The co-founder and chief executive of Provable Markets spent fifteen years on trading desks at Bank of America, Jefferies, and Nomura before deciding that securities lending, an approximately trillion-dollar market, should probably stop being negotiated over instant message. Then he built an SEC-registered ATS to prove it.
On a Tuesday in October 2022, a securities lending trade cleared through the Depository Trust & Clearing Corporation's brand new SFT Clearing Service. The trade itself was small. It was the fact of the trade that mattered. Nobody had ever done it before. On one end of the pipe sat Provable Markets, an eighteen-person New York fintech, and on the other end sat the machinery of the American clearing system. Matt Cohen was on the phone.
Cohen is the co-founder and chief executive of Provable Markets, and if you have not heard of him this is largely his own fault. He does not have a Twitter account. He does not have a personal website. He does not do the podcast circuit. He shows up at securities finance industry conferences, sits on panels next to people from BNY Mellon and DTCC, and explains, patiently, why the market for lending stocks against collateral should not still be running on phone calls and Excel spreadsheets. Then he goes back to the office at 200 Vesey Street and tries to make it stop.
Securities lending is a genuinely enormous market that most people who work in finance cannot fully explain. It is the plumbing of short selling, of ETF creation and redemption, of hedge fund alpha, of collateral transformation, and of about a dozen other things you do not need to understand to appreciate that they exist. It also runs, in large parts, on workflows that would look familiar to a trader in 1998. Cohen spent fifteen years inside those workflows, most recently as a Managing Director at Nomura and before that at Jefferies and Bank of America Merrill Lynch. He saw the leakage. Every trader saw the leakage. He is the one who quit and did something about it.
The origin story of Provable Markets is, on inspection, the sort of thing that only happens if you know the right venture capitalists. In early 2020, the fintech VC firm Anthemis introduced Cohen to a researcher named Thomer Gil, who was running Provable Labs, an outfit doing work on secure multi-party computation. Cryptographers do not typically get introduced to career equity finance traders. In this case the introduction stuck. Cohen had spent a decade and a half watching order information leak into the market before trades happened, and Gil had built the mathematical tools for encrypting order matching so that participants can see prices without giving up their positions. It is not a coincidence that Provable Markets is named for cryptographic provability. It is not exactly marketing, either.
From the outside, there is always a tendency to assume that financial markets operate more efficiently than they do. — Matthew Cohen, Securities Finance Times
Aurora Marketplace is the order matching layer. Lenders post inventory, borrowers post interest, encrypted matching happens without full pre-trade disclosure to the counterparty. This is the part that annoys the incumbent inter-dealer brokers.
Aurora Trade Manager runs the lifecycle: post-trade allocations, corrections, breaks, reconciliations. The stated goal is to make the middle office stop being where trades go to die. Boring on purpose.
Aurora connects members to DTCC's Securities Finance Transaction Clearing Service. This is the piece that made the October 2022 first-cleared trade possible. Post-trade risk mutualization, delivered as an API.
The pitch is not complicated. Securities lending is a market where the seller usually has better information than the buyer, and the buyer's very act of asking to borrow signals what the seller is about to do. The traditional workaround has been to disintermediate through voice trading and long-standing bilateral relationships. This works, mostly, provided you do not mind that it is inefficient, hard to audit, and structurally allergic to automation. Cohen's team encrypts the order book and centralizes the matching. In exchange, you get an auditable ATS, standardized APIs (FIX, REST, gRPC, because Provable ships all three), and, on the back end, the option to clear at DTCC instead of carrying counterparty risk on your own balance sheet.
None of this is a moonshot. Nobody at Provable Markets is claiming to reinvent finance. What they are claiming, in Cohen's own words, is that "solutions do not always need to be done in an overly complex way, and often leaner and more streamlined technology may result in the best outcome." That is the whole pitch. Boring is the feature. The founder's temperament matches the product. Cohen answers questions in interviews with the mild dryness of a man who has spent thousands of hours on trading desks and has no interest in performing enthusiasm he does not feel.
In May 2024, Dialectic Capital Management led an $8 million Series A round in Provable, with participation from Inkef and Anthemis. John Fichthorn, Dialectic's founder, joined the board. Steve Greenblatt and Derek Penn, both industry veterans, joined as independent directors. This is a small round by Silicon Valley standards. It is a serious round by market infrastructure standards, which is the market that actually applies here. Provable Markets is a broker-dealer with regulators and clearing houses and clients who need six FINRA licenses at the CEO level, which is more than most fintech founders can spell. Cohen has all six. He also has the Series 3, which lets him trade futures, and the Series 57, which lets him supervise securities traders. He is licensed to do the job.
“From the outside, there is always a tendency to assume that financial markets operate more efficiently than they do.”
“Customers are best served when providers collaborate to make the process low lift and low cost.”
“Solutions do not always need to be done in an overly complex way, and often leaner and more streamlined technology may result in the best outcome.”
“We have taken pride since our formation in being open at each stage in our development - in disclosing what we have built.”
“Nobody in their right mind trusts web transactions unless they are encrypted.”
Cohen frames securities lending as suffering from information leakage. Encrypted matching is the counter. This is the thesis in one sentence.
Co-founder and chief executive of Provable Markets, a New York fintech operating Aurora, an SEC-registered Alternative Trading System for securities lending.
Roughly fifteen years trading equity finance at Bank of America Merrill Lynch, Jefferies, and Nomura, with Managing Director titles at the latter two.
In early 2020, venture firm Anthemis introduced Cohen to Thomer Gil, who ran Provable Labs. The two co-founded Provable Markets as the commercial arm applying Provable Labs' cryptographic research to capital markets.
An $8 million Series A in May 2024 led by Dialectic Capital Management, with participation from Inkef and Anthemis.
A cloud-native, SEC-registered ATS for securities lending. It handles order matching, trade lifecycle management, and connectivity to DTCC's SFT Clearing Service via FIX, REST, and gRPC APIs.