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07.29.2021 15 new posts under Morning Note (10), CAPIS Insights (3), Compliance Docs. (2)

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ADVISORY NOTICE: HKEX Announces Increase of Stamp Duty on Stock Transactions Aug 1

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Please see Trading Notice below from the Hong Kong Stock Exchange Contact our trading desk for further information on the proper booking of stamp duties, taxes, and fees in international stocks at 866.349.6216 or intl@capis.com Subject: Increase of Stamp Duty on Stock Transactions Enquiry: Participant General Enquiry Hotline1 (Tel : 2840 3626 E-mail : trd@hkex.com.hk) Exchange Participants (EPs) are requested to note that the Government published in The Gazette the “Revenue (Stamp Duty) Bill 2021“ (the “Bill”) on 5 March 2021, and on 2 June 2021 second and third readings have been passed by the Legislative Council, confirming that the Bill, will come into effect on 1 August 2021. Under the Bill, along with other amendments, the rate of Stamp Duty payable on contract notes for the sale or purchase of Hong Kong stocks (not being jobbing business) will be increased from 0.1% to 0.13%, as a percentage of transaction value (“stamp duty increase”). For details, please refer to the Government Press Release and the Bill. EPs are reminded to take all necessary actions to prepare for the stamp duty increase including enhancing their Broker Supplied Systems, back office systems, relevant applications and operational facilities. Olivia Mak Senior Vice…

Please see Trading Notice below from the Hong Kong Stock Exchange Contact our trading desk for further information on the proper booking of stamp duties, taxes, and fees in international stocks at 866.349.6216 or intl@capis.com Subject: Increase of Stamp Duty on Stock Transactions Enquiry: Participant General Enquiry Hotline1 (Tel : 2840 3626 E-mail : trd@hkex.com.hk) Exchange Participants (EPs) are requested to note that the Government published in The Gazette the “Revenue (Stamp Duty) Bill 2021“ (the “Bill”) on 5 March 2021, and on 2 June 2021 second and third readings have been passed by the Legislative Council, confirming that the Bill, will come into effect on 1 August 2021. Under the Bill, along with other amendments, the rate of Stamp Duty payable on contract notes for the sale or purchase of Hong Kong stocks (not being jobbing business) will be increased from 0.1% to 0.13%, as a percentage of transaction value (“stamp duty increase”). For details, please refer to the Government Press Release and the Bill. EPs are reminded to take all necessary actions to prepare for the stamp duty increase including enhancing their Broker Supplied Systems, back office systems, relevant applications and operational facilities. Olivia Mak Senior Vice…

Employee Spotlight – Ben Jenkins, Director, Transition Management

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At CAPIS, we put relationships first. We think of our team as a family, which is why it is important for us to not only get to know each member but also shine a spotlight on them. We spoke with Ben Jenkins, Director, Transition Management, who re-joined CAPIS at the end of 2020. Take a look at our conversation below to learn about why he returned to CAPIS after spending some time away, some of the biggest challenges and successes he’s experienced during his career and during the pandemic, as well as how he has learned to step out of his comfort zone. [Note: This conversation has been edited for length and clarity.] Q. How did you get interested in transition management and CAPIS? I first joined CAPIS in 2002 after working at a few start-ups. I found the job posting on www.Monster.com and was able to secure an interview. Transition management helps broaden my financial education through client engagement, which I really enjoy. The chance to help solve a problem drives my passion daily. Q. Why return to CAPIS after 16 years? CAPIS is where I started my career and my love of transition management. The opportunity to…

At CAPIS, we put relationships first. We think of our team as a family, which is why it is important for us to not only get to know each member but also shine a spotlight on them. We spoke with Ben Jenkins, Director, Transition Management, who re-joined CAPIS at the end of 2020. Take a look at our conversation below to learn about why he returned to CAPIS after spending some time away, some of the biggest challenges and successes he’s experienced during his career and during the pandemic, as well as how he has learned to step out of his comfort zone. [Note: This conversation has been edited for length and clarity.] Q. How did you get interested in transition management and CAPIS? I first joined CAPIS in 2002 after working at a few start-ups. I found the job posting on www.Monster.com and was able to secure an interview. Transition management helps broaden my financial education through client engagement, which I really enjoy. The chance to help solve a problem drives my passion daily. Q. Why return to CAPIS after 16 years? CAPIS is where I started my career and my love of transition management. The opportunity to…

How Many Solutions Do Your Transition Managers Provide?

