Capitolis Recognized as one of American Banker’s 2024 Best Places to Work in Fintech

Capitolis Recognized as one of American Banker’s 2024 Best Places to Work in Fintech

Capitolis is proud to announce its recognition among the industry’s best workplaces, having been named to American Banker’s 2024 Best Places to Work in Fintech list.

The Best Places to Work in Fintech recognizes financial technology companies that provide a positive and supportive workplace environment, based on employee feedback. This award underscores the importance of fostering a sense of belonging among employees, further solidifying Capitolis’ status as a leader in the fintech industry.

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Capitolis Novations Platform Gains Strong Momentum within FX Options Market

Capitolis Novations Platform Gains Strong Momentum within FX Options Market

Meaningful PB’s, EB’s, and Clients have recently joined the platform and significant reductions in response times have been achieved

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company creating safer and more vibrant capital markets, has onboarded most major buy-side and sell-side market participants to its FX novations platform. The company is working to improve novation solutions, drive automation, and reduce response times. Capitolis has worked alongside participants to reduce response times by more than half already this year.

Capitolis’ Novations platform, the only FX novation platform on the market, helps drive efficiencies, safely expanding execution opportunities within the FX market and further reducing its risk and capital footprint. Capitolis automates the once manual novation process for all participants, including prime brokers, executing banks, hedge funds, and real money managers, to optimize FX options portfolios. With the continued implementation of regulations including the upcoming Basel III Endgame, market participants will have even greater pressure to be more efficient with their portfolios. The automated novation capability will be essential in helping them achieve this.

“We’ve seen great benefit in bringing most major market participants together on one automated novation platform, and many that weren’t participating in the past are now actively engaged on the platform,” said Gil Mandelzis, CEO & Founder, Capitolis. “We continue to partner with both buy-side and sell-side participants to understand and deliver on their needs, and we see huge potential for the industry solution we’ve developed for novations.”

“We are pleased to be working with the Capitolis Novations platform. The platform’s innovative approach to buy-side and sell-side collaboration offers us the ability to optimize our operations in a secure setting and enhance our overall efficiency,” said Nathaniel Litwak, Global Head FX Prime Brokerage, BNP Paribas.

Capitolis continues to grow the network of bank and non-bank customers on its FX novations platform, providing scale to facilitate higher novation volumes and optimize FX options portfolios. Capitolis can execute a novation even in the most complicated cases. Earlier this year, the company announced a significant innovation to its groundbreaking automated novations service in FX: automation of agency novations while maintaining anonymity, a first of its kind for the FX options market.

To learn more about the Capitolis Novations platform, visit https://capitolis.com/novations.

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The Importance of Mitigating Settlement Risk in Foreign Exchange Markets

The Importance of Mitigating Settlement Risk in Foreign Exchange Markets

Foreign exchange (FX) is the backbone of global trade: trillions of dollars are exchanged daily across global markets. FX settlement transactions are key to a functioning global financial system.

They also carry an inherent settlement risk. This can result in significant losses and high costs for market participants – and can lead to systemic consequences, too. Market participants are exposed to FX settlement risk every day: almost a third of deliverable FX turnover, or $2.2 trillion, was still at risk on any given day in April 2022 as it was not covered under Payment-versus-Payment (PvP).

Addressing this risk is essential for safeguarding the stability of the global economy. Market participants can turn to technology-driven tools, like settlement optimization services, to help reduce settlement risk and prepare to mitigate a potential problem—before it arises.

Drivers of Settlement Risk

Years ago, central banks devised a system wherein commercial banks would exchange currencies through a financial market utility (FMU), which are “multilateral systems that provide the essential infrastructure for transferring, clearing, and settling payments, securities, and other financial transactions among financial institutions or between financial institutions and within those systems.”

However, not all principal exchanges are covered on an FMU, including many currencies (e.g., Russian Ruble, Turkish Lira, Chinese Yuan), and therefore they are inherently exposed to higher settlement risk. In addition, when a country is in crisis, settlement risk is magnified by a greater likelihood of failure. Geopolitical risks, such as sanctions or political upheavals, will further exacerbate currency volatility, and increase settlement uncertainty.  

There have been seven major currency crises in the last 30 years. Most recently, we’ve seen a crisis with the Russian Ruble, where banks were overexposed to the currency and unprepared for the risk of Russia’s sudden invasion of Ukraine in 2022, which led to global sanctions and the devaluing of the Ruble.

A currency crisis is an unfortunate inevitability over a banking lifetime and can be crippling if banks are not prepared to handle the associated settlement risk.

Two Types of Viable Solutions to Mitigate Settlement Risk

  • Payment vs. Payment Transactions: The most common and effective present day FMU is a Continuous Linked Settlement (CLS), an international payment system launched in September 2002 to handle FX transactions. This utility offers banks and market participants real-time gross settlement to provide protection in the over-the-counter (OTC) FX markets. The CLS operates within a specific window of time each day, during which all commercial banks can exchange currencies on a simultaneous basis. This Payment vs. Payment (PvP) process ensures that both sides of a transaction are settled simultaneously, minimizing the risk of one party defaulting before the other side settles. While CLS has provided solutions for stable currencies, it is important to note that more volatile currencies are not so easily settled through a PvP process.
  • Optimization Services: If a currency isn’t covered on an FMU, or when a global crisis occurs and a currency is extremely volatile, the traditional CLS to facilitate a PvP transaction may not be a feasible risk-mitigation option. Instead, financial institutions can leverage a settlement optimization service – a technology solution that works to reduce every party’s settlement exposure in advance and avoid needing to settle any unnecessary PvP transactions. This method optimizes currency exposure by moving positions across participating banks and optimizing each pair simultaneously. In addition, the service enables financial institutions to reduce gross notional and line items to simplify their books, so they can more easily handle a sudden currency shock or crisis. In the same way one purchases a home insurance policy ahead of something happening to their home (e.g., a tree falling on it), a settlement optimization service looks to reduce exposure ahead of time, providing a unique and vital service by addressing potential settlement risks before they escalate. This creates an added layer of protection for the global banking system.

