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Capitolis Company Values

 

We believe a strong and safe financial system is critical for a well-functioning society and should work for everyone. We have the obligation and privilege to build and operate a model company for a better world, and lead by example, with purpose and intention in everything we do. We operate with a clear set of values that guide us– our way of being, decisions, and actions. These values define who we are, and we are committed to all of them.

These values are uniquely ours. We integrate lessons and learnings from others to inspire, influence, and shape our direction. If these values − all of them − speak to you, this is an amazing place, but we are not for everyone.

Our values are living and breathing, they help us deliver our purpose, and will change over time with feedback to best represent who we are today, who we aspire to be, and how we evolve.

We lead with purpose, while creating exceptional value.

We have to be a little crazy to change the world. We are driven by a deep sense of purpose and are intentional in everything we do. We are extremely passionate about what we do− this is not just a job. We believe purpose and value creation go hand in hand. Our platform enables us to make a bigger impact.

We pursue big breakthroughs, responsibly.  

We innovate to solve big problems. We embrace failure, don’t break things that really matter, and try hard not to make the same mistake twice. We move fast and iterate faster. We are responsible, ethical, street-smart and wise, and because we have been around the block a few times, our maturity guides us. Many are counting on us, and we take that very seriously.

We learn from the best and are unapologetically independent.

We proudly stand on the shoulders of giants. We are curious and inspired by others. We read, seek advice and perspective, listen, and question ourselves with humility. We collaborate broadly to bring in the best ideas. Yet, we make our own decisions, thoughtfully, based on our values, data, and logic. We are trailblazing our own path with conviction and courage.

We are obsessed with the future and fanatical about executing today.

We are maniacal about having a clear vision for the long-term. We are patient, building for scale, and investing for tomorrow. “Vision without execution is hallucination.” We prioritize only what matters and relentlessly deliver. We are agile, swift, and results driven.

We play tough, with heart.

We are more like a professional sports team than a family and are playing to win at the highest levels. We are all in. We have ridiculously high standards, voice our opinions and give direct feedback. We hold people accountable and there is no time to micromanage. We do not have capacity or patience for ego, pettiness, whispers, hierarchy, or politics. Only super smart, badass, good humans on our team. We believe in diversity and equality, cultivate meaningful relationships and respect each other’s needs, while considering the whole. We deeply care for and support one another, our families, and our broader communities. We create an environment where we are all that we can be.

 

Capitolis Readies for Next Stage of Growth with Key Hires Across the Business

Technology company continues to invest in people, expands employee base to support rapid growth and innovation

Capitolis, the technology company reimagining capital markets, announced it has grown its employee base by 50% versus the same period last year as the company continues growing and scaling the business to meet customer demands and ongoing opportunities to innovate. The investment in its people reflects Capitolis’ continued momentum after the company recently announced its Series D funding.

As the team grows, Capitolis has welcomed the addition of the following key strategic hires and notable promotions across the New York and Tel Aviv offices:

The company’s Strategy and Corporate Development team expands with Keerthan Harish joining as Senior Manager of Corporate Development, focused on partnerships, M&A, and strategic initiatives across the business, as well as Eyal Pelleg stepping into the role as Senior Manager of Strategy, tasked with driving our ongoing strategic initiatives with Product and Go-To-Market growth opportunities. Keerthan brings experience from Dataminr, Goldman Sachs and Bank of America’s investment management and wealth management division Merrill Lynch. Eyal has also held roles at McKinsey and Company, Karl Weiss LTD, and served as an officer in the Israeli Navy.

Capitolis’ newly established Project Management Office will be led by Director Maria (MC) Centeio, tasked with bringing process, structure and organization to the business as the company looks to mature its operations and deliver results against its audacious goals. Prior to Capitolis, MC worked on a small team at Bridgewater Associates responsible for taking Ray Dalio’s principles & products focused on systematized management to the external market; she oversaw the technical support and customer operations team.

After closing the August 2021 acquisition of LMRKTS an industry-leading multilateral optimization and compression provider that expanded Capitolis’ optimization suite into the most complete trade compression solutions available in the market, Capitolis placed a number of key talent into new roles to further the strategic growth of its FX business:

“We are excited by the momentum in our business – and the promotion and hiring of key, strategic leaders to meet growing customer demand and innovation at Capitolis,” said Gil Mandelzis, CEO and Founder of Capitolis. “The team remains focused on our vision to reimagine how capital markets operate. These key appointments keep raising the bar for our exceptional team, bringing the necessary experience to scale our operation to greater heights.”

Capitolis recently raised $110 million in Series D funding, driven by the rapid emergence and market acceptance of its compression and marketplace solutions. The company continues to make people one of its most critical investments to support the rapid growth and scale of the business for its future ahead. To learn more about Capitolis, visit https://capitolis.com/, and to join the team, visit the Careers page at https://capitolis.com/careers/.

Capitolis Raises $110 Million in Series D Funding to Turbo-Charge Its Revolutionary Capital Marketplace

Leading fintech investors Canapi Ventures, 9Yards Capital and SVB Capital co-lead the round.                                  

Jeffrey Goldstein, former U.S. Under Secretary of the Treasury for Domestic Finance and Counselor to the Secretary of the Treasury; and George Osborne, former UK Chancellor of the Exchequer, join Board of Directors, bringing decades of experience at the intersection of financial services, technology, and policy.

Capitolis, the technology company reimagining capital markets, today announced it has raised a $110 million Series D at a $1.6 billion valuation, driven by the rapid emergence and market acceptance of its marketplace solutions. The fundraise is co-led by top fintech investors Canapi Ventures, 9Yards Capital, and SVB Capital. Existing investors in Capitolis include a16z, Index Ventures, Sequoia Capital, S Capital, Spark Capital, Citi, State Street and J.P. Morgan. To date, Capitolis has raised $280 million.

In connection with the funding round, Jeffrey Goldstein, senior advisor at Canapi Ventures, Dan Beldy, partner at Canapi Ventures, and George Osborne, Founding Partner at 9Yards, join the Capitolis Board of Directors. All bring deep financial services and technology expertise and important experience on policy issues related to banking, regulatory reform and financial stability. Previously, Osborne served as an advisor to BlackRock following his role as UK Chancellor of the Exchequer; Goldstein, who sits on the Board of Directors of Bank of New York Mellon Corporation, previously served as Managing Director and Chief Financial Officer of the World Bank; Beldy is a founding partner at Canapi Ventures and previously served as Managing Director of Steamboat Ventures, the venture arm of The Walt Disney Company.

Canapi Ventures is co-led by Managing Partners Gene Ludwig and Chip Mahan. Ludwig served as Comptroller of the Currency under President Clinton before going on to co-found Promontory Interfinancial Network, an FDIC deposit-routing network serving approximately 2,900 financial institutions, as well as Promontory Financial Group, a regulatory and compliance consulting firm for large financial institutions. Mahan founded and currently serves as CEO and chairman of Live Oak Bancshares; he also co-founded nCino, founded Security First Network Bank, one of the world’s first internet banks, and previously led S1 Corporation.

9Yards was co-founded by George Osborne, Theo Osborne & David Fisher in 2018. Prior to this, George Osborne served as the UK’s Chancellor of the Exchequer as one of the longest serving finance ministers in the G7. George devised the open banking regime and the FCA ‘sandbox’ among many other regulations that positioned the UK as a global fintech leader. George also sat on the National Security Council and chaired the UK’s Cybersecurity Committee.

Capitolis combines deep capital markets expertise with a Silicon Valley mindset to bring the sharing economy to the forefront of the financial services industry. Capitolis enables banks, investors and institutional clients to expand their reach through a collaboration platform and gateway to connect opportunities with a democratized model of institutional capital, safely removing barriers that would otherwise restrict growth in the market.

“Over the past two years, our vision to reinvent capital markets has gained tremendous momentum as we have tripled our revenue, customer base and team,” said Gil Mandelzis, CEO and Founder of Capitolis. “We are just scratching the surface on reimagining the capital markets. We are thrilled to have partners like Canapi, 9Yards, and SVB Capital who bring strategic expertise, a true passion for the mission and a powerful network to leverage as we embark on our next chapter of growth.”

Canapi Ventures’ Partner Dan Beldy commented, “We are thrilled to be partnering with Gil, Tom and the entire Capitolis team as they build the next generation of technology infrastructure to help support the safe, efficient growth of the capital markets. At Canapi Ventures we are focused on great leadership teams and category defining innovations that help create a healthier, more robust and more inclusive financial ecosystem. We look forward to working with the Capitolis team as they continue to grow and create a company of great legacy and impact.”

9Yards’ George Osborne commented, “At 9Yards Capital we’re impressed by Capitolis and the innovation it is bringing to the task of making our financial system more secure and our capital markets more efficient.”

Tom Glocer, Executive Chairman and Co-Founder of Capitolis, said, “The additions of Jeffrey Goldstein, George Osborne and Dan Beldy to the Capitolis Board of Directors will strengthen an already world-class board. In particular, their years of experience in balancing sound regulatory policy and financial stability with innovation in financial markets will help guide Capitolis as we scale our technology and impact in global capital markets.”

“As an existing investor and commercial partner to Capitolis, we have seen firsthand the notable understanding Capitolis has in providing solutions to marketplace participants to achieve their business goals,” said Tilli Bannett, Managing Partner, SVB Capital. “We continue to be impressed by the company’s deep expertise and creativity in making capital markets more efficient, thereby freeing up necessary resources for participants to innovate and deliver financial solutions customers need.”

Tobias Krause, Senior Managing Director, State Street, commented, “We are impressed with Capitolis’ vision of creating a healthier, safer, efficient marketplace for matchmaking, discovery and resource optimization. At State Street, we have benefitted from dynamically reducing, and optimizing our exposures, which has created even more capacity to serve our clients in our growing business.”

“We are now moving to the next phase of growth for Capitolis as we grow exponentially year after year and deliver increased innovation for capital markets. Just two years after launch, the capital marketplace business has already transacted $60B+ notional from over 30 investors. Capitolis has optimized over $13 trillion in trades through its compression & novation engine, serving over 100 financial institutions. Our vision is becoming a reality and we look forward to super-charging our marketplace in the months and years to follow,” concluded Mandelzis.

