China Plans to Ban Cryptocurrency Mining in Renewed Clampdown

Apr 9, 2019

First Read

Did an April Fools joke cause bitcoin to breach $5K?
Matt Raebel – JLN

At one point in the 2013 comedy “The Wolf of Wall Street,” Matthew McConaughey’s character Mark Hanna – a slick, coke-snorting stockbroker – tells Leonardo DiCaprio’s character, “Nobody – I don’t care if you’re Warren Buffett or Jimmy Buffett – nobody knows if the stock is going to go up, down, sideways or in circles.” While many in the financial services world might disagree, we can probably all agree that this accurately describes the current crypto market. Just replace “the stock” in that sentence with “bitcoin.”

The crypto markets recently saw an unexpectedly huge spike in trade volume. At approximately 12 AM (CST) on April 2, the price of bitcoin shot from $4,200 per coin to around $4,550 in one hour. By noon on April 3, it was trading steadily at around $5,000 per coin. That price was still holding as of April 5.

“So, Mr. Buffett,” you may be thinking, “why did that happen?”

Many people seem to believe it was caused by an April Fool’s Day joke.

To read the rest of this commentary, go here.

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A “Computer Guy From Naperville”: Closing Arguments in US v Thakkar
Thom Thompson – John Lothian News

Closing arguments in the trial US v Thakkar took place Monday in a long morning for the jury, lasting about three hours. After the charge of conspiracy to spoof was dismissed by Judge Gettleman last week, Jitesh Thakkar still faces two charges of aiding and abetting the commission of a crime, for two separate occasions in 2013, February 25 and March 8.

In US v Thakkar, the prosecution’s case, as it reminded the court Monday, depends crucially on several emails that Navinder Sarao exchanged with Thakkar. The first contact between them was a solicitation that Sarao cut and pasted in emails sent to three different vendors, including Thakkar, at the same time. Sarao, who made around $13 million by spoofing electronic futures markets, is awaiting sentencing for two counts of spoofing to which he has admitted.

To read the rest of this commentary, go here.

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The LME’s Ambitious Revamp – Matt Chamberlain, LME
JohnLothianNews.com

London Metal Exchange CEO Matt Chamberlain knows that the more than 150-year-old exchange has not been at the front of the pack when it comes to technology, but he also knows that gives it an opportunity to survey what other market participants have done in their markets. The exchange spent 2018 making some structural and technological tweaks, but the big lift comes as LME rips out its interconnected “spaghetti” of technology and develops its next market data system using HKEX’s Orion platform as a base. (HKEX owns LME.) In this video from JLN’s Industry Leader Series, Chamberlain talks about straddling the line between being a monthly futures market and a daily forwards market all while building out this next iteration of exchange technology.

Watch the video »

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Hits & Takes
JLN Staff

The Association of Futures Markets 22nd Annual Conference is in Chicago on May 9 and 10. Terry Duffy (CME Group), Walt Lukken (FIA), Leo Melamed and Richard Sandor are confirmed as speakers at the event. Let’s make sure the Chicago trading community is well represented at the AFM conference. Sign up today.~JJL

I will be moderating a panel following AFM Chairman Pat Kenny‘s fireside chat with CME Group Executive Chairman and CEO Terry Duffy. Duffy and Kenny are best friends, so their chat should be a lovefest. My panel features Nicholas Kennedy, Head of Commodities, Euronext, France, and Mark Omens, Executive Director, Retail Sales, CME Group, USA. ~JJL

Speaking of Leo Melamed, my mother attended his speech in Sarasota, Florida on Saturday and was very happy she attended. Leo delivered a version of a speech he gave in Washington, DC at the behest of the U.S. State Department in 2017, so it was well developed and he had good practice in front of a large audience in DC.~JJL

STA Women in Finance is giving its inaugural Excellence in Journalism Award to Annie Massa of Bloomberg News for beat reporting on asset management. The presentation will take place on Tuesday, May 21, 2019 at India House (formerly Bayard’s) in downtown New York City.~SR

ISDA Quarterly, the association’s magazine, is out. The cover stories pertain to Asia’s derivatives markets.~SD

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The U.S. v. Jitesh Thakkar: Closing Arguments
Chuck Mackie – Medium

