This Week: DTCC shelves Investor Kinetics; LTX’s BondGPT; Citi HK settlement; and more

DTCC shelves Investor Kinetics data service amid information leakage concerns

The Depository Trust & Clearing Corp says it will indefinitely suspend its Investor Kinetics data service from July 31 in response to “ongoing client and industry concerns” about the service.

Investor Kinetics, part of a suite of “Kinetics”-branded data services, provides current and historical time-series trade data on institutional matched trades, such as volume, Vwap, number of trades, number of unique investment managers, and concentration, segmented by investor type—for example, asset manager, hedge fund, retail wealth manager—and delivered on a T+3 basis. According to DTCC, the service could be used to back-test trading models, and to “identify price and volume trends by investor type for alpha generation, risk modeling, and other purposes.”

The investor concerns stem from a May research report in which Themis Trading said this was tantamount to information leakage, and provided an unfair trading advantage to those who purchased the service, which comprised information on all firms’ “valuable trade information”. For example, according to the report, CloudQuant identified two signals relating to fund flow and concentration based on Investor Kinetics, which produced a “dollar-neutral portfolio return” of more than 35% per year, which outperformed the S&P 500 by an average of 21% over 10 years. CloudQuant referred to the data as a “gold mine”.

“Essentially, DTCC is using institutions’ trading activity to help those who purchase the data feeds gain a competitive advantage,” noted authors Joe Saluzzi, partner and co-founder of Themis Trading, and Scott Wilson, partner at Themis, in the report.

Tim Keady, managing director and chief client officer at DTCC, said in a statement provided to WatersTechnology: “We stand firm in our position that our data products offer valuable and appropriate transparency into market activity without revealing confidential trading information,” noting that all its data is anonymized and/or aggregated and shared on a delayed basis, and that DTCC has engaged third-party advisors, including data scientists and domain experts to “verify the effectiveness of these data protections”.

As of Friday, June 9, DTCC had already removed the product description of Investor Kinetics from its website.

LTX enters the LLM game

LTX, Broadridge’s bond trading platform arm, announced the launch of BondGPT, an application powered by OpenAI’s GPT-4 large language model. The tool aims to answer bond-related questions and assist users in the identification process of corporate bonds on the LTX platform.

BondGPT takes in liquidity information from the LTX Liquidity Cloud and use’s LTX’s “patent-pending bond similarity technology,” which filters information based upon a set of user-adjusted parameters to assist in identifying bonds with similar characteristics. Officials say it is designed to work like a chatbot that allows users to ask questions and identify corporate bonds on the LTX trading platform based upon the user’s criteria.

“LTX’s innovative implementation of generative AI for BondGPT offers portfolio managers and traders a new approach to pre-trade analysis, departing from traditional methods,” said Miguel Cota, VP & senior credit trader at American Century Investments, in a statement. “This opens up unprecedented possibilities for credit investment professionals.”

According to the vendor, more than 30 dealers and more than 80 asset managers have joined the LTX platform, which has over $7 billon in initiated firm orders and an average daily volume of over $25 billion in the Liquidity Cloud in Q1 2023.

Click here to see sample BondGPT queries and responses.

Citi rolls out automated settlement in HK

Citi Securities Services, the custodial arm of Citigroup, has unveiled a fully-automated settlement solution for clients in Hong Kong that provides better, more timely, and more flexible post-trade processing services. By connecting directly to Hong Kong’s CCASS Central Clearing and Settlement System, Citi can provide settlement outside of current scheduled batch settlement processing. Citi officials say the solution was developed in response to client demand for faster settlement processes to support more efficient collateral management and trade settlement confirmations for reporting purposes.

Northern Trust creates online research hub

Northern Trust’s asset servicing arm has rolled out an online “community and content hub,” dubbed A-Suite, which provides content and research, and the ability for asset owners to benchmark and share best practices.

Officials say A-Suite will help empower asset owners’ goals of maximizing returns so they can better serve their constituents, and that Northern Trust plans to quickly expand its capabilities by adding more features in upcoming releases.

Fenergo delivers compliance tools for fintechs

KYC and compliance platform provider Fenergo has unveiled a new software-as-a-service offering, dubbed KYC & Transaction Compliance, that can be integrated by financial technology vendors, allowing them to provide continuous transaction monitoring in real time as part of their services.

Officials say that connecting KYC and transaction data allows fintechs to obtain a 360-degree view of each customer, eliminating siloes that currently exist between disparate monitoring tools. The service can detect suspicious transaction activity, such as money laundering and terrorist financing, and can be used to trigger enhanced due diligence checks, a KYC data refresh, or to adjust risk ratings. It draws data from key sources via a single API, then uses low-latency AI technology to analyze historical transaction data, reducing the number of false positives, saving vendors time and money.

Facteus debuts natural-language database query tool, ‘Mobius’

Facteus, a provider of data-as-a-service consumer transactions databases, has launched a new interface, dubbed Mobius, that allows users to query large datasets by asking free-form text questions, and presents the results in a user’s chosen report type, without needing to write code, query databases or maintain data in spreadsheets.

Officials say Mobius converts natural language into data queries, similar to large-language models like ChatGPT, to extract answers from Facteus’ datasets, and helps users identify and connect to more relevant data to provide more accurate answers, and deliver them in the form of market share reports, cross-shopping reports, and competitor reports, among others.