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(hint: the correct answer is more than one) Asset allocation is an essential part of every institutional investor’s strategy. But it is also an occasional activity for most, with months if not years between events. So, when events arise, it is common practice to look to the transition management community for guidance and assistance on the best approach to implement the change while minimizing costs and risks to the portfolio. Given the infrequency between events, asset owners may not always be ready to ask the most pertinent questions for the event. And, to be fair, these questions change based upon the unique structure of each transition (or asset allocation) event. While the phrase can be overused, there is no “one size fits all” solution for transitions; there is rarely just one solution possible. Recently a client approached us with a transition to move from an active (separate) account to a passive (commingled) fund. They asked for guidance from at least one other provider and received a single solution. In comparison, our response included seven strategies, ranging from near-instant equitization to a more delayed trade implementation. In each strategy, we outlined the requirements, the risks, and the benefits. Some of you…

(hint: the correct answer is more than one) Asset allocation is an essential part of every institutional investor’s strategy. But it is also an occasional activity for most, with months if not years between events. So, when events arise, it is common practice to look to the transition management community for guidance and assistance on the best approach to implement the change while minimizing costs and risks to the portfolio. Given the infrequency between events, asset owners may not always be ready to ask the most pertinent questions for the event. And, to be fair, these questions change based upon the unique structure of each transition (or asset allocation) event. While the phrase can be overused, there is no “one size fits all” solution for transitions; there is rarely just one solution possible. Recently a client approached us with a transition to move from an active (separate) account to a passive (commingled) fund. They asked for guidance from at least one other provider and received a single solution. In comparison, our response included seven strategies, ranging from near-instant equitization to a more delayed trade implementation. In each strategy, we outlined the requirements, the risks, and the benefits. Some of you…

CAPIS Ownership Succession Transition Plan

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May 4. 2021 Ownership Changes/Succession Strategy To all CAPIS Employees/Clients: In a move designed to ensure our long-term success and stability, Capital Institutional Services, Inc. (CAPIS) is proud to announce the initiation of a two-step succession strategy. It is important to note that the Potts family will retain control of the firm and that these changes will only serve to improve our core businesses: global execution services, commission management, outsourced trading, and transition management. Step One, characterized by the shift of majority ownership to Cullen Potts, was effective May 1, 2021. Cullen has worked with CAPIS for over 20 years and brings a wealth of outside business experience to the table. “Cullen’s enthusiastic, hands-on approach is well known within the CAPIS family. We are excited to have Cullen taking the reins,” Ann Sebert, CEO. Step Two is Employee Ownership. Targeting year end, CAPIS intends to implement employee ownership opportunities. “While the structure and timing have not been finalized, it is my intent to provide ownership opportunities to those that have helped me build this wonderful organization,” Don Potts, Founder and Chairman of the Board. As a result of these exciting changes, CAPIS will be withdrawing our Women’s Business…

May 4. 2021 Ownership Changes/Succession Strategy To all CAPIS Employees/Clients: In a move designed to ensure our long-term success and stability, Capital Institutional Services, Inc. (CAPIS) is proud to announce the initiation of a two-step succession strategy. It is important to note that the Potts family will retain control of the firm and that these changes will only serve to improve our core businesses: global execution services, commission management, outsourced trading, and transition management. Step One, characterized by the shift of majority ownership to Cullen Potts, was effective May 1, 2021. Cullen has worked with CAPIS for over 20 years and brings a wealth of outside business experience to the table. “Cullen’s enthusiastic, hands-on approach is well known within the CAPIS family. We are excited to have Cullen taking the reins,” Ann Sebert, CEO. Step Two is Employee Ownership. Targeting year end, CAPIS intends to implement employee ownership opportunities. “While the structure and timing have not been finalized, it is my intent to provide ownership opportunities to those that have helped me build this wonderful organization,” Don Potts, Founder and Chairman of the Board. As a result of these exciting changes, CAPIS will be withdrawing our Women’s Business…

Employee Spotlight – Jannette Vasquez, Manager of Client Services

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At CAPIS, we put relationships first. We think of our team as a family, which is why it is important for us to get to know each member and shine a spotlight on them. We spoke with Jannette Vasquez, VP, Manager of Client Services, who has worked at CAPIS for 20 years. Take a look at our conversation below to learn about how she came to work at CAPIS, and some of the biggest challenges and successes she’s experienced over the past two decades, as well as her long-standing desire to keep the record straight. [Note: This conversation has been edited for length and clarity.] Q: What piqued your interest in finance? How did you find yourself at CAPIS? I didn’t have a large market background before CAPIS. Accounting-type work interested me, not so much finance and trading. The company I had been working for went through layoffs — I was an event planner for a property management company, and they weren’t doing great. A friend of mine worked at CAPIS in the trading group at the time and they were able to help make the connection. I expressed to CAPIS’ CFO that when I used to balance my…

At CAPIS, we put relationships first. We think of our team as a family, which is why it is important for us to get to know each member and shine a spotlight on them. We spoke with Jannette Vasquez, VP, Manager of Client Services, who has worked at CAPIS for 20 years. Take a look at our conversation below to learn about how she came to work at CAPIS, and some of the biggest challenges and successes she’s experienced over the past two decades, as well as her long-standing desire to keep the record straight. [Note: This conversation has been edited for length and clarity.] Q: What piqued your interest in finance? How did you find yourself at CAPIS? I didn’t have a large market background before CAPIS. Accounting-type work interested me, not so much finance and trading. The company I had been working for went through layoffs — I was an event planner for a property management company, and they weren’t doing great. A friend of mine worked at CAPIS in the trading group at the time and they were able to help make the connection. I expressed to CAPIS’ CFO that when I used to balance my…

March Research Call Recap: Fairlead Strategies’ Katie Stockton on Long-Term Momentum

