Global Custody News - 10 April 2025

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Welcome to Global Custody Pro! I'm Brennan McDonald, Managing Editor. I write about the global custody industry based on my 12+ years in financial services, including working at a leading global custodian. Have feedback? Just reply to this email or connect with us on LinkedIn.

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Table of Contents

• 📠 Editor’s Comment

• 🌏 Global Custody News

• 🚀 Digital Asset News

📠 Editor’s Comment

This week with all of the market volatility I thought I’d write about the impact on clearinghouses. You can find that article below in case you missed it on Wednesday. My take is that a lot of systemic risk has been taken out of public markets since the Global Financial Crisis, but that it still exists. You only have to look at the UBS acquisition of Credit Suisse and the Silicon Valley Bank drama for evidence of that.

On the financial markets infrastructure side, the Principles for Financial Markets Infrastructure and the wider global regulatory framework has changed the overall risk profile in public markets. More products are centrally cleared than in previous crises, shifting risk from bilateral counterparty risk to liquidity risk in times of stress as direct and indirect participants fund much larger margin calls on higher trading volumes.

There is, of course, bilateral counterparty risk in many financial products like uncleared OTC derivatives, and that can’t be underestimated, but there are many more layers of disclosure of these risks than you find in private markets. The risk at a system level is there - but the opacity of private markets is more likely to be hiding the next Global Financial Crisis. Just because there isn’t a daily mark-to-market and adjustment to reality doesn’t mean the risk isn’t there. Some of the marketing from private market operators this week reeks of hubris - human biases and errors are still very much alive in financial services.

🌏 Global Custody News

• BNY has successfully executed the first intraday triparty repo trades, allowing market participants to optimize liquidity with same-day repo settlements for specified time periods rather than traditional 24-hour terms. The USD-denominated pilot in February involved UBS borrowing from Swiss Re, followed by additional transactions between Banco Santander and Rabobank in April. "Our intraday triparty repo solution is an important step towards providing more flexible liquidity management possibilities," said Gesa Johannsen, BNY's Executive Platform Owner for Global Collateral, while UBS's Jason Crosskey noted that "this facility enhances intraday capabilities by allowing institutions to provide or access cash at specific times to better manage liquidity."

• Proxymity has launched Shareholder Disclosure, a regulatory solution that simplifies compliance with global shareholder disclosure requirements for intermediaries across 14 markets beyond its existing European SRD II coverage. CEO Dean Little said the solution transforms "a traditionally complex and fragmented process into a seamless, automated experience." This follows Proxymity's recent U.S. expansion with Vote Connect Total and aligns with its commitment to improving investor communications and corporate governance.

• Apex Group is acquiring Flow, a private markets software provider, in a move to enhance its fund services capabilities, the company announced. The acquisition adds 15 employees and $17 billion in assets under administration to Apex Group's portfolio. The deal builds on an existing partnership between the companies and will integrate Flow's digital solutions with Apex Group's comprehensive services.

• FNZ has secured US$500 million in new equity funding from its existing institutional shareholders, the company announced on April 5, 2025. The fresh capital will strengthen FNZ's financial position. CEO Blythe Masters stated the funding would help execute the company's refreshed strategy, while Group Chair Gregor Stewart described the investment as an endorsement of FNZ's strategy and the scale of opportunity in the wealth management sector.

• SS&C Technologies has opened a new office in Riyadh, Saudi Arabia, expanding its Middle East presence where it currently serves 850 financial institutions and corporate clients, the Nasdaq-listed financial software provider said on Monday. SS&C Chairman and CEO Bill Stone cited Saudi Arabia's Vision 2030 economic transformation program, expected to drive over $3 trillion in investments, as a key factor in the expansion decision. The new office, led by Director Issa Jadon, aims to strengthen relationships with Saudi regulators and better serve the company's 150 existing Saudi clients.

• Fund administration firm JTC PLC reported an 18.6% rise in annual revenue to £305.4 million for the year ended December 31, 2024, with net organic growth of 11.3%. The company announced or completed six acquisitions during the period, including Citi Trust which is expected to complete by Q2 2025. Despite strong underlying performance, reported profit before tax fell to a loss of £7.4 million, affected by a one-time employee share award of approximately £50 million.

