Nasdaq Futures Exchange confirms CEO departure

Nov 1, 2018

First Read

Hits & Takes
JLN Staff

Welcome to Movember. Time to stop shaving in the name of men’s health.~JJL

CME Group in October raised more than $37,000 from their employees and broader community for their Fourth Annual Pink for a Purpose campaign. Their donations have raised more than $37,000 to fund the early prevention and detection of breast and ovarian cancer. When you combine that amount with their corporate gift, more than $137,000 will be directed to @bebrightpink and over $15,000 will go to @CR_UK.~JJL

The 2019 Options Industry Conference registration is now open! You can network with over 400 options industry leaders. JLN will be there again with our video team.~JJL

The vision I had when asked to reinvent the LaSalle Street Dinner took steps forward this year. My grand plan of making Chicago the STEM capital of the world is still just a dream. However, in 2018 we launched Building Tech, Medical Tech and Civic Tech to join Trading Tech. The community interested in building STEM in Chicago through Scouting grew larger. Come to the 2018 LaSalle Street Trading Tech Awards on November 15 and learn more and help us grow even more.~JJL

If you are a proprietary or principal trader, FOW would like you to take part in the “Prop Traders’ 2018 survey.” The winners will be unveiled at the FOW International Awards Dinner in December.~JJL

My wife dressed up as a witch for Halloween to give out candy to the children of the neighborhood who came by in costume. She was of course a good witch.~JJL

Sylvie Bouriaux, 59, died on October 8, 2018. She was born in Dijon, France. After obtaining her Ph.D. in economics from the University of Paris, Sylvie continued her studies at Brown University in 1982 and at the University of Chicago in 1987. She worked at the Chicago Board of Trade as an economist for ten years in the 1990s, serving for several years as the manager of the exchange’s Financial Research and Product Development Group. CBOT members and clients valued Sylvie’s efforts to modernize the CBOT’s U.S. Treasury futures and options complex, build the fed funds and municipal bond futures markets, and develop international interest rate products. Sylvie also pioneered national and regional property insurance derivatives at the CBOT, a lasting contribution to the American insurance industry. After working for the CBOT, Sylvie joined the finance and insurance department at Illinois State University in Bloomington, where she served as a tenured Associate Professor of Finance at the time of her death. Sylvie lectured on, among other things, the role of derivatives in financial markets. Sylvie’s obituary is posted here.~JJL


Guess Who’s Back (Office)? Reimagining the Trade Life Cycle

In this compilation video from FIA Expo, Minium CEO Patrick Tessier, Fidessa Chief Operating Officer and Global Head of Derivatives Justin Llewellyn-Jones, and Eventus Systems CEO Travis Schwab talk about automating the trading life cycle and what streamlining that workflow means for the future.

Watch the video and read the rest »


Nasdaq Wants Crypto Market to Stamp Out Fraud—With Its Help
Julie Verhage – Bloomberg
Exchange operator licenses market surveillance technology; At least one crypto market, Gemini, already uses that system
The cryptocurrency industry is plagued by scandal. Stock exchange operator Nasdaq Inc. says it can solve the problem.

***** Too many moles, not enough hammers to whack them all.~JJL


Investor Alert: Celebrity Endorsements
The SEC’s Office of Investor Education and Advocacy (OIEA) is warning investors not to make investment decisions based solely on celebrity endorsements.

****** Does Bernie Madoff count as a celebrity?~JJL


Getting hairy could save millions of men
Ryan Prior, CNN
As the fall chill sets in, you may see some men sporting scruffy faces. It could be laziness, it could be a fashion statement, or maybe it’s a way for men to look out for each other.

***** Welcome to Movember. It is time to get hairy.~JJL


Bitcoin mining could cancel out climate change efforts, scientists say
CBC News
Demand for bitcoin could single-handedly derail efforts to limit global warming because the increasingly popular digital currency takes huge amounts of energy to produce, scientists said on Monday.
Producing bitcoin at a pace with growing demand could by 2033 defeat the aim of limiting global warming to 2 C, according to U.S. research published in the journal Nature Climate Change.