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This article was penned by CAPIS Last week we held our March research call, featuring Katie Stockton, founder of Fairlead Strategies. Stockton, a regular speaker on CAPIS research calls, is a renowned technical analyst who appears frequently on media outlets like CNBC. Click here for the research call video Our own Ed O’Dowd, Senior Vice President, Institutional Sales, started the call with an update on the day’s market activity – noting that despite pressure on the equities market, investors were still eager to purchase stocks (but with an eye to specific sectors). Furthermore, O’Dowd said that the Federal Reserve’s recent two-day meeting was now in the market’s rearview mirror without interest rate policy change, and that was a positive for stocks. Fairlead’s Stockton began her presentation by examining the market’s bearish moves in light of the spike in U.S. Treasury yields, saying that despite stocks suffering from a short-term oversold bias, the market remains solid moving forward. “We see long-term momentum to the upside continuing” for stocks, she said. This forecast for long-term strength, she added, will be supported by a continued decline in volatility (as measured by the VIX). “The market can avoid a ‘big’ correction in a lower…

This article was penned by CAPIS Last week we held our March research call, featuring Katie Stockton, founder of Fairlead Strategies. Stockton, a regular speaker on CAPIS research calls, is a renowned technical analyst who appears frequently on media outlets like CNBC. Click here for the research call video Our own Ed O’Dowd, Senior Vice President, Institutional Sales, started the call with an update on the day’s market activity – noting that despite pressure on the equities market, investors were still eager to purchase stocks (but with an eye to specific sectors). Furthermore, O’Dowd said that the Federal Reserve’s recent two-day meeting was now in the market’s rearview mirror without interest rate policy change, and that was a positive for stocks. Fairlead’s Stockton began her presentation by examining the market’s bearish moves in light of the spike in U.S. Treasury yields, saying that despite stocks suffering from a short-term oversold bias, the market remains solid moving forward. “We see long-term momentum to the upside continuing” for stocks, she said. This forecast for long-term strength, she added, will be supported by a continued decline in volatility (as measured by the VIX). “The market can avoid a ‘big’ correction in a lower…

Recapping “RIAs and Outsourced Trading: What You Need to Know To Navigate the Markets”

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This article was penned by CAPIS On February 25th, CAPIS hosted the second of its virtual panels, “RIAs and Outsourced Trading: What You Need to Know To Navigate the Markets.” View the full recording here. The panel featured: Mark Viani (Moderator), Director of Institutional Sales, ARC Product Manager, CAPIS Matt Krebs, Director of Outsourced Trading, CAPIS Chris Hurley, Director of Institutional Sales, CAPIS David Krebs, Principal & COO at Signia Capital Management Marc Van Rijssen, Director of Operations, UX Wealth Partners The discussion centered on the operational processes and intricate requirements for when registered investment advisors (RIAs) consider outsourcing, either in whole or part, the aggregation of their institutional and wrap/custodial platform orders. On the subject of outsourced trading, Hurley said that clients are choosing to divert their attention from costly and time consuming operational and execution processes to focus on portfolio management and increased alpha generation. David Krebs estimated that the migration of his prior labor and capital intensive process to a complete outsourced trading solution saves his firm ~$150,000/year. Other topics covered included: Operational complexities RIAs encounter when contemplating outsourcing. The aggregation and execution of institutional and wrap/custodial platform orders. Negotiating the elimination of “trade-away” penalties. Payment for…

This article was penned by CAPIS On February 25th, CAPIS hosted the second of its virtual panels, “RIAs and Outsourced Trading: What You Need to Know To Navigate the Markets.” View the full recording here. The panel featured: Mark Viani (Moderator), Director of Institutional Sales, ARC Product Manager, CAPIS Matt Krebs, Director of Outsourced Trading, CAPIS Chris Hurley, Director of Institutional Sales, CAPIS David Krebs, Principal & COO at Signia Capital Management Marc Van Rijssen, Director of Operations, UX Wealth Partners The discussion centered on the operational processes and intricate requirements for when registered investment advisors (RIAs) consider outsourcing, either in whole or part, the aggregation of their institutional and wrap/custodial platform orders. On the subject of outsourced trading, Hurley said that clients are choosing to divert their attention from costly and time consuming operational and execution processes to focus on portfolio management and increased alpha generation. David Krebs estimated that the migration of his prior labor and capital intensive process to a complete outsourced trading solution saves his firm ~$150,000/year. Other topics covered included: Operational complexities RIAs encounter when contemplating outsourcing. The aggregation and execution of institutional and wrap/custodial platform orders. Negotiating the elimination of “trade-away” penalties. Payment for…

Sarah’s Circle Winter Walk: A Mile in Her Shoes

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This article was penned by CAPIS At CAPIS, we understand the importance of giving back. For years, participating in philanthropic events has been a part of our core values, and as it is Women’s History Month, we are proud to support organizations who specifically target improving the lives of women and children. One of those is Sarah’s Circle, a non-profit organization with a mission of serving women who are homeless or in need of a safe space. On February 28, we sponsored its annual Winter Walk. For nearly three decades, Winter Walk: A Mile in Her Shoes has rallied support for women who are homeless in Chicago. By highlighting the extreme hardships women who are homeless face during Chicago’s harsh winter months, Winter Walk is an opportunity to make a lasting impact on the lives of these women. We are proud to announce that Sarah’s Circle exceeded their goal, and raised $230,809 from the Winter Walk. If you have questions, or would like more information about Sarah’s Circle, you can visit the website at sarahs-circle.org. Additionally, if you are interested in supporting its mission, you can donate here.