Capitolis Announces Successful SA-CCR Optimization Exercises Throughout Q1

Two-thirds of the largest global banks participated in Q1 2022 efforts

Recent progress includes compression innovations in SA-CCR optimization, reduction in exposure to Russian ruble

 

Capitolis, the technology company reimagining capital markets, is riding a strong wave of momentum as two thirds of the largest global banks have participated in balance sheet compression exercises leveraging Capitolis’ technology in the first quarter. These exercises have included optimizations with respect to the rollout of SA-CCR, or the Standardized Approach for Counterparty Credit Risk, as well as a reduction in exposure to Russian rubles. As we demonstrate our success, we have welcomed new bank participants in each exercise.

Capitolis has been innovating over the past year and a half to prepare for the rollout of SA-CCR and set financial institutions up for success when it comes to calculating exposure. The regulation requires banks to take a new approach to calculating counterparty credit exposure and will have a significant impact on regulatory capital calculations.

Capitolis’ capital optimization in line with SA-CCR regulation has reduced nearly a trillion dollars − and multiplying − of notional exposure for financial institutions in first quarter alone

SA-CCR has been phased in globally over the last few years to provide a single, standardized method by which financial institutions will be required to measure and ultimately manage and capitalize against. Capitolis anticipated a busy first quarter as SA-CCR went into effect in the United States and United Kingdom in January 2022. In the past three months, Capitolis has successfully reduced nearly a trillion dollars of notional exposure for financial institutions through a series of four multi-lateral optimization exercises.

“We are focused on helping our clients adjust to the regulatory impacts of SA-CCR while maximizing efficiencies in balance sheet optimization,” said Gil Mandelzis, CEO and Founder of Capitolis. “SA-CCR is something we have been innovating towards for years to better prepare financial institutions for success in multi-lateral optimization in line with the letter and spirit of the rule. Our vision is to reimagine how capital markets operate, and we look forward to continuing this work to enable a healthier, safer capital marketplace aligned with regulations including SA-CCR.”

Capitolis has been offering SA-CCR solutions to clients since mid-2020. Last year, the company performed multiple proof of concept optimizations, providing clients the opportunity to gain a better understanding of their data and internal processes as well as test and validate their own internal SA-CCR calculators. Many of the world’s largest financial institutions took part in Capitolis’ first-quarter 2022 compression runs, with growing participation and regular benefit for the whole capital markets system. This successful progress in optimization innovations sets the stage for an expanding footprint in the SA-CCR landscape in 2022 and beyond.

Capitolis successfully reduced Russian ruble exposure in risk reduction exercises for global banks

Following Russia’s invasion of Ukraine, Capitolis was approached by many of the world’s leading financial institutions seeking a targeted solution to manage and reduce exposures to the Russian ruble. Capitolis worked quickly to bring together a large network of global banks and, through its trade compression platform, supported a dozen banking entities to successfully reduce their exposure to Russian rubles and mitigate the impact of settlement failures due to sanctions or other market happenings. These banks needed the right technology and a trusted third party that had established its capabilities and credibility with them to execute. Capitolis’ trifecta of technology, relationships and trust got it done.

Capitolis has now completed two Russian ruble exposure reduction exercises, one of which was executed and managed in just three days following the invasion in Ukraine. In total, billions in redundant, notional exposures were reduced on behalf of the 17 global bank participants. The company will donate half of the revenues from these compression activities to Ukrainian relief and humanitarian efforts.

Capitolis intends to continue offering a Russian ruble compression run as long as it is needed by financial institutions.

For more information on the work Capitolis is doing with SA-CCR, and the recent Russian ruble optimization exercises, please visit www.capitolis.com.

 

Capitolis Successfully Helps a Large Network of Global Banks Reduce Russian Ruble Exposure in Multilateral Risk-Reduction Exercises

Capitolis Successfully Helps a Large Network of Global Banks Reduce Russian Ruble Exposure in Multilateral Risk-Reduction Exercises

A dozen entities participated in the multilateral optimization

 

Capitolis, the technology company reimagining capital markets, today announced it has completed a reduction in exposure to Russian rubles for many of the world’s leading financial institutions. The ruble optimization is a first for Capitolis, which was approached by the banks to design a solution and worked quickly to bring together a large network of banks to participate in this targeted solution. Through its trade compression platform, Capitolis was able to reduce these large exposures and promote financial soundness and stability for the benefit of the whole capital markets system.

In addition to helping clients and the overall market, Capitolis will donate fifty percent of the revenues generated from this optimization exercise to Ukrainian relief and humanitarian efforts.

“We are committed to making the global financial markets work better for our clients and the system as a whole,” said Gil Mandelzis, CEO and founder of Capitolis. “We worked quickly through our trade compression platform and in great collaboration and partnership with our clients to meaningfully reduce risk, while aiding the Ukrainian people amid this incredible suffering.”

Capitolis intends to continue offering a Russian ruble compression run as long as it is needed.

 

As Capital Regulation Accelerates, Data Processing is Key

The buy side is facing a paradigm-shifting year in 2022 as both the Uncleared Margin Rules (UMR) and SA-CCR (Standard Approach for Counterparty Credit Risk) increasingly impact financial institutions globally. As we highlighted in Why the Buyside Should be Talking to Banks About Capital Costs, there are solutions at hand for investors and managers to mitigate both direct and indirect effects on capital costs. What’s more, the crucial factor in achieving sizeable cost savings is easily accessible data, coupled with systems integration.

The Scope:

To grasp the magnitude of the new regulatory changes, in the UK and US alone, which make up some 60% of global FX turnover[1], non-bank financial institutions traded $570 billion per day in outright forwards, including Non-Deliverable Forwards and FX swaps. These products -in addition to options and other products across asset classes- are all subject to SA-CCR.

On top of this, the new standardized approach is different to previous capital regimes because exposures can be netted by currency pair, and do not need to be of the same tenor. The good news is that banks can now net a one-week trade against a five-year trade. On the flipside, asset managers’ rolls of positions, especially at month-end, can be large and directional. If a manager is rolling a $2 billion position for one month, this FX swap, if margined, will now attract the same regulatory costs as a six-month swap.

Beyond SA-CCR, UMR is now entering phase 6 in September 2022, and for funds entering the in-scope status, much of the reporting and systems integration is ongoing, further adding to regulatory complexity.

Banks globally have been actively utilizing capital optimization for cost savings, especially since the financial crisis. While take up on the buy-side has been more niched, it is now increasing across managers with a broader range of recognized benefits. One core driver is that capital costs are becoming more transparent and measurable with increased access to data, automation, and technology. This path is similar to what we saw with increased adoption of automated execution on the back of regulatory reforms for Best Execution.

Easy Data access:

Like all change, the implementation of new regulations bring uncertainty that needs to be worked through. Doing this in a manual setting is both time-consuming and suboptimal in terms of results. Tools, networks and leveraged learning can help facilitate and ease the transition. When a manager can easily access and view all their exposures in one place and submit their funds’ data for analysis and processing in an automated manner – the cost savings are maximized.

The need for seamless data connectivity has been an ongoing theme across the financial industry with companies leveraging external technologies to solve for internal needs. This is achieved by connecting pre-/post-trade systems through API and Cloud services with technology engines. At present, banks are actively optimizing to achieve significant SA-CCR savings in a multilateral interbank setting. This has accelerated efforts to streamline data systems and integrate effectively with technology service providers.

Correspondingly, there is a need for investors’ and managers’ data to be easily accessible in a dealer-to-client automated workflow. Managers need the ability to look at their entire portfolio of trades across funds, and counterparties, with their respective constraints identified (for example, the non-commingling of trades across investment strategies). The more comprehensive the data, the more opportunities for optimization and cost savings exist. Secure, direct connectivity between managers’ data and third-party optimization engines, adds another level of efficiency to the process as it allows managers to integrate seamlessly with technology providers from their own systems.

Bringing it all together:

Given the importance of data and connectivity, Capitolis is facilitating the integration with a range of systems, and recently entered a partnership with TradeNeXus[2] which provides direct data access and compression optimization and analytics to its users. This results in seamless access to identify optimization, to eliminate large and unnecessary positions and to free up capital. Similarly, Capitolis recently entered a partnership with Acadia[3] to process and generate a series of FX transactions that reduce capital requirements for banks and other financial institutions.

The direct benefits of capital optimization are broad and can include reductions in gross notional, line items, and counterparty concentration risk. It also provides margin efficiencies, frees up limits and addresses overall operational risks. Further benefits are achieved when the investor or manager takes part in an optimization framework that is also reducing the SA-CCR induced capital costs their counterparties carry from their mutual exposures.

To excel with capital optimization, managers need a consistent solution that works across participants, in a centralized network. Since managers’ numerous counterparties will be on the same schedule, there are also network effect benefits from broad participation. Client to dealer optimization has become a multilateral process in the age of SA-CCR.

 

[1] Semi Annual FX Turnover Report, April 2021, UK FX Joint Standing Committee (JSC) and New York Foreign Exchange Committee (FXC)

[2] Capitolis to Integrate with State Street TradeNeXus Platform

[3] Acadia and Capitolis Launch SA-CCR Optimization Service

 

Dr. Petra Wikstrom holds a PhD in Turbulence, Fluid Dynamics, from the Department of Mechanics at the Royal Institute of Technology (KTH) in Stockholm, Sweden, one of Europe’s leading technical and engineering universities.

Petra is currently a Business Development Executive with Capitolis. She is the former Global Head of Execution & Alpha Solutions within FXLM & Commodity Derivatives Sales and Trading at BNP Paribas in New York, NY. Previously she was the Head of QSI North America within FXEM Sales and Structuring at Morgan Stanley in New York, and the former Global Head Quant Solutions at RBS (now NatWest) in Greenwich CT, and London, England.

Supporting Ukraine and Global Financial Markets

 

At Capitolis we are devoted to making the global financial markets work better for our clients and the communities in which they operate. We now have the opportunity to greatly help these clients reduce risk and aid Ukrainian people at the same time.

Many of our global bank clients have large historical exposures denominated in Russian rubles. Through our trade compression platform we are working to reduce these large gross exposures and promote financial soundness and stability for the benefit of the whole system.

In addition to helping our clients and the overall market, Capitolis will donate 1/2 of our revenues from these compression activities to Ukrainian relief and humanitarian efforts. We stand united in support of Ukraine, will take action, and put our resources where they are needed most.