…and as I watched him on the stage, my hands were clenched in fists of rage… – Don McLean

I’ll admit it: I’m biased. I think the case against Jitesh Thakkar is a crock and, what’s worse, it is an uninformed, arrogant and dangerous abuse of government power. So, if you’re looking for a dispassionate recounting of today’s closing arguments from the government and the defense in this case, then what I have to say won’t be of much use to you. If, on the other hand, you’re interested in an informed and full-throated defense of Thakkar and castigation of the U.S. Justice Department, then you’ve come to the right place.
bit.ly/2Z2joQS

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The Spread – A Bumpy Ride
JohnLothianNews.com

Some fines and a speed delay make for a bumpy ride in this episode of The Spread.

Watch the video and see the stories referenced here »

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H&R Block agents took ’empathy training’ to handle people upset by smaller tax refunds or surprise tax bills
Nicole Lyn Pesce – MarketWatch
Some tax return preparers are doubling as therapists this tax season, comforting clients who are dismayed to find that they will get smaller tax refunds — or worse, will get hit with unexpected tax bills.
/on.mktw.net/2G7TNhU

***** Wow!~JJL

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Winklevoss twins can’t sue for defamation because they’re famous
Priscilla DeGregory – FT
Ah, the price of fame! Brothers Tyler and Cameron Winklevoss can’t sue an angry former business partner for defamation because they are “public figures,” an appeals court has determined. The 6-foot-5 identical twins — who gained their fame after suing Mark Zuckerberg, saying he stole their idea to create Facebook when they were all attending Harvard — brought the defamation case against Todd Steinberg, who said they backed out of a $500,000 investment deal for a start-up app called Eaze that delivers pot to customers.
/nyp.st/2D5uICi

***** The key is actual malice. Who can really dislike or have malice towards the Winklevi?~JJL

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Monday’s Top Three
The top read story of the day was The Wall Street Journal’s Gold Badges and Boozy Breakfasts: Inside the Frenetic Fight for IPO Listings. Second was the JLN video interview with OCC’s CEO John Davidson, in Ushering In The OCC’s Renaissance. Third was The Wall Street Journal’s https://on.wsj.com/2UppJXy:Trading Firm Jane Street Challenges Wall Street. An honorable mention should be made to the Open Outcry Traders History Project Announced by John Lothian

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Lead Stories

China Plans to Ban Cryptocurrency Mining in Renewed Clampdown
Edwin Chan – Bloomberg
Powerful state planner says it wants to abolish the industry; China is home to some of the world’s biggest crypto miners
China signaled its intent to ban cryptocurrency mining, dealing a fresh blow to an industry buffeted by tumbling virtual currency prices, stiff competition and waning investor interest.
/bloom.bg/2D3RMBt

*****Here is the Reuters version of this story.~JJL

City of London alarmed at EU’s no-deal Brexit equity trading plan; Watchdogs list 6,200 securities that EU banks and investors must trade in the bloc
Philip Stafford – FT
Fund managers holding European equities are praying that a no-deal Brexit is avoided this week. Europe operates the world’s most integrated cross-border share trading marketplace but the UK’s possible sudden departure from the EU would cleave this network into two: EU and non-EU markets.
/on.ft.com/2UpEBp8

Bank Executives to Tell Congress: Financial System Is Much Safer; Chiefs, facing skeptical House Democrats, cite postcrisis reforms and improved culture
Andrew Ackerman and Lalita Clozel – WSJ
The chief executives of the largest U.S. banks plan to tell Congress this week that the financial system is less risky and more tightly supervised than it was a decade ago thanks to a series of regulatory reforms implemented in the wake of the 2008 financial crisis.
/on.wsj.com/2D84f7c

College Grads Sell Stakes in Themselves to Wall Street; Instead of taking out loans, students can agree to hand over part of their future earnings in return for investment.
Claire Boston – Bloomberg
To pay for college, Amy Wroblewski sold a piece of her future. Every month, for eight-and-a-half years, she must turn over a set percentage of her salary to investors. Today, about a year after graduation, Wroblewski makes $50,000 a year as a higher education recruiter in Winchester, Va. So the cut comes to $279 a month, less than her car payment.
/bloom.bg/2CZnwYn

