Welcome to the BGC Partners Inc. Third Quarter 202 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker for today, Jason Chryssicas, Head of Investor Relations. Thank you, and please go ahead.

Good morning, everyone. Today, we issued BGC's third quarter 2022 financial results press release and the presentation summarizing these results prior to market open. You can find these at ir.bgcpartners.com. Please note, you can find additional details on our quarterly results in today's press release and investor presentation. Unless otherwise stated, the results provided on today's call compare only the third quarter of 2022 with the prior year period, and to compare revenue excluding insurance, due to its sale on November 1, 2021. We will be referring to our results on this call only on an adjusted earnings basis unless otherwise stated. We may also refer to adjusted EBITDA. We may refer to our liquidity, which we define as cash and cash equivalents plus marketable securities that have not been financed, reverse repurchase agreements and securities owned, less securities loans and repurchase agreements. We define total capital as our redeemable partnership interest, total stock ops equity and non-controlling interest in subsidiaries. BGC generates a significant amount of its revenue in non-U.S. dollar denominated currencies, particularly in the euro and pound Sterling. BGC presents revenue comparisons on a constant currency basis in order to present a better comparison of the company's revenues during the period, which exhibited volatile foreign exchange moments. BGC's constant currency movements assume foreign exchange rates used in term of the company's prior period revenues applied to the current period revenues. Please see today's press release for results under generally accepted accounting principles or GAAP. Please also refer to the relevant sections at the back of today's press release for complete and updated definitions of any non-GAAP terms, reconciliations of these items to the corresponding GAAP results and how, when and why management uses such terms. Additional information with respect to our GAAP and non-GAAP results mentioned on…

Thank you, Jason. Good morning, and thank you for joining us for our third quarter 2022 conference call. With me today are BDC's Chief Operating Officer, Sean Windeatt; and our Chief Financial Officer, Jason Hauf. Our pretax adjusted earnings margin expanded by over 300 basis points. This represents the eighth consecutive quarter of adjusted earnings margin improvement driven by our high margin electronic Fenics business, which now represents of our quarter of our total revenue. For more than 14 years, BGC and the entire financial service industry's trading volumes have been constrained by ultra-low interest rates and quantitative easing. For example, in the U.S. credit markets, issuance is up over 2.5 times and trading volumes are half of what they were in 2008. Over the same period, U.S. Treasury issuance is up 5 times and trading volumes are flat to 2008. And you can see this on Page 5 of our investor presentation, which you can get to at ir.bgcpartners.com. Throughout this period, we've worked to automate our business and improve our margins. We expect the return of interest rates to restore trading volumes to their historical correlation with issuance over time. This dramatic increase in trading volumes will drive our revenue growth for the foreseeable future, coupled with our improved margins, we expect BGC to produce record levels of profitability. With that, I'd like to turn the call over to Jason.

Thank you, Howard, and hello, everyone. BGC generated total revenue of $416.6 million, a decline of 1.3% as compared to last year. On a constant currency basis, our revenue was up 4.1% versus a year ago. During the quarter, the U.S. dollar continued to appreciate against the euro and pound Sterling, both of which were approximately 15% lower. Total revenue would have been $23 million higher on a constant currency basis. By asset class, rates increased by 1.1% and 10.2% on a constant currency basis. FX increased by 0.7% and 2.4% in constant currency. Credit decreased by 1.3%, but increased by 6.4% in constant currency. Energy & Commodities decreased by 7.2% and 5.5% in constant currency and Equities decreased by 11.6%, but only 5.1% in constant currencies. By geography and excluding insurance, Americas revenue increased by 9.3%, while Europe, Middle East and Africa and Asia-Pacific revenues decreased by 5.4% and 8.5%, primarily related to FX headwinds. Fenics, BGC's higher margin technology driven business represented 25.4% of total revenue, its highest mark ever and grew at a market leading rate of 10.8% to $105.6 million or 17.7% growth on a constant currency basis. Automation has been a key to driving the company's margins higher. Adjusted earnings margins and average front office productivity both improved year-over-year for the 8th consecutive quarter. Fenics Growth platforms recorded revenue of $12.7 million, an improvement of 19.4%, or 21.5% on a constant currency basis. Our Fenics Markets business generated revenue of $92.9 million, an increase of 9.7% or 17.2% on a constant currency basis and had a pretax adjusted earnings margin of 30.8%, an expansion of 107 basis points. Moving on to expenses. Our compensation and employee benefits under both GAAP and adjusted earnings decreased by 21.4% and 20.6%, respectively, due to increased automation the sale…