Acadia and Capitolis Launch SA-CCR Optimization Service

New service deepens commitment to enhanced capital optimization for regulatory changes

Acadia, the leading industry provider of integrated risk management services for the derivatives community, and Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced the launch of SA-CCR Optimization. SA-CCR Optimization will bring considerable cost savings to firms subject to the Standard Approach to Counterparty Credit Risk (SA-CCR) regulations, focusing on specific FX products such as FX forwards, options, deliverable swaps and cross-currency swaps.

With SA-CCR Optimization, banks and participating financial institutions provide trade data, which Acadia and Capitolis process and generate a series of FX transactions that reduce capital requirements, leaving each client’s net FX risk profile largely unchanged.

“The newest wave of capital regulation is pushing firms to be more mindful of capital consumption across their business.  SA-CCR Optimization is an opportunity for them to reduce consumption levels and deploy their capital in a more efficient manner,” says Chris Walsh, Chief Executive Officer of Acadia. “We are thrilled to provide clients with a dynamic infrastructure solution to compress trades and significantly reduce capital consumption, building upon our data analytics with Capitolis’ market-leading optimization platform.”

The launch of SA-CCR Optimization deepens the partnership between the two leaders in their fields, combining Acadia’s risk analytics and margin data platforms and Capitolis’ proprietary technology, allowing for greater capital optimization for financial institutions.

Gil Mandelzis, Chief Executive Officer and Founder of Capitolis added “Our continued integration with Acadia’s trusted platform is an effective solution for our clients to maximize efficiency in SA-CCR balance sheet optimization. Our partnership will also position the industry for success in multilateral optimization of SA-CCR.”

SA-CCR requirements for financial institutions based in some parts of Europe went into effect in June 2021, while regulations in the United States are set to be implemented on January 1, 2022.

 

Why the Buy Side Should be Talking to Their Banks About Capital Costs

The coming 12 months will see an upheaval in financial markets as the impact of two important pieces of regulation is felt by more buy side firms.

The Uncleared Margin Rules (UMR) and the Standard Approach for Counterparty Credit Risk (SA-CCR) will have a direct and indirect impact, respectively, on the largest asset managers. Although some managers may still be out of scope of UMR, the trickle-down effect of these regulations on their bank suppliers means they too should be preparing now.

Put simply, capital and margin are getting more expensive for banks. Consequently, the cost of servicing clients in the age of SA-CCR and UMR will increase, sometimes dramatically, if no additional measures are taken. Reducing these effects requires a joint buy- and sell-side effort to maintain an optimal, or even in some cases sustainable, service model for the benefit of all participants. Capital optimization opportunities will be at the heart of solving for this.

There is much to establish on the final impact of SA-CCR, but a significant impact is likely to be in directional, uncollateralized portfolios. For managers who fit this profile one may need to expand the network beyond the bilateral dealer to client and work across the panel of the manager’s counterparties. Finding solutions to address SA-CCR impact clearly has mutual benefits such as maximizing market accessibility and liquidity for the buy-side and opportunities for the sell-side.

An example of how asset managers are likely to be affected can be found in the knock-on effect of the G-SIB (Globally Systemically Important Banks) regulation in the forward FX market. A 2020[1] White Paper from the Bank for International Settlements found that at quarter-end, when banks are most focused on their G-SIB rating, – and as normal market practice, asset managers also re-evaluate and rebalance portfolios -, there is a discernible reduction in liquidity levels in FX swaps markets and spreads widen.

As the focus on capital efficiency and usage intensifies, it may well transpire that these particular liquidity phenomena don’t appear only at quarter-end, and managers could find their panel of banks less able or willing to price them as aggressively as they once had. Therefore, the starting point for many managers is having conversations with their providers to explore what they mutually could do to help the banks’ positions, and vice versa, and finding technology solutions enabling access to a broad centralized network of participants.

There are naturally multi-fold additional optimization benefits to be had for the buy-side. Such technologies with novation and compression solutions that are tailored across their needs – including the management of counterparty concentration risks, limits, and gross notional levels – further reduce capital costs and increase operational efficiencies.

This means that FX capital optimization is going to become a much more ingrained part of an asset manager’s toolkit, with in-depth analytics and well-presented data that is easy to interpret and action. This further implies a need for technology solutions dedicated to providing managers with the most up-to-date information and the ability to partake in optimization at the click of a button.

Initially, dealer-to-client SA-CCR optimization will likely be more post-trade based, with the manager retaining access to its same panel of liquidity and trades can be re-papered to the most appropriate and capital-effective counterparties. In the future, one can further envision a process where the impact of capital optimization is embedded in FX TCA (Transaction Cost Analysis) for instruments such as FX Forwards and Swaps. Ultimately, capital optimization is one component of many that can be incorporated into best execution processes to manage costs for the benefit of the end investor.

The clock is ticking on UMR and SA-CCR and although the costs on banks have not necessarily cascaded to the buy side so far, their impact is becoming more quantified. This will not be a ‘big bang’ moment since banks sit at different stages of their understanding of SA-CCR’s impact and is yet to be fully assessed. However further down the road, the overall benefits of addressing these capital costs with counterparties will become impossible to ignore.

[1] https://www.bis.org/publ/work836.pdf

 

 

Dr. Petra Wikstrom holds a PhD in Turbulence, Fluid Dynamics, from the Department of Mechanics at the Royal Institute of Technology (KTH) in Stockholm, Sweden, one of Europe’s leading technical and engineering universities.

Petra is currently a Business Development Executive with Capitolis. She is the former Global Head of Execution & Alpha Solutions within FXLM & Commodity Derivatives Sales and Trading at BNP Paribas in New York, NY. Previously she was the Head of QSI North America within FXEM Sales and Structuring at Morgan Stanley in New York, and the former Global Head Quant Solutions at RBS (now NatWest) in Greenwich CT and London, England.

Capitolis To Integrate with State Street’s TradeNeXus Platform

The partnership will provide seamless access to Capitolis’ proprietary optimization technology for customers of TradeNeXus, State Street’s award-winning post-trade solution

Capitolis, the fintech company re-imagining how the capital markets operate, today announced it will deliver to customers on State Street’s TradeNeXus platform, access to identify optimization opportunities, eliminate large and unnecessary positions, and free up capital through Capitolis’ optimization, novation, and trade compression solutions. Capitolis will connect to TradeNeXus’ large network of asset managers and executing banks, who electronically match, confirm, and communicate FX and Money Market settlement information.

The announcement comes as financial institutions are increasingly leveraging optimization services to help them comply with new regulations such as Standardized Approach for measuring Counterparty Credit Risk (SA-CCR) and Uncleared Margin Rules (UMR), which will impact their operations significantly over the next year. The collaboration has the potential to affect returns on capital and drive new cost efficiencies.

“Now is an opportune time for Capitolis to enter into this collaboration with State Street’s award-winning TradeNeXus platform with forthcoming regulations on capital requirements impacting how financial institutions address their balance sheets,” said Gil Mandelzis, CEO and founder of Capitolis. “State Street has been a fantastic partner to us for years, and we are excited to accelerate our efforts to bring optimization services to more buy-side institutions. TradeNeXus has unparalleled connectivity within the buy-side community. Together, we are revolutionizing how financial institutions engage with one another.”

“With deep capital markets expertise and an innovative technology platform, Capitolis is the ideal partner to complement the TradeNeXus offering, particularly with the implementation of new regulation in the near term,” said Louisa Kwok, Managing Director and Head of Product for TradeNeXus. “Combining Capitolis’ next-gen solutions with the TradeNeXus platform will be a critical differentiator in helping our clients optimize their workflows and post-trade processes.”

The news of the collaboration follows Capitolis’ recent announcement that it entered into an agreement to acquire LMRKTS. Earlier this year, the company also announced a partnership with leading FX settlement provider CLS to streamline trading and settlement for banks in the $6.6 trillion global currency market.

 

People Attributes

 

Capitolis seeks to build our team and culture with extraordinary people. Our People Attributes provide a consistent framework to hire, assess, and develop our team against.

 

Alicia Tillman, Former Top Marketing Boss at SAP, Joins Capitolis as Global Chief Marketing Officer

 

Capitolis, the fintech company re-imagining how the capital markets operate, today announced the appointment of Alicia Tillman as its Global Chief Marketing Officer. In this role, Alicia will build Capitolis’ worldwide marketing and communications strategy to drive significant brand awareness, demand, and customer growth.

 

Alicia brings to Capitolis tremendous depth of leadership experience at global giants SAP and American Express. Most recently, Alicia served as Global Chief Marketing Officer at SAP. She led SAP’s global marketing strategy, re-built the organization’s digital marketing infrastructure, re-wrote the brand narrative, delivered many recognized advertising campaigns around the world, and exponentially grew the company’s brand value as one of the top 20 most valuable brands in the world.

Prior to SAP, Alicia served as Global Vice President, Marketing, Public Affairs, and Business Services at American Express, where she overhauled the travel division’s marketing strategy and designed some of their first digital programs, including the travel and payment division’s first social media platforms and marketing automation capabilities.

In addition to her role at Capitolis, Alicia is a board director for Gates Industrial Corporation, a leader in industrial and commercial manufacturing, and Rainfocus, a leading event marketing technology company. She is also a board trustee and chairperson of the education committee for The Hun School of Princeton.

“Alicia has an incredible track record of building high-performing teams in large-scale companies that deliver superior levels of company brand value, awareness, demand, and loyalty,” said Gil Mandelzis, CEO and founder of Capitolis. “Alicia is the perfect CMO to join our leadership team as we continue to innovate and deliver value to the capital markets to accelerate Capitolis’ growth.”

“Capitolis’ technology enables collaboration between banks and financial institutions at a level of efficiency never seen before, improving overall business economics and investment capacity,” said Alicia. “I’m truly inspired by the size of the company’s ambition and the incredible culture and leadership team Gil has built, and I could not be more excited to build one of the world’s most valuable brands transforming the capital markets.”

Capitolis continues to expand its leadership team with numerous strategic appointments announced over the past year, including Christopher Pennington as Executive Vice President of Sales, Stuart Wexler as General Counsel, Jimmy Reilly as Head of Equity and Total Return Swaps Funding Solutions and Jen Vanderwall as Chief People and Culture Officer.