There are two types of optimization services – Bilateral Day of Settlement Netting and Multilateral Future Settlement Optimization.

Bilateral Day of Settlement Netting: A bilateral mechanism that allows for the offsetting of payment obligations between a pair of participants across multiple currencies the day the trades are due for settlement. The benefit of this service is operational risk reduction and operational efficiency.

Multilateral Future Settlement Optimization: Facilitated as a run with multiple participants looking to optimize for future settlement, this mechanism moves positions across network participants. The benefit of this service is future risk reduction while also allowing participants to reduce gross notional and line items to simplify books.

A case of leveraging Settlement Optimization to reduce volatile currency exposure just occurred via the Russian invasion of Ukraine. At the start of the crisis, many banks had large exposures to the Ruble, which became extremely volatile given sanctions, deflation of the currency, and growing uncertainty regarding what impact the war would have on the Russian economy. These banks had an immediate need to reduce their Ruble exposures. They only had a few means to do this: stop trading, roll off trades, and/or actively optimize their portfolios.

Using data from seven large global banks at the start of the Russian invasion of Ukraine through the end of the year proves the effectiveness of those means. Between March 2022 and December 2022, the aggregated exposure of those seven banks was nearly halved: from $35 billion to $18 billion.

We Must Be Prepared for Settlement Risk

In a world where trillions of dollars are exchanged daily across global markets, settlement transactions are the lifeblood of banking and as such carry monumental risks. If not accounted for, a single point of failure can trigger a cascading effect, disrupting the entire financial system. Market participants now have the tools to mitigate these risks and ensure the stability of the global economy.

Kate Weston is Head of Execution, Portfolio Optimization for Capitolis, the financial technology company creating safer and more vibrant capital markets.

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Capitolis Named to the 2023 Deloitte Technology Fast 500 List

Capitolis Named to the 2023 Deloitte Technology Fast 500 List

Capitolis, the technology company creating safer and more vibrant capital markets, is excited to announce its inclusion on the 2023 Deloitte Technology Fast 500 list of the fastest-growing companies in North America. It ranked 68 on the list.

“We are honored to be acknowledged by Deloitte as one of the fastest-growing technology companies in North America,” said Lindsey Baptiste, Chief Financial Officer at Capitolis. “This achievement is a testament to our exceptional Capitolis team and the unwavering support we have received from our clients and investors.”

Now in its 29th year, the Deloitte Technology Fast 500 compiles the fastest-growing companies in North America spanning the technology, media, telecommunications, life sciences, fintech, and energy tech sectors.

Inclusion on the Deloitte Technology Fast 500 is the latest growth and innovation-focused recognition Capitolis has garnered in the past year. Most recently, Capitolis was recognized as one of New York’s 100 Best Places to Work in 2023 by Crain’s New York Business for the second consecutive year. Capitolis was also named to Fast Company’s prestigious annual list of The World’s Most Innovative Companies for 2023 as well as CNBC’s inaugural World’s Top Fintech Companies 2023 list.

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Capitolis To Dedicate Next Multilateral Optimization Run to Support Israel Humanitarian Relief

Capitolis To Dedicate Next Multilateral Optimization Run to Support Israel Humanitarian Relief

Capitolis will donate a portion of proceeds from next optimization exercise scheduled for mid-November

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company creating safer and more vibrant capital markets, today announced it will donate a portion of proceeds from its upcoming multilateral optimization run to support humanitarian relief efforts in Israel. The company employs 46 people in its Tel Aviv office, including much of its technology team. The upcoming optimization run is slated for mid-November.

“Anyone in the world should be mortified by the atrocious and barbaric massacre Hamas conducted on innocent civilians including children, women, and the elderly. This is not the time to sit idly by. This is the time where companies and leaders must stand up for what’s right. We must all strongly condemn this and any type of terror attack,” said Gil Mandelzis, CEO & Founder, Capitolis, and a native Israeli. “Capitolis has meaningful presence in Israel, and we will do all we can to support our team there and the many innocent people who are suffering from this horrific situation.”

Capitolis conducts ongoing multilateral optimization runs across its global bank network to manage risks stemming from market and counterparty exposures across various foreign exchange (FX) workflows. Capitolis’ Portfolio Optimization exercises deliver significant reductions in exposures calculated under SA-CCR and additional objectives.

To learn more about Capitolis’ Portfolio Optimization solutions, visit https://capitolis.com/portfolio-optimization/.

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Capitolis Named Best FX Software Provider in 2023 Euromoney Foreign Exchange Awards

Capitolis Named Best FX Software Provider in 2023 Euromoney Foreign Exchange Awards

Capitolis’ optimization solutions help financial institutions optimize their existing portfolio by identifying unnecessary positions and eliminating them in collaboration with counterparties

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company creating safer and more vibrant capital markets, is proud to announce its recognition as the “Best FX Software Provider” in the 2023 Euromoney Foreign Exchange Awards, a hallmark of excellence within the global FX industry.

