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ASSET MANAGEMENT:

Female asset manager launches first ESG strategy RadiantESG Global Investors, the women-run asset manager backed by HSBC, has launched its first environmental, social and governance (ESG) strategy.

The new Positive Change Smaller Companies strategy seeks to address the growing demand for firms that exhibit positive change in achieving sustainable and measurable results with respect to ESG factors.

RadiantESG said its approach to ESG analysis uses its proprietary Mosaic data platform to find investment opportunities.

NN IP’s green strategies unchanged by new EU Taxonomy NN Investment Partners (NN IP) has said it does not hold natural gas within its green bond funds and that the European Commission’s announcement on December 31 to include natural gas and nuclear in the EU Taxonomy will not change this.

Moreover, the Hague-based asset manager said it does not have nuclear power-related exposure that was constructed after 2019 in its impact strategies.

At the start of the year, the European Commission began consulting with Member States on a draft text of a Taxonomy Complementary Delegated Act, which would also cover nuclear and gas activities.

BlackRock outlines investments in the metaverse BlackRock has said investment opportunities in the metaverse are a reality today and outlined how the world’s largest asset manager is looking to capitalise in this space.

Nigel Bolton, co-chief investment officer of BlackRock Fundamental Equities, said that it’s “not a question of if, but when and how” when it comes to the existence of the metaverse, as global tech giants have clearly highlighted that it’ll be the next frontier in the digital world.

He continued by comparing the metaverse to the rise of the internet in the 1990s or the smartphone in the 2000s. SECURITIES FINANCE:

SEC lending rules require ‘important changes’ - AIMA The US securities regulator’s proposed rule of reporting security loans requires “important changes”, according to the Alternative Investment Management Association (AIMA).

AIMA told Global Investor: “We have filed a response to the US Securities and Exchange Commission (SEC) encouraging them to make several important changes to this proposal before considering a final rule.”

The trade body’s changes include limiting the scope of the proposal to the wholesale segment of the securities lending market, revising the SEC’s loan definition to exclude all customer short positions and replacing its proposed 15-minute loan-by-loan reporting framework with publishing aggregate, wholesale market loan data on a T+1 basis.

MUFG eyes US custody and global lending business Mitsubishi UFJ Financial Group has said it is looking to grow its US custody and global securities lending businesses in parallel, as it welcomes its latest recruit from Deutsche.

Based in New York, Bill Browne joins Mitsubishi UFJ Trust and Banking Corporation (MUTB), the bank’s trust arm, as vice president.

Akira Iwamoto, head of the trust division at MUTB New York, told Global Investor: “Bill will be part of a team reporting to Anthony Mogavero which is tasked with supporting both our growing US domestic custody business as well as our global securities lending solutions business.”

Industrials most shorted European stocks in January - data Concerns over global supply chains made industrial firms the most shorted European stocks last month, according to new data.

Short-position data from SEI Novus, an intelligence firm formed when

the US asset manager bought Novus in November last year, shows that industrial firms made up 21.25% of European short positions last month, beating consumer discretionary firms which accounted for 18% of short positions.

Industrials’ short positions increased by more than 3% in January, more than any other sector, while communications and materials firms saw the greatest reductions in their short exposures, by 1.49% and 1.43% respectively.

CUSTODY:

State Street’s BBH acquisition extended to end of Q1 State Street has issued new guidance on the Brown Brothers Harriman Investor Services (BBH) acquisition, suggesting the deal will now close by the end of March this year.

A spokesperson from State Street told Global Investor: “Due to the timing of completing regulatory approvals across multiple jurisdictions, we have updated anticipated timing for the close of the transaction to be first quarter of this year.”

The bank had previously said the acquisition would complete by the end of 2021. DERIVATIVES:

‘Teething problems’ expected as CSDR goes live The introduction on February 1 of the settlement discipline regime of the Europe’s Central Securities Depositories Regulation (CSDR) may cause initial problems for firms bound by the rules, a European settlement expert has claimed.

Jesús Benito, head BME’s CSD Iberclear at SIX, reflected on the introduction of cash penalties for settlement failures by saying: “We can expect teething problems as from 1 February. This regulation is really complicated and in some instances the regulatory technical details have not been provided with sufficient time or clarity so as to allow the stakeholders to be well prepared in advance.” Gemini looks to expand products into UK, Europe Cryptocurrency exchange and custodian Gemini has said it is looking to roll-out its US products and services into the UK and Europe markets.

Stephanie Ramezan, director of business development at Gemini Europe, said: “We are looking to see how we can deliver some of the same products and services that we have in the United States, or even different ones, to suits the UK market.

“In the US we have Gemini Earn which is a way for people to earn interest on their crypto balances. We’re looking to see how we can roll that out in the UK and Europe. We haven’t done it yet and we do not have a timeline, but it’s certainly something we’re looking at.”

ICE smashes Sonia record after UK rate hike The European arm of Intercontinental Exchange smashed in early February its previous record for trading SONIA futures as traders reacted to the Bank of England’s rate hike.

London-based ICE Futures Europe reported 752,930 lots of SONIA futures, up 56% on the previous daily record of 482,800 lots in June last year.

The ICE SONIA futures contract came close to setting a new daily record in late January but was boosted by the Bank of England’s decision in early February to increase the UK borrowing rate to 0.5% from 0.25%.

2021 trading volume growth dominated by EM – FIA Record levels of trading in 2021 were driven by growth in emerging derivative markets in the Asia Pacific and Latin America, according to the FIA.

The trade body said trading jumped by a third last year, to 62.58 billion futures and options contracts.

Options trading accounted for the largest increase, up 56% to 33.3 billion lots last year, and that growth was driven by a 47% growth in the equity segment.

Cboe cites new initiatives for quarterly revenue boost Cboe Global Markets has cited the extension of its trading hours, the launch of its first European derivatives market and increasing demand for options from retail traders for a 27% hike in quarterly revenue.

Ed Tilly, president, chairman and chief executive officer of Cboe Global Markets, said in a presentation on Friday the fourth quarter of 2021 was “an exciting quarter for our derivatives businesses”.

Tilly said: “We continue to expand access to our products and services globally through new initiatives, including the successful launch of 24x5 trading for SPX and VIX options, scaling of our new European derivatives businesses and the continued engagement of retail customers in the options market.”

ED TILLY