For more information on Capitolis, please visit www.capitolis.com.

 

GlobalTrading Podcast: Capitolis’ ‘Audacious’ Goal to Transform Capital Markets

Capitolis CEO and Founder Gil Mandelzis and President Justin Klug discuss the fintech firm’s past, present, future and its core mission to optimize capital markets, with GlobalTrading Host Terry Flanagan.

CLICK HERE to listen to podcast.

Eyeing the Future of Financial Resource Optimization

As SA-CCR is implemented in the US later this year, efficient use of capital is more critical than ever.

Capitolis CEO Gil Mandelzis and President Justin Klug recently spoke with Shanny Basar from Markets Media about the powerful impact of the network effect and the future of financial resource optimization. CLICK HERE to read the full article.

SA-CCR and FX: Opportunity Knocks

Although SA-CCR (the Standardized Approach for Counterparty Credit Risk) will not impact every financial institution active in the FX markets, the roll out by the Basel Committee highlights the opportunity for all banks to streamline their use of capital, no matter what calculation methodology they use.

With SA-CCR’s roll out a staggered affair around the globe, market participants in some jurisdictions are fully au fait with the requirements while it is newly on the radar for others. Regardless of your level of awareness or preparedness, you should be focused on some basic questions:

These questions are relevant not just under SA-CCR but across all capital requirement regulations and mechanisms. Even with SA-CCR replacing the Current Exposure Method (CEM) and the Standardized Method (SM) for banks, some larger banks will be able to continue using the Internal Models Method (IMM). Regardless of the regime or model, however, institutions of all sizes should be looking to optimize how they consume and allocate capital. Capital costs affect everyone, even when SA-CCR does not, so it’s crucial to access solutions and processes that allow for optimization.

If you are not already thinking about how you can flatten delta positions and reduce currency pair exposures, you should be. With the SA-CCR implementation clock already ticking, this lets you leverage opportunities under both SA-CCR and IMM.

To achieve optimum capital efficiency in FX markets, a level of flexibility and dynamism is required. With SA-CCR enabling currency pair netting, no matter the tenor of the exposures, the opportunity to compress and reduce capital consumption arises much more dynamically than before.

Accessing these opportunities requires having dedicated technology that can provide that up-to-the-minute view of a bank’s risk positions and counterparty exposures. Just as important, the technology needs to have a broad reach and offer multiple solutions to the same problem – capital efficiency – while meeting the needs of a range of institutions, all of which are potentially taking a different path to achieve the same end result.

To fully benefit from a range of solutions, however, the network effect has to play a key role. The more participants use the same service, analyze the same data, and access the same solutions, the more they can take advantage of opportunities – even before critical mass is achieved. Having access to the right information in a timely manner is critical to any institution seeking to reduce their capital footprint.

The right technology, data, and analytics democratizes capital optimization: it enables banks outside the very top group to streamline their Markets businesses without negatively impacting their position in the industry, or, importantly, the level of service they can provide to customers. Achieving this, though, means bringing a lot of moving parts together and embedding SA-CCR across the business:

If nothing else, managers at all levels of the business should be able to better understand how their valuable capital resources are consumed and measure individual units against this critical metric. Increasingly, business units are being judged against a metric of capital consumption rather than just top-level performance. Particularly under SA-CCR, every dollar saved offers value.

Announcing Recipients of Second Annual Capitolis Connects Donations

Last year, in recognition of the difficult times many people were experiencing during the pandemic, we established Capitolis Connects – a philanthropic effort to give back to the cities and neighborhoods in which we live and work.

While the world is gradually re-opening, it is important for us to continue to keep in mind those in our communities who still need our help. We are proud to support innovative and impactful local charities that are making a difference in the three cities that Capitolis calls “home.”

As we did in 2020, for the month of June 2021, we will donate 10% of all transactional revenue from our platform, in addition to individual donations by Capitolis employees. The donation will be split equally among the three local charities selected by our employees in New York, London, and Tel Aviv. This year’s charities are:

  1. Covenant House, an organization offering housing and support services to young people in need in New York, currently reaching 50,000 youth each year.
  2. Compliments of the House, a food redistribution charity in London that collects fresh, surplus food and gives it to vulnerable individuals and families.
  3. Beit Issie Shapiro, Israel’s leading developer and provider of innovative therapies and state-of-the-art services for children and adults across the entire range of disabilities impacting over half a million people annually.

We hope you will be proud to know that a part of your spend with us in the month of June will be going to support these important organizations. Thank you for your continued support to this cause and our partnership.

To learn more about Capitolis Connects and the 2021 charities, CLICK HERE.

Capitolis to Offer Optimization Solutions Through Refinitiv Trade Notification Network

Capitolis,the leading SaaS platform that drives financial resource optimization for capital markets, today announced an agreement with Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, to enable access to Capitolis’ next-generation suite of optimization products through Refinitiv’s Trade Notification platform.

The partnership will allow leading financial institutions that leverage Capitolis’ revolutionary, proprietary technology platform to streamline their processing of FX instruments including options, swaps, forwards, and Non-Deliverable Forwards (NDFs) through a seamless connection to Refinitiv’s infrastructure for post-trade services, enabling market participants to collaborate to achieve new operational, cost, speed, and scale efficiencies.

Capitolis enables firms to optimize their balance sheet exposures through collaborative technology by eliminating unnecessary positions and finding the most suitable party to hold the remaining positions. To date, Capitolis has eliminated more than $9 trillion in overall positions for more than 75 financial institutions, including many of the world’s largest banks, as well as leading hedge funds and asset managers.

Capitolis chose Refinitiv’s Trade Notification platform given its position as the leading network connecting participants in the FX market including trading venues, brokers, liquidity providers, ECNs, and banks with guaranteed delivery. Refinitiv’s Trade Notification platform offers an unparalleled geographic reach and a client-centric model geared towards fast integration.

“We look forward to continuing our relationship with the team at Refinitiv through this partnership that will deliver greater efficiency and more seamless connectivity for our clients,” said Tom Glocer, Executive Chairman and co-founder of Capitolis, as well as former CEO of Thomson Reuters.  “As the adoption of our proprietary technology platform expands across the industry, the need for continued innovation and collaboration is crucial. I have deep roots in and affection for both Capitolis and Refinitiv, and I believe this partnership will benefit both companies and our common clients, in particular.”

This partnership expands the functionality of Refinitiv’s trade reporting tools, enabling greater transparency and helping to foster a smarter marketplace for all participants,” said Dean Berry, Group Head of Trading and Banking Solutions for Refinitiv. “At Refinitiv, we are always open to collaboration and pleased to welcome new publishers on our network such as Capitolis, whose collaborative platform is changing the ways in which financial institutions optimize their balance sheet exposure. Our focus is to serve our community on STP and increasingly in other initiatives such as this one, which add value to our clients.”

“We are pleased to continue our partnership with Capitolis and begin leveraging this product enhancement,” said Tobias Krause, Head of Global Markets Resource Management for State Street. “The new trade notification and transaction reporting tools will increase the efficiency of our optimization exercises, which directly increases State Street’s capacity to serve our clients.”

The announcement follows a year of record growth for Capitolis, including the recent announcements of a $90 million Series C funding round led by Andreessen Horowitz, a partnership with AcadiaSoft, combining their risk analytics and repository of industrywide margin data with Capitolis’ proprietary technology platform, and a collaboration with CLS to streamline trading and settlement for banks in the $6.6 trillion global currency market.

Capitolis Appoints Jen Vanderwall, Former Bridgewater Talent Executive, as Chief People and Culture Officer

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced the appointment of Jen Vanderwall, former people and talent leader at Bridgewater Associates, as its Chief People and Culture Officer, amidst meaningful expansion and maturation.

The news of Vanderwall’s hire comes just weeks after Capitolis announced the completion of a $90 million Series C funding round led by Andreessen Horowitz (“a16z”). As Chief People and Culture Officer, Vanderwall will be a key member of the executive team, charged with supporting the organization’s continued growth, emphasizing a dynamic culture combining innovation, collaboration, agility, and professionalism, and furthering Capitolis’ position as a premier global employer.

Vanderwall’s extensive experience in people and culture within financial services and work as an executive coach and human resources advisor are critical to support Capitolis’ success. She previously held leadership positions in human resources and talent at the world’s largest hedge fund, Bridgewater Associates, where she was a member of the firm’s core management team. At Bridgewater, she partnered with the CEO and board to oversee all people functions, assessing the strategies, plans, and progress for culture, diversity and inclusion, human resources, recruiting, and talent. During her time at Bridgewater, she also served as Chief Operating Officer, Technology, Strategy, and Incubation. Prior to Bridgewater, she worked at Mastercard Worldwide, where she served as Vice President, Prepaid Products, and at Willis Towers Watson, where she was a Senior Consultant.

“At Capitolis, we are re-imagining capital markets and the future structure of the markets that are fairer, safer, and healthier for all,” said Gil Mandelzis, CEO and founder of Capitolis. “In order to deliver on our transformative mission, we are building a global company around a thoughtful and deliberate culture, and Jen is the perfect person to lead our efforts and strengthen that culture as we grow. She brings unique insight from her years of experience with some of the world’s greatest minds, and we are ecstatic to have her join the team at this critical time for Capitolis.”

“Gil has pulled together a top-notch team, and I’m excited to partner with them to further enhance Capitolis’ strong culture and expand and develop talent to achieve the company’s goals to transform the market,” said Vanderwall. “I am thrilled to join the team and support management and the board in building a long-standing, leading FinTech company.”

With the funds from its latest investment, Capitolis intends to drive further innovation in its technology and product development, bolster customer support and sales, and grow its team from 90 employees to over 150 by year’s end. The announcement of Vanderwall’s hire follows multiple strategic appointments over the past year, including James Kibbe as Head of Structured Funding Origination, Callie Reynolds as Chief Customer Officer, Hen Lotan and Lindsey Baptiste as Chief of Staff and SVP, Global Head of Finance, respectively, and Rahul Auradkar as Chief Product Officer.