Inside the Chicago hedge fund turf war between billionaire Ken Griffin and Dmitry Balyasny
Bradley Saacks – Business Insider
The headquarters of Ken Griffin’s Citadel and Dmitry Balyasny’s eponymous hedge fund are separated by one mile, the Chicago River, and plenty of bad blood.
bit.ly/2D7u8Us

Swaps data: cleared volumes and CCP market share; Data shows CME and Eurex growing faster than LCH Swapclear
Amir Khwaja – Risk.net
All in all, it’s been a topsy-turvy first quarter of 2019. The US Federal Reserve first paused and then ultimately halted its rate rises. Meanwhile, after a series of bruising votes, the chances of an orderly Brexit hang by a thread.
Those machinations have pulled global swap volumes in opposing directions. Cleared US dollar swap volumes are down 14% on a year ago, while euro swaps volumes are 35% higher.
Looking at the market share of clearing houses, a different theme emerges. While LCH continues to dominate both US dollar and euro interest rate swap clearing, its rivals are gaining ground.
bit.ly/2UpXXdM

SEC Backs Nontransparent Exchange-Traded Fund; Precidian Funds ETF application will be approved unless commission orders a hearing
Asjylyn Loder – WSJ
Wall Street’s top regulator has paved the way for a new kind of exchange-traded fund that won’t immediately disclose its investments to the public.
/on.wsj.com/2UtHANr

Wells Fargo, Stuck in ‘Wait-and-See Mode,’ Struggles to Boost Its Businesses; Scandals tainted bank’s image; underneath, its businesses are also struggling
Rachel Louise Ensign – WSJ
Wells Fargo WFC 0.21% & Co.’s reputation has languished over the past 2½ years. Its key businesses aren’t doing much better.
/on.wsj.com/2D4Pzp7

UBS Fired Senior Investment Banker for Allegedly Not Informing Superiors About Buyout-Loan Details; Episode shows how government crackdown on leveraged lending continues to roil banks
Dana Cimilluca and Miriam Gottfried – WSJ
UBS Group AG fired a senior investment banker because he allegedly failed to apprise his managers of details of a leveraged-buyout loan, highlighting the pressure Wall Street firms are under to keep a lid on risk in the lucrative business.
/on.wsj.com/2D3STRF

Dirty Money Reports Surge in Denmark as Danske Case Causes Alarm
Frances Schwartzkopff – Bloomberg
Danish companies reported 44 percent more suspicious financial transactions last year, as the Danske Bank A/S scandal puts the banking industry on high alert.
/bloom.bg/2D3mRFi

Deutsche Bank Last in JPMorgan’s Investment Bank ‘Pecking Order’
Steven Arons and Jan-Patrick Barnert – Bloomberg
Deutsche Bank AG was ranked last among major European and U.S. investment banks in the first quarter, according to JPMorgan Chase & Co.
/bloom.bg/2D2PHWe

Explainer: For Fed’s trillions in bonds, size isn’t all that matters
Trevor Hunnicutt, Ann Saphir – Reuters
President Donald Trump last week called on the U.S. Federal Reserve to start building up its war chest of bonds again. He may get his wish – though not for the reason he wants.
/reut.rs/2UI77l9

Money Markets Brace to See If Fed Will Play Repo Whack-a-Mole
Alex Harris – Bloomberg
Repurchase agreement rates have been spiking at month-end; Central bank has hinted that it’s considering a new tool
The Federal Reserve could be preparing to explain within days how — or even if — it will add a new mechanism to help keep a closer rein on how the central bank actually implements monetary policy.
/bloom.bg/2D3s1Ba

Exchanges, OTC and Clearing

In perspective (part II): The rise of the buy side
Eurex
In the first part of this article we talked about the fundamental changes in our industry and the challenges and opportunities that these bring. One interesting and important fact is the rise of the buy side. Over the last couple of years, the buy side has started to undertake certain activities themselves, activities which they had previously relied on traditional commercial banks to undertake. Together with the trend to passive investments, this strengthens the role of the buy side in the financial markets.
bit.ly/2D3UPtp

