New York, June 01, 2022 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 25 May 2022 in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for these rated entities was Securities Industry Service Providers Methodology published in November 2019. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Securities Industry Service Providers Methodology
Scale: the absolute magnitude of a securities industry service provider's pre-tax earnings can be an important indicator of its franchise strength and competitive position within its line(s) of business. Scale can be an important distinguishing factor concerning the size and quality of its customer base and its ability to provide value-added services.
Profitability: the strength and stability of a securities industry service provider's profitability can be important indicators of its ability to adapt to changes in economic and business environments, and the level and sustainability of its competitive position, including its ability to sufficiently reinvest in human capital, technology, and other important contributors to sustained success.
Leverage and coverage: a securities industry service provider's cash flow in relation to interest and to total debt are important indicators of its ability to service debt, finance its business, and attract capital needed for investments and repaying maturing debt.
Operating environment: a security industry service provider's operating environment can have an important bearing on its long-term viability. Relevant economic, judicial/regulatory, institutional and general operating conditions may impact a securities industry service providers' creditworthiness.
Other qualitative considerations: important other qualitative considerations that can affect a securities industry service provider's creditworthiness include the extent of its business diversification, the level of opacity and complexity in its activities, its liquidity management, and its corporate behavior.
Support and structural analysis: a security industry service provider's rating may be positively affected by the capacity and willingness of its affiliates and public bodies to provide it with support.
Sovereign or parent constraint: a security industry service provider's rating may be negatively affected by a constraint related to the relatively lower creditworthiness of its sovereign or parent.
Instrument level rating considerations: individual instrument ratings also factor in notching considerations based on the seniority and collateral of the instruments.
• Advisor Group Holdings, Inc.
• Aretec Group, Inc.
• B3 S.A. - Brasil, Bolsa, Balcao
• Blucora, Inc.
• Cboe Global Markets, Inc.
• Charles Schwab Corporation (The)
• CME Group Inc.
• Coinbase Global, Inc.
• Greenhill & Co., Inc.
• Hightower Holding, LLC
• Intercontinental Exchange, Inc.
• Kestra Advisor Services Holdings A, Inc.
• Lazard Group LLC
• London Stock Exchange Group plc
• LPL Holdings, Inc.
• Minotaur Acquisition, Inc.
• Nasdaq, Inc.
• Oppenheimer Holdings, Inc.
• Raymond James Financial, Inc.
The principal methodology used for these rated entities was Securities Industry Market Makers Methodology published in November 2019. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Securities Industry Market Makers Methodology
Liquidity and funding: market makers are inherently confidence sensitive. As such, important credit considerations for a market maker include the adequacy of its available resources to support its daily business activities and its longer-term plans, its level of preparedness to withstand a liquidity shock and a comparison of its long-term funding structure with its asset risk and other obligations.
Profitability: the strength and stability of a market maker's earnings are important considerations in evaluating its ability to generate capital to absorb losses and recover from shocks and assess its long-term viability. The strength of earnings provides an indication of the level and sustainability of a market maker's competitive position, and the stability of its earnings provides an indication of its ability to adapt to changes in the economic and business environments in the sector(s) in which it operates.
Risk appetite and leverage: market-making is inherently confidence sensitive and balance sheet intensive. Managing risk is therefore a core attribute of any market maker, due to the inherent complexity of securities markets, where the activities and sentiments of a wide range of parties (governments, regulators, market makers, counterparties, and end customers) have a direct and often rapid influence on pricing, volumes, and liquidity. Also, an assessment of balance sheet leverage provides an important gauge of the firm's exposure to reduced asset values that could make it insolvent or cause confidence-sensitive counterparties to be concerned about its solvency.
Operating environment: a market maker's operating environment can have an important bearing on its long-term viability. Relevant economic, judicial/regulatory, institutional, and general operating conditions may impact market makers' creditworthiness.
Other qualitative considerations: important other qualitative considerations that can affect a market maker's creditworthiness include the extent of its business diversification, the level of opacity and complexity in its activities and its corporate behavior.
Support and structural analysis: a market maker's ratings may be positively affected by the capacity and willingness of its affiliates and public bodies to provide it with support.
Sovereign or parent constraint: a market maker's ratings may be negatively affected by a constraint related to the relatively lower creditworthiness of its sovereign or parent.