Catching Up with Capitolis – Index Ventures’ Jan Hammer & Gil Mandelzis Discuss the Reshaping of Capital Markets

Capitolis has just secured $90m from investors including Index Ventures, Andreessen Horowitz, Sequoia and Spark. Index Ventures partner Jan Hammer, who led Capitolis’ Series A in 2018 and has been working with the team ever since, speaks to founder and CEO Gil Mandelzis. He asks him how the Capitolis fintech platform changes the dynamics in the market, what the regulators make of it, and why we need it in the first place.

CLICK HERE to watch the video.

VC Partner Perspective

Capitolis is backed by preeminent VC investors including Index Ventures, Andreessen Horowitz (a16z), Sequoia, and Spark.

 

Alex Rampell, a16z General Partner, explains why a16z – known for backing bold entrepreneurs building the future through technology – chose to invest in Capitolis.

Investing in Capitolis

Capitolis Secures $90 Million in Series C Funding Round Led By Andreessen Horowitz

Revolutionary capital markets platform has raised $170 million to date from leading venture capital firms and some of the world’s largest global financial institutions.

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced it has closed a $90 million Series C funding round led by Andreessen Horowitz (“a16z”), a Silicon Valley-based venture capital firm that backs transformational companies and bold entrepreneurs disrupting their industries with next-generation technology.

“We launched Capitolis four years ago to fundamentally re-imagine how the capital markets operate. Just as Airbnb has brought more capacity to the lodging industry, Capitolis is bringing meaningful additional balance sheet, capital and financing capacity to the market that is structurally and meaningfully constrained to create healthier, more vibrant and growing financial markets,” said Gil Mandelzis, CEO and founder of Capitolis. “The market’s acceptance and adoption of our friendly disruptive solutions have exceeded our brightest hopes, and we are thrilled to have this significant investment and support from the world’s top technology investors and leading financial institutions to grow and expand much faster.”

“What sets Capitolis apart from other financial services players is the sheer scale of management’s ambition and the substantial talent, technology and capital milestones they have achieved in bringing their innovative services to market,” said Alex Rampell, partner at a16z. “We are proud to support Capitolis through this period of rapid growth.”

The funding round, which included participation from existing investors Index Ventures, Sequoia Capital, S Capital, Spark Capital, SVB Capital, Citi, J.P. Morgan and State Street, brings Capitolis’ total funding to date to $170 million.

Capitolis—which combines deep markets expertise with a Silicon Valley mindset—arms banks, asset managers and hedge funds across the market ecosystem with an innovative technology platform that allows them to free up capital and safely remove barriers that would otherwise restrict growth.

“The market has spoken. Capitolis is building the financial system of the future,” said Tom Glocer, co-founder and executive chairman of Capitolis. “With advanced technology, a talented team, a focus on operational excellence and the continued support of our trusted partners, I look forward to our ongoing progress.”

“At Citi, we have been impressed with Capitolis’ technology platform and their thoughtful, strategic approach to fostering a more efficient marketplace,” said Okan Pekin, Global Head of Securities Services at Citi. “We feel the opportunity in front of them is significant and there is a long runway for growth.”

Capitolis, which has a rapidly growing client base, intends to use the funds from this latest investment to drive further innovation in its technology and product development, bolster customer support and sales and grow its team from 90 employees to over 150 by year’s end.

Capitolis Partners with AcadiaSoft to Enable Greater Capital Optimization for Financial Institutions

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced a partnership with AcadiaSoft, the leading industry provider of risk and collateral management services for the derivatives community. The partnership combines AcadiaSoft’s risk analytics and repository of industrywide margin data with Capitolis’ proprietary technology platform, which will enable greater capital optimization for financial institutions.

The solution will allow financial institutions to eliminate large and unnecessary positions and find the most suitable party to hold the remaining positions. This offering will enable firms to more efficiently allocate their capital—as required by the evolving regulatory landscape—and has the potential to materially impact returns on capital, market liquidity, and access to markets.

“We are thrilled to partner with AcadiaSoft to create an industrywide solution for capital optimization, during an inflection point for collaboration among financial institutions,” said Gil Mandelzis, CEO and Founder of Capitolis. “AcadiaSoft’s status as a leader in risk management solutions and its suite of analytics services makes the firm an ideal partner for us in our mission to make the marketplace fairer, safer and healthier for all participants.”

Chris Walsh, CEO of AcadiaSoft, said, “Capitolis is reimagining how the capital markets operate. We have been working with their innovative team for a while and are excited to collaborate with a company that shares our vision for enhancing market efficiency and capital consumption for the market in a rapidly changing operating environment.”

The impact of upcoming regulations like SA-CCR (Standard Approach to Counterparty Credit Risk) will have a major effect on the capitalization of financial institutions. This partnership brings together two leading firms with a shared commitment to drive down costs in the industry. AcadiaSoft’s recent acquisition of Quaternion, a specialist risk management firm, further deepens the expertise of this unique partnership to develop services that firms will be able to deploy to gain immediate and lasting optimization results.

Why Are FX Traders Shifting Their Attention to Capital Efficiency?

For firms to compete, they must optimize the amount of capital held in reserve against their FX trades. Capitolis CEO Gil Mandelzis and President Justin Klug recently spoke with Terry Flanagan from Markets Media about how technology can help institutional FX trading firms create trade and capital efficiency to drive better returns.

Mandelzis and Klug discuss how Capitolis’ suite of optimization tools gives financial institutions more control, with sophisticated algorithms that constantly scan for opportunity and the ability to seamlessly perform on-demand, real-time compressions, and novations. They also consider how new regulations, such as SA-CCR, which will adjust current models for measuring exposure at default for counterparty credit risk, might create more demand for compressing notional to optimize balance sheets.

To read the full article in Markets MediaCLICK HERE.

Managing UMR Phase 5 With Trade Optimization and Margin Reduction

Capitolis global head of sales Ben Tobin joined a panel of experts at TradeTech FX US to focus on Uncleared Margin Rules (UMR). He discussed why institutions should look beyond pure preparedness to optimizing and reducing the amount of margin they must exchange.

The panel examined how the September 2021 Phase 5 of UMR will impact FX prime brokerage, particularly with regards to operational costs and market access. Panelists discussed who and what is in scope as AANA thresholds drop, why pre-and post-trade optimization will become more important, and how technology can help drive efficiencies across trading and operations to maximize financial resources.

CLICK HERE to watch the full discussion.

Panel Discussion: How will UMR phase 5 impact prime brokerage, cost pressures and market access and how can you leverage innovations in technology to turn this update into your competitive advantage?

Moderator: Michael Koegler, Managing Principal, Market Alpha Advisors

Speakers:
Van Luu, Global Head of Currency, Russell Investments
Victoria Cumings, MD, Americas, Global FX Division, GFMA
Ben Tobin, SVP, Global Head of Sales, Capitolis
Basu Choudhury, Senior Director, CME Group Traiana
Vinod Jain, Senior Analyst, Aite Group

Capitolis Hires Industry Veteran James Kibbe as Head of Structured Funding Origination

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced the appointment of James Kibbe as Head of Structured Funding Origination, amidst growing industrywide adoption of the company’s solutions among leading financial institutions.

In this role, Kibbe will lead the origination and execution of a suite of opportunities for banks, asset managers, hedge funds, and insurers that will enable these firms to address some of their biggest challenges, including capital, funding, and balance sheet needs, across asset classes.

Before joining Capitolis, Kibbe – a 25-year industry veteran – was a Managing Director at HSBC where he served in a variety of roles including Head of Rates, Repo/Derivative Financing; Co-Head of Institutional Sales for the Americas; and Head of Macro Sales. Under his leadership, HSBC’s UST cash trading business grew its market share to become a top three firm. He also built out the bank’s collateralized/derivatives finance franchise, working closely with the bank’s clients to identify and address their structured financing challenges, among other achievements. Prior to his tenure at HSBC, he served as Managing Director, Head of US Rates Sales, for UBS AG.

“In a short period of time, Capitolis has achieved a tremendous amount of success in developing an innovative technology platform designed to tackle financial institutions’ main challenges within structured finance,” said Kibbe. “I look forward to joining this amazing team who shares my passion for bringing to life the next generation of the market.”

“The market has undergone a significant transformation over the past year in terms of how financial institutions utilize their balance sheets and the resulting implications for capital and financial returns,” said Justin Klug, president of Capitolis. “We are delighted that someone of Jim’s caliber is joining Capitolis to lead the charge in addressing this critical need and take our structured solutions offering to the next level.”

Kibbe’s appointment follows a string of strategic new hires for Capitolis in recent months, including Callie Reynolds as Chief Customer Officer, Evelina Rosenstein as Head of Business Development, Hen Lotan, and Lindsey Baptiste as Chief of Staff and Head of Finance respectively, and Rahul Auradkar as Chief Product Officer.

Capitolis collaborates with world’s leading FX settlement provider CLS

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced a collaboration with CLS, a market infrastructure delivering settlement, processing and data solutions for the global FX market, that will integrate CLS’ data with Capitolis’ proprietary technology platform to streamline trading and settlement for banks in the $6.6 trillion global currency market.

The collaboration will allow financial institutions using Capitolis’ real-time technology platform to identify the best optimization opportunities, eliminate large and unnecessary positions and free up capital. These added efficiencies have the potential to materially affect returns on capital, market pricing, overall reduction of systemic risk and more.

Against a backdrop of more stringent capital requirements and the implementation of additional regulation, financial institutions’ ability to leverage innovative and effective optimization services is invaluable as these firms continue to seek to enhance their balance sheets, not just in the rapidly evolving FX market, but all global markets.

Gil Mandelzis, CEO and founder of Capitolis, said, “Capitolis brings a novel approach to the market, delivered through innovative technology. We are building a growing community of financial institutions that will allow these firms to collaborate and optimize their financial resources. Our alliance with CLS, one of the most trusted and formidable market infrastructures, will help us to create new opportunities for collaboration and move us closer to achieving our vision – to make markets safer, healthier and more efficient.”

Keith Tippell, Global Head of Product at CLS, said, “Our unique position at the center of the FX market enables us to collaborate with specialized service providers, like Capitolis, resulting in solutions that provide choice and flexibility for our clients and make the trading environment more efficient, safer and cost effective. We are excited to collaborate with the Capitolis team, providing CLS trade data and enabling improved capital efficiencies and significantly reducing risk for market participants.”