The World Federation Of Exchanges Welcomes FATF Recommendations To Identify Users Of Virtual Assets
Mondovisione
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to Financial Action Task Force (FATF) recommendations on mitigating risks associated with virtual asset service providers (VASPs).
bit.ly/2D5kK3Y

SET Grants Two Social Development Awards To Support Rural Development
Mondovisione
The Stock Exchange of Thailand (SET) jointly with Population and Community Development Association (PDA), has recently announced the annual SET social development award in rural development category to community groups with outstanding works in renewable energy promotion and sustainable water management to enhance well-being of people in communities.
bit.ly/2D3pk2w

Nasdaq March 2019 Volumes, 1Q19 Estimated Revenue Capture and Listings Statistics
GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for March 2019, as well as quarterly volumes, number of listings and estimated revenue capture for the quarter ending March 31, 2019 on its investor relations website.
bit.ly/2D7puWw

HKEX Signs MOU with Hebei Provincial Government
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) and the People’s Government of Hebei Province today (Tuesday) signed a Memorandum of Understanding (MOU) in Hong Kong to strengthen mutual communication and capital market cooperation, as well as to seek more Hebei-based companies to list in Hong Kong and support the real economy of Hebei province.
bit.ly/2D4n3UK

BlackRock-backed iCapital is teaming up with Nasdaq to create a private equity fund selling platform for wealthy investors
Meghan Morris – Business Insider
As wealthy individuals get into private equity and other illiquid investments in greater numbers than ever, they’re increasingly looking for ways to get out, too.
bit.ly/2Dgntrp

Fintech

Barclays plugs $6m into London financial tech startup Simudyne
Emily Nicolle – City A.M.
Financial simulation technology firm Simudyne will today announce the close of a $6m (£4.6m) series A funding round, led by Barclays.
bit.ly/2UmrEMA

Torstone Acquires Percentile To Bolster Risk And Compliance Offering
Mondovisione
Torstone Technology, a leading provider of post-trade securities and derivatives processing technology, has announced that it has signed a definitive agreement to acquire Percentile, a provider of real-time, cloud-based risk and compliance technology to global financial markets.
bit.ly/2D6vTRN

Travelex parent plans $200m London initial public offering; Finablr looks to tap strong investor demand for financial technology flotations
Simeon Kerr – FT
Finablr, a United Arab Emirates-based payments and exchange business, said it was planning an initial public offering on the London Stock Exchange to raise more than $200m via new shares.
/on.ft.com/2D6sUZB

The World’s Biggest Corporate Borrowers Are Dominated by Tech; Some of the most valuable companies are also the ones with the most debt.
Molly Smith – Bloomberg
The cheap-money era that followed the 2008 credit crisis has lured many companies into the debt market. Here’s a list of the 10 biggest nonfinancial corporate borrowers, based on Bloomberg data and recent financial reports.
/bloom.bg/2D3V9rO

Apiax opens in London; hires RegTech expert from FCA
Finextra
Apiax has hired a former FCA expert on regulatory technology and is opening a new office in London.
bit.ly/2D3foGk

Cryptocurrencies

World-Class Cryptographers Join Forces with Fusion to Build Superior Blockchain Interoperability and Distributed Custodial Solution
GlobeNewswire
Fusion Foundation, a non-profit organization on a mission to build the next generation financial infrastructure, announced that it has engaged in a joint initiative with highly esteemed cryptologists Rosario Gennaro, Professor of Computer Science at CUNY, Steven Goldfeder, Ph.D., Postdoctoral Researcher in the Department of Computer Science at Cornell University, Louis Goubin, Professor of Computer Science at University of Versailles and Pascal Paillier, Ph.D., CEO and Senior Security Expert at CryptoExperts to accelerate the implementation of Fusion’s highly anticipated interoperability and distributed custody solution, Distributed Control Rights Management (DCRM).
bit.ly/2UlZUYC

QuadrigaCX Officially Enters Bankruptcy With Millions Still Missing
Nikhilesh De – Coindesk
Canadian crypto exchange QuadrigaCX should transition into bankruptcy in the coming days, a judge ruled Monday. The ruling by Nova Source Supreme Court Judge Michael Wood means that QuadrigaCX, which has been operating under the Companies’ Creditors Arrangement Act (CCAA) since the end of January, will file for bankruptcy by next week, entering what is likely to be the final chapter in the exchange’s history.
bit.ly/2WX5RIu