For more than 44 years, the Euromoney Foreign Exchange Survey has stood as the most comprehensive representation of the wholesale FX market. Capitolis earned this distinction in the Non-Bank Award category, reaffirming its leadership in revolutionizing financial technology solutions for banks, institutional investors, asset managers, and hedge funds on a global scale.

“We are honored to be recognized as the Best FX Software Provider of 2023,” said Gil Mandelzis, CEO & Founder, Capitolis. “This award underscores our commitment to innovation and our dedication to solving complex market challenges for our clients. It is a testament to the hard work and unwavering commitment of our team, and we look forward to continuing to innovate with the goal of reducing risk, unlocking capital efficiency, and enabling growth and prosperity for more participants.”

Capitolis earned the “Best FX Software Provider” recognition for its agility and commitment to its clients in the face of unprecedented challenges, notably following Russia’s invasion of Ukraine in 2022. Working quickly to bring together a large network of global banks, Capitolis leveraged its trade optimization platform to support 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.

Capitolis has now completed 15 Russian ruble exposure exercises, reduced billions in redundant, notional exposures on behalf of global banks, and donated a portion of revenues from these compression activities to Ukrainian relief and humanitarian efforts.  

Over the past few years, Capitolis has also been working closely with its clients to help them prepare for the rollout of SA-CCR, the Standardized Approach to Counterparty Credit Risk, effective January 2022. Capitolis continues to execute optimization runs for its clients, driving a reduction of hundreds of billions in SA-CCR Effective Notional to-date.

Earlier this year, Capitolis was named to CNBC’s inaugural World’s Top Fintech Companies 2023 list and to Fast Company’s prestigious annual list of The World’s Most Innovative Companies, ranking No. 2 in the Finance category.

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Capitolis Named to Crain’s 2023 Best Places to Work in New York City

Capitolis Named to Crain’s 2023 Best Places to Work in New York City

NEW YORK—Capitolis, the technology company creating safer and more vibrant capital markets, today announced that it has been named one of New York’s 100 Best Places to Work in 2023 by Crain’s New York Business. This marks the second consecutive year that Capitolis has been honored by Crain’s on its annual list of the best employers in New York City.

“We are thrilled to be honored as one of the Best Places to Work in New York City for the second consecutive year,” said Gil Mandelzis, CEO & Founder, Capitolis. “This recognition underscores our commitment to both our employees and the communities we serve. I am proud of and thankful for our team, who bring an unwavering dedication and purpose every day to building solutions that promote the safety and stability of the financial markets.”

Crain’s, in partnership with Best Companies Group, an independent research firm, determined the rankings by conducting extensive employee surveys and audits of benefits, human resources, policies, perks, and corporate culture factors that define a company as an outstanding workplace. 2023 marks the 16th iteration of the annual rankings, which evaluates organizations based on an employee engagement and satisfaction survey (75% of rating) and an employer questionnaire on benefits and policies (25% of rating).

“We have a clear vision and strong values – and this recognition as a top New York City employer is a testament to our people, who demonstrate these values every day,” said Jen Vanderwall, Chief People and Culture Officer, Capitolis. “Employees know how their work contributes to the success of the company, and also cite our world class team, collaborative environment, and developmental managers as top reasons they love working for Capitolis. We are laser focused on achieving our audacious goals, and I look forward to our continued growth.”

In August 2023, Capitolis was named to CNBC’s inaugural World’s Top Fintech Companies 2023 list. Earlier this year, Capitolis was recognized on Fast Company’s prestigious annual list of The World’s Most Innovative Companies, earning the standing of No. 2 in the Finance category.

For more information on Capitolis’ Company Values, please visit https://capitolis.com/capitolis-company-values/

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Capitolis Named to the CNBC World’s Top Fintech Companies 2023 List

Capitolis Named to the CNBC World’s Top Fintech Companies 2023 List

NEW YORK—Capitolis, the technology company enabling safer and more vibrant financial markets, has been named to CNBC’s inaugural World’s Top Fintech Companies 2023 list, presented in partnership with independent research firm Statista. The World’s Top Fintech Companies 2023 list identifies fintechs providing innovative, technology-based, and finance-related products and services.

The list took into consideration key performance indicators from 1,500 companies. In-depth research into relevant KPIs was collected for a previously compiled longlist of eligible companies using publicly available sources such as annual reports, company websites, or newspaper articles, according to CNBC.

“It’s an honor to be recognized on CNBC’s inaugural World’s Top Fintech Companies list for our innovative approach to building solutions that promote the safety and stability of the financial markets,” said Gil Mandelzis, CEO & Founder, Capitolis. “This is a testament to the great progress we are making, working in close collaboration with market participants globally, as we continue to expand our suite of solutions targeted at our mission to make financial markets safer, healthier, and more accessible.”

One of Capitolis’ most important achievements in the past year has been leveraging its multilateral optimization technology to support global banks through an unprecedented crisis: Russia’s invasion of Ukraine, and the impact on bank exposures to the Russian ruble in 2022. Capitolis acted quickly to bring together a large network of global banks and, through its trade optimization 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.

In March 2023, Capitolis was also named to Fast Company’s prestigious annual list of The World’s Most Innovative Companies, earning the standing of No. 2 in the Finance category.

