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Tokenized Assets Era
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Global Custody Pro
February 13, 2025 • Time To Read: 10 minutes
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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—so you don’t have to. Let’s dive into this week’s top stories.
Table of Contents
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🌏 Global Custody News
Intercontinental Exchange (ICE) Chief Financial Officer Warren Gardner told Bank of America’s Financial Services Conference the company aims to generate significantly higher cash flows over the next five to ten years, building on its diversified model spanning global exchanges, fixed income data services and mortgage technology. Gardner highlighted ICE’s “buy-versus-build” approach to strategic acquisitions and noted the firm is already on track to reach five-year cost synergy targets by year two following its Black Knight deal, which enhances ICE’s leading mortgage servicing and origination software. He said ICE’s exchange segment—especially in energy and financial futures—remains a key revenue driver, with open interest showing double-digit growth so far this year. Gardner also pointed to emerging opportunities in AI-driven data products and Treasury clearing, emphasizing that ICE’s broad subscription-based and transaction-based revenues have helped it ride out shifting market cycles while continuing to invest in technology and product development.
State Street is targeting steady fee revenue growth, propelled by its Alpha front office platform, a push into private markets, and ongoing expansion in exchange-traded funds, Chairman and CEO Ron O’Hanley said at a recent financial services conference. Last year’s 6% core revenue gain reflected both fee income and net interest income strength, while bolstering service quality and posting a 97% client retention rate. O’Hanley expects continued demand for the Alpha platform’s integrated front-to-back solutions, along with a rising share of asset management flows through low-cost ETFs and retirement offerings. He noted that private markets servicing remains a high-potential area—already 9% of servicing revenue—with a goal of reaching $1 billion in annual revenue on the back of credit and other complex alternative funds. State Street is also harnessing AI and machine learning to streamline operations and boost service quality, while capital deployment remains balanced between supporting strategic growth areas and returning about 80% of earnings to shareholders. O’Hanley added that the CFO search is ongoing, with both internal and external candidates under consideration.
Digital investor communication platform Proxymity has raised $26 million from existing backers BNP Paribas, BNY, Citi, Clearstream, Computershare, J.P. Morgan and State Street to further develop its technology and expand its global footprint. The investment comes on the heels of new product launches—Vote Connect Global, Vote Connect Total North America and an Investor Portal Platform—which enable streamlined, real-time proxy voting and shareholder communications worldwide. The latest funding round underscores confidence in Proxymity’s ability to enhance transparency and efficiency across investor interactions, reflected in supportive statements from leading custody and financial service executives who praised Proxymity’s “cutting-edge” and “industry-transforming” solutions.
Euroclear and Euronext Clearing announced a new partnership to streamline collateral management and expand repo clearing services in Europe, with Euronext set to use Euroclear’s Collateral Highway® for the first time. Euroclear will act as triparty collateral agent, handling settlement, selection, valuation and substitutions for Euronext Clearing members. The collaboration, expected to go live in June, aligns with Euronext’s “Innovative for Growth 2027” strategy and is aimed at unifying European capital markets, reducing trading fragmentation, and optimizing collateral allocation for market participants.
The UK Accelerated Settlement Taskforce (AST) has set October 11, 2027, as the official transition date for T+1 settlement of cash securities, aligning with the EU to reduce operational risks and costs. The plan mandates regulatory amendments to UK CSDR, automation of settlement processes, and adherence to a new T+1 Code of Conduct (UK-TCC). Market participants must implement key changes, including real-time trade confirmations by T+0 and settlement instructions by 05:59 on T+1, while financial market infrastructures update rulebooks and systems. Temporary exemptions apply to Eurobonds, exchange-traded products (ETPs), and securities financing transactions (SFTs) pending global alignment. The move is expected to cut margin requirements by 40% and improve market efficiency, with an AST Implementation Command Centre overseeing the transition. Testing begins in Q1 2027, and firms failing to comply risk higher costs and settlement penalties.
Broadridge Financial Solutions has named Quentin Limouzi as its new Global Head of Post-Trade, citing his two decades of experience in front-office roles and enterprise transformation. Limouzi will oversee the firm’s post-trade services, including regulatory compliance and technology adoption. Chris Perry, President of Broadridge, announcing the appointment on LinkedIn, stated that Limouzi’s background would aid clients navigating changing mandates. Industry analysts indicate a growing focus on sophisticated post-trade solutions for efficiency gains.
TMX Group Chief Executive Officer John McKenzie, speaking at the UBS Financial Services Conference, highlighted the company’s transformation from a transaction-based model into a diversified, data-driven platform.
Growth catalysts include its Trayport energy business, which has… x.com/i/web/status/1…
— Global Custody Pro (@globalcustody24)
6:06 AM • Feb 11, 2025
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🚀 Digital Asset News
ESMA said crypto-asset prices hit record highs at the end of 2024, driven in part by a pro-crypto US administration and social-media-fuelled speculation. Bitcoin rose by 30% and meme coins such as Dogecoin also surged, lifting total crypto market capitalisation to EUR 3.3 trillion – 27% above the previous peak in November 2021. ESMA renewed its warning on the highly speculative nature of these assets, highlighting risks for inexperienced investors, especially amid the potential for sudden market corrections.
Swiss financial market infrastructure provider SIX launched its Digital Collateral Service (DCS), allowing financial institutions to post both select cryptocurrency and traditional assets as collateral for a single exposure. Drawing on expertise from its custody business and digital exchange SDX, the service integrates crypto custody safeguards and default protection for posted collateral, aiming to streamline collateral management, minimize counterparty risk, and cater to growing institutional appetite for digital assets, company executives said.
Global issuance of DLT-based fixed income instruments surged to €3bn in 2024, a 260% increase from 2023, largely fueled by central bank trials from the ECB and SNB, according to AFME’s new Distributed Ledger Technology Market Report. Financial issuers led volumes, with most deals on public-permissioned blockchains such as SDX and HSBC Orion, while green bond DLT issuance topped €483mn, primarily driven by the Hong Kong Authority. Limited trading activity has constrained price discovery, though yields have broadly aligned with traditional equivalents, and central bank repo pilots underlined near-instant settlement benefits. Tokenized funds’ AUM exceeded €2.1bn across 31 products, predominantly invested in US and EU government securities and led by U.S.-based issuers Hashnote, BlackRock, and Franklin Templeton. Beyond fixed income, other tokenized assets—covering ABS, equity, real estate, and private credit—reached a combined market cap of over $30bn.
📊 Chart Of The Week
📣 Quote of the Week
There were regulatory and capital implications but we have built the capabilities and ultimately, we're working very closely with our regulators. We obviously want to progress that business in a very safe and sound fashion, but we have all of the capabilities to do it ourselves and to do it in-house.
🎧 What We’re Listening To
📺 What We’re Watching
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