This article was penned by CAPIS At CAPIS, we understand the importance of giving back. For years, participating in philanthropic events has been a part of our core values, and as it is Women’s History Month, we are proud to support organizations who specifically target improving the lives of women and children. One of those is Sarah’s Circle, a non-profit organization with a mission of serving women who are homeless or in need of a safe space. On February 28, we sponsored its annual Winter Walk. For nearly three decades, Winter Walk: A Mile in Her Shoes has rallied support for women who are homeless in Chicago. By highlighting the extreme hardships women who are homeless face during Chicago’s harsh winter months, Winter Walk is an opportunity to make a lasting impact on the lives of these women. We are proud to announce that Sarah’s Circle exceeded their goal, and raised $230,809 from the Winter Walk. If you have questions, or would like more information about Sarah’s Circle, you can visit the website at sarahs-circle.org. Additionally, if you are interested in supporting its mission, you can donate here.

Approaching Diversity in Financial Services As a Small- or Mid-Sized Firm

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This article was penned by CAPIS Today, one of the best investments a financial services firm makes is in its diversity and inclusion efforts. The financial industry has been making some progress on this front, but still has a long way to go. The industry knows it needs to improve. Last year, the U.S. House Committee on Financial Services released its first report on Diversity and Inclusion, specifically looking at large banks — all 44 banks asked to participate acknowledged the need to do more. Earlier in the year, CAPIS’ Coleen Donohue spoke with Liz Whitehead and Heather Cox, co-founders of business consultancy Diversity Masterminds™, about what small- and medium-sized businesses can do to compete with large firms that have more resources to devote to D&I. They mentioned that for any business, investment in internal D&I efforts (like hiring practices), as well as external ones (like supplier diversity programs), leads to better performance of the business. We wanted to drill into that sentiment, especially since the bottom line will move even the most stubborn firm into action. The research is clear — more diverse firms do better. According to McKinsey, those companies in the top quartile for ethnic and racial…

This article was penned by CAPIS Today, one of the best investments a financial services firm makes is in its diversity and inclusion efforts. The financial industry has been making some progress on this front, but still has a long way to go. The industry knows it needs to improve. Last year, the U.S. House Committee on Financial Services released its first report on Diversity and Inclusion, specifically looking at large banks — all 44 banks asked to participate acknowledged the need to do more. Earlier in the year, CAPIS’ Coleen Donohue spoke with Liz Whitehead and Heather Cox, co-founders of business consultancy Diversity Masterminds™, about what small- and medium-sized businesses can do to compete with large firms that have more resources to devote to D&I. They mentioned that for any business, investment in internal D&I efforts (like hiring practices), as well as external ones (like supplier diversity programs), leads to better performance of the business. We wanted to drill into that sentiment, especially since the bottom line will move even the most stubborn firm into action. The research is clear — more diverse firms do better. According to McKinsey, those companies in the top quartile for ethnic and racial…

February Research Call Recap: Nicholas Colas on the “Biden Effect”

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This article was penned by CAPIS Last week we held our February research call, featuring Nicholas Colas, co-founder of DataTrek Research. Colas is a regular speaker on the CAPIS research call and respected commentator on financial markets. Our own David Choate, COO & Executive Director of Sales and Trading, started the call with an update on CAPIS’ status given the effects of recent winter weather in Texas and the resultant power grid failure and disruptions. Choate explained to attendees CAPIS suffered no trading disruptions at its data centers and trading desk, emphasizing the firm’s technological and trading redundancy, as well as its commitment to having physical traders on the main Dallas trading desk. Then Colas began his presentation that addressed the following questions: What does history say when one party has all control of the legislative and executive branches? Using data collected since 1948, when Democrats control both the legislative and executive branches, the S&P 500 returned ~14%. When Republicans held control of both Congress and the Presidency, it returned ~16%. This led Colas to say that “parties have an incentive to get ‘everything’ right when in full control” — meaning the Democrats need to manage and handle the…

This article was penned by CAPIS Last week we held our February research call, featuring Nicholas Colas, co-founder of DataTrek Research. Colas is a regular speaker on the CAPIS research call and respected commentator on financial markets. Our own David Choate, COO & Executive Director of Sales and Trading, started the call with an update on CAPIS’ status given the effects of recent winter weather in Texas and the resultant power grid failure and disruptions. Choate explained to attendees CAPIS suffered no trading disruptions at its data centers and trading desk, emphasizing the firm’s technological and trading redundancy, as well as its commitment to having physical traders on the main Dallas trading desk. Then Colas began his presentation that addressed the following questions: What does history say when one party has all control of the legislative and executive branches? Using data collected since 1948, when Democrats control both the legislative and executive branches, the S&P 500 returned ~14%. When Republicans held control of both Congress and the Presidency, it returned ~16%. This led Colas to say that “parties have an incentive to get ‘everything’ right when in full control” — meaning the Democrats need to manage and handle the…