Crypto Exchange Quadriga Gets Court Approval to Shift to Bankruptcy
Doug Alexander – Bloomberg
Judge freezes assets held by late founder’s estate, widow; Law firm’s withdrawal request also granted by Canadian court
Cryptocurrency exchange owner Quadriga Fintech Solutions Corp. is moving into bankruptcy proceedings.
/bloom.bg/2D4k8eF

Facebook Said to Be Seeking $1 Billion in Funding for Crypto Project
Yogita Khatri – Coindesk
Social media giant Facebook is said to be seeking to raise as much as a billion dollars in outside funding for its cryptocurrency project.
bit.ly/2D2gBO0

Blockchain for Brexit: a wonderfully terrible idea
Jemima Kelly – FT
We’ve been here before. Blockchain, the antidote to all the world’s greatest ills, is once again being trotted out as a solution to Brexit.
/on.ft.com/2D5hIwC

CME Bitcoin Futures Volume Hits Record High as Prices Rebound
Eric Lam – Bloomberg
The sudden resurgence in Bitcoin prices this month is also providing a boost for the futures market, with CME Group Inc. contract trading volumes for the largest cryptocurrency hitting a record high.
/bloom.bg/2D0s9kH

Bitcoin hits massive milestone with its 400,000,000th transaction … and it didn’t need permission from nobody
David Canellis – TheNextWeb.com
Bitcoin $BTC?0.44% has reached a milestone! The blockchain powering the world’s most popular cryptocurrency officially processed its 400,000,000th transaction overnight.
bit.ly/2D8xOFz

Hold-It-Yourself Crypto Exchange LGO to Roll Out Hardware Wallet in Q2
Anna Baydakova – Coindesk
LGO Markets, a new bitcoin exchange for institutional traders, has revealed more details about its unorthodox approach to custody, including a forthcoming optional hardware wallet.
bit.ly/2D4VGd3

Politics

Trump vows to put tariffs on $11 billion of EU products
Reuters
U.S. President Donald Trump on Tuesday said the United States would impose tariffs on $11 billion of products from the European Union, a day after the U.S. Trade Representative proposed a list of targeted products as retaliation for European aircraft subsidies.
/reut.rs/2D3XkMj

Dimon and Dalio capture the spirit of capitalist reform; The ultra-wealthy need to do more than simply warn about inequality
The editorial board – FT
Last week two of America’s richest men — Bridgewater’s Ray Dalio and JPMorgan’s Jamie Dimon — expressed passionate concern about the sustainability of the capitalist system from which they have so roundly benefited. Mr Dimon, the most outspoken of Wall Street’s bank bosses, used a 50-page letter to shareholders to analyse the shortcomings of unbridled capitalism, proposing a catalogue of remedies and praising Europe’s tradition of social democracy, with all the “strong safety nets” that go with it.
/on.ft.com/2D5PIZo

Wall Street Has a Plan for Angry Lawmakers: Let Jamie Dimon Take Over
Robert Schmidt and Austin Weinstein – Bloomberg
Bank CEOs to face tough questions at Wednesday House hearing; JPMorgan boss considered a seasoned hand in dealing with D.C.
There’s a joke going around Washington about the best strategy for the Wall Street CEOs when they face off with lawmakers this week: stay calm and let Jamie Dimon take over. Unlike the rest of the bank leaders testifying before the House Financial Services Committee, the JPMorgan Chase & Co. boss has been in the congressional hot seat many times before. And rival executives point out, he has a tendency to dominate the conversation anyway.
/bloom.bg/2D29ncQ

Regulation

SEC Chief Raises Concerns About Risky Lending
Gabriel T. Rubin – WSJ
A top markets regulator said he was concerned about the growth of loans by banks to highly indebted companies, joining other policy makers who have highlighted risks that leveraged loans could pose to financial markets.
/on.wsj.com/2UpXzfk

ESMA Updates On The Impact On Its Databases And It Systems Of A No-Deal Brexit Scenario On 12 April 2019
Mondovisione
In accordance with the previous statement from 28 March 2019, the below dates of the operations of ESMA data systems detailed in its statement from 19 March 2019 are amended as follows:
bit.ly/2UtKotX

