“We’re seeing a renewed interest in digital assets from institutions, but the areas of focus have shifted compared to a few years ago,” observes Ian Salmon, Director of Ignite G2M, a consultancy firm specialising in the digital asset space. “Back in 2019 and 2020, there was a surge of interest, but then it tapered off as proofs-of-concept (POCs) and similar initiatives started to fade. However, over the past year or so, there’s been a resurgence. This time, the emphasis is on actual pilots rather than just POCs. Institutions are beginning to implement production-style infrastructure to address real use cases, potentially involving real transactions in production environments.”

Given these renewed levels of interest, what are the key challenges that institutions now face around the adoption of digital assets, and where might the market evolve from here?

Achieving Equivalence

Industry experts would probably agree that the future of digital asset adoption hinges on three key factors: regulatory clarity, robust infrastructure, and compelling real-world use cases. Clear regulations would allow institutions to confidently engage in these nascent markets by minimising compliance risks and establishing consistent rules across jurisdictions. Robust infrastructure, encompassing secure custody solutions and scalable networks, is crucial for safely and efficiently managing large-scale transactions. And use cases that clearly demonstrate value will lead to broader acceptance and participation, thus driving the critical mass needed to create liquid and stable markets.

But first things first.

“To truly kickstart the digital asset revolution, we first need to establish equivalence with the current systems before we can build something more advanced,” suggests Michele Curtoni, Head of Strategy at SIX Digital Exchange (SDX). “To achieve this equivalence, regulatory status is crucial. Switzerland provides a good example, and we’re seeing similar progress in the UK and in the EU with the respective pilot regimes. The US is lagging, but Singapore is also making strides.”

He continues: “Regulatory status is essential for regulated institutions to handle digital assets. This means that securities can be recorded not only through double-entry bookkeeping in a CSD (Central Securities Depository) but also on a distributed ledger, with both forms being equivalent. Next, we need the financial market infrastructure to support this ecosystem. A bank can service some use cases with its clients on its own, but it’s the financial market infrastructure that connects everything and generates network effects. We need both the technical capability to issue digital assets and the ability to settle them.”

This is where the role of CBDCs (Central Bank Digital Currencies) becomes important, says Curtoni. “Once we have the regulatory status, a common platform, and a way to handle both delivery and payment—CBDCs for payments and digital assets for delivery—we reach parity with existing systems. The next step is building critical mass to drive adoption. The next step is to build value creating use cases beyond what we can do today with traditional securities.”

Curtoni highlights the Helvetia Project, a collaborative initiative led by the Swiss National Bank (SNB) and the Bank for International Settlements (BIS), which successfully demonstrated that tokenised assets could be settled using a CBDC while maintaining regulatory and operational standards comparable to those of traditional CSDs. The project underscored the potential for dual regulatory status, where blockchain-based assets receive treatment equivalent to those in conventional systems, effectively bridging legacy and digital ecosystems. The Helvetia pilot has now been extended for at least two more years, allowing the industry to explore new use cases with this framework in place.

Production Use Cases

Two asset classes that are increasingly being utilised in digital form are bonds and money market funds. Tokenised bonds can benefit from improved efficiency in issuance and settlement processes – by leveraging blockchain technology, settlement times can be reduced from days to near-instantaneous, which also lowers counterparty risk and operational costs. Additionally, tokenisation allows for fractional ownership, broadening access to bond markets and potentially attracting a wider range of investors.

To date, tokenised bonds have been SDX’s primary focus, rather than other assets such as equities or funds. “What we’ve done is allow for native digital bond issuance on SDX, so if you want to trade a bond with all the brokers on the Swiss exchange, you can move the asset back and forth between the digital and traditional worlds,” says Curtoni. “This interoperability allows you to access liquidity where and when you need it, while also enabling atomic settlement and native digital issuance on SDX. We’ve created a dual model with a single ISIN, which is a significant achievement. It took us two years to reach the point where every issuance could operate this way. Initially, we had two ISINs and two parallel copies, which offered no real benefit. Now, we have one ISIN for a single bond, which can move seamlessly between the two worlds and remains equivalent in both.”

Money market funds are also ideal candidates for tokenisation due to their high liquidity and short-term nature. Tokenising these funds enables real-time trading and instant settlement, which aligns well with the demand for flexibility and efficiency in cash management. Institutions are increasingly looking for solutions that provide immediate access to liquidity while maintaining capital stability, making tokenised money market funds particularly attractive.