CAPIS CEO Ann Sebert Elected as FINRA Representative for District 6

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This item was penned by Ann Sebert, CEO This month I was elected FINRA’s Representative Candidate for District 6, headquartered in Dallas. It’s been a winding road to get to this point, where I will have the responsibility of advising FINRA on industry trends and relaying relevant regulatory developments to District 6’s members. The first direct experiences I had with FINRA were 15 years ago when I began supervising CAPIS’ accounting as the firm’s controller. I did not think that come 2021 I would be in a position to advocate for the right regulatory frameworks for markets and give voice to issues impacting CAPIS. I just thought there’d be more examinations. (And on that front, I was right.) My time with FINRA will begin in January and I already know of a few things that will occupy my time. The Consolidated Audit Trail is in the midst of complex implementation and debugging. A new administration can, and inevitably does, revisit hotly debated proposals. Rule 606 is not without its issues. European regulators are examining the impact of MiFID II’s research provisions, a topic that impacts the American operations of global asset managers and the whole of commission management, a key…

This item was penned by Ann Sebert, CEO This month I was elected FINRA’s Representative Candidate for District 6, headquartered in Dallas. It’s been a winding road to get to this point, where I will have the responsibility of advising FINRA on industry trends and relaying relevant regulatory developments to District 6’s members. The first direct experiences I had with FINRA were 15 years ago when I began supervising CAPIS’ accounting as the firm’s controller. I did not think that come 2021 I would be in a position to advocate for the right regulatory frameworks for markets and give voice to issues impacting CAPIS. I just thought there’d be more examinations. (And on that front, I was right.) My time with FINRA will begin in January and I already know of a few things that will occupy my time. The Consolidated Audit Trail is in the midst of complex implementation and debugging. A new administration can, and inevitably does, revisit hotly debated proposals. Rule 606 is not without its issues. European regulators are examining the impact of MiFID II’s research provisions, a topic that impacts the American operations of global asset managers and the whole of commission management, a key…

From Our Family to Yours: CAPIS Holiday Recipe Book

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At CAPIS, we pride ourselves on being a family both inside and outside of the office. We wanted to bring our team together, though we are apart this holiday season, so we collected favorite recipes and put together a CAPIS Family Recipe Book to share with each other, our clients, friends, and family, since food brings people together – especially here in Texas. Within this e-book you’ll find some favorite recipes from almost every family member here at CAPIS. You’ll see a variety of dishes from appetizers to casseroles, southern side dishes, and tasty desserts like my family’s Sweet Noodle Kugel (page 64) and our COO Dave Choate’s Aunt Huldah’s Chocolate Sheet Cake (page 9). Dive into our recipe book to get some inspiration for upcoming holiday meals, hearty comfort food classics, or ideas for dinner this week. Don’t forget to follow us on Twitter and LinkedIn to see featured recipes and learn more about #TheCAPISDifference. Have a happy, healthy (and tasty) holiday season, Ann Sebert, CEO

At CAPIS, we pride ourselves on being a family both inside and outside of the office. We wanted to bring our team together, though we are apart this holiday season, so we collected favorite recipes and put together a CAPIS Family Recipe Book to share with each other, our clients, friends, and family, since food brings people together – especially here in Texas. Within this e-book you’ll find some favorite recipes from almost every family member here at CAPIS. You’ll see a variety of dishes from appetizers to casseroles, southern side dishes, and tasty desserts like my family’s Sweet Noodle Kugel (page 64) and our COO Dave Choate’s Aunt Huldah’s Chocolate Sheet Cake (page 9). Dive into our recipe book to get some inspiration for upcoming holiday meals, hearty comfort food classics, or ideas for dinner this week. Don’t forget to follow us on Twitter and LinkedIn to see featured recipes and learn more about #TheCAPISDifference. Have a happy, healthy (and tasty) holiday season, Ann Sebert, CEO

CAPIS Hires Ben Jenkins as Director, Transition Management

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November 4, 2020 (DALLAS, TX) – Capital Institutional Services (CAPIS), a Dallas-based institutional broker-dealer, today announced Ben Jenkins rejoined the firm as a director in the firm’s transition management group. Jenkins comes to CAPIS with 18 years of experience in financial services with a background in trading, operations and project management. Previously, Jenkins was global head of transition management at Northern Trust where he expanded the reach of the product to both EMEA and APAC regions and grew the business to $100 billion in annual transitions. Before Northern Trust, Jenkins spent four years early in his career with CAPIS. “My original time with CAPIS provided me with a wide range of experiences and allowed me to grow my career beyond my wildest expectations,” Jenkins said. “To come back to my roots after nearly 15 years and help CAPIS in this latest chapter of the firm’s development is an opportunity few get and one I could not pass up.” Jenkins first joined CAPIS in 2002 as a research assistant and then joined the transition management team as a vice president in 2004. “We are thrilled to have Ben returning to CAPIS,” said CAPIS COO David Choate. “His return demonstrates our commitment…