Profit & Loss Magazine: Momentum Building – FX Swaps on the Cusp of Change

Is the last bastion of the “traditional” FX market about to be overrun? Talking to market participants and technology providers, Colin Lambert, Managing Editor of Profit & Loss Magazine is starting to think that market structure change in FX swaps is, finally, upon us. Read more on his interview with Capitolis CEO Gil Mandelzis and other industry leaders below.

In terms of false starts, the restructuring of the FX swaps market has, over the past decade and a half, had more than the 100 meter sprint at the summer Olympics. Probably the first was in 1997 when the FX industry had a “we have seen the future” moment with the launch of what was Reuters D2-2 for forwards, or Matching as has long been known. Rumors abounded of challengers to the platform, not least from its close spot rival EBS, but the reality is that until very recently Matching for Forwards has had the market to itself.

The banks advanced the automation of the product by including forwards on their single dealer platforms, initially as an RFQ but then as a stream; the multi-dealer RFS platforms followed suit and then? Not a lot. “I think the industry has lagged behind on building out FX swaps infrastructure because the clients were generally happy with what they had,” suggests the head of FX forwards trading at a bank in London. “Even more than spot clients tended to look at swaps as an administration trade and as long as the price was tight, they could electronically trade and were happy.

“It is only in the last couple of years when other factors came into play that the banks started looking at the issue again,” the FX forwards head continues. “There is a fear that the market structure change will bring more competition to the space with non-bank firms able to play, so the banks have, finally perhaps, become more engaged on the subject of forwards market structure.”

The e-FX head at a bank in London believes any change has been thwarted by forwards dropping further down the task list the more challenges emerged elsewhere. “Most banks could have driven change in forwards eight to 10 years ago had they been more open on credit allocation and not had to deal with unexpected challenges elsewhere in the business,” the e-FX head argues. “Our business certainly looked at several FX swaps initiatives post Dodd-Frank but then we found – as many did – that our spot business was haemorrhaging cash and was losing market share thanks to others being better at pricing and risk managing. When that happens, the only option is to maintain the status quo in the forwards and throw everything you have at the spot business.”

The head of forwards at the bank in London also believes the ambiguous nature of the FX swaps business, specifically where it sat in the broader business, hampered development ambitions, noting, “It’s hard enough getting buy in for change in one business, but when the FX business is trying to drive it and bring the interest rates silo along for the ride – for that is where FX swaps sits in many institutions – you’re just making the challenge twice as hard.”

There were three other factors at play in the resistance to change, the inability to reach consensus on what the market structure should look like – as one interviewee for this story points out, FX clearing is not exactly a new concept – and forward traders’ liking for trading at mid-market. “The voice brokers did – do – a really good job of selling their ability to bring buyers and sellers together,” says the FX forwards head. “Traders on the desk just got used to the fact that the bookies were often executing at mid and in those circumstances why change?”

The third factor is ongoing, the very flat interest rate environment in the world today. “There’s still money to be made in these markets but it’s a fraction of what it was 10, 20 and 30 years ago,” explains the FX forwards head. “That is pushing more banks towards the ‘broker’ model where they just facilitate customer business.

“I am a little concerned as to what happens when interest rate volatility returns – as it will someday,” the head adds in what could be a warning to the market. “We had the ‘taper tantrum’ in 2013 which some dealers found tricky to handle, and when it comes to seeing things for the first time, in 2015-17 we had traders on the desk experiencing their first ever Fed hike. There is a whole generation of forwards and interest rate traders coming through who have no concept of how busy it can get when we get divergent interest rate paths.”

Whilst all the aforementioned challenges existed and played a part in the slow change in the FX swaps market structure, there was one issue over-riding all – solving the credit bottleneck. “We have spent a lot of time talking to clients over the years about changing how the credit check is done and we often get pushback because they are concerned about collateral management, which plays such a big role in credit availability for short term funding requirements,” says Paul Clarke head of FX trading venues at Refinitiv. “A lot of our clients are using Matching for Forwards to manage their short end funding requirements and rolls, so they need to be able to continue to meet that need as the product evolves.”

While Gavin Wells, head of FX swaps strategy at Deutsche Borse’s 360TGTX platform, believes the FX swaps market is at a turning point, he acknowledges that overcoming the credit hurdle remains a substantial challenge for some. “Fully-automated trading in FX swaps is missing because of the manual credit checking that has to take place,” he observes. “You can’t really move to API trading when there is a manual credit check, which is why we built Mid-Match.”

Changing Moods

The problems are clear, therefore, but whereas three-to-five years ago few were looking at solutions, now there are a plethora of firms seeking to clear the bottleneck created by credit and post-trade processes generally. From CME Group’s FX Link which seeks to break down the barriers between the OTC and futures markets through a basis spread trade, through countless technology solutions seeking to optimize collateral, credit and capital, to new offerings such as the New Change FX beta indices, the industry has more choice than ever before. More importantly, however, there is a mood for change.

“Working with voice brokers became very hard during the lockdown and that has made banks think more about their forwards business,” explains the head of forwards at a bank in London. “The result is they want it to become more electronic, but this time the impetus is coming from above, where it once wasn’t.

“Traders are also being made even more aware of the cost of them occupying the seat,” the forwards head continues. “As regulation pushes into the FX swaps market they are faced with no choice but to embrace the change. Costs suddenly matter a lot more than they used to for these traders and while they are more obsessed than ever with making money, there seems a greater awareness that lower cost bases can reduce the ultimate number they need to make to be seen to be successful.”

Automation is also being embraced. “The e-trading teams, who typically have passed their positions to the voice desk, now want to auto-hedge their exposures to gain efficiencies and because they are seeing more of their clients electronically trade forwards,” says Clarke. “We are also seeing clients become more interested in becoming market makers by posting interest – that is one reason we launched our API for Forwards Matching earlier this year. It’s not just about the short end now either, there is a lot of interest to price and execute along the curve.”

Reinforcing the point, Clarke says that Refinitiv is planning the roll out of what is effectively an Excel plug in that will allow manual traders to interact more easily on the platform. “If a bank hasn’t got the infrastructure or doesn’t want to spend the technology budget coding to our API, they can use this Excel add-on to publish their prices or curves and execute their trades more effectively,” he explains.

Another important factor in the evolution of the forwards market structure is – and again this has been a long time coming – competition. “360T launching its swaps product has been good for the industry, for while we may not want fragmentation, we don’t want an effective monopoly,” says the head of e-FX at the bank in London.”

Unsurprisingly, Wells agrees. “We believe the market should be offered choice and what’s missing in terms of choice in FX swaps has been price transparency,” he says. “It’s not only about trading, it is also about providing better pricing for many other areas including, for example the middle office doing rate reasonability checks.”

Wells also believes another factor is at play in FX swaps at this time – the entrance of new players to the market. “The BIS and FX Committee surveys have signaled the growth in FX swaps, not just as a notional amount but also as a share of FX trading overall,” he says. “This seems out of line with existing market participants simply wanting to do more FX. To me it supports the notion of new participants in FX swaps, with new motivations to trade.”

“These players are there because of things like the liquidity coverage ratio, where you need to hedge all your outgoings for the next 30 days, and other capital requirements that have driven a need for funding, and this is becoming a more common theme – the desire to use FX swaps for funding,” he continues. “Funding and liquidity pressures seem evident by the continued use of FX swap lines between central banks – the question now is whether the FX swap market can provide the funding function that came from these.”

Front Office Solutions…

Impending regulatory pressure – and it remains significant that FX swaps remain outside of regulations in some jurisdictions – will force a degree of change, but to get the full experience, traders, both electronic and voice, have, as Clarke notes, to be brought along. “We have to be thoughtful about how we change the model and, for example, manage credit and the trading workflow,” he says. “We know the market is going to evolve and we want to ensure that all our clients can benefit –we have 300-plus clients on Matching for Forwards and they should all benefit from being able to trade with the rest of the community.”

In terms of what is actually being done, the main focus seems to be on supporting the existing experience of traditional traders whilst also enabling e-traders to execute effectively with the broad set of participants on the venue. Refinitiv has an “upping the quantity” function which allows two participants to trade initially, and then communicate with each other to increase the size of the trade. This is done in the post-trade environment and Clarke says the functionality has proved “very popular”.

At 360T, Wells also stresses the importance of engaging with all sides of the market, reiterating the platform’s desire to provide greater price transparency. Noting that it is “odd” that in the biggest segment of the biggest market in the world there is minimal price transparency, Wells argues that once that transparency is delivered best execution can be enabled both manually and via API, something that plays to current and impending regulation.

“Our swap data feed has over 20 banks, pricing in more than 48 currency pairs in over 60 tenors,” he says. “That means lots of prices that are – importantly – clean of skew for credit and that are delivered by an independent third party. If you have a mid-price, people start looking to trade on it, which is why we built Mid-Match. Clients can see mid-market through the Swaps Data Feed and then post interest in a dark environment to exchange risk at that level.

“This brings players together but that doesn’t work effectively without a better credit model,” Wells continues. “The soft credit model has its place but, again, we believe there has to be choice – Mid-Match automates the credit checking process – you cannot stop a deal for credit purposes, so there is certainty of trade.”

Fungibility also plays a role in the new solutions, with CME’s FX Link pioneering, although it is notable that not everyone views it positively, with one senior forwards trader observing that there is still an underlying lack of liquidity holding back broader adoption. “It’s an elegant solution, but maybe too elegant,” the trader argues. “I still think there needs to be more flexibility – this is not just about capital and credit charges, the bottom line for any trading venue is it has to offer deep enough liquidity.”

The head of forwards at the bank in London acknowledges that futures are not the largest part of the FX market, but feels they are important, especially if the fungibility can be built out further. “I think CME is missing one important piece of the puzzle – and that is direct access to an OTC forwards platform to help it build liquidity. It owns EBS so the opportunity is there if it can grasp it. FX Link is still likely to play an important part in the evolution of FX swaps if it can fill that gap.”

360T’s Wells is bullish over the prospects for a blended pool of liquidity embracing OTC and futures. “When you bring those two pools together you create opportunities,” he says. “We have seen how popular swap algos have become and if we succeed in building these fungible pools of liquidity then I think you will see streaming EFPs – and that provides the global market with another source of funding, hedging and alpha generation.”