“The reason money market funds are particularly appealing is that in a high-interest-rate environment, you don’t want your money just sitting in a bank account, a stablecoin like USDC or USDT, or even a high-interest account where access is restricted,” says Simon Barnby, Chief Marketing Officer of Archax, a UK-regulated digital assets exchange. “You want it readily available while still earning a yield, and money market funds are perfect for that. In the traditional world, you’d invest in a money market fund, receive your yield, and get your money back at the end. In the digital world, however, you not only receive your yield, but you’re also given a token that represents your ownership of money market fund shares. This token can be used as collateral, transferred to others, borrowed against, or lent out, unlocking a range of new possibilities. A lot of banks transfer money overnight, posting margin payments, repos, and other transactions. Moving in and out of fiat can be cumbersome, so having a token that represents a money market fund, which earns you a yield and can easily transfer value between institutions or between institutions and their clients, is highly attractive. We’re seeing considerable institutional interest in the capabilities these tokenised assets offer once they’re in digital form and represented by a token. This kind of innovation is really exciting,” he says.

Both bonds and money market funds are well-regulated and understood by institutional investors, making the digital versions easier to integrate into existing portfolios. As tokenised markets grow, they could serve as key drivers of institutional adoption, offering clear advantages while maintaining the stability and risk profiles that institutions require.

Different Approaches to Interoperability

Within the digital asset domain, a particularly thorny challenge is how to connect isolated digital asset ecosystems – or ‘tokenisation islands’ – and integrate them with regulated infrastructure. Different digital asset platforms operate on varying technologies and standards, making seamless interaction difficult. Regulatory fragmentation across jurisdictions further complicates efforts to integrate these digital ecosystems with traditional financial infrastructure.

“Servicing these assets remains a challenge,” says Salmon. “For example, if an asset was created on Polygon, traded on Ethereum, and settled with a specific coin, how do you then manage dividend payouts in the future? Where does the recipient hold their wallet? These are complex interoperability issues that need to be addressed.”

Blockchain-to-blockchain solutions, utilising interoperability protocols, offer a means to enable decentralised asset transfers across different blockchains without intermediaries. While this approach aligns with the DeFi ethos, it does face several challenges, including issues related to security, scalability, and standardisation. Moreover, such solutions require significant technical integration and cooperation between networks.

Ben Stephens, CEO of Cleartoken, a central counterparty (CCP) for digital asset markets, questions whether this is the right approach. “Technologists often claim that we need native interoperability between chains, but do we really?” he asks. “Let’s consider the practicalities. When we talk about interoperability, we’re saying that blockchain A holds the title to an asset, and you want that asset to appear on blockchain B. But do you really want that, or do you just want the two chains to be connected in some way? If you want to move an asset from blockchain A to blockchain B to facilitate atomic settlement, you’re essentially immobilising the asset on blockchain A. How do you plan to do that? Through a smart contract? So, something on blockchain A would depend on an action on blockchain B? This is a risky approach. While you might be able to use a wormhole or a bridge, history shows that these solutions have been hacked repeatedly in the last couple of years, leading to billions of dollars in losses.”

Stephens suggests an alternative approach. “What you actually need is something like a depository receipt, facilitated by a financial institution that holds the asset in custody. We can solve that from legal, regulatory, and operational perspectives without needing native interoperability.”

This depository receipt-style approach essentially involves tokenising assets backed by custodians, allowing traditional assets to be traded within digital ecosystems using established legal and regulatory frameworks. This method would be familiar to institutions, legally secure, and would integrate well with existing financial infrastructure, but one could argue that it doesn’t fully leverage blockchain’s decentralised potential.

In short, whereas depository receipts could provide regulatory certainty and ease of adoption, which could be ideal for bridging traditional assets into digital markets, blockchain-to-blockchain solutions could offer more flexibility within purely digital ecosystems, albeit with greater complexity and potentially more risk.

Public, Private and Permissioned Public Blockchains

When building digital asset infrastructure on distributed ledger technology (DLT), institutions and consortiums face a fundamental strategic decision: whether to utilise public or private blockchains.

Public blockchains – open, decentralised networks where anyone can participate, offer transparency and security through large-scale decentralisation, but their open nature can pose regulatory and privacy challenges for institutions. Private blockchains – closed networks controlled by a single entity or consortium, offer enhanced privacy, speed, and control, making them suitable for internal operations or industry-specific use cases. However, their centralisation can limit broader interoperability and trust.

“There’s been more clarity regarding the use of public versus private blockchains,” says Salmon. “For financial market infrastructures, it’s becoming clear that a secure, permissioned environment is required. However, this may not be necessary for consumer or B2C models, resulting in a bifurcated market. This has prompted regulators to examine how these different technologies will coexist. BIS, through Project Agora, is exploring how the market will evolve with different technology bases and how they’ll work together. Similarly, the Monetary Authority of Singapore’s (MAS) Project Guardian is focused on making point solutions interoperable in the market. The key question is whether we’re building walled gardens or if we’ll actually be able to move assets around seamlessly.”

