US structured products platform Halo Investing has signed a Memorandum of Understanding (MoU) to enhance First Abu Dhabi Bank (FAB) structured notes business ‘on a global scale’.
The MoU establishes a framework for collaboration between FAB and Halo in Abu Dhabi, as the largest bank in the UAE seeks to capitalise on technology innovation to improve the investment experience of its clients.
Our goal is to improve the effectiveness, clarity, and availability of structured notes for our clients - Michel Longhini, FAB
‘Our goal is to improve the effectiveness, clarity, and availability of structured notes for our clients,’ said Michel Longhini (below right), global head of private banking at FAB.
This effort will empower us to provide more customised investment solutions, fine-tuning risk-return profiles, and maximising investment opportunities for our clients.’
The MoU signed during the Abu Dhabi Finance Week (ADFW) in ADGM is aimed at enabling investors to access a wider range of investment products and solutions.
According to Sadiq Hussain (pictured), senior executive officer at Halo Investing MEA in ADGM, Halo’s platform will help FAB to improve the investment process and management of structured notes, and provide investors with access to a wide range of structured products.
CrossBorder launches XAU/FX AMC strategy
CrossBorder Capital has launched a new actively managed certificate (AMC), issued by UniCredit Bank, and featuring the CrossBorder Kintore XAU/FX strategy.
The CrossBorder Kintore strategy is a fully systematic, bidirectional trading system that trades gold (as a currency) versus seven of the largest and most liquid currencies in the world.
The strategy is "trend following" in nature and fully automated in terms of trade implementation and execution - buy and sell signals are generated from price breakouts, volatility and other proprietary signals.
The Kintore strategy is agnostic regarding position side. Leverage is limited to a maximum of 2:1. The strategy has been live since February 2015. YTD the strategy has gained 32.29% net, whilst Gold has gained just 9.402%.
‘We have been working very closely with the Kintore strategy for 15 months. During that time, we have been extremely impressed by the discipline, risk management and, of course, the returns,’ said David Straker-Smith (right), director of CrossBorder.
‘As an investment manager, we feel that a bidirectional exposure to gold is always a very sensible addition to most traditional portfolios. This is especially true at this time of great opportunity.’
EBA consults on extensions and changes to the market risk models under the FRTB
The European Banking Authority (EBA) has launched a public consultation on its draft Regulatory Technical Standards (RTS) on the conditions for assessing the materiality of extensions and changes to the use of internal models as well as to the subset of the modellable risk factors applicable under the Fundamental Review of the Trading Book (FRTB) rules.
These RTS follow the Capital Requirements Regulation (CRR) differentiation between material extensions and changes, to be approved by competent authorities, and non-material extensions and changes, to be notified to competent authorities.
The RTS further divide the latter category into two sub-categories: notified extensions and changes requiring additional information and other extensions and changes.
For the categorisation of model extensions and changes to the relevant categories/sub-categories, the EBA is proposing a combination of qualitative and quantitative conditions.
In particular, the quantitative conditions aim at assessing the effect of the extension or change on the IMA own funds requirements and on each component of the FRTB IMA (expected shortfall, stress scenario risk measure and default risk charge), before and after the planned extension or change.
The CRR allows institutions to calculate their own funds requirements for market risk using the alternative internal model approach (IMA), provided that permission from competent authorities is granted.
According to the CRR, material changes to the use of the IMA, the extension of the use of the IMA and material changes to the institution's choice of the subset of the modellable risk factors require separate permission from competent authorities.
These RTS are part of the Phase 4 deliverables of the EBA roadmap for the new market and counterparty credit risk approaches. The consultation runs until 29 February 2023.
SimCorp unveils investment analytics platform
Danish financial software and services provider SimCorp has announced the introduction of a new cloud-native performance attribution solution, developed to meet the growing demand for accurate and real-time performance analytics.
The new service is part of the inaugural offering under SimCorp’s Investment Analytics Platform, providing investors with the capability to calculate performance attribution in real-time.
According to Hansen, performance attribution will help investment managers assess the effectiveness of their investment strategies, whether it's active, passive, or smart-beta with style factor tilting.
‘By deconstructing portfolio performance into its smaller components, investment managers can showcase their expertise to demonstrate their value proposition to both new and existing investors,’ he said.
The company said it will further expand its offerings under the Investment Analytics Platform by introducing solutions related to ESG attribution and risk attribution as the next set of services.
Google, Symphony launch voice analytics offering for banks
Google and markets infrastructure and technology platform Symphony have launched a joint venture to help banks retain and flag suspicious discussions as regulators continue to step up scrutiny of record-keeping practices at financial firms.
The new messaging compliance tool combines Google Cloud’s generative artificial intelligence platform, Vertex AI, with Symphony’s AI and domain expertise to offer financial markets voice analytics.
The partnership seeks to leverage Google Cloud’s Vertex AI to enhance Symphony’s Cloud9 voice product with more sophisticated speech-to-text and natural language processing capabilities.
Symphony’s Cloud9 is used by finance and trading teams use to communicate across commodities, interest rate swaps and equity derivatives.
‘Adding generative AI to Cloud9 will provide banks with real-time voice analytics capabilities that can be used to improve customer service, accelerate trade reconstruction and minimise post-trade processing issues while maintaining compliance and security standards,’ stated the two firms in an announcement.
Symphony, which claims to serve more than 1,000 institutions, uses Google as its primary cloud provider.
The partnership follows several penalties imposed by US regulators related to record-keeping violations to more than two dozen financial firms since 2021.