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- Global Custody News - 28 March 2025
Global Custody News - 28 March 2025
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Global Custody Pro
March 27, 2025 • Reading Time: 9 minutes
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🌏 Global Custody News
Source: Testing out Open AI ChatGPT’s new 4o image generation model
State Street has successfully transitioned to Proxymity's Vote Connect Total solution for the German market, continuing their global collaboration after implementing the platform in 14 other markets earlier this year. Both companies' executives emphasized the importance of this partnership in delivering transparent, efficient, and technology-driven investor communications. The migration coincides with Proxymity's recent $26 million fundraising round, which strengthens its position as a leader in digital investor communications.
FICC, a DTCC subsidiary, has launched its enhanced Agent Clearing Service with new capabilities for separating house and customer activity and margin ahead of the SEC's March 31 deadline, despite regulatory extensions for mandatory Treasury clearing. Daily clearing volumes through FICC have more than doubled from $4.5 trillion to over $9 trillion since the SEC's proposed rule, with multiple daily peaks exceeding $10 trillion. FICC's Sponsored Service experienced 85% year-over-year growth in February, providing more than $700 billion in daily balance sheet capacity to the industry.
Pirum has appointed Ed Corral, former Global Head of Collateral Management at J.P. Morgan with over 30 years of industry experience, as its new Head of Collateral Services to lead the expansion of CollateralConnect in North America. Working from Pirum's New York office, Corral will leverage his extensive background, which includes heading Tri Party Repo and Collateral Optimization at Morgan Stanley, to grow the firm's U.S. presence. Pirum, which provides securities finance automation and collateral management technology to over 150 financial institutions globally, views Corral's "exceptional track record and industry connectivity" as crucial for its North American growth strategy, according to company President Ben Challice.
REGIS-TR has appointed María Santos as its new Head, who joined in March 2024 as Managing Director and has led the company's migration to the SIX Group. Jose Manuel Ortiz-Repiso, Head of Securities Services ad interim at SIX, welcomed Santos for her "extensive experience and leadership in the industry" while thanking outgoing leader Thomas Steimann. Before joining REGIS-TR, Santos spent five years in management positions at Iberclear, Spain's Central Securities Depository, after working at the Financial Information Services of the Madrid Stock Exchange.
The UK government has made permanent the pension fund exemption from clearing obligations that was set to expire on June 18, 2025. A review determined that ending the exemption, which has been in place since 2012, could restrict pension funds' investments and increase financial risks by forcing them to meet difficult margin requirements when clearing through central counterparties. UK officials will continue monitoring the policy in partnership with regulators to ensure it remains appropriate.
The Office of the Comptroller of the Currency will stop examining banks for reputation risk and remove related references from regulatory materials, focusing instead on transparent risk areas. Acting Comptroller Rodney E. Hood said the change demonstrates the OCC's commitment to objective supervision without influencing banks' business decisions, while maintaining expectations for prudent risk management. The OCC will update all relevant public documents in the coming weeks.
The Financial Conduct Authority has fined the London Metal Exchange £9.2 million for failing to maintain adequate systems during extreme nickel market volatility in March 2022, when prices surged above $100,000 in just over an hour. The FCA found that junior staff disabled protective price bands during Asian trading hours without notifying senior management, amplifying investor risk due to inadequate automatic volatility controls. The fine was reduced by 30% from £13.2 million due to the LME's cooperation and swift remedial actions following the incident.
HKEX announced its subsidiary OTC Clear will accept Chinese Government Bonds and Policy Bank Bonds held by international investors through Bond Connect as margin collateral for all derivative transactions starting March 21, 2025. This expands the January arrangement that only permitted these bonds as initial margin for Northbound Swap Connect transactions. HKEX's Glenda So said the move aims to boost capital efficiency and flexibility for investors while promoting the internationalization of RMB-denominated assets.
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🚀 Digital Asset News
DTCC has joined the ERC3643 Association, supporting the growth of a widely used tokenization standard originally developed by Tokeny. Nadine Chakar, Global Head of DTCC Digital Assets, said adopting the ERC3643 standard aligns with the company's strategy to modernize financial market infrastructure. ERC3643 Association President Dennis O'Connell highlighted DTCC's involvement as important for driving institutional adoption of tokenization.
Custodia Bank and Vantage Bank have completed the first tokenization of U.S. dollar demand deposits on a permissionless blockchain, issuing Avit™ stablecoins on Ethereum's mainnet. The ERC-20 tokens allow customers to self-custody and transact outside traditional banking infrastructure before redeeming them back into dollar deposits. Custodia Bank CEO Caitlin Long called the project a groundbreaking legal and regulatory achievement that signals a shift toward wider adoption of stablecoin technologies.
Bakkt Holdings will exit the digital asset custody business by selling Bakkt Trust Company to Intercontinental Exchange, as it shifts to become a pure play crypto infrastructure provider. The company cited intensifying competition, margin compression, and regulatory changes, including the repeal of the SEC's SAB 121 that had limited banks' entry into crypto custody. CEO Andrew Main said the sale aligns with Bakkt's strategic shift toward crypto brokerage and institutional trading services, adding that the company is exploring alternatives for its loyalty business.
Stablecoin issuer Circle has partnered with SBI Holdings to launch USDC in Japan on March 26, making it the first global dollar stablecoin approved for use in the country. SBI VC Trade secured regulatory approval from the Financial Services Agency on March 4, with major exchanges Binance Japan, bitbank, and bitFlyer committing to future listings. Circle CEO Jeremy Allaire highlighted Japan's leadership in Web3 adoption, while SBI Holdings CEO Yoshitaka Kitao said the initiative would enhance financial accessibility and drive digital asset innovation.
Banking Circle S.A.'s subsidiary, BC Payments Pte. Ltd., has secured in-principle approval from the Monetary Authority of Singapore for a Major Payment Institution license. BC Payments Singapore CEO Mishal Ruparel plans to double the company's Singapore team within a year, highlighting its commitment to the Asia-Pacific market and regional financial innovation. The development follows Banking Circle's pending acquisition of Australian Settlements Limited, which is still awaiting regulatory approvals.
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Given all of these outstanding questions, in regulating financial crypto, we ought not be bound by the way we have long regulated existing financial markets. We should welcome the opportunity to reevaluate existing regulation in the light of these questions to ensure its appropriateness for both traditional and new markets.
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