A third option, combining aspects of both public and private blockchains, is a permissioned public blockchain. This is a public network operating with access controls, where only authorised participants can validate transactions or access specific data. This model provides a balance, enabling institutions to maintain privacy and control while still leveraging the broader ecosystem’s security and transparency.

“Institutions like to have control, but they also recognise that to unlock the full value of digital assets, they’ll need to work with public blockchains and ensure interoperability between different chains,” says Barnby. “At Archax, everything we’ve done so far has been on public networks, though they are permissioned public networks. This means that there are KYC and AML measures, and a good deal of protection in place. We also utilise Silent Data, which allows for data on the public blockchain to be obfuscated so that only those with the right permissions can see it. For example, if two institutions are transacting on a public chain, the details they don’t want to be visible to others remain hidden, viewable only by them and possibly the regulator. This capability makes public blockchains much more appealing to institutions. I believe we will see a mix of private, public, and permissioned public chains, along with chain interoperability. The data security is already there.”

How to Achieve Secondary Market Liquidity?

Despite the growing institutional interest in digital assets, the majority of activity to date has been around issuance in the primary markets, with trading in secondary markets much less developed. So what is needed to drive secondary market trading?

“Before you can fully develop a secondary market, you need to see success in the primary market, which needs to be proven and operational before moving on to secondary trading,” explains Barnby. “Liquidity becomes an issue—who makes the market, and who stands behind the trades? With money market funds, for example, some of the asset managers we’re talking to are willing to support secondary market trading. They’re open to buying back their own money market funds at a slight discount or selling at a slight premium because there’s value in enabling real-time trading. People want the ability to get in and out of positions quickly, and they’re often willing to trade at slightly lower or higher prices to benefit from instant liquidity. So, secondary markets will come, but you need to prove things in the primary market first.”

“Running an institutional secondary market is quite challenging for a number of reasons,” adds Stephens. “Secondary markets obviously exist for cryptocurrencies, but they function through a structure where the same entity often takes on multiple roles: running a CCP (Central Counterparty Clearing House), managing the exchange, acting as the market maker, handling the order book, providing custody, operating as the prime broker, and running the borrowing desk. This concentration of roles is typically not institutional-grade; it’s far from the robust infrastructure separation required for large-scale institutional involvement.”

He continues: “At ClearToken, we’re addressing these challenges by building independent horizontal infrastructure which will solve many of these issues. At the venue level, we’re providing a CCP, which handles operating capital, netting, and risk management, enabling borrowing/ lending, non-deliverable forwards, spot trading, and essentially everything needed to run a T+0 system. By offering this setup, institutions won’t be tied to individual exchanges for custody and similar functions. We provide a ‘trade on any venue and settle with any custodian’ model, which increases choice and mitigates market risk issues. And since we will be regulated by the central bank, we will be required to ensure margin is prefunded to cover a firm’s risk exposure. And because the settlement timeframes are so short, the total margin requirements are generally lower, for instance, than they would be for equities, which settle T+2 outside North America.”

Driving Further Adoption

Looking ahead, critical mass will be essential for driving broader institutional adoption of digital assets because it will create the network effects, liquidity, and trust necessary for sustainable growth. A foundation for scale is only likely to be established when key stakeholders—including regulators, financial institutions, technology providers, and market participants—align on regulatory, technological, and operational standards.

If and when such a critical mass of participants is reached, it will lead to improved liquidity, more efficient markets and better price discovery. This, in turn, will attract additional participants, creating a virtuous cycle of adoption. Without this critical mass however, the ecosystem will remain fragmented, limiting broader institutional engagement and stunting market development.

“Liquidity will grow as these assets are used more frequently,” says Salmon. “I see it as a combination of three key factors: regulatory and legal frameworks, market adoption and understanding, and technological maturity. These three elements need to come together. We’re approaching that point now, but we could benefit from more regulatory and legal certainty, a better understanding, and more proven use cases. The technology has advanced significantly through various POCs. Organisations like MAS and BIS play a crucial role in this process by focusing efforts on programs that create sandboxes, allowing people to test how these systems will function in practice.”

“This is no longer a technology problem—it’s becoming a legal and operational problem, and soon it will be an adoption problem,” says Stephens. “But we need to resolve the legal and operational issues first. We’ve already made significant progress on the technology front.”

