Industry Professionals Expect the SEC to Be More Flexible With Digital Assets

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SEC fines J.P. Morgan subsidiaries

Institutional investors and wealth managers expect more flexible regulation from the U.S. Securities and Exchange Commission (SEC) in the coming year regarding digital assets, along with greater clarity, according to a new global study conducted by Nickel Digital Asset Management (Nickel), a London-based, leading regulated and award-winning digital asset hedge fund manager in Europe, founded by former alumni of Bankers Trust, Goldman Sachs, and JPMorgan.

The study, conducted with organizations already investing in the sector, found that 68% expect greater flexibility from the SEC compared to 35% who anticipate stricter regulation. More than half (53%) expect increased clarity and guidance, while 44% believe the regulator will be more constructive, reflecting political changes.

Nickel’s research, which surveyed institutional investors and wealth managers in the U.S., U.K., Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates, who collectively manage around $1.7 trillion in assets, found strong support for the SEC and recognition of its importance in the sector.

Around 90% believe the SEC has been an effective regulator of the digital assets sector, and 85% say it is currently very or somewhat favorable to the sector. Only 5% say it is either not constructive or aggressively restrictive. Approximately four out of five (80%) believe it has been clear in distinguishing between securities and non-securities in the digital assets space.

Nearly three out of four (73%) say the SEC’s recent clarifications on Security Token Offerings (STOs) have had the most significant impact on the sector, compared to 42% who highlight its guidelines for Initial Coin Offerings (ICOs).

Around four out of five (80%) agree that SEC regulatory clarity is important for the sector, and 83% say the SEC’s regulatory actions will have a very or somewhat positive impact on innovation in the digital assets space.

However, only 35% of respondents say SEC regulations have a significant impact on their investment decisions in the digital assets sector, while 55% say the regulations have a moderate impact, and 10% say they have a slight impact.

“Strict regulatory actions against FTX and Binance have contributed to increasing confidence in the digital assets sector. The survey reveals that institutional investors and wealth managers now expect more flexible regulation of the sector by the SEC after a period of intense scrutiny. It is reasonable to assume that a more accommodative regulatory environment will drive growth of the asset class in the U.S.,” comments Anatoly Crachilov, CEO and founding partner of Nickel Digital, in light of the survey results.

Muzinich & Co. Strengthens Its Presence in US Offshore With Jesús Belascoain in Miami

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Muzinich & Co. has strengthened its presence in the US Offshore Latin American market by relocating Jesús Belascoain Gómez to Miami.

“The offshore market is one of our key targets as we seek to expand our credit solutions through a wider range of distribution channels. Jesús’s relocation, to be closer to our clients in the region, demonstrates our commitment to this channel as we continue to develop and promote our ability to create solutions based on our clients’ risk/reward parameters,” said Rafael Ximénez de Embún, Country Manager for Iberia and LatAm at the firm.

Belascoain, who has 20 years of experience in financial services, joined Muzinich in 2015.

At Muzinich’s Madrid office, Belascoain was responsible for the business development of the company’s wholesale and institutional client base in Spain, Portugal, and Latin America.

“Muzinich is already recognized as a respected corporate credit manager in the region, with a diverse offering that covers the entire credit spectrum. In this new challenge, I am looking forward to continuing to work on established relationships and creating new ones that highlight the firm’s longevity, expertise, and range of credit products in both public and private markets,” commented the industry veteran who arrived in Miami.

According to BrokerCheck, Belascoain obtained his FINRA licenses in July of this year.

August Has Passed… and the Market Is Once Again Suffering From Excesses

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The correction in the S&P 500’s price at the beginning of August was resolved almost as quickly as it occurred, and the market is once again suffering from the same symptoms of overvaluation and technical and sentiment-driven excesses.

The market is nearing overbought territory again, and retail investor surveys are once more showing excessive confidence, as evidenced by investors’ reaction to Nvidia’s results on Wednesday, with a post-market drop that reached 7%.

The numbers highlighted the potential of the business: the company continues to exceed consensus expectations in sales, margins, and EPS quarter after quarter. Its outlook for medium-term demand maintained the optimism of previous quarters. “We expect to grow our data center business significantly next year. Blackwell is going to completely change the game for the industry,” said Jensen Huang, CEO of Nvidia. Additionally, concerns about delays in the launch of its new product, Blackwell, were alleviated. However, the strong performance and the CEO’s comments—unclear regarding the ROI impact of the massive GPU investments by companies like Microsoft, Google, Amazon, or Meta—did not fully satisfy investors’ optimism.