Most recently, Capitolis announced significant momentum in its Portfolio Optimization business in the first half of 2023.

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Capitolis Named 2023 Merit Awards for Business Gold Winner

Capitolis Named 2023 Merit Awards for Business Gold Winner

Capitolis was named the Gold winner of this year’s Merit Awards for Business in the Business Advancements category. 

The Merit Awards for Business acknowledges outstanding achievements in various global industries and their respective markets. The awards are granted based on comprehensive submissions that demonstrate excellence in leadership, corporate culture, workplace environment, emerging business ventures, and the success of both privately and publicly held companies. 

“This year’s recipients represent leaders and businesses that have demonstrated innovation, excellence and overall business success,” Marie Zander, executive director, Merit Awards, said in a release. “We congratulate each winner and look forward to seeing their future accomplishments.”

At Capitolis, we are proud to be celebrated among organizations that excel in these areas and contribute to the growth and advancement of their industries. 

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Capitolis to Connect to LCH ForexClear’s FX Smart Clearing Solution, Increasing Optimization Efficiencies for the FX Market

Capitolis to Connect to LCH ForexClear’s FX Smart Clearing Solution, Increasing Optimization Efficiencies for the FX Market

Capitolis’ proprietary technology optimizes risk-weighted assets and funding requirements for the OTC FX market to mitigate counterparty credit risk across global banks

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company creating safer and more vibrant capital markets, announced it is connecting to LCH’s FX Smart Clearing solution. This will add another layer of optimization benefits to help banks overcome the challenge of increased costs resulting from the introduction of the Standardized Approach to Counterparty Credit Risk (SA-CCR) and other risk measures in the FX industry, particularly relating to FX forwards, FX swaps and cross-currency swaps.

In collaboration with LCH ForexClear, part of London Stock Exchange Group’s post trade division, Capitolis’ innovative post-trade optimization technology helps find the optimum capital and funding state between cleared and uncleared markets by moving optimized trades where they best fit.

In a proof-of-concept with nine global banks, Capitolis demonstrated the benefits in capital and funding that FX Smart Clearing would provide to the company’s existing SA-CCR optimization service. It reached a network yield of 42% of total funding costs including the funding of capital.

“Combining FX Smart Clearing with our post-trade optimization technology is the ideal approach to managing capital for our customers,” said Gil Mandelzis, CEO & Founder, Capitolis. “The relationship with LCH ForexClear, coupled with our network of participating global banks, is a sophisticated and advanced model for the industry, bringing multi-lateral optimization to the next level by including a clearing node.”

“We are pleased to work with Capitolis,” said James Pearson, Head of LCH ForexClear. “Through this initiative, more market participants can benefit from FX Smart Clearing, enabling capital and funding
requirement benefits under SA-CCR. FX Smart Clearing is another tool we are providing for banks to financially optimize their resources, unlock capital constraints and help to ensure a safe and efficient financial system.”

Following the proof-of-concept, Capitolis will roll out the service in conjunction with LCH ForexClear to reduce capital burdens and balance margin requirements for global banks. With this functionality, Capitolis hopes to add additional banks into future FX Smart Clearing exercises, increasing the benefit for all.

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Capitolis Announces Fourth Annual Capitolis Connects Program

Capitolis Announces Fourth Annual Capitolis Connects Program

Annual program focuses on supporting human service organizations in New York, London, and Tel Aviv

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company creating safer and more vibrant capital markets, announced its fourth annual Capitolis Connects, a program focused on supporting local human service organizations in New York, London, and Tel Aviv doing innovative and impactful work to serve these communities. For the month of June, Capitolis will donate a portion of all transactional revenue from its platform to local human service organizations selected by each local employee base. Employees of Capitolis will also personally volunteer their time at each of these local organizations.

With its purpose-driven culture, Capitolis is leveraging its platform to provide for organizations dedicated to helping those most in need. This year, Capitolis is supporting the following organizations:

  • Covenant House, New York – Covenant House helps transform and save the lives of more than a million homeless, runaway, and trafficked young people in the New York area;
  • Coalition for the Homeless – Grand Central Food Program, New York – The Grand Central Food Program, part of Coalition for the Homeless, was founded in 1985 the day after a homeless woman died of starvation in Grand Central Terminal. They deliver approximately 1,000 hot, nutritious meals to homeless and hungry individuals and families on the streets of NYC every night of the year;
  • Compliments of The House, London – Compliments of the House is a food redistribution charity in London that collects fresh, surplus food and delivers it to vulnerable individuals and families;
  • Notnim BeAhavah, Tel Aviv – Notnim BeAhavah “Giving with Love” is just that: giving to those who are in need, as equals and from love. Helping a child who’s in a state of risk, aiding families who are below the poverty line, being there for the lonely elder and turning Israel into a better place.

“At Capitolis, we remain committed to giving back to our communities and to help those who need it most. We are proud and extremely excited to continue Capitolis Connects and work with our selected human service organizations this year,” said Gil Mandelzis, CEO & Founder, Capitolis. “These organizations are near and dear to our hearts. We look forward to continuing to support meaningful causes through acts of service.”

“We are grateful to continue to work with our longstanding partner Capitolis to help provide essential needs and promote awareness of critical issues related to youth homelessness,” said Tod Monaghan, SVP, Key Partnerships, Covenant House. “Their contributions are truly making a difference for many young people in need in New York.”