Curtoni suggests that digital assets adoption is no longer a question of why, but when. “The big challenge now is how we connect these ecosystems,” he says. “Our approach is to start linking everything to regulated infrastructure to overcome these digital or tokenisation islands. We’ve focused on building out the infrastructure, securing regulatory certainty, and achieving critical mass, which has put us in a strong position for adoption. Other players, whether banks or startups, often start with specific use cases and then retrofit everything else. Depending on where we all began, we’re all making significant progress. It will be fascinating when we reach the point where, for example, a bank can exchange a bond issued on SDX, settle it on HQLX, and use JPMorgan Coin for the transaction. That’s when we’ll see true adoption. But we need regulatory harmonisation to make this happen, as well tech interoperability.”

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ForecastEx is underpinned by Connamara’s EP3 platform, which integrates key exchange functions into a unified system, offering market access, data distribution, order matching, execution, risk management, regulatory reporting, and settlement. Designed to meet the needs of evolving markets, including predictions, crypto, and tokenized real-world assets, EP3 is also adaptable to traditional trading markets like equities and derivatives.

“Our relationship with ForecastEx began when David Downey, their CEO, approached us about two years ago with the idea of building an exchange,” Jim Downs, Connamara’s Co-Founder & CEO tells TradingTech Insight. “I’ve known David from our days on the trading floor at the CBOE, so we go way back. However, David is very thorough – he didn’t just rely on our longstanding relationship. ForecastEx conducted a rigorous due diligence process to ensure we would be the right partner.”

Maureen Downs, Connamara’s Co-Founder and Chair, expands on some of the reasons why ForecastEx chose the company, and what sets Connamara’s offering apart. “First, we provide a fully integrated, end-to-end solution, covering everything from the matching engine and risk management to market surveillance, clearing and settlement. We believe having a seamless, integrated system is crucial for the market. Our platform is cloud-native, but we offer flexible deployment options—single cloud, multi-cloud, hybrid, colocation plus cloud, or even a fully on-premise physical setup. This is important because, in some jurisdictions, regulations still require a physical presence. Although regulators are becoming more comfortable with cloud and hybrid models, certain areas still mandate physical infrastructure. Our flexibility lets clients choose what best suits their needs.”

Another important point is cost accessibility, she says. “We’re seeing an explosion of new exchanges and innovators entering the market with fresh products—everything from digital assets and carbon credits to events and sports trading. For many of these innovators and emerging markets, cost has been a significant barrier. So, we designed a product that’s accessible and quick to market.”

Jim adds that clients are also drawn to Connmara because of their strong foundation in trading and markets. “Our experience in the markets has been invaluable over the years. We founded the business 25 years ago during the transition from floor trading to electronic markets and since then, we’ve built a team that deeply understands market dynamics. That gives us an edge over providers who purely come from a software background. We can speak the language of exchanges and innovators, helping them fine-tune their ideas and execution. These are the reasons people choose us.”

The growing trend of buy and build, where firms want to pick and choose components and build their own solutions around those via APIs, plays to Connamara’s strengths, says Jim. “That’s exactly how we designed EP3,” he says. “I always emphasise to our engineers that what we’re really offering is access to APIs. That’s why we call it an exchange platform rather than an exchange trading system, which implies a closed ecosystem. With EP3, I envisioned a platform that delivers core, standardised functionalities while offering customisable elements around the edges. By exposing our APIs thoughtfully, exchanges can add their unique ‘special sauce’ to differentiate themselves or extend the platform when launching new products, like ForecastEx did. Several of our clients are heavy API users, and from the beginning, we focused on thorough documentation and sample applications to help them integrate smoothly. For example, we offer a clearing and settlement API, knowing that operating a clearing house is a specialised business function that might be handled separately. Our API framework is well-documented, versatile, and includes multiple adapters for different needs. We also offer a range of pre-built integrations that clients can leverage, providing a lot of flexibility.”

The component-based structure lets clients manage costs efficiently, adds Maureen. “For example, a client might only need a matching engine or a limited set of components, allowing them to start small and scale as they grow. Some trading venues begin as non-regulated entities, then move toward regulation as they expand. This approach keeps initial costs low while allowing for growth as their needs evolve.”

ForecastEx, a subsidiary of Interactive Brokers Group, Inc., operates under licences from the Commodity Futures Trading Commission (CFTC) as a Designated Contract Market (DCM) and a Derivatives Clearing Organization (DCO).

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DXtrade XT can be deployed either as an off-the-shelf solution or with varying levels of customisation, allowing firms to adapt the platform to their specific needs. To support proprietary trading firms that provide capital for traders to trade on their behalf, DXtrade’s built-in trading simulator integrates seamlessly with firms’ existing CRM/Portal systems via API. The platform allows for comprehensive risk management, including configurable account position limits, customised trading day schedules, and automatic position liquidation at session end. Real-time monitoring ensures that traders’ performance and rule adherence can be tracked effectively.

