Global Custody Pro - 08 August 2025

SEC, Broadridge, EBA, Galaxy, ISDA, CFTC and more

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Global Custody Pro
August 07, 2025 • Reading Time: 8 minutes

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Welcome to Global Custody Pro, read by custody professionals like you. I'm Brennan McDonald, Managing Editor. I write about the global custody industry, having spent over 12 years in financial services, including working at a global custody bank. An AI voice reads the audio version of this newsletter. Have feedback? Just reply to this email or connect with us on LinkedIn.

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🌏 Global Custody News

SEC offers guidance on Treasury clearing rules

  • Driving the news: The SEC’s Division of Trading and Markets has released FAQs to assist broker-dealers with amendments to the customer protection rule for the central clearing of U.S. Treasury securities.

  • The big picture: The guidance is part of the SEC’s effort to provide clarity as the industry approaches compliance dates of 31 December 2026 for cash transactions and 30 June 2027 for repo agreements.

  • Key Move: Chairman Paul Atkins has appointed Commissioner Mark Uyeda to lead the agency's work on the transition, signalling the regulator's focus on ensuring a smooth implementation.

US federal enforcement plunges as states step up

  • Driving the news: Federal regulatory enforcement actions against US financial firms fell 37% in the first half of 2025, with monetary penalties dropping 32%, according to a new Wolters Kluwer analysis.

  • By the Numbers: Competition-related penalties saw the steepest fall, dropping 97% in value. The volume of enforcement actions for financial offences fell 53%, while consumer protection violations decreased by 22%.

  • Why it matters: The shift from centralised federal oversight to a fragmented state-by-state approach presents a significant operational challenge for financial institutions, which now face the task of managing compliance across numerous different regulatory regimes.

Broadridge projects up to 12% EPS growth for fiscal 2026

  • Driving the news: Broadridge reported a 7% rise in constant currency recurring revenue and an 11% increase in adjusted EPS for fiscal 2025. The company forecasts 5-7% recurring revenue growth and 8-12% adjusted EPS growth for fiscal 2026.

  • The big picture: The results were driven by growth across its main divisions, with Investor Communication Solutions (ICS) recurring revenue increasing by 6% and Global Technology and Operations (GTO) by 8% for the year. Management highlighted strong performance in its distributed ledger repo platform, which now exceeds $200 billion in daily volumes.

  • The Bottom Line: The company announced an 11% increase in its annual dividend, supported by a 104% conversion of free cash flow in fiscal 2025. Broadridge also deployed $193 million on M&A and repurchased $100 million in shares during the fiscal year.

EBA details draft crypto capital rules for banks

  • Driving the news: The European Banking Authority has published its final draft Regulatory Technical Standards (RTS) to harmonise capital requirements for institutions' crypto-asset exposures across the European Union.

  • Under the Hood: The draft standards outline technical calculations for credit, counterparty credit, and market risks associated with asset reference tokens and unbacked cryptocurrencies, such as Bitcoin, as well as covering netting, hedge recognition, and position aggregation.

  • The big picture: These rules align with the international Basel standard and the EU's Markets in Crypto Assets Regulation (MiCA), providing a transitional framework that allows institutions to capitalise their exposures and participate in the crypto market ahead of permanent rules.

🚀 Digital Asset News

Galaxy's Data Centre Bet Deepens with CoreWeave, Land Deal

  • Driving the news: Galaxy Digital reported a Q2 2025 adjusted gross profit of $299 million and announced its key data centre client, CoreWeave, has exercised its final option to take the full 800 megawatts (MW) of capacity at the Helios facility in Texas.

  • The big picture: The firm is executing a dual-track strategy, expanding its institutional digital asset business while making a significant, capital-intensive push into AI-focused data centre infrastructure. Following the quarter, Galaxy acquired adjacent land to potentially expand the Helios site to 3.5 gigawatts (GW), signalling a long-term commitment to becoming a primary power provider for high-performance computing.

  • By the Numbers: Galaxy ended Q2 with $2.6 billion in equity capital, a Q2 net income of $31 million, and an average lending book size of $1.1 billion. The firm's combined assets under management and staking reached nearly $9 billion.

  • Driving the news: The International Swaps and Derivatives Association (ISDA) has responded to a Bank for International Settlements (BIS) consultation on tokenisation, outlining its perspective on the implications for the over-the-counter (OTC) derivatives market.

  • Why it matters: ISDA sees a significant opportunity in using tokenisation to improve collateral management through near-instantaneous atomic settlement, which can substantially cut counterparty and settlement risk. The technology could also enhance the use of non-cash assets as collateral and lower transaction costs through automation.

  • The big picture: The association warns that widespread adoption is hindered by significant challenges, chiefly legal and regulatory uncertainty, particularly in insolvency scenarios. ISDA advocates for a "same activity, same risk, same regulatory outcome" approach and the industry-wide adoption of data standards, such as the Common Domain Model (CDM), to ensure stability.

CFTC flags key risks from AI, crypto, and cyber threats

  • Driving the news: CFTC Commissioner Kristin Johnson has summarised key themes from a July roundtable with US, UK, and European regulators, focusing on artificial intelligence, cyber risk, third-party providers, and the supervision of digital assets.

  • Why it matters: Participants reached a broad consensus on the need for coordinated regulatory frameworks to address systemic cyber risk, embed AI governance and transparency into supervision, and harmonise oversight of digital assets and critical third-party infrastructure.

  • Zoom in: Discussions highlighted new threats, including AI-accelerated financial crime, market manipulation via social media, and surveillance gaps in crypto markets where a significant volume of trading occurs off-chain and is not recorded on public blockchains.

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