Clear Street to become a new player in the futures clearing market
22 January 2024 US
Image: Coloures-Pic/stock.adobe.com
Clear Street has received approval from the National Futures Association (NFA) to serve as a Futures Commission Merchant (FCM) in the US market and to offer futures clearing services.
The firm is preparing to release its new full service FCM business, having announced its entry into the futures clearing market with the acquisition of React Consulting Services in July 2023.
React’s futures clearing platform, BASIS, is currently being integrated into Clear Street’s infrastructure to create “one cohesive” offering.
Speaking to SFT, Clear Street’s chief operating officer Andy Volz says the FCM project, led by Chris Smith CEO Clear Street Futures, is a multi-year build and will see the firm create a cohesive prime brokerage and futures offering globally, with elements of this being available to the market this year.
The FCM’s exchange memberships will stagger, with the first membership anticipated by Q2 2024.
Following in its aim to go international, Clear Street is finalising an application to the Financial Conduct Authority (FCA) as its first non-US jurisdiction for its futures business.
The firm intends to set up outside of the US for both prime brokerage and futures.
According to Volz, market demand is high for such a business. He explains: “Similar to how there really hasn’t been a new scalable prime broker the way Clear Street has scaled over the last five years, there hasn't been a scalable entry into the futures space either.
“We are filling a very similar gap in the futures industry that we are filling now in the more traditional institutional prime brokerage industry.”
Clear Street is working on an “ambitious growth plan” to provide for every asset class globally, Volz says.
The company aims to expand further into broker-dealer clearing. Volz explains, historically, “we have serviced active traders and traditional institutions” — such as hedge funds, family offices, exchange-traded funds (ETFs) — and are now looking to service broker-dealers and market makers.
While the firm will aim to service global asset managers outside of the US, going international is likely to be on the roadmap for next year.
The “build it ourselves” company has made a number of senior engineering hires in the last 12 months, with the intention to expand engineering functions across the board, including clearing execution, client experience and futures.
“We are growing our teams, while a lot of other firms are potentially shrinking theirs. We want to hire the best talent, and we want to hire people that follow our values and want to be creative and collaborative and grow business with us,” Volz comments.
The firm is preparing to release its new full service FCM business, having announced its entry into the futures clearing market with the acquisition of React Consulting Services in July 2023.
React’s futures clearing platform, BASIS, is currently being integrated into Clear Street’s infrastructure to create “one cohesive” offering.
Speaking to SFT, Clear Street’s chief operating officer Andy Volz says the FCM project, led by Chris Smith CEO Clear Street Futures, is a multi-year build and will see the firm create a cohesive prime brokerage and futures offering globally, with elements of this being available to the market this year.
The FCM’s exchange memberships will stagger, with the first membership anticipated by Q2 2024.
Following in its aim to go international, Clear Street is finalising an application to the Financial Conduct Authority (FCA) as its first non-US jurisdiction for its futures business.
The firm intends to set up outside of the US for both prime brokerage and futures.
According to Volz, market demand is high for such a business. He explains: “Similar to how there really hasn’t been a new scalable prime broker the way Clear Street has scaled over the last five years, there hasn't been a scalable entry into the futures space either.
“We are filling a very similar gap in the futures industry that we are filling now in the more traditional institutional prime brokerage industry.”
Clear Street is working on an “ambitious growth plan” to provide for every asset class globally, Volz says.
The company aims to expand further into broker-dealer clearing. Volz explains, historically, “we have serviced active traders and traditional institutions” — such as hedge funds, family offices, exchange-traded funds (ETFs) — and are now looking to service broker-dealers and market makers.
While the firm will aim to service global asset managers outside of the US, going international is likely to be on the roadmap for next year.
The “build it ourselves” company has made a number of senior engineering hires in the last 12 months, with the intention to expand engineering functions across the board, including clearing execution, client experience and futures.
“We are growing our teams, while a lot of other firms are potentially shrinking theirs. We want to hire the best talent, and we want to hire people that follow our values and want to be creative and collaborative and grow business with us,” Volz comments.
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