“Over the past year, we’ve onboarded about 40 proprietary trading firms to our FX and CFD platform,” says Jon Light, Head of OTC Platform at Devexperts, in conversation with TradingTech Insight. “The next significant trend we’re seeing is prop trading focused on futures, particularly CME futures in the US. To stay ahead, we’ve developed a futures-specific version of our prop trading platform. We’re targeting two key audiences: First, existing prop trading firms that currently trade CFDs, FX, and crypto, but want to expand into futures, especially since targeting the US market is more feasible where CFDs aren’t permitted. Second, traditional futures brokers interested in offering a prop trading solution.”

In addition to trading functionalities, DXtrade offers integration with dxFeed, Devexperts’ market data and index management service, providing access to Level 1 and Level 2 US and EU futures data. Compliance, subscription management, and account creation are also supported, alongside features for transaction processing and group account management.

Available via web and mobile, DXtrade supports various trading tools, including quick order entry, position monitoring, trading journals, and advanced charting. Order types include stop market, stop limit, and trailing stop.

“There is strong demand for futures trading technology, especially as the rapidly growing prop trading segment explores new opportunities,” says Light. “We’re excited to now offer US futures contracts alongside our existing CFD services. Devexperts is uniquely positioned to provide both futures data through dxFeed and robust trading functionality. Additionally, we differentiate ourselves by offering expert guidance and support to clients entering the brokerage business.”

The expansion positions DXtrade as a comprehensive solution for prop firms looking to offer futures trading with a focus on rapid deployment and scalability.

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The implicated firms admitted to the facts outlined in the SEC orders, acknowledging that their conduct breached record-keeping provisions under federal securities laws. Collectively, the firms have agreed to pay $392.75 million in civil penalties and are in the process of implementing measures to enhance their compliance policies. Three firms that voluntarily self-reported their infractions will face significantly reduced penalties.

“As today’s enforcement actions against more than two dozen firms reflect, we remain committed to ensuring compliance with the books and records requirements of the federal securities laws, which are essential to investor protection and well-functioning markets,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Among this group of firms, there are several that differentiated themselves by self-reporting prior to the staff’s investigation, demonstrating once again the real benefits of proactive cooperation.”

The SEC’s investigations revealed pervasive use of unapproved communication methods, referred to as off-channel communications, across the firms. These off-channel communications included records that should have been preserved under securities laws but were not, impeding the SEC’s ability to conduct effective investigations. The violations were found to involve personnel at various levels, from senior managers to supervisors.

The firms were charged with breaches of record-keeping provisions under the Securities Exchange Act and the Investment Advisers Act, in addition to failures in supervising their personnel to prevent such violations. Alongside financial penalties, the firms were ordered to cease and desist from further breaches and received formal censures.

Reacting to the announcement, Matt Smith, CEO of integrated surveillance solutions provider SteelEye, commented: “The SEC’s recent hefty fines dispel any notion of a softer stance on off-channel communications breaches. Its crackdown remains in full force. The SEC is clearly expanding its focus beyond large tier-one banks, continuing to target investment advisers and broker-dealers. With fines posing a growing threat to firms of all sizes, it’s crucial they invest in the necessary measures, embracing smarter, more efficient approaches to supervision to navigate the evolving regulatory environment more effectively. Only then will they be able to keep pace with the SEC’s unforgiving scrutiny.”

Oliver Blower, CEO of London-based communications surveillance specialist VoxSmart, added: “It has been eerily quiet on the watchdog front of late, particularly when it comes to instant messaging record-keeping penalties. But this barrage of fines offers a stark reminder that the regulator will continue waging its battle on off-channel communications for the foreseeable. While this will alarm US firms ill-equipped to monitor staff use of platforms like WhatsApp, financial institutions operating beyond the SEC’s reach should also pay close attention. Overseas regulators certainly will be, and we expect a domino effect as watchdogs worldwide follow suit.”

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ASIC contends that ASX misrepresented the status of the project in announcements made on 10 February 2022, where the company stated that the CHESS replacement remained ‘on-track for go-live’ in April 2023 and was ‘progressing well.’ According to ASIC, these statements gave the impression that the project was proceeding according to plan and would meet the announced milestones, including the scheduled launch in April 2023. However, ASIC alleges that these representations were misleading and deceptive, as the project was not on track at the time, and ASX had no reasonable basis to make such claims. On 28 March 2022, just six weeks after making those statements, ASX announced a likely delay in the April 2023 go-live date. Subsequently, ASX engaged Accenture to review the project, which identified significant challenges with the solution design. As a result, ASX decided to pause the project, leading to a $250 million write-down in costs.