This is relevant because Nvidia is one of those rare cases where a single company, or sometimes a single industry, like technology in 1999, becomes so significant that it comes to dominate the macroeconomic landscape by embodying the essence of the generative AI theme. This is the underlying idea behind the stock market rally over the last two years, since the official launch of ChatGPT in November 2022.

The numbers don’t lie: this year, the GPU company contributed about 230 points to the S&P 500 before the earnings release, accounting for 27% of the total returns the U.S. index has generated so far this year.

Maintaining business momentum like the one Nvidia has shown over the past 12 months is not sustainable, and its growth is slowing both year-over-year and quarter-over-quarter—although, to be clear, sequential growth is expected to pick up again in the fourth quarter as Blackwell begins reaching end customers, while demand for Hopper remains strong.

At a macro level, a similar situation is unfolding, despite the desire to celebrate Jerome Powell’s comments at Jackson Hole a few weeks ago. Despite the strong U.S. GDP data for the second quarter and the July retail sales figures, there is evidence of weaker growth. Manufacturing activity has contracted again, and the U.S. consumer, the main driver of global expansion over the past two years, is now less dynamic.

Real disposable income is growing at only 0.9% year-over-year, and a number of multinationals tied to household spending disappointed during earnings season (e.g., McDonald’s, Ford, Alphabet, or LVMH). The excess savings accumulated during the pandemic have been spent, fiscal policy will be less generous—regardless of who ends up in the White House in 2025, and especially if it’s Donald Trump—and the labor market is showing signs of fatigue.

Cumulative unemployment claims suggest that companies are reluctant to hire, and while the most optimistic observers attribute the activation of the Sahm rule to the exceptional nature of Tropical Storm Beryl, which impacted the U.S. Gulf Coast in July, the rise in unemployment over the past 12 months is affecting not just Texas but 80% of the 51 states that make up the union.

While it is true that payroll growth continues to be positive—and is usually negative in the context of economic contractions—this fact confirms that immigration is likely the main cause of the rise in unemployment from a low of 3.4% to 4.3%. We find ourselves in the unusual situation of rising unemployment alongside a growing economy because the imbalance is coming from the supply side of workers.

Demand is moderating, as indicated by the JOLT (Job Openings and Labor Turnover Survey) data on voluntary quits and hires. Although the economy is still creating a reasonable number of jobs each month, and inflation-adjusted private sector wages are increasing by 2.5%, these figures do not pose an imminent threat to GDP. However, growth has peaked, is deflating, and raises doubts about the ability to meet the ambitious EPS growth projections that consensus is forecasting for 2025.

On the geopolitical front, the potential implications of Harris overtaking Trump in betting markets (according to PredictIt, but not Polymarket) and in polls do not appear to be adequately priced into stocks. Investors don’t like the economic platform of either candidate, but in Harris’s case, it is assumed that Republicans will control the House of Representatives or the Senate (if not both), which would prevent much of her fiscal agenda from coming to fruition. In Trump’s case, he would have near-unilateral authority on tariffs, creating risk regardless of what happens with Congress.

The CEO of Wealth Management at J.P. Morgan Will Join UBS as Head of US Wealth

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Michael Camacho, CEO of Wealth Management Solutions at J.P. Morgan, announced on Tuesday that he will be joining UBS as Head of Wealth for the U.S. market.

“After 33 incredible years at J.P. Morgan, I will be moving to UBS as Head of US Wealth. This decision was not made lightly, as my time at J.P. Morgan was filled with invaluable experiences, personal growth, and cherished relationships,” Camacho posted on LinkedIn.

As CEO of J.P. Morgan Wealth Management Solutions, Camacho is responsible for all wealth management products, services, and platforms, including investments, lending, and banking.

Before assuming his current role, he was Head of the Asset Management Investment Platform and developed its ETF and index businesses. Prior to joining Asset Management, he spent 25 years in the Investment Bank, holding several leadership positions, including Global Head of Commodities, Head of Structured Investments in the Americas, and Head of Exotic Rates Trading in dollars, according to his biography on the social network.