Exclusive: Standard Chartered expected to pay just over $1 billion to resolve U.S., U.K. probes
Reuters
London-based Standard Chartered is expected to pay slightly more than $1 billion to resolve a nearly five-year-old investigation of potential U.S. sanctions violations tied to its banking for Iran-controlled entities in Dubai, as well as a related U.K. probe, according to a person familiar with the matter.
/reut.rs/2UoeUVH

U.S. Fed proposes new regulatory regime for foreign banks
Pete Schroeder – Reuters
The U.S. Federal Reserve on Monday proposed a new regulatory regime for 23 foreign banks operating in the U.S. that could make life easier for some lenders, while tightening up rules for more risky foreign firms.
/reut.rs/2UoUuMr

Shareholder advisers urge investor protest over Credit Suisse pay
Reuters
Two shareholder advisers have recommended Credit Suisse shareholders vote against the Swiss bank’s compensation report and a third backed the report while expressing reservations about whether management pay matched performance.
/reut.rs/2UmenDU

Isda’s CDS fix draws murmurs of dissent; Proposed changes don’t go far enough for some; others say it will block legitimate activity
Questions
Helen Bartholomew – Risk.net
An industry-led effort to clamp down on manufactured credit defaults is running into criticism.
bit.ly/2D7rez2

London-based brokerage ordered to pay fine after losing challenge; Linear Investments faces FCA penalty over failings in market abuse controls
Cat Rutter Pooley – FT
A prime broker that had sloppy controls against market abuse will have to pay a fine of almost a third of its net profits after it lost a legal challenge against the UK’s financial watchdog.
/on.ft.com/2D5R2LQ

Linear Investments Ltd v The Financial Conduct Authority: [2019] UKUT 0115 (TCC)
Gov.UK
Upper Tribunal Tax and Chancery decision of Judge Bartlett and Member Fraenkel and Member Woodman on 9 April 2019.
bit.ly/2D7eQ23

New SEC Campaign Educates Investors on Where and How to Get Answers
SEC
The Securities and Exchange Commission today unveiled a public service campaign to empower Main Street investors to take control of their financial future. The public service announcement (PSA) encourages investors to use the free tools and unbiased information available on the SEC’s online resource for investor education-Investor.gov-to get answers to their questions about investing.
bit.ly/2D2RHxI

Proposed Rule Change to Adopt Remaining Legacy NASD and Incorporated NYSE Rules as FINRA Rules
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to adopt the following NASD Rules as FINRA Rules in the consolidated FINRA rulebook without any substantive changes
bit.ly/2D6lzcF

ASIC welcomes FRC report on audit enforcement
ASIC
ASIC has welcomed the release of the report by Australia’s Financial Reporting Council (FRC) Auditor Disciplinary Processes: Review and the Federal Government’s response to that report.
bit.ly/2D5iN7E

ASIC enforcement update July to December 2018
ASIC
ASIC has today released its enforcement update report for the period 1 July 2018 to 30 December 2018.
bit.ly/2D3Wjnt

ESMA updates Q&A on MiFIR data reporting
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on data reporting under the Market in Financial Instruments Regulation (MiFIR).
bit.ly/2D5QENo

The Joint Committee of the ESAs publishes its 2018 Annual Report
ESMA
The Joint Committee of the European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – published today its 2018 Annual Report providing a detailed account of all the joint work achieved in the past year.
bit.ly/2D4o8fg

Standard Chartered set to pay $1bn to settle Iran sanctions probe; Bank looks to draw line under a five-year long investigation
Kadhim Shubber, David Crow and Caroline Binham – FT
Standard Chartered is preparing a $1bn settlement over allegations that it breached sanctions against Iran, according to people briefed on the bank’s negotiations with US authorities.
/on.ft.com/2D5tpDo

Stockbroker Degiro faces investor complaints of missing funds
Zayani Bhatt – Investorschronicle.co.uk
Low-cost broker Degiro has admitted that upgrading its anti-money-laundering (AML) and anti-terrorist-funding (ATF) processes is to blame for the disappearance of funds from several customers’ accounts.
bit.ly/2D7m2Lw