November 4, 2020 (DALLAS, TX) – Capital Institutional Services (CAPIS), a Dallas-based institutional broker-dealer, today announced Ben Jenkins rejoined the firm as a director in the firm’s transition management group. Jenkins comes to CAPIS with 18 years of experience in financial services with a background in trading, operations and project management. Previously, Jenkins was global head of transition management at Northern Trust where he expanded the reach of the product to both EMEA and APAC regions and grew the business to $100 billion in annual transitions. Before Northern Trust, Jenkins spent four years early in his career with CAPIS. “My original time with CAPIS provided me with a wide range of experiences and allowed me to grow my career beyond my wildest expectations,” Jenkins said. “To come back to my roots after nearly 15 years and help CAPIS in this latest chapter of the firm’s development is an opportunity few get and one I could not pass up.” Jenkins first joined CAPIS in 2002 as a research assistant and then joined the transition management team as a vice president in 2004. “We are thrilled to have Ben returning to CAPIS,” said CAPIS COO David Choate. “His return demonstrates our commitment…

CAPIS/DataTrek Research Call Recap: The Election is Not a Binary Event

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Penned by CAPIS Staff Tuesday’s U.S. presidential election has dominated market narratives and headlines for the past few months — in tandem with those related to the resurgence of COVID-19. But the overall national elections i n sum do not represent a binary outcome. There are time (delayed vs. immediate results) and party (what makeup of Congress with what President) variables to contend with. To help better inform our clients of the potential ramifications of the election, CAPIS hosted a research call with DataTrek Research’s Co-Founder Nick Colas, with added market color from our own Forrest Hopper. Colas ran market return numbers from post-WWII to the present and found that a common assumption i s a fallacy: markets generally do not respond well to a single party having control of the presidency and both chambers of Congress. It was a myth that was started and perpetuated because of early ‘ 80s market returns under President Reagan. Instead, having a split legislature and some gridlock has historically been the most supportive of bullish environments. When i t comes to unemployment, DataTrek sees a likelihood that unemployment will remain around current levels of 7% – 8%. Entering 2020, some 20% of…

Penned by CAPIS Staff Tuesday’s U.S. presidential election has dominated market narratives and headlines for the past few months — in tandem with those related to the resurgence of COVID-19. But the overall national elections i n sum do not represent a binary outcome. There are time (delayed vs. immediate results) and party (what makeup of Congress with what President) variables to contend with. To help better inform our clients of the potential ramifications of the election, CAPIS hosted a research call with DataTrek Research’s Co-Founder Nick Colas, with added market color from our own Forrest Hopper. Colas ran market return numbers from post-WWII to the present and found that a common assumption i s a fallacy: markets generally do not respond well to a single party having control of the presidency and both chambers of Congress. It was a myth that was started and perpetuated because of early ‘ 80s market returns under President Reagan. Instead, having a split legislature and some gridlock has historically been the most supportive of bullish environments. When i t comes to unemployment, DataTrek sees a likelihood that unemployment will remain around current levels of 7% – 8%. Entering 2020, some 20% of…

The Arm-Wrestling Match Between Human Interaction and Tech Advancements in the Bank Trust Industry

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This was penned by CAPIS Staff On October 14, CAPIS hosted a virtual panel on the state of the bank and trust services industry, “Banking on Tech: Challenges and Innovations in Today’s Environment.” The virtual session, available to view in full here, was moderated by our own Jon Lantz, and featured as panelists Adam Unger, Accutech; Angie Gorman, Infovisa; Bill Martin III, INTRUST Bank; Jack Curran, GreenHill; and Stuart Allen, Association of Trust Organizations. One theme rang true throughout the conversation – for all of the importance of technological adaptation and innovation, an absence of the human element is a detriment in the bank trust sector. Everyone agreed that the logistical challenges presented by the onset of the COVID-19 pandemic were handled well, although they were acute. An at-the-office work standard and culture predominated the industry and preparedness exercises were predicated on a temporary interruption of normal operations, not a long-term reality shift. Now, the industry is in an optimization phase, figuring out what has been sorely missed. There was a tailwind behind disintermediating people even prior to COVID-19, and now that wind is gale-force. The trend is potentially troublesome given there is a valid reason why the wealth…

This was penned by CAPIS Staff On October 14, CAPIS hosted a virtual panel on the state of the bank and trust services industry, “Banking on Tech: Challenges and Innovations in Today’s Environment.” The virtual session, available to view in full here, was moderated by our own Jon Lantz, and featured as panelists Adam Unger, Accutech; Angie Gorman, Infovisa; Bill Martin III, INTRUST Bank; Jack Curran, GreenHill; and Stuart Allen, Association of Trust Organizations. One theme rang true throughout the conversation – for all of the importance of technological adaptation and innovation, an absence of the human element is a detriment in the bank trust sector. Everyone agreed that the logistical challenges presented by the onset of the COVID-19 pandemic were handled well, although they were acute. An at-the-office work standard and culture predominated the industry and preparedness exercises were predicated on a temporary interruption of normal operations, not a long-term reality shift. Now, the industry is in an optimization phase, figuring out what has been sorely missed. There was a tailwind behind disintermediating people even prior to COVID-19, and now that wind is gale-force. The trend is potentially troublesome given there is a valid reason why the wealth…