ASIC Chair Joe Longo commented: “ASX’s statements go to the heart of trust in the integrity of our markets. We believe this was a collective failure by the ASX Board and senior executives at the time. Companies and market participants rely on what the ASX says about its operations to make their own decisions and investments. We expect the ASX to be a place to list and invest with confidence. When the ASX falls short, it has wide ranging consequences across the market.”

Longo emphasised the significance of the CHESS replacement, describing it as a critical technology project with substantial implications for national infrastructure and the Australian economy.

“Its critical importance was all the more reason ASX needed to ensure it told the Australian public the truth about how the project was tracking and whether it would be completed on time,” he said. “We allege that the true state of affairs as at 10 February 2022 was that the project was not ‘progressing well’, contrary to ASX’s announcement. The delay and subsequent pause of the project in November 2022 caused significant cost to ASX and market participants who relied on assurances as to the progress of the project and scheduled go-live date.”

He continued: “The CHESS replacement project must be managed effectively and transparently. Failure to do so can lead to a lack of confidence in Australia as a market to attract investment.”

ASIC has not yet determined the penalty it will seek for ASX’s alleged breaches. This legal action follows ASX’s recent payment of a $1,050,000 penalty on 7 March 2024, following an ASIC investigation into its compliance with market integrity rules.

Andrew Carrier, Member of the Executive Committee at Quant, specialists in distributed ledger technology and interoperability for financial institutions, comments:

“ASX’s blockchain project has been described as a ‘Frankenstein’, but the promise this technology shows for use in the capital markets makes it a beast worth taming. ASX’s project management issues were compounded by the fact that they were building their own blockchain from scratch, when public and permissioned blockchains, tested and validated in real-world scenarios, already offer scalable and secure solutions that can be tailored for financial services.”

He continues: “The smart move is to use reputable, low-code tokenisation platforms that deliver enterprise-grade tokens and secure smart contracts without hefty price tags. We always say to start small, test, iterate, and then scale – just like successful CBDC pilots. Firms starting out with blockchain can also just complement their existing infrastructure with digital asset capabilities. By adding an overlay, firms can trade digital and traditional assets side by side without disrupting current capital market flows. Once adoption hits critical mass, it is then possible to transition to the new technology and phase out legacy systems. No big bang needed, no day-to-day disruptions. Blockchain’s potential is immense, let’s get it right.”

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By way of background, Ediphy offers expertise in fixed income execution, workflow automation, and large-scale data management and analytics. The company provides automated execution services for a range of instruments, including government, sovereign, supranational, and agency bonds, credit bonds, and cleared interest rate swaps, with aggregated liquidity covering over 250,000 ISINs.

Iress provides software and services used by more than 10,000 businesses and 500,000 users globally, including trading & market data, investment management and data intelligence. According to the company, their customers are increasingly demanding the ability to trade fixed income instruments, with up to 20% of their order flows being aligned to fixed income as an asset class. The partnership with Ediphy further extends Iress’s ability to provide access to additional fixed income liquidity sources globally, without the need to onboard individual venues and liquidity providers.

Following the announcement, TradingTech Insight took the opportunity to speak with Ediphy’s CEO, Christopher Murphy, and Iress’s CEO, Global Trading and Market Data, Jason Hoang, to learn more about the partnership.

TTI: What was the strategic rationale behind the partnership, and what strengths do each of you bring to the other, particularly in terms of liquidity access and automation?

CM: Essentially, Ediphy integrates with multiple fixed income execution venues, helping clients streamline their trading workflow. Iress has a large global network, primarily supporting clients with their equity trading workflow. The strategic fit for us is strong because many of Iress’s clients currently trade fixed income largely outside their network. If we can help these clients trade fixed income in the same way they trade equities—by sending the order through the Iress platform—there will be benefits for Ediphy, benefits for Iress, and, most importantly, benefits for the client.

JH: The partnership with Ediphy enhances our clients’ access to aggregated liquidity across fixed income instruments globally. The Ediphy offering provides a low-cost mechanism coupled with an automated execution model to trade fixed income instruments across APAC, Europe and the US. Our clients only have to onboard with Ediphy to obtain access to liquidity through an extensive network of liquidity providers. We remain open to further automating this workflow to enhance the client user experience between our applications.

Iress remains agnostic and partnerships with the right service providers and vendors are a big part of our strategy in the short to medium term.