“We greatly appreciate the support from companies such as Capitolis, who believe in giving back to their communities and serving vulnerable individuals and families,” said Sinéad Brown, CEO & Founder, Compliments of The House. “The continued support makes a true difference in the lives of those without access to fresh food.”

Thanks to the efforts of Capitolis’ clients and employees, over one hundred thousand dollars have been raised in the first three years of Capitolis Connects. Capitolis will be hosting three events across each of its markets in New York City, London, and Tel Aviv to honor these human service organizations.

For more information on Capitolis Connects, visit https://capitolis.com/capitolis-connects/.

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Capitolis Continues Strong Momentum Across Portfolio Optimization Business in First Half of 2023

Capitolis Continues Strong Momentum Across Portfolio Optimization Business in First Half of 2023

Reduces $341 billion in SA-CCR Effective Notional across global bank network in record-breaking 26th multilateral optimization run

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company helping to create safer and more vibrant capital markets, has gained significant momentum in its Portfolio Optimization business in the first half of 2023. The company’s latest optimization run drove a record reduction of $341 billion in SA-CCR (Standardized Approach for Counterparty Credit Risk) Effective Notional and included a record number of 20 entities. The run optimized for SA-CCR as well as additional objectives while being flexible to accommodate a multitude of constraints. As the Capitolis network continues to expand, both existing and new customers are seeing increased benefits from the network effect.

“We are very pleased with the momentum our Portfolio Optimization business continues to achieve. Our algorithms are constantly improving, and the results have been better than expected,” said Gil Mandelzis, CEO & Founder, Capitolis. “We entered 2023 with the goals of expanding the size of our participating network to drive more value for all participants, introducing innovation to further streamline the execution process, and launching additional optimization opportunities. Our latest run concentrated on SA-CCR and additional objectives, with record-breaking results and a record number of participants, is a further advancement toward these goals.”

The SA-CCR framework, which seeks to normalize and standardize the capital requirements on derivatives portfolios for financial institutions, has been phased in globally over the last few years to provide a uniform and standardized method by which financial institutions will be required to measure exposures and ultimately manage and capitalize against. Capitolis’ Portfolio Optimization exercises deliver significant reductions in exposures calculated under SA-CCR and additional objectives.

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Capitolis Expands Novation Product to Include Agency Flow

Capitolis Expands Novation Product to Include Agency Flow

Capitolis now enables automation of agency novation while maintaining anonymity; a first of its kind for the FX options market

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company reimagining capital markets, announced a significant innovation to its groundbreaking automated novation service in foreign exchange (FX): it can now novate agency trades while maintaining anonymity. This unlocks more of the FX options market for novations by including agency flow and further helps to reduce risk, notional and capital footprint.

Agency novation is a very complex workflow. It requires maintaining anonymity throughout the entire process, and many participants are involved. For these reasons, very few agency novations have been performed up until this point. The FX industry needed a trusted partner with the experience, network and relationships throughout the entire FX options market to get this done. Capitolis is that partner.   

Capitolis worked with industry participants for over a year to understand the various market needs and develop its agency offering. The automation of agency flow novations now allows for the collapsing of nearly all boxed FX option positions and the ability to execute a novation even in the most complicated cases. 

“We challenged Capitolis to deliver technology to facilitate agency novation and they delivered,” said Marcus Butt, Global Head of Prime Services at NatWest. “The improved operational efficiencies remove much of the friction that previously impeded these novations. As a result, we anticipate clients more actively optimizing their portfolios.”

“We usually insist that our portfolio managers trade in and out with the same agency brokers, but with this new feature in the Capitolis novation platform, we no longer mandate that requirement,” said Gaurav Prinja, Head of Compression at Brevan Howard. “Now our portfolio managers have a wider liquidity pool from which to choose.”

Since launching the novation service five years ago — the first of its kind for the FX options market — volumes continue to grow. To date, Capitolis has novated over 81,000 trades and reduced total notional by over $9 trillion.

“We partnered closely with industry participants to understand their needs and delivered on them. I’m thrilled that Capitolis is the only provider that can offer agency novation,” said Gil Mandelzis, CEO & Founder of Capitolis. “Our network continues to grow, and we see huge potential as we safely expand execution opportunities within the FX options market, while further helping to reduce its risk and capital footprint.”

To learn more about the Capitolis novations solution, visit https://capitolis.com/novations.

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Capitolis Announces Further Progress in the Expansion of its Capital Marketplace Business

Capitolis Announces Further Progress in the Expansion of its Capital Marketplace Business

On the heels of its security-based swap dealer registration, Capitolis’ subsidiary has submitted an application to become a registered broker-dealer in anticipation of new products

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company reimagining financial markets, announced that its subsidiary, Capitolis Global Broker Dealer LLC, has applied to become a broker-dealer. This is the next step in Capitolis’ journey to provide innovative solutions to the market in order to keep the capital markets both safe and vibrant. This application is currently being reviewed and subject to approval by the necessary regulatory bodies.

At the beginning of this year, Capitolis announced its subsidiary, Capitolis Liquid Global Markets LLC (CLGM), was conditionally registered as a security-based swap dealer (SBSD) in support of its ground-breaking equity swap financing solution. Its next pursuit in standing up a broker-dealer will allow Capitolis to launch additional products that have been in development for quite some time.

