Global Custodian’s most read stories of 2020 Part One: BlackRock, CSDR and a rising star

The first look at some of the most read stories of the past 12 months on Global Custodian.

By Joe Parsons

Unsurprisingly, COVID-19 has dominated many of Global Custodian’s headlines this year. The operational strain and the mass shift to remote working as a result of the pandemic provided us with plenty of editorial content, whether it was around the monumental increase in settlement failures, delays to key post-trade regulations, or rising outsourcing demands from buy-side firms. But while the theme dominated in terms of the quantity of stories, our most-read articles mostly focused on new product launches, people moves and regulatory shifts.

Before we take a look at the top 10 most read stories of 2020, here are some honourable mentions of those stories that we felt stood out this year:

Now to our top 10 most-read stories of 2020, starting with number 10:

  1. How BlackRock plans for Aladdin to become the investment ops language for custodians

It was a standout year for BlackRock and its Aladdin platform, which announced a series of partnerships with the likes of BNP Paribas, Citi, HSBC and Northern Trust (in addition to its alliances with JP Morgan and BNY Mellon a year prior).

The asset manager giant is making waves in the securities services industry, with its flagship Aladdin platform becoming a core infrastructure for custodian’s front-to-back strategies. Speaking to Global Custodian in May Sudhir Nair, global head of Aladdin, explained how the platform is set to become the investment operations language for custodians.

“The current state of the industry is still very inefficient, forcing a lot of manual work and unnecessary reconciliation. There are also inconsistent data processes, and a lot of non-digital ways to transmit data, resulting in thousands of calls, emails, faxes, spreadsheets etc, with instructions to downstream providers,” Nair explained at the time. “Aladdin Provider is about bringing a standard to investment operations, working in partnership so that there is consistency across the board allowing providers to get closer to their clients.” 

  1. HSBC launches Amazon-style data service for securities services 

Industry commentators have frequently cited the ‘Amazonisation’ of securities services, featuring greater self-service capabilities and an app store for custodians. HSBC made its own step in this regard with the launch of an Amazon-style data store for its securities services business, allowing clients to select specific trade data and even provide recommendations by using artificial intelligence.

The new platform – called Data Mesh – included the consolidation of 60 terabytes of data across its European transfer agency, fund accounting, and some sub-custody business across 200 systems.  The new system will also support the launch of new application programming interfaces (APIs) and data products across HSBC’s securities services business. 

HSBC has aimed to migrate all of its transfer agency data to the Data Mesh platform by the end of the year.

  1. Settlement Discipline Regime could be delayed to February 2022 in regulatory U-turn

It took a global pandemic and countless letters from industry associations for European regulators to postpone the introduction of the settlement discipline regime (SDR) under the Central Securities Depository Regulation (CSDR).

Calls to delay the regulation were rife prior to COVID-19, resulting in ESMA delaying enforcement of the rules from September 2020 to February 2021. Regulators have also been urged to review the buy-in regime, which remains largely opposed by the industry in its entirety. Then in July, ESMA announced it would delay the implementation of the buy-in regime due to the impact of the COVID-19 pandemic on the implementation of regulatory projects and IT deliveries to CSDs, and came in response to a request from the European Commission.

The European Commission has since launched a consultation into the rules, asking for industry feedback of the SDR. While it is unlikely the buy-in regime will be quashed, it is hoped regulators would amend the rules so that that the buy-ins are optional.

  1. State Street to expand new pricing model to wider client base 

A year after State Street announced the establishment of a new pricing committee and the introduction of a new client coverage model for its largest 50 clients, the bank revealed in its third quarter results that it is now taking this to wider range of asset managers and asset owners.

State Street said it would take this approach to clients which hold around $50-100 billion in assets under management, enabling the Boston-based bank to meet buy-side pressures to lower fees while also maintaining growth.  

The new pricing model helped State Street achieve consistent asset servicing revenue growth, as it looked to work closer and take on a wider set of outsourced functions for its largest clients. By expanding it to a wider range of firms, the move could further accelerate the businesses’ impressive growth.

  1. JP Morgan appoints fund services rising star to lead securities services client solutions

In another big people move of the year, this summer JP Morgan appointed a rising star who transformed the bank’s fund accounting offerings to lead its securities services client solutions unit. Keith Slattery, its former global head of fund accounting, took on the role this summer where he would be responsible for several teams dedicated to daily delivery of securities, working with clients on collaborative solutions, and expanding service delivery, onboarding and implementation of new products. 

Slattery has been a key driving force behind the bank’s fund accounting transformation effort, where it has invested considerably in new cutting-edge technology to drive growth in the fund services business. “Keith played a pivotal role in securing and successfully executing a number of the largest ever conversion and out-sourcing mandates in the industry… His dedication to our clients and our people make him the ideal person to take us through the next arc of our business transformation,” said Teresa Heitsenrether, global head of securities services for JP Morgan, in an internal memo at the time.

Keep an eye out, part two with the five most read stories will be published tomorrow.