BMLL adds Cboe Europe Indices to product suite

BMLL, a provider of harmonized, historical data and analytics for equities and futures markets, has made constituent data for Cboe Europe Indices available within its BMLL Data Lab, BMLL Data Feed, and BMLL Vantage suite of products. This complements existing Cboe historical data for Europe, US and Japan, which are already available in BMLL’s products.

BMLL’s trading analytics and liquidity fragmentation can now be analyzed across Cboe Europe’s single country, pan-European and sector indices. Examples include the Cboe UK 100, Cboe Eurozone 50 and Cboe Europe Finance Sector indices.

The addition of the new datasets continues BMLL’s strategic plan to enhance data coverage for the benefit of market participants globally. Most recently, BMLL added APAC and South Africa markets to its coverage.

• (Editor’s note: the below are from the previous week)

VerifyVASP becomes GLEIF validation agent to increase digital asset transparency

The Global Legal Entity Identifier Foundation (GLEIF) announces that VerifyVASP, a Singapore-based regtech solutions provider, has joined the Global LEI System as a validation agent.

VerifyVASP is the first validation agent to operate exclusively in the crypto and digital asset trading space. By assuming the role, the company can now help obtain legal entity identifiers (LEIs) for its clients among virtual asset service providers (VASPs), and can incorporate its clients’ LEIs into its decentralized messaging service to provide the verified entity identification data needed for compliance with current and anticipated regulations. The initiative aims to bring a new level of trading entity transparency in crypto and virtual assets across borders and jurisdictions.

Murex extends connectivity to London Stock Exchange Group’s Real-Time Optimized on AWS

Murex, a provider of trading, risk and processing solutions for capital markets, has announced that its MX.3 platform can now be connected with the London Stock Exchange Group’s cloud-based market data solution, Real-Time–Optimized, when MX.3 is hosted on Amazon Web Services.

Real-Time–Optimized provides financial firms with access to real-time market data from hundreds of exchanges and OTC markets around the world via the cloud. This connectivity enables Murex’s clients to choose how they want to retrieve real-time market data in the MX.3 platform. Using the same connectivity, they can choose between three possible deployment models offered by LSEG, including via AWS, LSEG’s private cloud, and on-premise delivery.

ExtractAlpha launches new alternative datasets to improve alpha generation

ExtractAlpha, a provider of investment research and data analytics, has released four new tools to help investors make better-informed decisions and improve alpha generation.

TrueBeats Global is a flagship dataset from ExtractAlpha and has been expanded with a new global version that now covers companies from Europe and Asia. The tool provides EPS and revenue surprise forecasts for thousands of companies worldwide.

Transcripts Model Asia is an AI-powered solution that analyzes earnings call transcripts from companies based in Asia. This unique dataset extracts insights and sentiment from company calls and offers access to restricted, in-person events across the region. It can be used to predict future stock returns for more than 2,000 Asia Pacific equities.

IRP Sentiment Signal provides a measurement of sentiment of Investment Research Provider reports covering Asia Pacific equities, using proprietary natural language processing of the report text. The signal has been proven to provide uncorrelated alpha in a dollar-neutral setting for developed Asian market stocks.

Finally, ExtractAlpha has built a new widget for Estimize, the crowdsourced platform that provides earnings and revenue estimates for thousands of companies. The Estimize Widget enables website owners to embed and access Estimize’s data directly from their own websites, allowing visitors to their websites to participate and benefit from crowdsourced estimates.

Accelex launches portfolio analytics and reporting platform for alternatives

Accelex, a SaaS platform specializing in alternative investment data acquisition, reporting and analytics, has launched a portfolio analytics and reporting platform for institutional investors and asset servicing providers, in response to growing client demand for a solution that delivers powerful insights from data extracted via periodic fund performance reports and statements.

Private markets investment professionals face significant challenges in accessing and visualizing detailed transparency data from their invested fund portfolios, resulting in firms needing to deploy expensive resources on manually surfacing and analyzing data, rather than focusing on delivering improved investment and risk decisions.

Accelex’s solution offers features that allow investors and asset servicers to analyze portfolio drivers across their entire investment network, including underlying asset operating performance. The solution also provides a comprehensive audit trail that links all data to its location within the source document, exposure analysis to identify concentration risks or deviation from allocation policies, as well as unique cohort analysis and historical comparisons.

The platform is part of Accelex’s integrated alternative investment data solution, which allows investors and service providers to automate the acquisition, extraction and analysis of data on their fund portfolios. The analytics dashboards are available via an online portal and data can also be fed directly into any middle- and front-office software solution.

Regnology enters exclusive talks to acquire Invoke

Regulatory reporting solutions provider Regnology expects to sign a definitive agreement to acquire Invoke, a French-based provider of financial, regulatory, and tax reporting solutions for supervisory authorities and reporting entities. Once complete, the deal will mark the fifth acquisition in less than a year for Regnology.

Invoke employs more than 160 full-time employees,Iserving over 1,800 regulated entities and supervisory authorities throughout Europe with its XBRL-based banking, insurance, and tax reporting solutions. Invoke’s corporate tax solution will complement Regnology’s financial tax reporting solution and open a new growth area for the company.

The contemplated acquisition would follow on the heels of Regnology’s acquisition of UK-based statistical SDMX reporting specialist Metadata Technology earlier this month. This strategic deal was preceded by the purchase of KPMG’s K-Helix reporting software business unit and the acquisition of Brussels-based reporting specialist B-fine in November 2022. In June 2022, Regnology announced a deal to acquire PwC UK’s Tax Information Reporting software business.

The contemplated acquisition is subject to further due diligence and conditions.