“The registration of a broker-dealer, on the back of our introduction of an SBSD, will allow us to expand our product offerings and propel our already strong momentum,” said Gil Mandelzis, Founder & CEO of Capitolis. “Both initiatives have been in the making for a very long time, led by our team and advisors, and we are exceptionally grateful for their hard work and brilliance.”   

The Company has also announced that David Lamb, Chief Compliance and Risk Officer, has informed them that he intends to retire later this year, after a successful 26-year career in various capacities across the financial services industry. David has been with the Company from the early days and led the establishment of its robust risk management and compliance infrastructure. He was also instrumental in establishing Capitolis’ SBSD and broker-dealer initiatives. David will continue to fully perform his current responsibilities until later this year while Capitolis is actively working to identify his successor.

“I’m humbled by what I’ve been able to see Capitolis accomplish over the past six years. I am proud of the robust infrastructure we have built for managing compliance and risk,” Lamb said. “It’s been amazing building innovative solutions for important parts of the capital markets infrastructure. Planning towards my retirement has been a long time in the works, and I am excited to begin that chapter of my life later this year, however I’m going to truly miss the incredible people I work with every day.”

“Dave is an incredible friend,” said Mandelzis. “He was part of the early ideation process to develop the vision for Capitolis well before we even started the company and joined us a short while after we began operating. We are grateful for all he’s done to stand up the necessary infrastructure around compliance and risk for Capitolis, along with the work he has contributed to enable our recent SBSD registration and broker-dealer application filing—both meaningful undertakings that have taken a lot of time and effort to achieve. With those behind us, I am very happy for Dave as he works toward a well-deserved retirement later this year.”

While Capitolis actively works to identify David’s successor, he will continue to fully perform his current responsibilities.

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Capitolis Named to Fast Company’s Annual List of The World’s Most Innovative Companies for 2023

Capitolis Named to Fast Company’s Annual List of The World’s Most Innovative Companies for 2023

Capitolis ranks #2 in the Finance category for innovations facilitating how businesses manage their fiscal assets

New York, New York, March 2, 2023 — Capitolis, the technology company reimagining capital markets, has been named to Fast Company’s prestigious annual list of The World’s Most Innovative Companies for 2023, the premier showcase for organizations that are moving the world forward.

These companies are setting the standard with some of the greatest accomplishments of the modern world. Capitolis has earned the standing of No. 2 in the Finance category for innovations facilitating how businesses manage their fiscal assets. This year’s list highlights the businesses at the forefront of their respective industries, paving the way for the innovations of tomorrow.

“Capitolis’ mission is to strengthen capital markets by reducing risk, increasing stability, unlocking capital efficiency, and adding diversified capital to the system,” said Gil Mandelzis, CEO & Founder, Capitolis. “We are thankful to Fast Company for recognizing our unique problem-solving approach to eliminating unnecessary risk and complexity, reducing interconnectedness, and ensuring the system can thrive in its safer state for the benefit of all.”

In November 2022, Capitolis was named to Fast Company’s second-annual Next Big Things in Tech list, honoring technology breakthroughs that promise to help define the future of the industries they serve. In 2022, Capitolis was also included on Crain’s 2022 Best Places to Work in New York City list and was named “Best Compression/Optimization Service for FX” at the June 2022 FX Markets e-FX Awards, which seeks to recognize firms that have set the bar in electronic foreign exchange trading with skill, dedication, and creativity.

The World’s Most Innovative Companies is Fast Company’s signature franchise and one of its most highly anticipated editorial efforts of the year. It provides a firsthand look at the inspiring and innovative efforts of companies across all sectors of the economy. Fast Company’s editors and writers sought out the companies making the biggest strides around the globe.

“What a strange and thrilling year it has been to honor this year’s Most Innovative Companies. This year’s list compiles some of the most cutting-edge groundbreakers who are changing our world every single day, from legacy organizations like McDonald’s to upstarts like MrBeast and institutions such as NASA. Everyone on this list does something completely, uniquely different, yet, they all have one thing in common: innovation,” said Fast Company editor-in-chief Brendan Vaughan.

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FX Capital Optimization – The Buy-Side is Stepping up to the Table!

FX Capital Optimization – The Buy-Side is Stepping up to the Table!

Last year saw the impact of the Standardized Approach for Counterparty Credit Risk (SA-CCR) reach new heights

In January 2022, US and UK banks joined their Australian and Canadian counterparts, who have been operating under the regulatory regime longer. This resulted in an accelerated appetite to effectively optimize under this methodology. By addressing their exposures, banks reduced record amounts [1] of SA-CCR RWA on an interbank level. Further, it became evident SA-CCR RWA may at times be dominated by those originating from buy-side client exposures, leading to new conversations and explorations on how to optimize for an enhanced liquidity partnership [2].  

At the same time, Uncleared Margin Rule (UMR) phase 6 took effect in September 2022, reducing the AANA thresholds from $50bn to $8bn, adding a large new universe of funds required to post and receive margin. This further increased the number of buy-side funds in-scope that needed to address processes for margining of uncleared derivatives. The increase was anticipated to be between 700 to 1,200 additional firms globally, a significantly larger number than the estimated 300 firms which were in-scope for Phase 5, according to the DTCC [3].  

