📻 Don't forget private markets in 2025📻

📰 Welcome to the Newsletter

Good morning, at Global Custody Pro we track what's happening in global custody, clearing, payments, and digital assets. We filter through industry news to bring you what matters most in clear language.

The global custody industry is complex, but for a reason. This year we’re going to keep publishing articles that help unpack that complexity each Wednesday and share this roundup of news each Friday to save you time.

This week we’re thinking about private markets. A lot of market infrastructure is built around public markets - stocks, bonds, listed derivatives. Private markets are their own complex arena and we will write more about how the value chain for supporting these investments differs, but still needs to be integrated into the platforms of global providers.

Don’t forget about private markets when you think about the global custody industry. They’re complicated because they are much less transparent, yet have trillions of dollars in assets under management. So a big question for 2025 is - as they keep growing, how are risks managed? What is under the hood of private markets around the world?

🌏 Global Custody News

• In their 2024 Japan AGM review, Sodali & Co found that shareholder proposals in Japan have risen since 2019. Their analysis finds that more investor interest in corporate governance issues and a willingness on the part of asset managers to support shareholder resolutions is one reason for the growth.

• KPMG have published a comprehensive overview of the Final Rule for US Treasury Clearing, which will change the post-trade services landscape for US fixed income with mandated central clearing. They explain the rules in detail and the downstream regulatory reporting obligations. While systemic risk will be reduced, there are major changes and developments for all participants across the value chain.

• The Muscat Stock Exchange (MSX) and Muscat Clearing and Depository (MCD) have announced the issuance of new regulations governing dual securities lending and borrowing (SLB) activities, as well as covered short selling (CSS).

• Apollo highlight in their 2025 outlook for Private Markets that from 2003 to 2023, the share of private credit as a share of US total credit has risen from 1.7% to 6.6%. There is now over US$1.5 trillion in private credit funds globally, with over US$400 billion in “dry powder” available to be deployed.

• The WSJ reported that the SEC has written off at least US$10 billion in fines it couldn’t collect over the past decade. How many other regulatory fines are written off around the world? Given the keen press releases from prosecutors, this could be a wider issue globally.

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🚀 Digital Asset News

• Volatility Shares has filed for a Solana Futures ETF. This suggests that crypto ETF issuers are expecting no issues with regulatory approval in 2025 from the SEC or CFTC. Volatility Shares currently has a suite of leveraged ETF products including 2x Bitcoin and 2x Ethereum products.

• The Block published their 2025 Digital Assets Outlook. The regulation section in Part 8 is worth a read for a more “crypto industry” view of regulation in the digital asset space compared to how more traditional financial services experts interpret potential changes under a Trump administration.

• Attorneys from Shepherd Mullins explore the SEC focus on targeting the use of NFTs as securities. Their analysis suggests NFTs can be securities, resale royalties could be a key factor in assessing an NFT project, and marketing statements need to be carefully considered. How this approach will change in 2025 under a new administration will be an issue to watch.