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📰 Welcome to the Newsletter

Good morning from Global Custody Pro! Each week, we break down the most important developments in global custody, clearing, payments, and digital assets to save you time. Let’s dive into this week’s top stories.

Table of Contents

• 🌏 Global Custody News

• 🚀 Digital Asset News

• 📊 Chart Of The Week

• 📣 Quote of the Week

• 🎧 What We’re Listening To

• 📺 What We’re Watching

🌏 Global Custody News

• The U.S. Securities and Exchange Commission (SEC) has extended compliance deadlines for rules governing the clearing of U.S. Treasury securities, granting market participants additional time to adapt to operational changes. The SEC pushed back the compliance date for Rule 17ad-22(e)(18)(iv)(A) and (B) by one year, setting it to Dec. 31, 2026, for cash market transactions and June 30, 2027, for repo market transactions; this rule mandates that clearing agencies ensure direct participants submit all eligible U.S. Treasury transactions for clearance and settlement. Additionally, a temporary exemption for Rule 17ad-22(e)(6)(i) shifts its enforcement deadline from March 31, 2025, to Sept. 30, 2025, relieving clearing agencies from immediately enforcing policies on separately calculating and collecting margin for proprietary and indirect participant positions. SEC Acting Chairman Mark T. Uyeda underscored the need for proper implementation in the vital U.S. Treasury market, noting the extensions allow time to address compliance and operational challenges.

• Hong Kong Exchanges and Clearing Limited (HKEX) reported record revenue of HK$22,374 million in 2024, up 9% from 2023, and profit attributable to shareholders of HK$13,050 million, a 10% increase, marking its best-ever financial performance. The growth was propelled by a 9% rise in core business revenue, driven by higher trading and clearing fees from increased volumes across its Cash, Derivatives, and Commodities Markets, including a fee increment from the London Metal Exchange (LME), though tempered by lower net investment income from Margin Funds. Net investment income from Corporate Funds rose 18% to HK$1,748 million, boosted by smaller losses on unlisted equity investments. Operating expenses increased 6% due to elevated staff and IT costs, but EBITDA climbed 10% to HK$16,281 million, with the margin improving to 74%.

• The London Stock Exchange Group (LSEG) reported robust financial results for 2024, with total income excluding recoveries rising 7.7% on an organic, constant currency basis to 8,494 million pounds, bolstered by growth across all divisions. Adjusted EBITDA increased 9.1% to 4,148 million pounds, lifting the margin by 160 basis points to 48.8%, driven by strong performances in Data & Analytics, FTSE Russell, and Tradeweb, which saw exceptional gains. CEO David Schwimmer emphasized significant strides in product innovation, including over 500 enhancements to the Workspace platform and expanded cloud-based data access, alongside progress in its Microsoft partnership and Tradeweb’s acquisition of ICD. LSEG forecasts organic income growth of 6.5-7.5% and a 50-100 basis point margin improvement for 2025, underpinned by equity free cash flow of 2.2 billion pounds in 2024. The Post Trade segment we’re most interested in at Global Custody Pro recorded revenue of 928 million pounds and adjusted operating profit of 410 million pounds, down from 446 million pounds the year prior. LSEG increased its stake in LCH Group Holdings Limited to 94.2% by acquiring an additional 11.6% from minority shareholders in two transactions during the year.

• CME Group and DTCC announced plans on February 24, 2025, to enhance their existing cross-margining arrangement, extending capital efficiencies and margin savings to end users by December 2025, pending regulatory approval. The expanded arrangement will enable eligible clients of both CME Group and DTCC’s Fixed Income Clearing Corporation (FICC) Government Securities Division to offset risks between U.S. Treasury securities and CME Group interest rate futures, provided they use a dually registered FCM and broker/dealer. This initiative, building on a 20-year partnership, aims to reduce systemic risk, improve liquidity, and enhance risk management in U.S. Treasury markets, aligning with upcoming regulatory timelines for expanded Treasury clearing requirements.

• ESMA released its final report on the draft Regulatory Technical Standards, outlining a detailed, indicator‐based framework to determine when a Central Securities Depository (CSD) is deemed “substantially important” in a host Member State. The report sets out criteria for assessing core services—including notary, central maintenance, and settlement functions—by measuring whether a CSD’s activity reaches a 15% threshold of market value or volume, which would trigger the formation of supervisory colleges to ensure coordinated oversight. It also details the data collection and aggregation processes to be carried out by national competent authorities and ESMA, alongside a cost–benefit analysis that compares alternative threshold scenarios, all designed to harmonize supervision and enhance investor protection across the EU.

🚀 Digital Asset News

• The FBI has advised that North Korea was responsible for the theft of approximately $1.5 billion USD in virtual assets from the cryptocurrency exchange Bybit on February 21, 2025, in an operation labeled "TraderTraitor." The actors involved are rapidly converting and dispersing the stolen assets across thousands of addresses on multiple blockchains, with expectations that these assets will be further laundered and eventually converted to fiat currency.

• Aux Cayes FinTech Co. Ltd., an affiliate of cryptocurrency exchange OKX, has settled a U.S. Department of Justice investigation by admitting it operated without a money transmitter license, enabling some U.S. customers to trade on its global platform. The company agreed to pay an $84 million penalty and forfeit $421 million in fees earned from these clients, mostly institutional accounts, with no allegations of customer harm or charges against employees. OKX, which voluntarily hired a compliance consultant to address compliance gaps, highlighted its enhanced global Know Your Customer (KYC) program, anti-money laundering tools, and a 150-person financial crime team. The DOJ recognized the company's cooperation, and OKX reaffirmed its commitment to regulatory compliance and innovation as it pursues global expansion.

• Bastion announced on February 25, 2025, that it has acquired Dibbs Trust Company from Dibbs Group and secured a New York Limited Purpose Trust Company charter from the New York State Department of Financial Services (NYDFS) for the entity. This acquisition and regulatory milestone enable Bastion to position itself as a compliant and secure platform for white-label stablecoin issuance, targeting financial institutions and enterprises seeking to innovate payments, enhance customer loyalty, and unlock new revenue streams. Operating under NYDFS oversight, Bastion aims to leverage its new trust charter to develop a scalable stablecoin-as-a-service offering, complemented by its existing custody and orchestration APIs, with further rollout subject to additional regulatory approvals.

• Digital Asset and Euroclear have launched the first phase of a project to enhance collateral asset mobility using the Canton Network, a blockchain designed for financial markets with a focus on privacy and scalability. This initial phase, involving industry participants, aims to apply Euroclear's collateral management expertise to digital and crypto markets, facilitating regulated exchanges of digital assets and cash as collateral. The initiative responds to growing demand for efficient, privacy-compliant trading solutions and seeks to improve global market efficiency while supporting 24/7 crypto derivatives trading. Both companies view the project as a key step toward integrating traditional and digital finance, with the Canton Network positioned as a critical infrastructure for regulated digital asset markets.

📊 Chart Of The Week

📣 Quote of the Week

🎧 What We’re Listening To

📺 What We’re Watching

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