Additionally, the effect of higher interest rate levels with elevated FX volatility, increased uncertainties across Emerging Markets (EM) currencies and less stable economies, heightened the need to manage risks including settlement risk. The latest BIS quarterly review [4] quantifies that in April 2022 $2.2 trillion of daily FX turnover was subject to settlement risk compared to an estimated $1.9 trillion in April 2019, an increase in line with general turnover change. Further, the same review highlights that nearly a third of deliverable FX turnover is subject to settlement risk according to the 2022 BIS Triennial Survey. Current market conditions aside, the need to address risk management and post-trade processing is always critical from a best practice standpoint and included in the FX Global Code [5]. 

On the back of regulatory reforms is the increased need for data and automation. For example, we have seen buy-side execution desks adopting automated execution and transaction costs analysis (TCA) alongside MiFID II (Markets in Financial Instruments Directive). The financial industry trend of seeking increased transparency, analytics, and insights has entered the post trade capital and funding space. Buy-side execution desks, operations, and portfolio managers are being bridged closer and closer together as the benefits of efficient post-trade capital optimization can be added to the bottom line of aggregated risks and costs across portfolios. By accessing on demand metrics, such as EM settlement risk and RWA drag on counterparties, portfolio managers receive increased insights to mitigate risk.

Now, some managers are starting to explore the indirect effects of SA-CCR and how to jointly enhance the liquidity partnerships with their banks under the regime. Also, banks, not yet under SA-CCR, may benefit from joining this trend now to be ready when the time comes. This is positively affecting the cost of business across participants, with an opportunity to additionally address multiple utilities and constraints. For example, an asset manager having UCITS funds can benefit from gross notional reductions to reduce leverage while also addressing their counterparty’s need.

Expect an emergence of more asset managers seeing the direct benefits for their FX businesses and client services by adopting capital optimization solutions just as banks, and hedge funds, have done for years. The utilities are multi-fold and can include metrics such as reduction of gross notional, line items, counterparty concentration, limits, settlement risk, margin, and much more. Many portfolio managers have several constraints including non-comingling of funds, where block trades are allocated back to each individual fund or sub account. Hence, utilizing technology and automation is crucial to seamlessly optimize for a large number of funds, which could be in the order of hundreds or thousands. By leveraging technologies and services, users can simplify workflows, scale, and gain a competitive edge.  

When reaching their bank counterparties on a single go-to platform, buy-side users receive not only consistent processes, but also simultaneous access to the full network of counterparties with bilateral and multilateral opportunity sets. Joining the client-to-dealer network has a scope far greater than one single utility or regulation. It allows liquidity partnerships to be manifested and glued together with technology for enhanced transparency and flexibility to quickly adapt to new emerging risks, regulations, and events of the future.   

[1] https://www.marketsmedia.com/capitolis-completes-record-sa-ccr-optimization/ 

[2] https://capitolis.com/buysidetalkingtobanksaboutcapitalcosts/ 

[3] Ready or Not: What In-Scope Firms Should Be Doing to Prepare for Phase 6 of the Uncleared Margin Rules

[4] https://www.bis.org/publ/qtrpdf/r_qt2212.pdf, page 75-77, “FX settlement risk: an unsettled issue” 

[5] https://www.globalfxc.org/fx_global_code.htm

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.

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Capitolis Completes Record Breaking SA-CCR Optimization

Capitolis Completes Record Breaking SA-CCR Optimization

Growing network delivers over $290 billion in SA-CCR effective notional reduction for participants

NEW YORK–(BUSINESS WIRE)–Capitolis, the technology company reimagining capital markets, completed its nineteenth Standardized Approach for Counterparty Credit Risk (SA-CCR) optimization in January, with this latest run incorporating a record number of entities, driving a record reduction of over $290 billion in effective notional. This marks another momentous occasion for Capitolis as its Portfolio Optimization business enables both new and existing clients to reap the benefits of the network. Over the last 12 months, Capitolis has enabled a $2.5 trillion reduction in SA-CCR effective notional.

The SA-CCR framework, which seeks to normalize and standardize the capital requirements on derivatives portfolios for financial institutions, has been phased in globally over the past few years to provide a uniform way to calculate counterparty credit exposures. Capitolis continues to innovate with its customers for market needs, making it easier for more participants to join and execute optimization runs while increasing the network effect and benefits for all. As SA-CCR stays top of mind for the industry, Capitolis works hand in hand with each of its clients to deliver on their objectives.

“We are excited by this latest milestone and the overall momentum of our business,” said Gil Mandelzis, CEO & Founder, Capitolis. “Our latest SA-CCR run marks another historic achievement for Capitolis. As we build solutions that promote the safety and stability of the capital markets, we are extremely focused on continuing to deliver meaningful capital benefits in an efficient and timely manner and look forward to introducing more innovative solutions to the market.”

Capitolis’ Portfolio Optimization business has experienced tremendous growth over the past year. Their plan for 2023 is to focus on expanding the size of their network to drive more value for all participants, introduce new innovation to further streamline the execution process and launch additional, new optimization opportunities.

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Capitolis Registers a Security-Based Swap Dealer (SBSD)

Capitolis Registers a Security-Based Swap Dealer (SBSD)

The fintech company registered an SBSD on January 4th

NEW YORK–(BUSINESS WIRE) — Capitolis, the technology company reimagining financial markets, officially announced that its subsidiary, Capitolis Liquid Global Markets LLC, is conditionally registered as a security-based swap dealer (SBSD) as of January 4th. The company’s ground-breaking equity swap financing solution will operate within this structure.

