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Industry roundup: 13 January

Surecomp enables Absa Group’s roll out of pan-African trade finance digitisation 

Surecomp, a provider of global trade finance solutions for banks and corporates, has announced that South African bank Absa Group has gone live with the latest version of its back-office trade finance solution IMEX in 10 countries across the continent as part of their ongoing digitisation initiatives.

A Surecomp customer since 1998, Johannesburg-based Absa Group has seen an unprecedented rise in demand for its trade finance services in the past two years. One of the main drivers for deploying Surecomp initially was to improve operational efficiency while mitigating risk and demonstrating agility in its ability to scale and meet increasing customer demand. Taking a phased approach throughout 2020 to bringing its multiple subsidiaries across Africa onto one integrated platform, the bank has now gone live on IMEX 8 in South Africa, Zambia, Botswana, Uganda, Kenya, Tanzania, Ghana, Mauritius, Seychelles and Mozambique.

This latest digital version offers a web-based interface for remote accessibility and open API connectivity, with full integration to the Surecomp Marketplace for access to other fintech partners within the trade finance ecosystem. As a result, Absa Group is now fully equipped to continue supporting its rapid growth projections.


ECS Fin becomes Nacha preferred partner for corporate remittance and data routing

ECS Fin is now a Nacha Preferred Partner for Corporate Remittance and Data Routing. It joins a select group of innovators that Nacha recognises for offering products and services in the US that align with Nacha’s core strategies to advance the ACH Network.

“Our Preferred Partners play a key role in the evolution of the nation’s modern ACH Network,” said Jane Larimer, president and CEO of Nacha. “We welcome ECS Fin to the Nacha Preferred Partner community and look forward to working with them.”

ECS Fin specialises in designing and developing software solutions that help banks, corporates and others optimise transaction processing. Their work focuses on assisting businesses that are trying to connect to multiple infrastructures.

“The ACH Network plays a critical role in the way money moves between customers, beneficiaries, merchants and service providers," commented Finney Zechariah, COO at ECS. "ECS’ solutions make the pre- and post-payment part of that movement even easier by creating ways to more efficiently process and exchange data.”


Swedbank Robur launches policy and sharpens strategies to opt out fossil fuels

Swedbank Robur's policy for responsible investments has been updated and supplemented with three new strategies for exclude, include and engage, which will be applied to the company’s various fund types. Swedbank Robur's Climate Strategy was also revised during the year and sharpened further. In line with this, since the beginning of the year the fund company has decided to expand its strategy to for opting out of fossil fuels to include oil, gas and power production from fossil fuels in addition to coal. 

The fund company says it has also choosen not to invest in unconventional fossil fuels such as Arctic oil/gas, shale oil/gas and oil sands. Exceptions can be made for transition companies that are judged to be able to meet the Paris Agreement's goal of carbon neutrality by 2050. These will be reported on Swedbank Robur's Green List.

“We strive to be a leader in developing the industry by setting standards and ambitious goals for sustainable investments," said Liza Jonson, CEO of Swedbank Robur. "We want to contribute to a more sustainable development in society, by shifting our investments towards sustainable alternatives and thus influence others to do the same. We are now taking yet another big step by expanding our criteria for exclusion of fossil fuel companies to encompass coal, gas and oil operations. This is a natural and logical next step for us, and something we are very happy to communicate."

Swedbank Robur's policy for responsible investments has been updated and also supplemented with three new strategies for exclude, include and engage, to integrate sustainability furthermore within the investment management. This updated policy, and the new strategies, applied from 1 January 2021.


Analysing the issues that will have lasting impact on equity market structure

Although overshadowed in a year of unprecedented crisis and volatility, US equity markets experienced several important changes in 2020 that will have significant implications for how markets function in the future. 

A report from Greenwich Associates, 'Investors’ Take on Market Structure Issues 2020/2021', analyses the potential impact of these developments and reveals how the buy side views these important alterations to market structure. Perhaps the biggest development came near year-end, when the US Securities and Exchange Commission surprised markets with the scope and breadth of its Final Order on Market Data Infrastructure. One of the key elements of the proposal is a revision to the definition of “odd lot” orders, which have been growing as a share of overall market trading volume. Because much of the trading in higher priced securities is done in odd lots - both in terms of actual trades, as well as in terms of what is actually quoted - odd lots contain tremendous information.

“When you consider that you have to place an order valued at well over $300,000 in order to get a protected quote in Amazon (AMZN), it certainly seems like it is time to make some changes to the odd lot regime,” said Shane Swanson, senior analyst for Greenwich Associates Market Structure & Technology, and author of the new report. “Although these rules are sweeping in scope, we’re pleased to see that the SEC did take into account feedback from the buy side in several areas when writing the final proposal.”

The launch of three new US equity exchanges last year triggered renewed debate about rules providing exchanges with “protected quote status” under Regulation NMS. To date, the debuts of the MEMX, MIAX and LTSE have attracted more media attention than realised market share. Concerned about the additional complexity and potential market fragmentation, the buy-side institutions participating in annual Greenwich Associates US Equity research now favour higher thresholds for protected status. In 2019, a majority of investors thought exchanges should be required to hit 1% of market volume to qualify for protected status. In 2020, that thinking has shifted toward 2.5% or even 5%.

Meanwhile, investors continued seeking solutions to their difficulties trading thinly traded securities, with 42% of investors favouring suspending Unlisted Trading Privileges (UTP) - which allows for stocks listed on one exchange to be traded on all others - with the goal of consolidating liquidity for thinly traded stocks on a single exchange.

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