MiFID II: We Hardly Knew You…

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This was penned by CAPIS Staff Last week, CAPIS was fortunate to have the chance to participate in STA’s 87th Annual Market Structure Conference. CAPIS’ own Chris Halverson is STA’s current chairman (and helped emcee the event) while our COO Dave Choate moderated the panel, “The International Impact of MiFID II,” which featured Thompson, Siegel & Walmsley’s Director of Trading, Chip Coleman, and Integrity Research Associates’ Principal, Sandy Bragg. Given MiFID II’s tentacles have crept far beyond the confines of the European Union, and that there are changes afoot, we wanted to shed some light on the discussion if you were unable to attend. The key piece of collateral damage discussed is borne out by the data: research unbundling, one of the key provisions in MiFID II, is significantly hampering asset managers’ ability to achieve the same performance as they did prior to MiFID II’s implementation in 2018. Smaller managers are at a disadvantage compared to their larger counterparts as they are less likely to have internal analysts and economists to generate their own research to make up for the shortfall. And EU firms are falling short of their U.S. peers as research from Evercore ISI and Frost Consulting has…

This was penned by CAPIS Staff Last week, CAPIS was fortunate to have the chance to participate in STA’s 87th Annual Market Structure Conference. CAPIS’ own Chris Halverson is STA’s current chairman (and helped emcee the event) while our COO Dave Choate moderated the panel, “The International Impact of MiFID II,” which featured Thompson, Siegel & Walmsley’s Director of Trading, Chip Coleman, and Integrity Research Associates’ Principal, Sandy Bragg. Given MiFID II’s tentacles have crept far beyond the confines of the European Union, and that there are changes afoot, we wanted to shed some light on the discussion if you were unable to attend. The key piece of collateral damage discussed is borne out by the data: research unbundling, one of the key provisions in MiFID II, is significantly hampering asset managers’ ability to achieve the same performance as they did prior to MiFID II’s implementation in 2018. Smaller managers are at a disadvantage compared to their larger counterparts as they are less likely to have internal analysts and economists to generate their own research to make up for the shortfall. And EU firms are falling short of their U.S. peers as research from Evercore ISI and Frost Consulting has…

So, You Think You Can Trade Closed-End Funds, Eh?

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This article was penned by Russell Robinson In an age of technological advancements, there is at least one market where technology is yet to take hold. Trading closed-end funds on an institutional level. In the equity markets, it is fair to say that if you run institutional money, you have access to a wide array of trading algorithms to automate and manage your orders. Where this notion falls short, is with Closed-End Funds. How so, you may ask? Within ~500 Closed-End Funds that can be traded in the secondary markets, only about half have an average daily volume of greater than 50,000 shares. And much of the volume that is traded is crossed in blocks, rendering standard trading algorithms useless. So, where does one turn to effectively transact in this market? Ideally, you would find a firm that has the CEF experience and natural order flow to cross large blocks. Have you considered CAPIS? With 40 years’ experience and a trading desk that boasts an average tenure of over 20 years, CAPIS has the experience to bring institutional CEF clients together. Trading for some of the largest CEF managers on a daily basis, CAPIS provides access to natural liquidity. …

This article was penned by Russell Robinson In an age of technological advancements, there is at least one market where technology is yet to take hold. Trading closed-end funds on an institutional level. In the equity markets, it is fair to say that if you run institutional money, you have access to a wide array of trading algorithms to automate and manage your orders. Where this notion falls short, is with Closed-End Funds. How so, you may ask? Within ~500 Closed-End Funds that can be traded in the secondary markets, only about half have an average daily volume of greater than 50,000 shares. And much of the volume that is traded is crossed in blocks, rendering standard trading algorithms useless. So, where does one turn to effectively transact in this market? Ideally, you would find a firm that has the CEF experience and natural order flow to cross large blocks. Have you considered CAPIS? With 40 years’ experience and a trading desk that boasts an average tenure of over 20 years, CAPIS has the experience to bring institutional CEF clients together. Trading for some of the largest CEF managers on a daily basis, CAPIS provides access to natural liquidity. …

Can You See How Risk Was Managed?

