliance services to clients in the asset management industry, reports that it has acquired Compliance Advisory Services, a regional consulting firm for financial institutions.
The acquisition “expands Foreside’s footprint in the U.S. and captures additional market share,” the company says in its statement.
Foreside Financial’s headquarters are in Portland, Maine, and it maintains offices in New York, Boston, Berwyn and Columbus, Londonderry, Concord, and Delray Beach, the firm notes.
CME Group Offers Market Data via Google Cloud
The CME Group, a Chicago-based derivatives marketplace, reports that it will become the “first derivatives marketplace to offer real-time futures and options market data on Google Cloud.”
The cloud-based marketplace is scheduled to begin operations on Nov. 17, 2019.
Employing cloud technology will “allow market participants to access CME Group’s valuable market data … from anywhere in the world with an internet connection through Google Cloud’s global network,” the group says in a statement.
“Our clients around the world increasingly are looking for quality real-time data within the cloud,” Trey Berre, CME Group’s global head of data services, says in a statement. “This innovative collaboration with Google Cloud will not only make it easier for our clients to access the data they need from anywhere with an internet connection, but will also make it easier than ever to integrate our market data into new cloud-based technologies.”
Exablaze Cuts Latency by More Than Half
Exablaze, a provider of ultra-low latency network devices, reports that it has achieved new STAC-T0 benchmark results for its ExaNIC FDK-XP (Firmware Development Kit Extension Pack), officials say.
“It slashed latency to less than half the previous benchmarked best, recording actionable latencies of 31-44 nanoseconds, signaling a marked advance in tick-to-trade system performance,” according to Exablaze. “In the STAC benchmarks, Exablaze demonstrated a high degree of determinism, with maximum latency remaining constant even while running at 11 million packets per second (7.72 Gbps), 3.4 times the maximum ingress (message) rate tested previously2. Exablaze set new records in every measurement.”
Exablaze was evaluated via the Securities Technology Analysis Center (STAC), an independent testing agency that facilitates the STAC Benchmark Council, an industry group consisting of financial firms and technology vendors, officials say.