Additionally, he is a member of the Asset and Wealth Management and Global Private Bank Operating Committees and serves as the executive sponsor of the Hispanic Leadership Forum within Asset and Wealth Management.

He holds a degree in Computer Science from Columbia University and a master’s in Finance from New York University.

State Street Global Advisors Takes Stake in Australian Fintech Platform Raiz

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Slatestone y Temperance Partners
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State Street Global Advisors announced a strategic investment in Raiz Invest Limited, an Australian fintech platform that helps customers grow their wealth by helping them to save and invest. The parties have entered into an equity investment agreement (the “Initial Share Purchase”) as part of a strategic relationship pursuant to which State Street Global Advisors will acquire approximately 5 percent of Raiz’s share capital through a placement.

In addition, the strategic relationship will see State Street Global Advisors’ trusted brand and deep knowledge of markets come together with Raiz’s mobile-first platform, which helps Australian retail investors with micro-investments primarily in ETFs and model portfolios. Leveraging State Street Global Advisors’ international library of resources, insights and trends, Raiz customers will have access to a broader array of financial literacy content and investment education tools.

“We are excited to expand our relationship with Raiz, a proven fintech leader in bringing important tools and educational resources to investors across the region. This strategic investment reinforces our strategy to join forces with wealth firms who share our commitment to help investors globally manage their investments and savings for retirement,” said Yie-Hsin Hung, President and CEO for State Street Global Advisors.

State Street Global Advisors’ SPDR® S&P/ASX 200 Fund (ASX: STW) is currently the largest single fund holding in the model investment portfolios provided by Raiz to its customers. The asset manager’s SPDR® MSCI Australia Select High Dividend Yield Fund (ASX: SYI) and SPDR® S&P® Global Dividend Fund (ASX: WDIV) are also available on Raiz, the firm information said.

State Street Global Advisors Head of Intermediary Asia Pacific, Meaghan Victor, said deepening the existing relationship with Raiz reinforces State Street Global Advisors’ commitment to the Australian market. “This investment is a natural extension of the successful relationship we have enjoyed with Raiz since launch in 2016. Both of us share a passion for making financial tools and solutions accessible to all investors, and through this strategic arrangement we will leverage our respective capabilities to help Australian investors plan and save for retirement.”

On the other hand, Raiz Managing Director and CEO, Brendan Malone, said the strategic relationship would see Raiz and State Street Global Advisors work more closely together to create innovative savings and investment insights and education for customers. “From learning about investments in ETFs through to more complex investment strategies such as superannuation retirement portfolios, we look forward to continuing our relationship with State Street Global Advisors on educational tools for all stages of a customer lifecycle.

Time to Study: 3 Principles for the Portfolio

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Back to school arrives in the US and after a tumultuous August, the market is looking to recover the losses of Black Monday on the promise of a rate cut by the Fed.

With the S&P 500 adding another 6% last month and accumulating 17% year-to-date with rate cuts just around the corner the J.P. Morgan Private Bank investment team offers an analysis of three principles to consider in the portfolio.

1. Know your toolkit: Each asset has a role to play

“If you’re looking to get top marks this year, having the right school supplies is likely the first step. From the trusty pencil to the elegant protractor, to the almighty graphing calculator, each item has a purpose. Your portfolio is no different. Whether it’s cash, stocks, bonds or alternative investments, each asset has a distinct role to play—and they work together to achieve your long-term goals,” the experts said.

Each investment has its own particularity:

  • Cash:Everyone needs cash. From filling up the car tank to paying the down payment on a house, cash is king. Many also think of cash as a safe haven or even a source of income when interest rates are high. But cash is not designed to beat inflation. This means it’s equally important to think about how much you really need to have, and how much, if any, you can redirect to other types of investments to meet your goals.
  • Bonds: Bonds Fixed income securities can provide investors with a degree of stability. The coupon payments distributed over time by bonds, in addition to repaying the initial loan amount, assist in reducing the uncertainty and volatility present in a portfolio. The principal risk associated with bonds is the possibility that the issuer will default on its repayment obligations. However, historical data indicates that defaults in investment-grade debt have been exceedingly rare. For instance, default rates for corporate bonds have remained at approximately 2.5% since the Great Financial Crisis, while those for municipal bonds have remained below 0.1%. Additionally, fixed income is expected to outperform cash and inflation, and it also tends to exhibit less volatility than equities.
  • Stocks: Owning a stock entails a stake in a company and its future performance, including both positive and negative outcomes. Stockholders typically benefit from earnings growth and dividends paid by companies to reward shareholders. Since 1991, earnings and dividends have contributed almost all of the 3,205% total return for the S&P 500. Changes in valuation have driven less than 5% of the total return. Over time, equities are typically the engine of capital appreciation for portfolios, and they can provide the highest expected return, but this is accompanied by higher volatility.
  • Alternatives and real assets: Hedge funds, private equity, private credit, and other real assets, such as real estate and commodities, can provide distinctive exposure to portfolios and enable investors to access more targeted exposures. Such an approach may potentially enhance returns while reducing volatility, but it may also entail the risk of longer-term investment lock-in.

“While each has a distinct role to play, the ultimate key to notching consistent returns over the long haul is diversification across asset classes and, of course, staying invested,” the experts advise.

2. Maintain a long-run mindset

Beyond having the right supplies, the next step to being teacher’s pet is having the right mindset. For investors, a long-run mindset, in particular, can help pave the way for success, the analysis says.

Recent volatility is a prime example that over the short term, different assets can have a wide range of possible outcomes. That said, history tells us that over the long term, the possibilities can be much more certain.

“So even though markets can always have a bad day, week, month or even year, history suggests investors are less likely to experience losses over longer periods—especially in a diversified portfolio. Above all, keep the time horizon of your goals in mind. A bucketing approach can be helpful to determine how and where to invest your money over various time periods,” the text adds.

3. It’s about time in the market, not timing the market

The next step on the road to valedictorian is staying out of trouble. Discipline can help us avoid falling victim to bad habits. For investors, one of the worst habits to have is trying to time the market.

Since the start of the year, we have seen the S&P 500 make almost 40 all-time highs. When market levels are elevated, it may lead some investors to feel like it is too late to get invested, which often keeps them on the sidelines in the hope of a pullback While we did see an -8.5% drawdown from July highs, trying to get the timing just right is a dangerous game to play.

For other investors, market pullbacks do not feel like an opportunity. Instead, the fear associated with them and the ensuing volatility may push them out of the market, causing them to miss the rebound on the other side.

The article by J.P. Morgan Private Bank can be found at the following link.

Pictet AM Hires Juan Ramón Caridad García as Head of Strategic Clients for Iberia and Latam

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Photo courtesyJuan Ramón Caridad García, Head of Strategic Clients para Iberia y Latam de Pictet AM.

Pictet Asset Management, the institutional asset management and fund management division of the Swiss Pictet Group, has made two key appointments for the Iberian and Latin American markets, under the supervision of Gonzalo Rengifo Abbad, who has been its General Manager in Iberia and Latam since 2002.

As announced, Juan Ramón Caridad García is joining the Pictet AM team as Head of Strategic Clients for Iberia and Latam, reporting to Gonzalo Rengifo from the Madrid office. Additionally, Lorenzo Coletti Perucca has been promoted to Head of Iberia, taking on the responsibility for the Iberian market, while Tiago Forte Vaz becomes Head of Latam, responsible for the Latin American market. Coletti joined Pictet AM in 2001 as Sales Director for the Italian market and has been in Spain since 2005, while Forte Vaz joined in 2013 to develop business in Portugal and Brazil.

Meanwhile, Patricia de Arriaga Rodríguez, who began her career in 1984 and joined Pictet AM in 2006, will remain with the company as Deputy General Manager in Spain until the end of 2024, and later as Senior Advisor for key clients until her retirement in 2025.

Following Caridad’s appointment, Gonzalo Rengifo Abbad, General Manager in Iberia and Latam, stated: “This is a new transversal role aimed at facilitating a differential service in the various markets of Iberia and Latam and enhancing global synergies. Juan Ramón fits perfectly into the team, as he shares our values of responsibility, entrepreneurial spirit, and long-term thinking.”

