Weekly Roundup

Artificial Intelligence: ChatGPT and other forms of AI are gaining traction in corporate America, but AI has yet to be equally embraced in the world of trading. While quants have used machines and algorithms to inform their decisions for years, many are saying they are sticking to a theory-first approach due to nuances of the data they work with.

Trading on Twitter: Twitter has partnered with online brokerage eToro. Users can now see market charts and buy and sell stocks and other assets directly from the Twitter app. This is a step toward Musk’s goal to make Twitter a “super app.”

Congress Bank Trades: As calls for restrictions on congressional stock trading continue to intensify, at least three lawmakers traded bank stocks last month. The lawmakers were working on government efforts to address fallout from the collapse of Silicon Valley Bank and Signature Bank, raising questions of whether they received inside information that may have guided their stock trades.

Reporting Errors: Credit Suisse and the SEC have been debating over the severity of reporting deficiencies that led the Swiss bank to delay its annual report last month. At the heart of the issue were changes Credit Suisse made to reports and whether they had to be disclosed to the auditor committee. On Tuesday, the SEC published correspondence on the matter dating back to July.

Crypto Compliance: Following SEC Chair Gensler’s request for $200 million from Congress to beef up the SEC’s crypto compliance team, the SEC has listed a job post seeking attorneys to help conduct and litigate “complex, fast-moving investigations being undertaken by the SEC involving crypto asset securities and cyber issues.”

Crypto Recovery: Bankrupt crypto exchange FTX has recovered over $7.3 billion in cash and liquid crypto assets so far. FTX attorney Andy Dietderich stated, “The situation has stabilized, and the dumpster fire is out” and that the exchange is thinking about its future. FTX plans to file a preliminary Chapter 11 in July but acknowledges that many details are still to be worked out.

Instinet Expansion: Instinet announced the launch of BlockMatch Asia, an Alternative Liquidity Pool for non-display trading of equity securities. Ian Lauder, head of liquidity strategy, Asia Pacific, noted “an increase in client interest and awareness of conditional order types in APAC over the past two years in particular” and expects that trajectory to continue.

 Crumbling Quote Indicator: IEX has introduced a new version of The Signal, or the “Crumbling Quote Indicator”, to better protect its investors from adverse price selection. Some enhancements include looking at both size and number of venues (rather than just venues), adding new venues (MEMX, MIAX, Nasdaq PSX), and shifting from a logistic regression to a rules-based model.

Comment Letter: The Antitrust Division of the US Department of Justice submitted a letter to the SEC commenting on its four market structure proposals. The Division commended the SEC for proposing the rules, while also “encourag[ing] the Commission to carefully consider potential interactions among the Proposed Rules when preparing their final versions, planning for the rules’ implementation timelines, and evaluating the actual effects of the rules once they go into effect.”

In the Mix: This Week’s Top FinTech Thought Leader

  • Micah Hauptman, Director of Investor Protection at the Consumer Federation, appeared on Morningstar’s “The Long View to discuss conflicts of interest in the financial-advice space, crypto assets, and how social media affects investment decision-making.

    Steph Guild, Robinhood Head of Investment Strategy, spoke with Insider about how retail trader behavior on the app has shifted in the past year. She noted that everyday investors are favoring long-term strategies over meme plays. She also noted increased traffic on the site’s educational resources, including her weekly column.

    Tom Emmer, Congressman and House Majority Whip, called SEC chair Gary Gensler a ‘bad faith regulator’. Emmer, known as a crypto-friendly regulator, used Coinbase as an example and stated that Gensler “might have an open door, but it is an enter-at-your-own-risk door because what he does is, despite several meetings over several months, Gary Gensler’s SEC refused to provide feedback.”

    Ralston Roberts, Former Instinet CEO and Goldman Sachs Executive, has joined Velocity Clearing as Head of Global Markets. Roberts will oversee the firm’s trading business and global expansion strategy. This announcement comes after Velocity Clearing named Brian Schaeffer as president in March.