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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.

President Donald Trump’s second-term inauguration has set the stage for a seismic shift in financial regulation—and the crypto world is bracing for impact. With deregulation now a top White House priority, the global financial sector is watching closely: Will Trump’s administration dismantle his predecessor’s crypto crackdowns? How far will rollbacks go on climate policies and banking rules?

Early signs suggest a regulatory storm is brewing. Major U.S. banks and asset managers are already abandoning Net Zero alliances in a stark pivot from sustainability pledges, while crypto firms eye looser oversight as agencies like the SEC face potential overhauls.

As battle lines form between innovation and investor protection, one question looms: Will the U.S. double down on its America First regulatory playbook—or clash with global efforts to arrive at some form of regulatory consensus? The stakes have never been higher.

PS: reply to this email if there’s a story you think we’ve missed.

🌏 Global Custody News

• Global custodian State Street reported its fourth quarter earnings with Assets under Custody and/or Administration up 11% YoY to $46.6 trillion. Servicing fees grew 6% YoY to $1.283 billion. The custody bank announced that almost $2.99 trillion in AuC/A is in their pipeline to be onboarded off the back of over $1 trillion in AuC/A wins in Q4 2024. Total revenue for FY2024 reached $13 billion and CET1 ratio was 10.9% with total deposits reaching $237 billion.
  
  

  

  Source: State Street

• The U.S. Securities and Exchange Commission’s (SEC) Treasury clearing mandate, set to begin with cash Treasury securities by Dec. 31, 2025, and repos six months later, faces mounting industry pushback over unresolved legal, operational, and capital challenges, with the International Swaps and Derivatives Association (ISDA) warning that rushed implementation risks destabilizing markets. ISDA, which has published a comparative analysis of clearing models and is collaborating on documentation efforts, stressed that critical issues such as unresolved client-level cross-margining, lack of capital framework alignment, and the U.S. supplementary leverage ratio (SLR) threaten to strain bank balance sheets and curb clearing capacity. The group highlighted that proposed Basel III reforms and G-SIB capital surcharges could spike capital requirements for client clearing by 80%, which ISDA called an "unnecessary tax on clearing" that jeopardizes the economic viability of the business.

• The Swiss Securities Post-Trade Council (swissSPTC) has recommended shifting to a T+1 settlement cycle for Swiss and Liechtenstein domestic markets by October 2027, aiming to align with expected EU and UK timelines, according to a statement on Thursday. The council emphasized a coordinated migration with European counterparts as optimal but said it would follow the "first mover" in case of delays, provided the shift occurs no earlier than 2027. The Swiss State Secretariat for International Finance (SIF) and SIX Swiss Exchange acknowledged the plan, with SIX set to adjust its Rule Book to facilitate the transition. A dedicated task force will develop detailed transition proposals, while market participants are urged to advance internal preparations. The move seeks to enhance post-trade efficiency while maintaining regional harmonization.

• The London Stock Exchange Group (LSEG) announced on Thursday that Susi de Verdelon will become CEO of its clearinghouse unit LCH Limited in February 2025, pending regulatory approval, succeeding Isabelle Girolami, who will step down after leading the division since 2019. De Verdelon, currently LCH’s Group Head of SwapClear and Listed Rates, joined the firm in 2017 and previously held senior roles at Goldman Sachs. LSEG Markets chief Daniel Maguire praised her role in expanding LCH’s rates clearing services amid market reforms, while de Verdelon pledged to drive innovation and strengthen the unit’s risk management leadership.

• Acting FDIC Chair Travis Hill, appointed Jan. 20, 2025, unveiled a regulatory reset aimed at easing rules to spur economic growth and address 2023’s bank collapses. Key goals include scrapping “problematic” proposals like brokered deposit curbs, accelerating merger approvals, and balancing capital rules with growth. Hill pledged to promote fintech and digital assets innovation, streamline oversight to prioritize core risks, and revamp crisis tactics for large institutions. The agency will also modernize anti-money laundering rules, expand banking access, study deposit stability, and tackle internal culture issues, marking a shift from prior policies. Subseqently the FDIC announced it would exit the Network for Greening the Financial System because it was “outside its mandate”, giving some flavor for how regulatory agencies will change in the Trump administration.

🚀 Digital Asset News

• The U.S. Securities and Exchange Commission (SEC) on Tuesday announced the creation of a new crypto task force led by Commissioner Hester Peirce to develop a clearer regulatory framework for digital assets, aiming to shift from its reliance on retroactive enforcement actions. Acting Chair Mark Uyeda said the initiative will establish registration pathways, disclosure rules, and targeted enforcement, addressing criticism that the SEC’s past approach bred legal uncertainty and stifled innovation. The task force, staffed by SEC divisions and coordinated with federal agencies like the CFTC, will seek public and congressional input to balance investor protection with fostering market integrity and innovation, Peirce said in a statement.

• A recent survey by crypto firm Zumo revealed that many Crypto-Asset Service Providers (CASPs) in the European Union lack preparedness for sustainability mandates under the bloc's upcoming Markets in Crypto-Assets (MiCA) regulation, set to take effect in 2024. While 75% of surveyed CASPs claimed familiarity with MiCA overall, only a third understood its environmental compliance requirements, highlighting a critical knowledge gap. Key challenges include unclear regulatory guidance and a perceived lack of ready solutions, though some tools exist. Despite hurdles, two-thirds of respondents aim to achieve compliance within six months.

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