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🚀 Digital Asset News

• BlackRock, the world's largest issuer of spot crypto ETPs with $50 billion in AuM, has expanded its partnership with Anchorage Digital Bank to include digital asset custody services, the companies announced. BlackRock selected Anchorage as an additional custodian eligible to support its spot crypto ETPs and other crypto funds. The relationship grants BlackRock access to Anchorage's bankruptcy-remote custody, staking, settlement and on-chain governance capabilities. Robert Mitchnick, BlackRock's Head of Digital Assets, cited Anchorage's institutional-grade quality, while Anchorage CEO Nathan McCauley expressed pride in helping "bridge digital assets and traditional finance" to meet growing retail and institutional client demand.

• Broadridge announced the launch of Broadridge Digital Asset Solutions on Tuesday, offering capabilities to help financial institutions scale their digital asset strategies while meeting global regulatory requirements. The new solutions, which include the previously launched ClearFi platform, aim to bridge traditional and decentralized finance by aggregating on-chain and off-chain information from hundreds of sources into a standardized format. According to Michael Tae, Co-President of Broadridge's Investor Communication Solutions Business, the initiative will enhance transparency for investors navigating cryptocurrency and tokenized assets, similar to how the company has assisted millions of investors with equity and fund investments.

• Digital asset broker Zodia Markets, backed by Standard Chartered, has partnered with Finery Markets to expand institutional access to digital asset and fiat liquidity, the companies announced on Wednesday. The collaboration leverages Request-for-Quote trading methods to distribute pricing through a single connectivity point, eliminating need for additional technical integration. Zodia Markets will provide access to foreign exchange pairs with same-day settlement capabilities across all Finery Markets products, including its Marketplace, Liquidity Match and Whitelabel services. The partnership also utilizes Finery's existing integrations with prime brokers like Hidden Road (whose acquisition by Ripple was announced this week) - streamlining settlement processes.

• Ripple has announced the acquisition of Hidden Road, a global multi-asset prime broker, for $1.25 billion in one of the largest deals in the digital assets space. The acquisition will see Ripple inject billions of dollars of capital to scale Hidden Road's prime brokerage, clearing and financing platform, which currently clears $3 trillion annually with over 300 institutional customers. The deal positions Ripple as the first crypto company to own and operate a global, multi-asset prime broker, while also strengthening Ripple USD (RLUSD) as an enterprise-grade USD-backed stablecoin. Hidden Road will migrate its post-trade activity across the XRP Ledger to streamline operations, showcasing the ledger's potential for institutional decentralized finance. The acquisition, expected to close in the coming months pending regulatory approval, comes as Ripple's CEO Brad Garlinghouse cited an "inflection point" for digital asset adoption with the U.S. market "effectively open" following the end of regulatory challenges.

• Euroclear has joined the Hong Kong Monetary Authority (HKMA) Project Ensemble as an Architecture Community member to develop industry standards supporting interoperability between central bank money, tokenised money and tokenised assets, the firm said on Monday. The Brussels-based firm will contribute to the HKMA initiative, launched in March 2024, which aims to foster and shape Hong Kong's tokenisation ecosystem. HKMA Executive Director Nelson Chow highlighted the 20-year partnership with Euroclear that has enhanced Hong Kong's infrastructure as an international financial center, while Euroclear's Asia Pacific CEO Philippe Laurensy said the collaboration aligns with the company's Asia and innovation strategies to develop solutions for a more interconnected financial ecosystem.

• The U.S. Securities and Exchange Commission’s Division of Corporation Finance issued guidance declaring that certain USD-pegged stablecoins do not qualify as securities under federal law, provided they meet specific criteria. The guidance applies to "Covered Stablecoins" that maintain a one-to-one value with the U.S. dollar, can be redeemed for USD at that ratio, and are backed by low-risk, liquid assets held in reserves that match or exceed the stablecoins in circulation. The clarification provides regulatory certainty for stablecoin issuers who structure their products within these parameters.

• Cboe Global Markets announced on April 7, 2025, plans to launch Cboe FTSE Bitcoin Index futures on April 28, pending regulatory review. The cash-settled futures, based on the FTSE Bitcoin Reduced Value (1/10th) Index, will complement CBOE's recently introduced Bitcoin U.S. ETF Index options. The new futures will settle monthly on the last business day and will be cleared through OCC, the same clearinghouse used for their bitcoin options products. The launch represents the first product under a new collaboration with FTSE Russell.

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