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ASSET MANAGEMENT

Liquidity is top problem for hedge funds this year - report Liquidity problems have affected hedge fund performance this year as volatile markets have tested their internal systems and processes, a new report has found.

The first Systematic Hedge Fund Management Insight Report from intelligence firm Acuiti suggested that two thirds of hedge funds had “some or major issues” with their inability to optimise their trading performance due to liquidity issues.

Technology key to navigate different attitudes to ESG - BNY Mellon Technology is key to delivering data in the right format to navigate the differing attitudes to environmental, social and governance (ESG) in Europe and the US, a managing director at BNY Mellon has suggested.

Speaking at the Association for Financial Markets in Europe (AFME) operations, post-trade, technology and innovation conference in London, Corinne Neale managing director, global head of ESG applications at BNY Mellon, argued that ESG has a different meaning in the US to Europe.

SECURITIES FINANCE

SEC proposes to increase clearing of US treasuries, repo The US securities regulator has proposed to expand the scope of clearing in the US treasuries market, including US repo, as it seeks to increase market transparency and reduce systemic risks.

The US Securities and Exchange Commission (SEC) said in a statement that global firms depend on the $23.3 trillion (£20 trillion) US treasuries market to manage risk, post collateral and set benchmarks for borrowing and lending decisions.

Europe cancels UnaVista’s securities finance reporting license The European securities regulator has cancelled UnaVista’s securities finance reporting approval a year after the trade repository arm of the London Stock Exchange Group said it was closing the business.

The European Securities and Markets Authority (ESMA) said it had withdrawn the trade repository (TR) registration of UnaVista under the securities financing transactions regulation (SFTR) and all UnaVista’s clients have been transferred to a TR of their choice.

Apple overtakes Tesla as mostshorted US stock - research Apple has overtaken Tesla for the first since April 2020 as the most-shorted US stock, according to new research from New York-headquartered S3 Partners.

Apple short interest reached $18.44 billion (£16.1 billion) in September with 112.86 million shares shorted compared to Tesla short interest of $17.44 billion and 57.3 million shares in short positions.

CUSTODY

State Street targets proxy voting to enable ESG alongside lending State Street has said it is working to make the process of proxy voting more efficient and transparent as asset owners look to use this function to apply their environmental, governance and social (ESG) strategies alongside their lending programmes.

Speaking to Global Investor Francesco Squillacioti, global head of client management, securities finance at State Street, believes the idea of clients looking to vote through proxies has always been important from the early days of securities lending.

FRANCESCO SQUILLACIOTI

Euroclear invests in ESG analytics provider Euroclear has invested an undisclosed amount in an environmental, social and governance (ESG) technologyenabled analytics and data science solutions provider, to help firms increase their understanding of the sustainable impact of their investment strategies.

By partnering with London-based Impact Cubed, investors will now be able to compare a security’s sustainability exposure, allowing them to make more informed investment decisions.

Komainu hires former LSEG equities head Bertrand as CEO Digital asset custodian Komainu has appointed markets veteran Nicolas Bertrand as its new chief executive, settling an open position at the head of the joint venture backed by Japanese investment bank Nomura.

Komainu, based in Jersey, said in late September that Bertrand has become its chief executive with immediate effect and is charged with growing its business in the face of the uncertain market environment.

DERIVATIVES

ISDA wants 12 months to implement UK reporting reforms The International Swaps and Derivatives Association has recommended a 12 month grace period for firms to implement the “designated reporter” trade registration system proposed by the British regulator in September.

In its response to a UK Financial Conduct Authority (FCA) consultation, the New York-based trade body recommended an implementation period of 12 months citing operational challenges.

Singapore Exchange launches NDFs amid FX growth plan Singapore Exchange (SGX) has begun trading non-deliverable forwards (NDFs) on its new over-the-counter foreign exchange venue, marking a key first step in the Asian group’s plan to expand coverage in the asset class.

The Singapore-based firm said in September the new platform called SGX CurrencyNode streams liquidity for FX spot, precious metals and NDFs for clients, and is hosted in Singapore’s SG1 data centre.

CME fee cuts, portfolio margining to support Libor switch CME Group plans to introduce this year additional measures to encourage voluntary switching from US dollar Libor to the alternative reference rate ahead of its planned conversion dates in the second quarter of 2023.

Agha Mirza, global head of rates and over-the-counter products at CME, told Global Investor the exchange group plans to roll out the additional measures by the end of 2022, ahead of its planned April conversion dates for listed and CME cleared derivatives referencing Libor. Cboe predicts record year for options trading Cboe Global Markets has said it is on track to break its annual options volume record as the exchange reaps the benefit of an increase in portfolio hedging activity, according to analysis by the group.

AGHA MIRZA