Caridad has 25 years of experience. Until last May, he was Managing Director and Head for Iberia & Latam at GAM Investments. Caridad holds a degree in Economics and Business from the Autonomous University of Madrid and a postgraduate degree in Business Analysis and Valuation from the London School of Economics and Political Science. He is the Academic Director of the Master’s in Finance and Alternative Investment at Bolsas y Mercados Españoles and Co-Director of the I3 program at Instituto de Empresa. Additionally, he is a trustee of the FIDE Foundation.

Rengifo also highlighted that “Patricia will continue to contribute to the business with her extensive experience, deep knowledge of Pictet AM’s investment strategies and capabilities, and close relationship with clients. She has helped multiply the business in the Spanish market to €8.91 billion as of March 2024, making it one of the top ten international asset managers in our country. Among her wide range of achievements, she has been instrumental in successfully advancing thematic investments as well as financial education through various initiatives over the years.”

According to the firm’s head for Iberia and Latam, “these appointments underscore Pictet AM’s commitment to experienced professionals to drive growth and establish itself as a leading partner for institutional investors in the Iberian and Latin American markets.”

Santander PBI Continues its Expansion in Dubai with the Relocation of Iñigo Urbano

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Iñigo Urbano, Santander Private Banking International

Iñigo Urbano has relocated from Miami to Santander Private Banking International’s office in Dubai.

“After more than a decade with our team in Miami, we are delighted to welcome Iñigo Urbano Zumalacarregui to our new Branch in DIFC where he will join the team as Executive Advisor,” the firm announced Wednesday on LinkedIn.

The portfolio manager, who worked for 13 years in Santander’s discretionary management division in Miami (2011-2024), is moving to Dubai for the new office led by Masroor Batin.

Throughout his 20-year career, Urbano has worked at Credit Suisse (1999-2002), Fortis (BNP Paribas) between 2003 and 2009 as a senior portfolio manager. He later worked at Seguros RGA for two years before joining Santander, according to his LinkedIn profile.

In December 2023, Santander Private Banking announced, through an internal memorandum, the opening of an office in Dubai led by Masroor Batin, the former Head of Middle East and Africa at BNP Paribas Wealth Management, in line with its interest in expanding its business in the United Arab Emirates.

In this context, the entity continues to strengthen its Dubai team. Among those who joined before Urbano’s relocation are Jacques-Antoine Lecointre, Kamram Butt, Mustafa Asif Mahmood, and Fady E. Eid.

Generative AI in the Insurance Market Could Generate Over $50 Billions

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The international consultancy Bain & Company has published a study on the impact of generative artificial intelligence (AI) in the insurance industry, highlighting that this technology could increase company revenues by up to 20% and reduce costs by up to 15%, creating an opportunity for over $50 billion in annual economic benefits.

According to the report, the early use of generative AI in insurance will enable a transformation in distribution, covering four areas. First, its implementation will help agents produce content faster, reduce low-value interactions, and provide guidance to improve customer relationships.

Additionally, having an always-active virtual assistant will expand agent availability and assist customers with product comparisons and digital purchases.

This also opens up the possibility of large-scale hyper-personalization, where conversations, content, and offers will better respond to individual customer needs. Finally, combining structured and unstructured data will provide new insights and assist in risk identification. According to the consultancy, the application of generative AI will boost productivity, adjust workforce size, increase sales through more effective agents, and reduce commissions.

For individual insurers, the technology could increase revenues by 15% to 20% and reduce costs by 5% to 15%. However, Bain concluded that any change must be applied responsibly, recommending that insurers implementing this digital tool should focus on experimentation, learning, and change management.

SEC Issues $24 Million Awards to Two Whistleblowers

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SEC fines J.P. Morgan subsidiaries

The SEC announced awards of more than $24 million to two whistleblowers whose information and assistance led to an SEC enforcement action and an action brought by another agency.

The first whistleblower will receive an award of $4 million, while the second whistleblower will receive an award of $20 million. While the first whistleblower reported first, prompting the opening of the investigation, the second whistleblower received the higher award, as their information and substantial cooperation proved critical to the success of the actions.

“Today’s awards highlight the incredible public service provided by whistleblowers,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “The information would have been difficult to obtain in the absence of the whistleblowers as it pertained to conduct occurring abroad.”

Payments to whistleblowers are made out of an investor protection fund, established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.

As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.