…And Back

It is a testament to the impact of regulation that the biggest driver of change in the FX swaps market is unlikely to come from principals or intermediaries in the market. With capital, credit and collateral management dominating the agenda the fintech world is driving a lot of change, and seeking to push even further in the search for efficiencies. “The issue is more complex than just credit limitations,” observes Gil Mandelzis, founder and CEO of Capitolis. “It could be that a firm is running out of appetite for a certain counterparty due to risk-weighted asset reasons, especially if that counterparty is not highly rated and comes with a much higher weighting.

“Financial resource optimization has become a major issue, but if, for example, you liken it to the e-commerce evolution, then we are in the 1990s. There is little refinement or granularity, and the appropriate tools to deal with this complexity are not available on an industry-wide basis,” he continues. “That is what Capitolis offers, a more customized approach that recognizes that different market participants have different motivations and limitations regarding their trading, but it is still very early days. Senior management at the banks understand the problem, but at the trading desk level that understanding is only now starting to have an impact.”

Mandelzis believes that interest in optimization is going to spread beyond the top 10-15 players currently engaged on the issue. “We are going to see growth in clearing, that is a fundamental step towards solving the issue, but we are also going to see solutions outside of that space such as compression and novation,” he says. “Three years ago people were saying I don’t need to compress in FX – that is changing.”

Earlier this year a Bank for International Settlements’ paper found evidence that G-SIB requirements were prompting several larger banks to pull back from the FX swaps market at month and quarter ends, thus signaling that what was once just a year-end problem has now multiplied. Banks seeking to reduce the G-SIB rating through lower forward exposures saw spreads widen at these crucial junctures in firms’ funding cycles, the paper found.

Andrew Williams, CEO of compression and optimization services provider Quantile, points out that compression works well for reducing G-SIB scores and believes the spillover from interest rate markets will continue, making the service even more valuable to FX swaps desks.

“Business managers are starting to look at both cleared and uncleared exposures together,” he says. “Whether it be the FX or rates business, they are focused on their total funding cost regardless of where the trades reside, so while our optimization service started looking at uncleared margin, increasingly it’s being used to incorporate cleared positions as well.”

Williams believes that there will continue to be greater interaction between trading and optimization desks within banks. “In addition to the XVA desks, the optimization desks also look at firmwide exposures to try and make the business as a whole more capital efficient, which is where we can help. Traders should be free to focus on pricing to clients and accessing liquidity, on multiple venues using multiple products. If Quantile can efficiently rebalance risk across these channels and products, there is a feedback loop that leads back to the trader making tighter prices to clients.”

The Nine Ton Gorilla

“You can forget the saying about the 900-pound Gorilla in the room,” says the head of forwards trading at the bank in London. “We have an absolute monster sitting there and it’s got a clearing tag around its neck. There are those who feel clearing is a panacea and others who are less sure – all I can say is that if clearing does eventually emerge as a major part of the FX swaps market then we would have discussed it to death internally and it will be there because it works.”

At face value the argument for clearing seems strong – a centralized liquidity pool without credit restrictions – but if that is the case, why is it taking so long for the market to embrace it? Dodd-Frank was seen as a driver but exempted FX, the CFTC in 2014 looked set to mandate FX clearing but pulled back and then just a year later Europe looked like it was going to take the lead, but again nothing has happened. “I think there were cost issues,” says a source in the clearing world. “Few firms were going to spend valuable resource on building the framework required for clearing, but as UMR gets closer, that mood is changing. Frankly it just wasn’t important enough for most banks and, if you ask them now, they would still prefer not to be heading that way.”

The reluctance to embrace change is partly, some argue, because clearing will ramp up competition levels in the forwards market and drive something similar to what was seen in spot markets with the entry of non-bank market makers. “Getting prime brokers onto the OTC trading platforms would be a good start, it could provide additional liquidity and interest,” says a senior manager at a platform. “There will be resistance from banks, though, and I wonder how many platforms are really willing to poke that bear at this time when competition is high and volumes in spot are not exactly growing.”

It could be argued, of course, that with spot volumes largely static platforms should indeed be looking at not only building forwards platforms but actively seeking new LPs to power them, but as a senior trader at a major asset manager points out, “We’re perfectly happy with our pricing in forwards. We can put banks in competition, spreads are tight – why do we need to go elsewhere?”

There is also the factor that the really big issue being solved for in FX swaps does not, to a large degree, involve the buy side – it is very much about automating and bringing efficiency to the dealer-to-dealer market that makes up such a large proportion of trading. That said, if the core market structure is enhanced, inevitably buy side clients will want to see the benefits of any change.

Whichever way one looks at it, credit remains a bottleneck, however, as 360T’s Wells observes, “Automated credit is pretty good but it’s not centralized credit – that only happens in an exchange or central counterparty environment.”

Wells believes that the changing rules are driving FX into a more regulated environment, but accepts it is still very slow to change. “The change to the SA-CCR risk model next year is really beneficial for clearing and it ties in with the tail end of the capital regulations in UMR, which also happen next year,” he says. “SA-CCR brings netting benefits and could lead to a re-shaping of market infrastructure.”

Intriguingly, however, Wells also warns, “This is probably the last shot for clearing to present itself as a viable alternative to some sort of automated bilateral credit solution. We do believe that the change will occur but it’s far from guaranteed.”

Capitolis’ Mandelzis sees clearing as the “central limit order book of optimization”, which has a role to play going forward, noting, “SA-CCR lends itself to optimization where participants can rebalance their exposure, not only between their uncleared counterparties, but also move some of their risk into the clearing house, so there are significant capital benefits, which could lead to the clearing of more deliverable FX.”

As long as the OTC market dominates, however, Mandelzis stresses the need to alleviate capital and credit pressures more generally. “This is the number one bottleneck in FX markets,” he says. “Break that bottleneck and you can unleash tremendous growth because there is a lot of pent-up demand existing today. Any time banks don’t want to win business due to regulations like G-SIB you have a fundamental problem – one that needs to be solved. We can help solve those balance sheet problems and help the industry grow by offering a flexible, granular solution.”

Williams acknowledges the concern that margin requirements could get out of hand as FX clearing grows if it is not managed in an appropriate manner, but believes the argument for clearing in FX is becoming more compelling. “Uncleared compression is typically harder than cleared compression as you need to consider the counterparty risk and various financial agreements between banks,” he observes. “When compressing at a CCP, it’s a different and more efficient process, so if there is more clearing of FX over time it will benefit compression activity and free up more capital for the business.”

“The rates business has generally been front and center from a compression perspective but it’s fair to say that all businesses want to drive efficiency and most are assessed on return on capital, not just outright P&L,” he continues. “This means the incentives to optimize the use of financial resources, such as capital and funding, in each individual business is becoming increasingly important. Compression and counterparty risk rebalancing both have a significant part to play in FX going forward, and more clearing will help drive that.”

“SA-CCR provides another significant incentive for clearing,” he adds. “We need to clear in an optimized fashion to increase netting and decrease risk fragmentation across multiple netting sets. This optimized approach will help to realize the material benefits of clearing whilst managing the total margin and capital requirements across the portfolio.”

It is unlikely that all FX swaps will trade in an automated fashion, or be cleared, there will always be bespoke transactions with clients and different demands from the sell side hedging fraternity. There is a real sense, however, that genuine change is coming, both in terms of automated trading, optimization and clearing. From this a new, more modern, FX swaps market is likely to emerge which is in itself important. For as 360T’s Wells points out, “People have been discussing this for a long time, which is right because FX provides the oxygen for the global economy. Now, however, more than just enabling cross-border trading, the FX swaps market is seen as a primary source of funding which means it has to modernize. It needs more automated credit checking than it currently has; clearing for those counterparties that require it to ease their regulatory burden; and deeper liquidity through a fungible cash and futures market.

“A homogenized FX swaps market would offer a really viable and richer pool of funding to a market that really needs more capital than is currently available if it is to provide the resiliency and stability that both participants and regulators want.”

*Original article published by Colin Lambert in Profit & Loss Magazine on October 29, 2020.

CLICK HERE to read the article in Profit & Loss.

Capitolis Secures Strategic Investment from Citi, J.P. Morgan and State Street

The investment reflects industry support for Capitolis’ vision to transform capital markets by helping financial institutions optimize their capital for the benefit of all participants.

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced the completion of a strategic investment from Citi, J.P. Morgan and State Street.

The transaction represents a collaborative effort by the three leading global financial institutions to drive further adoption of Capitolis’ proprietary technology platform, which helps financial institutions free up capital and remove barriers that would otherwise restrict trading. Capitolis enables firms to optimize their balance sheet exposures through collaborative technology by eliminating unnecessary positions and finding the most suitable party to hold the remaining positions. To date, Capitolis has eliminated $5 trillion in overall positions for more than 50 financial institutions, including many of the world’s largest banks, as well as leading hedge funds and asset managers.

“We are excited to have three of our trusted partners provide further support for our vision and business model focused on transforming the marketplace for the benefit of all participants,” said Gil Mandelzis, CEO and founder of Capitolis. “While we have made great strides over the past three years since starting the company, it is only the beginning of our work in creating a new industry standard through collaboration, innovation and technology. There is much more transformation yet to come.”

The announcement follows a $40 million Series B funding round in November 2019, led by Spark Capital and SVB Capital, with participation from existing investors Index Ventures, Sequoia Capital and S Capital. Capitolis intends to use the funds from this latest investment to further accelerate its technology and product development, as well as expand sales and marketing initiatives in the months ahead.

“We are proud to support Capitolis and its innovative approach to capital optimization and efficiency,” said Okan Pekin, Global Head of Securities Services at Citi. “We have been growing supporters of the platform since its inception and believe Capitolis’ unique approach will play a significant role in enhancing global markets by driving increased industrywide collaboration to achieve higher growth.”

“Capitolis’ approach to innovation within the financial markets is unique and transformational,” said Troy Rohrbaugh, Head of Global Markets, J.P. Morgan. “We are happy to support them as they invest and build technology that helps free up capital creating greater efficiencies within the global markets industry.”

“State Street is very pleased to announce this latest investment, which is another significant milestone in our three-year partnership with Capitolis,” said Tobias Krause, Head of Global Markets Resource Management for State Street. “Their products have improved resource efficiencies and unlocked previously idle capacity in OTC markets. This ultimately helps our organization deliver better results on behalf our clients and ensures market participants have great access to financial resources. We look forward to continuing our work with Capitolis.”