***** If you were hot or cold on Bitcoin, there might be another reason.~JJL


Wednesday’s Top Three
Our top read story of the day yesterday was The Wall Street Journal’s piece on spoofing and other alleged misdeeds in Market Cheats Getting Caught in Record Numbers. And then we have the Leo and Pat show, now extended into their fourth straight day in the top three. Second again went to the Sun-Times article Judge risks 81-year-old Pat Arbor dying in jail, ex-CBOT chief’s lawyer says. Third was the Chicago Tribune’s piece on Melamed’s real estate moves Former Chicago Mercantile Exchange chairman sells contemporary Glencoe mansion, buys Gold Coast condo


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Lead Stories

Nasdaq Futures Exchange confirms CEO departure; Rick Beaman was appointed CEO of Nasdaq Futures Exchange in 2016, although is leaving to pursue an opportunity with a startup.
Hayley McDowell – The Trade
The chief executive of US-based Nasdaq Futures Exchange is due to step down from his role and leave the company, a spokesperson has confirmed to The TRADE.

ICE outlines RFQ expansion; President at ICE, Benjamin Jackson, says that following the acquisitions of BondPoint and TMC Bonds, ICE will expand its RFQ services.
Hayley McDowell – The Trade
Intercontinental Exchange (ICE) has outlined plans to integrate more RFQ functionality onto its all-to-all execution platform, as the trading venue continues its drive in fixed income.

EEX Group launches EEX Asia; Redefining Asian commodities business to better serve the needs of its clients
EEX Group has announced that it will redefine its business in Asia through a reorganisation of the services offered by its wholly owned subsidiary CLTX. As of today, the business will operate under two separate brands: EEX Asia and Cleartech. The strategic repositioning will allow the business to better serve the needs of its clients by using both sets of services through greater focus and specialisation on each business area.

Brexit financial services deal talk moves pound higher; British and EU officials sceptical over finalising an equivalence regime this month
George Parker in London and Alex Barker in Brussels – FT
The pound rose sharply on Thursday on reports that Britain and the EU have reached an agreement on trade in financial services after Brexit, although the suggestion that a deal has been finalised was downplayed in London and Brussels.

The Man Who Bet It All on Bitcoin, and Still Believes; Moving Upstream takes a journey with a man who bet all he owned on a decentralized cryptocurrency future
Thomas Di Fonzo and Hilke Schellmann – WSJ
In 2017, bitcoin seemed almost unstoppable as investors and consumers poured money into the cryptocurrency. For one Dutch businessman and father of three, it was the year to make a radical change. Didi Taihuttu sold almost everything he owned, including his business, house and car, and put all that money into bitcoin. He bet everything he had, and everything his family had, on a decentralized cryptocurrency future.

Coinbase to Bring in $1.3 Billion in Revenue Despite Crypto’s Massive Slump
Julie Verhage – Bloomberg
In the last year, the cumulative value of all major cryptocurrencies has tumbled by more than 70 percent. But that doesn’t mean no one’s making money in crypto anymore.

World’s Biggest Derivatives Exchange Is Getting a Boost From Trade War
Isis Almeida – BloombergQuint
Trading in CME agriculture complex jumped most in three years; ‘When there’s risk, people hedge,’ CME’s Andriesen says
First it was a drought in Russia, the biggest wheat exporter. Then dry spells struck European and Australian crops. And to spice up the mix, Donald Trump started a trade war with top soybean and pork buyer China.

Hong Kong Reveals Crypto Rules in Push to Tame Wild Market
Benjamin Robertson – Bloomberg
Crypto fund managers need to apply for regulatory license; New rules open potential route to the licensing of exchanges
Hong Kong’s securities watchdog unveiled new rules for cryptocurrency funds and said it may regulate digital-asset exchanges, joining a global push to improve supervision of an industry whose rapid expansion has attracted everyone from mom-and-pop investors to Wall Street banks.

City of London breathes sigh of relief on Brexit deal to secure financial crown
Will Martin – Business Insider
UK and EU negotiators have secured a deal on the future relationship for financial services firms operating in the two jurisdictions after Brexit, The Times newspaper reported on Thursday.

U.K., EU Officials Push Back Against Brexit Bank Deal Report
Tim Ross and Ian Wishart – Bloomberg
Times reported preliminary agreement based on equivalence; U.K. and EU officials play down report, pound pares gains
British and European officials are playing down reports that a Brexit deal has been reached for banks that would provide access to the single market after the U.K. leaves the bloc. The pound pared gains.

U.S. Falls to Eighth in World’s Best Places to Do Business
Josh Zumbrun – WSJ
The U.S. fell two spots, dropping to eighth place, in the World Bank’s annual ranking of the world’s economies for their ease of doing business, as the American business environment was eclipsed by Norway and the Caucasus nation of Georgia.

Startling new research finds large buildup of heat in the oceans, suggesting a faster rate of global warming
Chris Mooney and Brady Dennis – The Washington Post
The world’s oceans have been soaking up far more excess heat in recent decades than scientists realized, suggesting that Earth could be set to warm even faster than predicted in the years ahead, according to new research published Wednesday.