Thanks, Jason, and good day, everyone. Fenics, our technology driven higher margin business, generated record third quarter revenue of $105.6 million, growing at a market leading pace of 10.8% or 17.7% on a constant currency basis. Fenics represented 25.4% of our overall revenue and is expected to become an ever larger part of BGC's overall business going forward. Looking at Fenics in more detail. Our Fenics Growth Platforms revenue improved 19.4% or 21.5% on a constant currency basis, driven by growth across Fenics U.S. Treasuries, Lucera, Fenics FX, Fenics GO and Portfolio Match, partially offset by Compression and Algomi. Fenics U.S. Treasuries revenues increased over 24% driven by ADV growth of 14%. CLOB market share was 18% during the quarter. Fenics UST saw a significant growth in its streaming offering, which reached record levels in the third quarter, streaming a significantly higher fee capture. Fenics UST's T-Bill offering continued to scale with ADV growth of 266% compared to a year ago. Fenics UST recently launched its automated off-the-run spread facility. This technology enhances trading volumes, Fenics Market Data and will create trading synergies across FMX Interest Rate futures. Lucera, our infrastructure and software business had a record quarter, generating strong double-digit revenue growth of 30% versus last year. Lucera saw an increase in clients trading both cryptocurrencies and fixed income products through its LUMEMarkets platform. Additionally, in the third quarter, Lucera launched a cryptocurrency hosting offering for exchanges and traders. Fenics FX, an ultra-low latency electronic FX trading platform, generated volume growth of 44%. Fenics FX continues to win market share, onboard leading market participants, and has grown at market-leading levels throughout 2022. Fenics GO, a global options electronic trading platform, saw strong volume growth across its Asian business, where HSCEI, KOSPI and MSCI index option volumes were up 4.7x…

Thank you. [Operator Instructions] Our first question for today comes from Gautam Sawant from Credit Suisse. Your line is now open. Please go ahead.

Hey. Good morning, and thank you for taking my questions. Can you please share your perspective on what gets you comfortable with the updated time lines for FMX? And can you give us the nature of the types of regulatory approvals that might still be pending? And if there's any factors that could push out the time line further from this point?

So we are awaiting approval for our new products. The exchange that we -- that was operated was primarily during weather futures for the past number of years. And now that we are converting upon BGC's acquisition to interest rate futures required an application to get that approved. So that is what we are waiting on. And we expect that in large part -- our expectation is, and we are confident that, that will be received in the first quarter. I mean, look, this process just takes more time than it used to take. I think you all understand that the way things are working in the world these days, just take more time. But we have that expectation, and we don't have any reason to believe that it would last to be pushed further out than the first quarter of '23.

And then when you're going to announce the partners, how should we think about the time line about the partner launch? Does that come after the regulatory approval and then before the 2Q '23 platform launch?

I think that's a discussion with the partners, but we would expect it, for sure, before launch, and it may coincide with the regulatory approvals in our launch date opening. My thinking would be you want to create the most excitement when you have an opening day. To announce that Ryan and George Clooney attending the opening of your restaurant, which you have no idea when it's going to open. It's just not as much fun as when you say we're going to open X date. So I think we're going to have great partners. That's our expectation, and we want to announce them when we have our opening dates, so people can get excited about meeting that data as opposed to just generally, we're opening someday.

Okay. Understood. I wanted to stay on the FMX topic. The CLOB market share for the USD platform, it's declined to 18% relative to 19% in the last quarter and in the same quarter of 2021. Are there any factors that are impacting the market share right now?

So these were -- this was really the first period that our BrokerTech picked up a little market share. And that stems back from the extreme volatility that was in the marketplace. When -- I've been in this business a long time and when we were operating long, long ago, the busier the market, the stronger the leader is in extreme volatility. So this is an example of this extreme volatility, our growth -- while we continue to grow in volume, market share went to the larger player. But that's just during this extreme volatility. I think as that dissipates, the extremes dissipate, I think you'll see our growth continue. And as obviously, as we announced, the partners they join, we think we will see a material improvement in our market share thereafter.

Okay. And just last question for me here on time lines. Can you provide us an update on your digital asset or cryptocurrency initiatives? And if the time line for those platforms has changed?

Sure. So in Lucera, we are connecting market participants to exchanges. We are also hosting exchanges as well. Our team that builds exchanges, obviously, is very, very focused on FMX making every I-dot and T-Cross to make sure our system is as good as it possibly can be and covers as many idiosyncratic nuances that futures traders want to use in their system. So we are focused on that. And once FMX is launched, we will turn our attention to building the exchange for crypto. The timing for an exchange from crypto, we are trying to meet is when the large traditional finance banks and trading firms decide to get into that space. So we are connected to all the banks and all the trading firms in the world, and we want to go into that business when our key clients around the world are starting to trade crypto. They think about it, they have the right to do it. There's a little bit of announcements you've seen every here and there. Now there's a few firms willing to custody it. This is all beginning. So we're trying to meet that timing. So I think we are not racing towards it. I think we are doing FMX first and then crypto and digital will be second. But I think what the key for us is we're trying to time it to be ready, open and available and rocking when the large banks of the world decide that they're going to start trading. And that's sort of our special sauce, if you will.

Got it. Thank you for taking my questions.

Yes. If you think about it in big banks, where they rather trade on FMX and BGC in the place where they are comfortable or would they ran a trade with by names. I just think we seem pretty -- the right choice.

Thank you. [Operator Instructions] Okay. We currently don't have any further questions. So I'll hand back to Howard Lutnick for any further remarks.

Like our margins improving, we're getting more efficiency on our conference call. So thanks for spending the half hour with us, and we look forward to seeing you again and updating you on the corporate conversion, updating you on FMX, and we look forward to speaking over the quarter. Thanks, everybody.

Thank you for joining today's call. You may now disconnect.