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This is the third and final installment is our series on Transition Management Without intraday exposure charts, it would be impossible to confirm a risk management strategy. However, when equipped with those intraday sector exposure charts, you can see how the event was handled. The example below illustrates a clear effort to quickly reduce market and sector exposure imbalances. The dotted line represents market exposure, which became neutral to the target in the first few minutes. All other sectors were neutral by mid-day. Below is an example that lacked a risk management strategy. The most obvious risk is market exposure represented by the dotted line. The portfolio began overexposed by $50 mil and reached $60 mil underexposed to the market at 13:30. This is risk clearly illustrated. The CAPIS Difference: Since 1998, CAPIS has been a trusted independent provider for transition management services; Providing unique post-trade transparency. As a true independent agency broker, CAPIS does not have the conflicts associated with proprietary risk books, internal investment management or affiliated execution venues. Our focus is simple: provide clients with superior execution, complete transparency, and personal service. To learn more about CAPIS and how we can be a valuable…

This is the third and final installment is our series on Transition Management Without intraday exposure charts, it would be impossible to confirm a risk management strategy. However, when equipped with those intraday sector exposure charts, you can see how the event was handled. The example below illustrates a clear effort to quickly reduce market and sector exposure imbalances. The dotted line represents market exposure, which became neutral to the target in the first few minutes. All other sectors were neutral by mid-day. Below is an example that lacked a risk management strategy. The most obvious risk is market exposure represented by the dotted line. The portfolio began overexposed by $50 mil and reached $60 mil underexposed to the market at 13:30. This is risk clearly illustrated. The CAPIS Difference: Since 1998, CAPIS has been a trusted independent provider for transition management services; Providing unique post-trade transparency. As a true independent agency broker, CAPIS does not have the conflicts associated with proprietary risk books, internal investment management or affiliated execution venues. Our focus is simple: provide clients with superior execution, complete transparency, and personal service. To learn more about CAPIS and how we can be a valuable…

Can You Identify a Conflicted Crossing Trade?

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This is the second part in a three part series on Transition Management Without intra-day trading transparency, it would be impossible to see a conflicted crossing trade. However, when you combine intra-day volume with exposure imbalances, conflicted crosses jump off the page. In the example below, four conflicted crosses can easily be seen; all sells represented by the unusually high pink bars. Based on the consistent level of buys and sells (red and blue bars), the transition manager apparently put this event on a basic time-slicer (this should be your first clue that execution and risk management are not high on their list of priorities). How do we know these crosses were conflicted? Look at the sector exposure chart for this event. The dotted line represents market exposure. With each cross, the portfolio became less exposed to the market relative to its objective. Bottom line, each cross provided more revenue to the transition manager while increasing performance risk for the client. The conflict is clear. The CAPIS Difference: Since 1998, CAPIS has been a trusted independent provider for transition management services; executing every position as if it were our own. As a true independent agency broker, CAPIS does…

This is the second part in a three part series on Transition Management Without intra-day trading transparency, it would be impossible to see a conflicted crossing trade. However, when you combine intra-day volume with exposure imbalances, conflicted crosses jump off the page. In the example below, four conflicted crosses can easily be seen; all sells represented by the unusually high pink bars. Based on the consistent level of buys and sells (red and blue bars), the transition manager apparently put this event on a basic time-slicer (this should be your first clue that execution and risk management are not high on their list of priorities). How do we know these crosses were conflicted? Look at the sector exposure chart for this event. The dotted line represents market exposure. With each cross, the portfolio became less exposed to the market relative to its objective. Bottom line, each cross provided more revenue to the transition manager while increasing performance risk for the client. The conflict is clear. The CAPIS Difference: Since 1998, CAPIS has been a trusted independent provider for transition management services; executing every position as if it were our own. As a true independent agency broker, CAPIS does…

Can You Identify A Conflicted MOC Trade?

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This is the first part in a three part series on Transition Management Frankly, most people would have to say, “No.” Identifying a conflicted Market-on-Close (MOC) trade can be difficult, but we can show you how. It simply requires a fill-level execution file from your transition manager and some advanced intraday charting capabilities. Tell-tale signs of a conflicted principal trade: Single stock identifiers: Fill-level prints that are larger than the market’s closing print For example, if your fund sold 120,000 shares of XYZ at the close, but the closing print in the market was only 80,000 shares, your trade was executed by a principal desk. Look for unusual price action prior to the close. Portfolio level indicators: Dramatic price disparity in the final hour of trading After charting the portfolio disparity between the target and legacy, look for an inflection point in the final hour. In the example below, the black line represents the implicit cost as measured by the difference between buys and sells. Note the inflection point at 15:40, 20 minutes before the close. This portfolio lost over 100 bps in the final 30 minutes. The CAPIS Difference: Since 1998, CAPIS has been a trusted independent provider…

This is the first part in a three part series on Transition Management Frankly, most people would have to say, “No.” Identifying a conflicted Market-on-Close (MOC) trade can be difficult, but we can show you how. It simply requires a fill-level execution file from your transition manager and some advanced intraday charting capabilities. Tell-tale signs of a conflicted principal trade: Single stock identifiers: Fill-level prints that are larger than the market’s closing print For example, if your fund sold 120,000 shares of XYZ at the close, but the closing print in the market was only 80,000 shares, your trade was executed by a principal desk. Look for unusual price action prior to the close. Portfolio level indicators: Dramatic price disparity in the final hour of trading After charting the portfolio disparity between the target and legacy, look for an inflection point in the final hour. In the example below, the black line represents the implicit cost as measured by the difference between buys and sells. Note the inflection point at 15:40, 20 minutes before the close. This portfolio lost over 100 bps in the final 30 minutes. The CAPIS Difference: Since 1998, CAPIS has been a trusted independent provider…