Michael
Sanocki.

Michael Sanocki runs RQD* Clearing, a four-year-old correspondent clearing and custody firm at 1 World Trade Center. Thirty-four people work there. Between them, they process billions of dollars of US equity and options trades on any given day, using a cloud-native platform sitting on Microsoft Azure. The pitch, delivered in whatever venue will listen, is that the incumbent clearers are running the market on twenty-year-old batch jobs and mainframes, and that this is fine only for the incumbent clearers.

The path to running RQD is a slow, unglamorous accumulation of the exact credentials you would want if you were going to argue with the SEC, an exchange, and a dozen broker-dealer general counsels in the same week. Colgate, class of 2004. English and Economics. Then a joint JD/MBA at American University, finished at the same time in 2009. Which is to say Sanocki was in law school and business school simultaneously, on purpose, for four years.

From there, the sensible ladder: three years as an associate at Schulte Roth & Zabel, the big financial services firm; then inside the SEC's office; then Assistant General Counsel at ISE Holdings, the options exchange that Nasdaq bought in 2016; then more than five years running compliance and legal at Volant Trading, a technology-driven broker-dealer that does options, futures and equities. He picked up FINRA's Series 7, 24, 57 and 63 along the way, plus the New York and DC bars. If you were designing a founder to sell a clearing firm to a compliance officer, you would design something close to this.

What RQD Actually Does

Correspondent clearing is the part of Wall Street nobody sees and everyone depends on. When a retail investor or a small broker-dealer buys a share, someone has to arrange for the money to move, the security to move, the risk to be posted, the position to be reported to the DTCC, and the tax lot to be assigned. Traditionally, this happened in batches, overnight, on systems built during the Nixon administration and patched ever since. Sanocki's argument is that the batch is the bug.

RQD* runs the same workflow in real time, with API access, low-latency direct market access, and a real-time transfer status feed for automated ACATS-style transfers. The firm handles clearing, custody, execution, margin financing, securities lending, portfolio margin, and fractional shares. It is a SIPC participant and a DTCC/NSCC/SFT member. It also does the boring but load-bearing work of automated account opening and client onboarding, which is where most small broker-dealer relationships bleed to death at legacy clearers.

The Series A

In October 2023, RQD* announced a Series A led by Nyca Partners and ABN AMRO Clearing Investments B.V. Nyca is a fintech shop. ABN AMRO Clearing is one of the largest independent clearing firms in the world. A Dutch clearing house writing an equity check to a US challenger is a specific kind of signal, and Sanocki's public quote about it was diplomatic in the way that all Series A quotes are diplomatic: "powerful catalysts for taking the business to the next level." Belvedere later joined as a strategic investor. Tom Miglis, the former Chief Information Officer of Citadel, joined the board.

The Miglis appointment is not an accident. Citadel is the modern gold standard for real-time market infrastructure. If you are trying to convince prospective clients that a small firm can be trusted with the operational spine of their business, having Miglis on your board is worth roughly a hundred pitch decks.

The Argument

The public Sanocki has one theme and repeats it. "Clearing, for lack of a better word, is broken," he told Traders Magazine. "Legacy clearing firms have failed the market." Elsewhere: "Consolidation across the clearing sector has resulted in less competition, fewer options for securities firms, and a broken system." And: "The industry is broken due to its reliance on legacy tech either built in-house or by one of the few vendors which are all firmly rooted in the market. Ultimately, this means clients are stuck dealing with rigid processes and inefficiencies."

These are unusually direct sentences for a CEO whose regulator was, until quite recently, his employer. They work because they are accurate, and because the target market - small and mid-size broker-dealers who feel underserved by the surviving legacy clearers - already agrees with him. Sanocki calls that segment "sorely underserved" and "ripe for disruption," which is founder-speak for "our churn-out-the-door pipeline is warm."

Why the Resume Matters

There is a category of fintech founder who begins with an app and figures out the regulation later. Sanocki is not that. He was inside the SEC. He worked on rulebook issues at an options exchange. He ran compliance at a broker-dealer that trades in a heavily-scrutinized product set. This means two things. First, the regulatory pathway to launching RQD - and it was long, because clearing firms don't just appear - was probably a lot less scary from the inside than it looks from the outside. Second, and more importantly, when Sanocki says "the industry is broken," he means it as a matter of process detail rather than a marketing tagline. He has read the rulebook. He has written parts of it. He knows exactly where the batch job runs.

The Shape of the Business

Thirty-four employees, one World Trade Center address, cloud-native tech stack, a target market that is "sorely underserved," and a board that includes a former Citadel CIO. The financial data traps this snapshot as a very early growth-stage firm - annual revenue around $2 million on a Series A round - but the leverage of the business is what matters. If RQD can convert a handful of mid-size broker-dealers off legacy providers, the same 34 people can, in theory, clear a multiple of what they clear today, because the marginal cost of adding a client to a cloud-native platform is closer to zero than to whatever it costs at a mainframe shop. That is the entire bet.

What He Is Not

Sanocki is not a bombastic public figure. There is no personal Twitter feed to speak of. The public trail is a LinkedIn, a Crunchbase, a handful of interviews with trade press, and press releases. He tends to let the product - and the willingness of Nyca, ABN AMRO, Belvedere and Miglis to attach their names to it - do the talking. When he does speak, it is usually in the language of an operator explaining plumbing to someone who thinks plumbing is boring.

Which, of course, is the whole point. Clearing is boring right up until it isn't. Ask anyone who lived through the 2021 meme-stock settlement drama, which broadly speaking was an argument between broker-dealers and their clearers about whether the current infrastructure can survive contact with a crowd. Sanocki's answer, more or less, is that it can't, and that he is going to sell you the thing that will.