Instrument-level rating considerations: individual instrument ratings also factor in notching considerations based on the seniority and collateral of the instruments.
• Citadel Securities LP
• Cowen Inc.
• CTC Holdings, L.P.
• DRW Holdings, LLC
• Hudson River Trading LLC
• Jane Street Group, LLC
• Jefferies Financial Group
• Jump Financial, LLC
• RBC Capital Markets, LLC
• StoneX Group Inc.
• VFH Parent LLC
• XP Inc.
The principal methodology used for these rated entities was Banks Methodology published in July 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Banks Methodology
Asset Risk: a bank's asset risk is fundamental to creditworthiness because banks have high leverage, which implies that a small deterioration in asset value has a large effect on solvency. Credit quality problems are typically at the root of most bank failures, even though these problems can take a variety of forms, for example a deteriorating value of the loan collateral, resulting in higher losses. Asset risk includes a bank's other assets as well may also be vulnerable to other non-lending risk including market risk and operational risk.
Capital: asset risk and the need for capital go hand in hand. The greater the risk of unexpected loss, the more capital a bank needs to hold in order to retain the confidence of creditors, which enables the bank to fund itself and to shield bondholders from loss.
Profitability: profitability is an important indicator of an institution's ability to generate capital, and is hence another measure of its ability to absorb losses and recover from shocks. A bank with weak or negative profitability has less ability to absorb asset risks than one with strong internal capital generation capacity, other things being equal.
Funding Structure: a bank's funding structure has a strong bearing on its probability of failure or requiring assistance, because some sources of funds are less reliable than others. A bank that makes significant use of an unreliable funding source — perhaps short-term in nature, or from particularly risk-sensitive counterparties — is more likely to suffer periodic difficulties in refinancing its debt, putting it at greater risk of needing support.
Liquid resources: to provide a full picture of liquidity, an assessment of the funding structure of a bank has to be viewed in the context of the composition of its assets. Liquid resources are enhanced when a bank has high-quality liquid assets that can both be readily sold or pledged for cash in private markets in response to its funding counterparts' changing behavior, or that can in extremis be repoed with central banks under standard terms.
Qualitative considerations: There are occasionally other bank-specific considerations that we believe can influence core fundamentals. These additional factors are typically qualitative in nature, although in some cases our assessments may be informed by certain quantitative indicators. These factors include Business Diversification, Opacity and Complexity and Corporate Behavior.
The bank ratings are ultimately derived from the application of our Support and Structural Analysis, which comprises the following:
Affiliate Support, where an entity may be supported by other entities within a group, or occasionally affiliated third parties, thus reducing its probability of default.
Loss Given Failure (LGF), where we undertake a liability-side analysis to assess the impact of a failure — absent government support — in terms of the potential resultant loss on the bank's rated debt instruments. We also incorporate instrument-specific coupon features.
Government Support, where an entity may be supported by public bodies, such as local, regional, national, or supranational institutions, again reducing the risk for some or all instruments. We assess this using our JDA framework.
• Exane S.A.
• MUFG Securities (Europe) N.V.
• RBC Capital Markets, LLC
The principal methodology used for these rated entities was Clearing Houses Methodology published in November 2019. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Clearing Houses Methodology
Default management capabilities: a central counterparty clearing house's (CCP) default management capabilities include the effectiveness of its utilization of risk management tools and waterfall resources to insulate itself from risks presented by clearing members and products cleared, including consideration of the credit strength of its counterparties.
Corporate profile: a CCP's business and financial profile includes its competitive position, liquidity coverage and other general business risks.
Operating environment: external operating environment conditions includes the economic strength, institutions and governance strength, and susceptibility to event risk of the key sovereign(s) in which the CCP operates. The operating environment also includes a consideration of industry fundamentals, specifically the strength of the CCP's regulatory oversight and the CCP's industry structure.
Other qualitative considerations: important other qualitative considerations that can affect the assessment of a CCP's creditworthiness include its corporate behavior and its operational risk.
Support and structural analysis: a CCP's ratings may be positively affected by the capacity and willingness of its affiliates and public bodies to provide it with support.
Sovereign or parent constraint: a CCP's ratings may be negatively affected by a constraint related to the relatively lower creditworthiness of its sovereign or parent.
Instrument-level rating considerations: individual instrument ratings also factor in notching considerations based on the seniority and collateral of the instruments.
• Depository Trust & Clearing Corporation, The
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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