“It’s been a pleasure to work with these three leading financial institutions,” said Tom Glocer, Executive Chairman of Capitolis. “It is the logical next step to add them to our capitalization table, and we look forward to their guidance in evolving our services to meet the needs of our clients for years to come.”

Capitolis Achieves Record Volume In FX Options Novations In Second Quarter 2020; NatWest Joins Community On Growing Platform

Since its inception, the Capitolis FX Options Novations platform has eliminated positions of more than $2.5 trillion in notional.

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced that Capitolis Novations, its foreign exchange novation platform, achieved a record transaction volume of $417 billion in notional for FX options novations during the second quarter of 2020, ended July 31, nearly doubling the volume from a year earlier.

Reflecting the desire for enhanced operational efficiency within the $5 trillion global currency market, NatWest has also joined the community of more than 50 leading global financial institutions, including Citi, HSBC, Standard Chartered, Nomura and Societe Generale, who are active participants on Capitolis’ Novations platform.

Since its inception two years ago, Capitolis Novations has recorded transaction volume of over $2.5 trillion in notional, underscoring the widespread industry adoption and momentum of its ground-breaking optimization technology among prime brokers, executing banks, hedge funds and money managers.

By automating a historically onerous and manual process, Capitolis has reduced transaction time from weeks to days ⁠— or even hours. It has also expanded the possibilities for trade optimization by making it economically viable for buy- and sell-side market participants to identify unnecessary positions that consume capital and move or eliminate them in collaboration with a much broader range of counterparties.

Gil Mandelzis, CEO and founder of Capitolis said, “Our strong performance in a challenging environment, as well as the addition of NatWest to the Novations community, reflects the tremendous growth of our platform. We look forward to increasing the network of market participants who can utilize our optimization tools to free up capital and boost their returns.”

“The Capitolis Novations platform has brought a new level of client service to the FX market by connecting a network of counterparties through a seamless and automated process that provides new efficiencies and cost benefits,” said Marcus Butt, Global Head of Prime Services & Futures at NatWest. “We support Capitolis’ efforts to help create a more collaborative market environment.”

Capitolis Finalizes Charitable Fundraising Efforts From Capitolis Connects

Capitolis is excited to announce the completion of fundraising efforts for Capitolis Connects, the firm’s new, annual philanthropic effort connecting capital markets with small, local charities doing incredible work to serve our communities.

Charitable donations are needed now more than ever – especially as this pandemic continues to affect our society from a health and economic perspective. From fundraising efforts throughout the month of June, Capitolis has donated tens of thousands of dollars to three local charities who have been doing amazing work fighting food insecurity and poverty and supporting communities who are on the front-line fighting COVID-19.

City Harvest in New York will use the donation to support their emergency response work in New York City during the pandemic. This money will help rescue and deliver more than 56,000 pounds of food to help feed food-insecure New Yorkers.

Compliments of the House in London will buy a temperature-controlled van to collect and deliver meals from local restaurants to vulnerable individuals and families in need.

Magen David Adom will purchase advanced medical kits for over two dozen of the hospital’s first responders fighting COVID-19 in Israel.

A very special thank you goes out to our clients for their ongoing commitment to our firm and for helping us reach these fundraising goals. We look forward to supporting local and impactful charities through this new program for years to come.

Capitolis Appoints Rahul Auradkar as Chief Product Officer Amidst Record Growth

Auradkar joins Capitolis’ executive team to drive global product development

Capitolis, the leading SaaS platform that drives financial resource optimization for capital markets, today announced the appointment of Rahul Auradkar as its Chief Product Officer. In this role, Auradkar will lead Capitolis’ product development efforts globally and is the latest addition to the company’s growing executive management team.

Auradkar joins Capitolis with vast experience in the software industry and a track record of building and leading cloud businesses across start-ups, pre- and post-IPO businesses and large software enterprises. At Microsoft, Auradkar drove the company’s virtualization efforts and led teams in product and engineering, driving transformative customer impact through the company’s Azure, Office 365 and Windows Server businesses. He also served as Vice President of Products at Apptio, an enterprise SaaS company pioneering technology business management, providing transparency and optimization to enterprises on their technology investments. While at Apptio, Auradkar and his team helped grow the business from a start-up to a publicly-traded company, with nearly 800 employees and more than $200 million in annual revenue. Most recently, Auradkar was Chief Product Officer of AnsweriQ, a start-up driving customer service automation through machine learning and AI.

“I’m excited to welcome Rahul to the Capitolis team. His deep expertise and successful track record of building best-in-class, scalable SaaS platforms and applications will help us to enhance our product offering and take it to the next level,” said Gil Mandelzis, CEO and founder of Capitolis.

“Capitolis is taking an innovative and collaborative approach to transforming capital markets,” Auradkar said. “Capitolis’ fintech platform enables financial institutions to become much more efficient in how they utilize their balance sheets, a development that has far-reaching implications for the future of the industry. I look forward to continuing the innovation and building Capitolis’ SaaS offerings with the talented team that has built a strong and successful foundation.”

The announcement follows a year of record growth for Capitolis, which has helped leading financial institutions on its platform eliminate more than $3.5 trillion in overall positions to date, leading to leaner financial institutions and reduced systemic risk. Auradkar’s hire comes on the heels of additional leadership announcements in March, including the recent addition of Amos Arev as Vice President of Engineering, and the appointment of Igor Teleshevsky as Executive Vice President and Head of Professional Services and Illit Geller as Chief Business Development Officer.

The Unpredictable (Event) is Predictable: How Companies Can Prepare for the Next One

The COVID-19 pandemic has drastically changed nearly every aspect of our lives. Massive bailouts have been launched to rescue households and entire industries and economic activity – grounded to a halt by lockdowns across the globe – is just beginning to recover, due to the unprecedented nature of the global health crisis.

Reflecting on how so many people are heroically navigating these challenging times reminds me of just how often we have been faced with such turbulent periods in recent history and the need to always be ready for the next potential crisis to come.

I started my career in financial services more than 20 years ago, just before the Federal Reserve Bank of New York organized a $3.6-billion bailout to prevent Long-Term Capital Management from causing massive losses throughout the financial system. I remember vividly the shock in the system, and how many people were saying it was an extremely low probability event and “no one could have predicted that”. Since then, as the founder and chief executive of several companies over more than two decades, I have encountered many black swans – or those events that are ‘impossible to foresee’ – including the dot-com bust, the September 11 terrorist attacks, the global financial crisis and now the COVID-19 pandemic. And each time, the size of the disaster, its effect and required intervention were much larger. While each of these crises were different, in each instance, we have heard the same assessment – this is an unprecedented event, and no one could have been prepared for it.

But is that really the case? Surely, corporate executives, lawmakers and economists alike might not have predicted the exact circumstances of each unfortunate event. Yet, in reviewing the list I mentioned above, it has become evident that these types of global incidents will happen again. Black swans are not nearly as rare as we would like to think. The unprecedented event is commonplace every decade. In other words, the occurrence of the unpredictable event is highly predictable.

Against that backdrop, below are recommendations of what companies, and particularly startups, can learn from this latest crisis:

The preparation for the next crisis starts now. Unfortunately, it’s coming. It will be unexpected to most of us, unprecedented and huge. At the same time, it will be predictable and survivable, if we make sure we are always prepared.

This article was originally published on LinkedIn on June 23, 2020. Click here to read the article in its original format on LinkedIn.

The Innovative Bank – New Business Models for Capital Markets

Complex workflows in the capital markets, asset management and the wholesale and corporate payments space are often more difficult to tackle than the more “simplified” peer-to-peer lending, robo-advisory, crowdfunding, or other direct-to-consumer propositions.

Join Capitolis CEO Gil Mandelzis and Pascal Bouvier of MiddleGame Ventures along with other leading industry CEOs from DriveWealth and RTGS.global as they discuss disruption and innovation outside of the traditional banking sphere, looking at new business models for today’s corporate and investment banks.

This on-demand session from the 2020 Paris FinTech Forum examines how fintechs in this space approach a very different risk/return proposition, collaborate with a wide array of counterparties, manage resources and execute, and differentiate themselves as a true disruptor.

CLICK HERE to watch the session on-demand.

*Original panel filmed at the annual Paris FinTech Forum on January 29, 2020.

Announcing the Launch of Capitolis Connects

In these challenging times, Capitolis recognizes how fortunate we are to operate in a market that remains vibrant and continues to grow.

With this in mind, we feel passionate about supporting those in need, and unfortunately there are so many individuals and families suffering right now.

Therefore, we are very excited to announce Capitolis’ new philanthropic effort – Capitolis Connects – to give back to the cities and neighborhoods in which we live and work. With the support of our investors, our Board and our employees, we are establishing this effort as an annual program to serve as a conduit that connects capital markets with small, local charities that are doing incredible work to serve our communities.

For the month of June, Capitolis will donate 10% of all transactional revenue from our platform. The donation will be split equally among the three local charities selected by our employees in New York, London, and Tel Aviv. This year’s charities are:

City Harvest, New York City’s largest food rescue organization, is helping to feed the more than 1.2 million New Yorkers who are struggling to put meals on their tables, especially during this time.

Compliments of the House, a registered food redistribution charity in London that collects fresh, surplus food and gives it to vulnerable individuals and families.

Magen David Adom, a leading organization in Israel that is helping the public fight COVID-19 by collecting medical supplies, testing individuals, and funding necessary medical services.

We are always grateful for your business on any day, and we hope you will be delighted to know that a percentage of your transactional spend with Capitolis during the month of June will go to these wonderful charities. And of course, the more you do, the more these charities will benefit!

If you have any questions regarding this effort, please reach out to our Global Head of Marketing, Jessica Zall at jessicaz@capitolis.com.

Thank you for your continued support.

Waters Technology Podcast – Fintech Startups & The World of FX

Join Waters Technology editor, James Rundle, and Anthony Malakian, editor-at-large, for their weekly Wavelength podcast as they look at the fintech startup world with Capitolis Founder & CEO Gil Mandelzis. In this podcast, Gil examines the differences in the startup world today versus twenty years ago and looks at some of the challenges facing the foreign exchange market.

CLICK HERE to listen to the podcast.