GE warns financial services arm could need more support; CFO says more than $3bn may be required for group’s former growth engine
Ed Crooks in New York – FT
General Electric has warned that it might have to put more capital into its financial services division than it had previously suggested, reminding investors that what was once a growth engine for the company has become a drag on its performance.

An Englishman’s Home Is His (Expensive) Castle; U.K. real estate has the BOE in a bind ahead of Brexit. Brazil and Mexico are in a tug of war for international investors.
John Authers – Bloomberg
The U.K.’s attempt to extricate itself from the European Union is turning into a slapstick national embarrassment. Those efforts add an extra layer of complexity to an economic problem that is otherwise startlingly similar to that of the U.S. The unemployment rate has improved to a point where it looks historically good.

The Stock Market Bandwagon Is Filling Up Quickly; After a nasty sell-off, equity strategists are feeling strangely enthusiastic.
Robert Burgess – Bloomberg
The U.S. stock market as measured by the MSCI USA Index just posted its best two-day performance since February, rising 1.58 percent Tuesday and 1.13 percent Wednesday. What’s notable is that the gains, in the wake of a nasty sell-off that left equities on the cusp of a correction, aren’t coming with the usual caution from prominent Wall Street strategists about “dead cat bounces.” Instead, they are expressing a remarkable sense of enthusiasm.

Credit Suisse Trading Unit Disappoints in Setback for CEO Thiam
Jan-Henrik Foerster – Bloomberg
Swiss bank posts lower-than-expected revenue and net income; Bank is abandoning global markets revenue target after loss
Credit Suisse Group AG’s turnaround is entering its final phase, but there’s one headache that Chief Executive Officer Tidjane Thiam can’t seem to shake off: the Global Markets unit.

Lessons since Lehman about corporate culture; The financial sector must develop positive working environments from within
Michelle Scrimgeour – FT
September marked 10 years since the collapse of the Lehman Brothers investment bank. It is an apt point to consider what has changed in that time.

Exchanges, OTC and Clearing

NYSE-owner ICE beats estimates on strength in data services
Intercontinental Exchange Inc (ICE.N), the owner of the New York Stock Exchange, reported a better-than-expected quarterly profit on Wednesday, as a rise in its market data services unit eclipsed sluggish growth in its transaction and clearing business.

CME Group Announces Intention to Reconvene the Special Meeting of Shareholders to Thursday, November 29, 2018
CME Group
CME Group Inc. (Nasdaq: CME) today announced that it intends to reconvene the special meeting of its shareholders to be held at 10:00 a.m. Central Time on Thursday, November 29, 2018. The company plans to adjourn the special meeting of its shareholders scheduled for 10:00 a.m. Central Time on Monday, November 5, 2018, without conducting any business, and in order to provide more time to solicit additional proxies to vote in favor of the proposal to amend and restate CME Group’s certificate of incorporation to eliminate some or all of the election rights held by its Class B shareholders.

MiFIR/MiFID II – Trading Participant Due Diligence
With this circular, we would like to inform you that Eurex Deutschland will shortly send out a questionnaire that encompasses the regulatory requirements of Commission Delegated Regulation (EU) 2017/584 of 14 July 2016 (previously known as RTS 7) supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying organizational requirements of trading venues, Article 7 Due Diligence of members of trading venues.

SGX launches Single Stock Daily Leverage Certificates with 5x leverage
Widens investor choice with new DLCs based on individual Singapore and regional stocks; Trading value of DLC product suite has reached over S$3.5 billion since its launch
Come 7 November 2018, SGX will welcome the listing of an initial batch of 10 new Single Stock Daily Leverage Certificates (DLCs), offering 5x leverage on Singapore blue-chip companies and well-known regional stocks.

Trading Overview in October 2018; Japan Exchange Group released Trading Overview in October 2018.
Cash Equity Market – In October 2018, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 3.3329 trillion.
Derivatives Market- In October 2018, total derivatives trading volume was 48,130,993 contracts, an all-time high.

DGCX On Track To Break Annual Volumes Record
The Dubai Gold and Commodities Exchange (DGCX) has traded 18.8 million contracts year-to-date (Y-T-D), up 35% year-on-year (Y-O-Y), and is on track to break its annual volumes record of 19.67 million contracts. Y-T-D Average Daily Volumes (ADV) are at an all time high, reaching 87,253 lots.