TTI: Jason, can you elaborate on the trends you’re observing in the demand for fixed income trading among your clients? What are the key drivers behind their increasing interest, particularly in the current global economic environment?

JH: Higher interest rates and a number of macroeconomic factors have forced Discretionary Fund Managers and Wealth Managers to invest outside of equities to provide more balanced portfolios and mitigate risk. This in turn has driven demand in fixed income as an asset class across our client base. This diversification can also be seen across our retail customer base, where retail investors are looking for more than access to liquidity in single stock equities.

TTI: Given that Ediphy’s offerings cover a broad range of fixed income markets, and given the wide range of trading protocols for fixed income compared to equities, how do you both anticipate this partnership will impact your clients’ trading strategies?

JH: Ediphy provides access to circa 250,000 fixed income instruments globally. This partnership won’t necessarily change our clients’ trading strategies, but it provides further optionality should they wish to. This partnership broadens the breadth and depth of coverage of fixed income products available to our client base.

CM: People often talk about the ‘equitisation’ of fixed income, but it won’t look exactly like equities because the fixed income market has its own unique challenges. However, there’s a reason equities have evolved in the way they have; clients ideally want to send an order down the pipe and have it executed seamlessly. That’s what we’re delivering for fixed income.

We abstract all the different protocols, so the order comes to us, and where we can automate, we do. However, where a heavier human touch is required, we have people on our side ready to step in. Our aim is to marry man and machine; we leverage technology where it can do a better job, but when human intervention is needed, we have fully FCA-authorised personnel to handle it. We have integrations with RFQ platforms, where our involvement is almost zero-touch, but when we need to engage in an IB chat, for example, we have the capability to do so. We take that burden away from our clients to provide them with a streamlined process.

TTI: Jason, with the rapidly evolving landscape of fixed income trading and market structure changes, how is Iress planning to stay ahead in providing innovative solutions to its clients? Are there any future developments or enhancements in your trading platform that we can expect following this partnership with Ediphy?

JH: As a firm we have recognised that to stay at the forefront of an ever-evolving market landscape, sometimes you have to partner with firms that are better positioned than yourselves to meet regulatory and market demands in certain fields. Ediphy are at the forefront of this fixed income evolution and are very much a trusted partner to potentially help our clients overcome their challenges by further automating and making complex workflows lower touch.

We constantly review how we can enhance the user experience and improve efficiencies in our trading and market data offerings.

TTI: Chris, how do you see things evolving from here?

CM: We see a convergence within this market, particularly with interest rates where they are, where there’s an increase in retail-type demand for fixed income products. The question is, how can we democratise access to help wealth management clients, for example, gain more streamlined entry to the bond market? We’re very excited about this as part of a broader paradigm shift.

TTI: Thank you both.

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RiskSmart X is specifically designed for prime brokers, risk managers, and operations executives at sell-side institutions. It provides tools to assess and manage risk exposure to various counterparts, and to prepare for regulatory changes, audits, and government inquiries. Since its launch last year, the product has enabled users to determine the margin needed from their buy-side clients. With the addition of the new CCP Margin Calculator, users can enhance their risk management capabilities by calculating the margin requirements from their exchange counterparts, as and when necessary.

“One of TS Imagine’s key differentiators is our ability to cover all asset classes in real time,” Andrew Morgan, President and Chief Revenue Officer of TS Imagine, tells TradingTech Insight. “While many businesses rely on batch or overnight processing to calculate margin, RiskSmart X enables this at the click of a button. Our primary focus up until now has been on helping FCMs and prime brokers manage their clients’ funding and obligations, offering sophisticated and complex risk management tools within RiskSmart X, including VaR, stress tests, and historical Monte Carlo simulations, which are essential for prime brokers and sophisticated hedge funds. With the introduction of the CCP margin calculator, we are now providing our clients the capability to manage the street-facing side of their operations.”

Morgan points out that since the G20 derivatives market reforms were initiated 15 years ago, global regulators have gradually expanded the range of instrument types that need to be cleared centrally, for obvious reasons such as financial stability and transparency. “As a result of those reforms, there has been approximately 20% compound annual growth in the number of centrally cleared trades, a trend that is expected to continue,” he says. “That means that more business lines are coming within the scope of these regulations. Another significant development is the increase in automated liquidity and algorithmic trading, which accelerates the velocity of trading. This heightened speed amplifies the potential for rapid market movements. Therefore, having real-time insight into market activity and being able to anticipate margin requirements across all relevant venues is exceptionally powerful.”

TS Imagine operates globally, with staff in every major financial centre, allowing for extensive coverage within RiskSmart X’s CCP Margin Calculator. Currently, the platform supports 33 clearinghouses, over 50 global exchanges, and 13 methodologies. Calculations are updated continuously throughout the trading day, and TS Imagine plans to expand its coverage in response to client needs and developments in global financial markets.