Investing and Trading

There Is a New Champ in Town
Aaron Back – WSJ
The stock market has a new group of superstars, but do they have staying power?
A recent Morgan Stanley analyst note crowned a new group of investor favorites to replace the legendary FAANG team of Facebook, Amazon.com, Apple, Netflix and Alphabet, parent of Google. The new champs are payment giants Mastercard, Visa and PayPal Holdings, which Morgan Stanley dubs the MVPs.
/on.wsj.com/2UqBm0w

Frackers, Chasing Fast Oil Output, Are on a Treadmill; With more oil wells front-loaded to boost output, many companies will have to drill again soon—and find new capital to keep production up
Rebecca Elliott – WSJ
Shale companies from Texas to North Dakota have been managing their wells to maximize short-term oil production. That has long-term consequences for the future of the American energy boom.
/on.wsj.com/2D52uYp

Goldman Says for a Peek Into Oil’s Future, Go Back to 1990s
Serene Cheong – Bloomberg
Bank sees further backwardation, raises 2Q Brent oil forecast; Prospect of production rebound to weigh on long-dated futures
The future of the oil market may resemble the past — specifically the 1990s — according to Goldman Sachs Group Inc. That’s when prices remained steadily in backwardation, a market structure where near-term futures are costlier than later contracts — reflecting tight supplies in the present and ample barrels further out, analysts including Damien Courvalin wrote in a April 8 report.
/bloom.bg/2D3UBSM

The Best Argument for the Gold Standard; There’s no reason to believe central bankers will be as responsible in the next 40 years as they’ve been in the past 40.
Tyler Cowen – Bloomberg
With President Donald Trump’s apparent plans to nominate Stephen Moore and Herman Cain to the Federal Reserve Board, attention has turned once again to the gold standard, a policy option once advocated by both men. Trump himself has expressed admiration for the gold standard.
/bloom.bg/2D5zShE

Institutions

Merrill Makes a Play for Younger, Less Affluent Clients
Rachel Louise Ensign – WSJ
Merrill Lynch financial advisers are about to get some help wooing younger customers.
Bank of America Corp. is putting hundreds of staffers who specialize in selling digital investing products geared toward younger, less affluent investors in its Merrill Lynch Wealth Management offices in major U.S. cities.
/on.wsj.com/2Uq02X8

TD Ameritrade Expands Lineup of Securities in 24-Hour Trading Program to 24 ETFs
BusinessWire
TD Ameritrade today announced an expansion of 10 additional securities available in its 24/5 trading offering, now totaling 24 products, to allow clients broader exposure to markets during the overnight trading session. The additions come one year after TD Ameritrade became the first U.S. retail broker dealer to allow investors access to trade select securities 24 hours a day, 5 days a week.
bit.ly/2UstEmz

U.S. Fed proposes new regulatory regime for foreign banks
Pete Schroeder – Reuters
The U.S. Federal Reserve on Monday proposed a new regulatory regime for 23 foreign banks operating in the U.S. that could make life easier for some lenders, while tightening up rules for more risky foreign firms.
/reut.rs/2UFFdq0

Nomura chief risk officer, senior traders exit
Star Online
Nomura Holdings Inc.’s Chief Risk Officer Lewis O’Donald and senior salespeople and traders in New York, Europe and Asia are among those leaving as Japan’s largest brokerage retrenches from several markets including US credit, according to people familiar with the matter.
bit.ly/2D6mKZD

Bank of America Aims to Raise Minimum Wage to $20 an Hour by 2021; Bank is increasing minimum wage to $17 in May
Allison Prang – WSJ
Bank of America Corp. BAC 0.31% said it is raising the minimum wage so it hits $20 an hour in 2021. Part of the changes will go into effect May 1, when the bank increases its minimum wage to $17 an hour, it said Tuesday.
/on.wsj.com/2D8sVMJ

Hargreaves and Share Centre to buy £1.5bn of JPMorgan assets; Sale is part of asset management arm’s plans to focus on selling its own funds
Kate Beioley – FT
Hargreaves Lansdown and the Share Centre have agreed to acquire £1.5bn in assets and take on 53,000 clients from JPMorgan Asset Management as the asset manager winds down its direct-to-consumer role to focus on fund management.
/on.ft.com/2D5bSeF