Capitolis was established six years ago to enhance the safety, stability, and vitality of the financial markets. Capitolis’ solutions bring in additional capital to support the financial markets and eliminate unnecessary risk and complexity, so that the system can thrive for the benefit of all. Registering a security-based swap dealer is an additional way, and the next step, in which Capitolis will continue to bring its mission to life.

“After close to a year in the making, we are pleased to have registered a security-based swap dealer,” said Gil Mandelzis, Founder & CEO of Capitolis. “Capitolis looks forward to continuing to fulfill the needs of our clients by building solutions that promote the safety of the system, unlock capital efficiency, and enable growth and prosperity for all.” 

Capitolis has experienced exceptional momentum coming into 2023 and continues to support the financial markets with diversified capital, ensuring a vital and healthy ecosystem for all.

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Capitolis Accelerates Growth with Key Hires Across Engineering, Sales and Product Teams

Capitolis Accelerates Growth with Key Hires Across Engineering, Sales and Product Teams

FinTech platform expects to grow team from 50 employees at the beginning of 2020 to 90 employees by year-end.

Capitolisthe leading SaaS platform that drives financial resource optimization for capital markets, today announced the appointment of several key hires across its major growth areas, including its engineering, sales and product teams. The new hires reflect Capitolis’ continued momentum amidst growing industrywide adoption of its proprietary technology platform.

Among the new hires, Capitolis has added Evelina Rosenstein as Sales Manager and Alex Dubost as Business Development Director in London, along with Dr. Petra Wikstrom as Business Development Executive for Buy Side Americas. Meanwhile, the company added 12 new employees to its engineering teams in Tel Aviv and New York to support product development efforts, including Meshi Peer as Director of Engineering.

To support the company’s strong growth trajectory, Capitolis expects to nearly double its headcount from 50 employees at the beginning of 2020 to 90 employees by year-end. As the company continues to drive efficiency for the capital markets, these key hires will help bolster sales efforts, as well as place a continued emphasis on innovation and acceleration of product development. 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 have enjoyed tremendous growth and momentum this year and must expand the team to support our efforts globally,” said Gil Mandelzis, CEO and founder of Capitolis. “We look forward to continually investing in top talent to advance our mission of transforming the capital markets through collaboration, innovation and technology.”

“We’re excited to welcome all of the new hires to Capitolis and look forward to seeing their contributions across the organization as we seek to create a fairer, safer and healthier marketplace for all participants,” said Tom Glocer, executive chairman of Capitolis.

Prior to joining Capitolis, Rosenstein was Head of Sales, EMEA at Broadway Technology, while Dubost was EMEA Sales and Client Relationship Director at RESET, formerly NEX RESET, now part of CME Group. Wikstrom served as Senior Advisor of Electronic Trading to Greenwich Associates and was Global Head of Execution & Alpha Solutions within FXLM & Commodity Derivatives Sales and Trading at BNP Paribas. Peer joins Capitolis from Como, where she previously served as Vice President of R&D.

Capitolis, which helps financial institutions free up capital and remove barriers that would otherwise restrict trading, 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.

This hiring announcement follows the recent addition of Lindsey Baptiste, who joined Capitolis as Senior Vice President of Finance, Hen Lotan, who was appointed Chief of Staff and Rahul Auradkar, who was brought on as Chief Product Officer. In addition, Capitolis recently completed a strategic investment from Citi, J.P. Morgan and State Street.

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Rony Grushka Joins Capitolis Board of Directors

Rony Grushka Joins Capitolis Board of Directors

Markit Co-Founder Brings Over 20 Years of Financial Information & Technology Experience to the FinTech Start Up as Board Member and Advisor

Capitolis, the innovative financial technology company that is reimagining how global capital markets operate, today announced the appointment of financial technology industry leader Rony Grushka to its Board of Directors. Rony will also serve as an advisor to the executive team on strategic initiatives.

An industry veteran with extensive experience within technology and financial services, Rony is best known for his role as a co-founder of Markit Group where he played a significant role in building it into one of the world’s most respected financial information companies. During his 13 years with the firm, he was Global Head of Corporate Strategy, Chief Financial Officer, a member of the Executive Management Committee, and Secretary to the Board of Directors. He also led the company’s initial public offering on the NASDAQ stock market.

Gil Mandelzis, CEO and Founder of Capitolis said, “We are thrilled to welcome Rony to our board. His experience building a world-leading financial information company will be a tremendous asset as Capitolis seeks new partnerships with the world’s leading financial institutions and delivers innovative solutions to the market.”

Tom Glocer, Executive Chairman and Co-Founder of Capitolis, added, “Capitolis has now entered a phase of exponential growth. Rony’s experience guiding Markit and other technology companies from early success to IPO will be of great benefit to the board and management team of Capitolis as we scale for success.”

Grushka’s appointment follows Capitolis’ announcement in March that it hired a new Vice President of Engineering and named two leaders to new roles to better support the firm’s rapid growth.

“Capitolis’ platform is truly unique and has established itself as a leader in this fast-growing category. It has the potential to revolutionize how banks, asset managers, hedge funds and other market participants manage their balance sheets. During these challenging times, Capitolis’ services are needed now more than ever,” said Grushka.

In addition to serving on the board of Capitolis, Rony is also a member of the boards of Cappitech, Sygnia, and Puls VATBox. He is also a member of the Court of Governors for the London School of Economics and Political Science in London. Rony holds accounting and finance degrees from the LSE and Tel Aviv University.

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