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The improved speeds on these long-distance and complex routes – spanning multiple countries between Europe’s hubs (London, Frankfurt, Dublin, Zurich) and the major East Asian hubs – were achieved through comprehensive network upgrades using cutting-edge technologies, according to the company.

The demand for routes between Europe and East Asia is increasing, fuelled by a rise in FX and cryptocurrency electronic trading volumes and heightened participation from institutional traders. London, as the world’s largest currency trading hub, and Tokyo, a primary centre for crypto trading and price discovery for digital assets, are critical nodes in this network. Avelacom’s network enhancements provide the necessary infrastructure to support the growing trading volumes by offering faster connectivity that is pivotal for the algorithmic strategies prevalent in these markets.

The announcement comes on the back of the company’s recent expansion of its network to include low-latency routes between Seoul, Hong Kong and Singapore, to service the region’s cryptocurrency exchanges.

Aleksey Larichev, CEO of Avelacom, commented: “Fast is never done because we serve global banks and prop trading firms that deploy sophisticated market-making and arbitrage strategies. We’ve built our reputation by introducing unique, proprietary, and fastest connectivity options, tailored for the financial industry. Constantly updating network latencies is a significant part of our overall business success”

Upgrades to routes involving Seoul, Korea are slated to follow.

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Under its new licence, One Trading will become the sole crypto derivatives trading venue for perpetual futures in the EU and the first cash-settled perpetuals platform in Europe, including the UK. The approval also positions One Trading as the first regulated crypto derivatives exchange in Europe accessible to retail clients.

One Trading is pioneering the onshoring of crypto derivatives as “traded on a trading venue” instruments, enhancing regulatory frameworks and security for European customers. These new products offer a modern alternative to traditional exchange-trade futures products, with – according to the company – simpler, more precise, and more capital-efficient structures than traditionally cleared derivatives such as dated futures.

Distinguishing features of perpetual futures by One Trading are real-time settlement of all derivatives positions, and availability 24/7 across all markets, complemented by One Trading’s proprietary technology, claimed to be the fastest and most scalable spot trading platform globally.

By integrating custody and settlement on Distributed Ledger Technology (DLT), One Trading becomes the first EU venue to allow the use of crypto assets as collateral for trading regulated financial instruments. Offering a suite of services without the need for external clearing, One Trading’s DLT infrastructure enables collateral mobilisation on a t+0 basis, operating 24/7, and eliminating costly post-trade processes.

Joshua Barraclough, Founder and CEO of One Trading commented, “The long-term vision of the company is to enable all customer types to go long or short on any asset, use any asset as collateral, settle everything instantly, and perpetually roll contracts. Our team has been dedicated to developing a platform that not only meets but exceeds the highest regulatory standards. With this licence, we are well positioned to introduce new regulated products and offer institutional-grade solutions to all customer types starting with BTC and ETH products where no onshore EU regulated venue currently exists. This is just the beginning of our journey to redefine the landscape of digital asset and traditional security trading.”

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GPW’s project to develop a new proprietary trading platform commenced in July 2019, at an initial estimated capex cost of PLN 90 million, and with a target launch date of June 2023. However, the test version of the trading system was not rolled out until February 2024, when an initial six clients connected to the test platform at Equinix’s IBX data centre in Warsaw.

This decision regarding the new launch date follows a recommendation from the GPW WATS Implementation Committee, which is overseeing the system’s deployment and includes representatives from exchange members, KDPW/KDPW_CCP, as well as from GPW itself. Their collective oversight will aim to ensure that the roll-out remains on schedule and that all preparatory steps are completed efficiently.

WATS is set to deliver numerous technological and operational benefits across the GPW Group. The system’s advanced functionalities are expected to enhance both the quality and efficiency of exchange operations, with significant improvements in security and reliability. As a state-of-the-art solution, WATS is a pivotal component of GPW’s strategy to maintain a competitive edge and drive forward its digital transformation.

S?awomir Panasiuk, Vice-President of the GPW Management Board, commented: “The implementation of GPW’s new trading system WATS is a key step in the further development of the Warsaw Stock Exchange. Setting the roll-out date has been necessary to schedule preparatory and implementing activities on the part of GPW and other stakeholders. A specific date was expected by some market participants in order to optimally plan the necessary adaptation and preparation work.”

The GPW Management Board and Supervisory Board, along with the Implementation Committee, will continue to monitor the progress of the roll-out closely, ensuring all stakeholders are aligned with the new implementation timetable.

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