MUFG plans fintech push to unlock sleeping assets; Japan’s biggest bank eyes digitisation to translate data trove into proactive sales
Leo Lewis in Tokyo – FT
Mitsubishi UFJ Financial Group is planning a fresh wave of investment in artificial intelligence and fintech as Japan’s biggest bank seeks alternatives to the “horrendously large number” of people required to extract profits from its customers.
/on.ft.com/2D3VHhm

SocGen cuts 1,600 jobs as investment bank overhauled; Investment bank workforce to be reduced by 8% as company pursues cost savings
Stephen Morris – FT
Société Générale has announced 1,600 job cuts as part of a plan to eliminate EUR500m in costs after missing its financial targets due to poor performance in its trading unit.
/on.ft.com/2D3SxdN

**** See the Bloomberg story too

How Wells Fargo’s regulators and employees drove out its CEO
Imani Moise, Pete Schroeder – Reuters
The day after former Wells Fargo & Co Chief Executive Tim Sloan told U.S. lawmakers he was transforming the bank’s high-pressure culture, Federal Reserve officials met privately with bank employees.
/reut.rs/2Dgo5xd

Regions

Swiss, Brazil intensify efforts to unravel Petrobras affair
Brenna Hughes Neghaiwi – Reuters
Crimefighters in Switzerland and Brazil pledged to intensify cooperation to resolve the sprawling corruption case linked to state oil firm Petrobras in which around 700 million Swiss francs ($701 million) remain frozen in Switzerland.
/reut.rs/2D7jyga

Hacker-for-Hire Accused of Aiding Saudis Is Worrying Wall Street
Davide Scigliuzzo – Bloomberg
Lenders demand premium to fund management buyout of NSO Group; Israeli firm’s software allegedly used to target dissidents
It helped Mexico track down El Chapo, but it’s also been accused of assisting Saudi Arabia spy on dissidents. Now NSO Group, hackers-for-hire likened to a private intelligence service, has become a strain for two Wall Street banks that helped fund a buyout of the Israel-based company last month.
/bloom.bg/2D5aJnn

Aramco gets whopping $100 billion demand for landmark bond
Davide Barbuscia, Rania El Gamal, Hadeel Al Sayegh – Reuters
Orders for Saudi Aramco’s debut international bonds topped $100 billion on Tuesday, a record breaking vote of market confidence for the oil giant despite some investor concerns about government influence over the company.
/reut.rs/2D3t6ZK

Brexit

Why global investors are steering clear of Brexit-battered stocks; Big ‘macro’ funds mostly see better, clearer opportunities outside the UK
Laurence Fletcher, Nikou Asgari and Robin Wigglesworth – FT
On the face of it, UK equity prices hammered down by concerns over Brexit present a real bargain for overseas investors. But so far, few of them are piling in.
/on.ft.com/2D2QpTo

Britain must say how it wants to use Brexit extension – EU presidency
Reuters
It is critical that Britain explains to European Union leaders on Wednesday how it intends to use the extension of the Brexit deadline it wants to apply for, the Romanian minister for European Affairs George Ciamba said on Tuesday.
/reut.rs/2D6mp9h

Energy traders urge single UK power price under no-deal Brexit
Reuters
The European Federation of Energy Traders (EFET) has urged power exchanges Nord Pool and EPEX SPOT to keep a single British day-ahead power price if there is a no-deal Brexit.
/reut.rs/2D2UPcW

Miscellaneous

Inside Texas’s Exclusive, Bizarre Enclave of Family Offices
Leanna Orr – Institutional Investor
The armed guards know who doesn’t belong. Take a few steps past the open gates of Dallas’s Old Parkland — a former hospital complex that’s now an exclusive investor enclave — and security will be on you, all southern charm and sidearms.
Walking is a dead giveaway, for one. Texans do not walk outside. Black SUVs with tinted windows and Teslas are the favored modes of transport in and out of Old Parkland. Even the underground garages have become legendary. “There are incredible sculptures in the parking lot,” says one consultant who visits frequently. If you can’t gaze at a masterpiece while your Tesla parks itself, are you even living?
bit.ly/2KjA2bm

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