Putting The ‘Two-Tiered Market’ Myth To Rest In Washington
Oliver Albers, Senior Vice President and Head of Strategic Partnerships, Nasdaq’s Global Information Services
Last week, representatives of U.S. stock exchanges joined banks, brokers, academics, and lobbyists in Washington D.C. for a two-day discussion on market data at the Securities & Exchange Commission. Nasdaq was represented on five of seven panels, which focused on topics ranging from market governance to the definition of core data.


Fintech: Banks face ‘extinction phase’ amid new financial technology
Kelly Olsen – CNBC
Pedigrees, some stretching back centuries, are of little use to global banks unless they aggressively adapt to new financial technologies.
That’s long been true, but the pace of innovation means financial juggernauts now face what one top executive likened to a mass extinction event.

CloudMargin Appoints Daniel Schwartz Chief Information Officer; Senior Executive Brings More than 20 Years of Financial Products, Technology, Markets Experience to Newly Created Role
CloudMargin, the award-winning creator of the world’s first and only collateral and margin management solution native to the cloud, announced today that Daniel Schwartz, a 20-year veteran of financial products, markets and technology leadership, has joined the firm as Chief Information Officer (CIO). Based in the New York office of the London-based company, Schwartz reports to CEO Steve Husk.

Volante Technologies Releases Designer Version 6.0
Volante Technologies Inc., a global provider of software for accelerated financial message integration and end-to-end payments processing, today announced the release of Volante Designer version 6.0. This major release allows banks and financial institutions to address the increasing industry demand for API, cloud and microservices enablement.

For Fintech Startups, Winning Customer Trust Is All About The Revenue Model
Anne Field – Forbes
An enterprise’s revenue model is, of course, vital to success. But for fintech entrepreneurs, it’s especially crucial. That’s because, as research shows, consumers point to financial companies’ revenue models–say, charging high fees that eat into investor gains or pushing proprietary products–as a top reason for not trusting such enterprises. At the same time, winning customer confidence is particularly important for fintech companies.

Desmarais Scion Says Canada Fintech Lag Could Hurt Banks Abroad
Sandrine Rastello – Bloomberg
Canadian regulations are holding back the country’s financial technology industry and complicating top lenders’ foreign expansion plans, according to the Desmarais family scion in charge of Power Corp. of Canada’s start-up strategy.


Scary, and Boring, Times for Bitcoin’s 10th Birthday
Vildana Hajric – Bloomberg
Biggest coin closes October down for a third straight month; The cryptocurrency’s volatility is near a two-year low
It’s a frightening 10th birthday for Bitcoin. The original cryptocurrency finds itself mired in a steady decline, finishing down for a third consecutive month on the anniversary of its creation. Bitcoin’s value has decreased by about 18 percent since the beginning of August and more than 50 percent since the start of the year. This is happening despite an extended period of low volatility and a decline in speculative investments.

Bitcoin remains a triumph of hope over experience
Tom Buerkle – Reuters
Bitcoin’s short history is a triumph of hope over experience. The digital money is marking its first decade with a punishing slump. Fraud and regulatory zeal have dried up the issuance of rival cryptocurrencies. The underlying blockchain technology has yet to produce its first killer app. It’s a long way from the revolution envisaged by founder Satoshi Nakamoto.

Coinbase’s Head of Trading Resigns After Six Months on Job
Ian Allison – Coindesk
The head of trading at Coinbase, Hunter Merghart, has resigned from the U.S. crypto exchange and wallet provider after just six months on the job, CoinDesk has learned. Merghart made the decision to leave the company last week and is now exploring other opportunities, according to people familiar with the situation. Coinbase declined to comment on the move when reached.
His departure follows that of the executive who hired him, Adam White, who left Coinbase earlier this month to become the chief operating officer of Bakkt, the new institutional crypto trading platform being launched by Intercontinental Exchange (ICE), the parent of the New York Stock Exchange.

Hong Kong watchdog outlines plans to regulate cryptocurrency industry
Alice Woodhouse in Hong Kong – FT
Hong Kong’s securities watchdog has announced plans to regulate cryptocurrency exchanges and funds that invest in digital assets to protect investors.

Bitcoin SolidX ETF awaits SEC approval
Henry Fernandez – Fox Business
VanEck is leading the charge behind the launch of the first bitcoin exchange-traded fund (ETF).

Here’s what could happen if India bans cryptocurrencies
Nupur Anand – Quartz
The Indian government mulling a blanket ban on cryptocurrencies has set off alarm bells in the ecosystem. For such a move could deal a body blow to an industry already struggling under tightening norms.

Cryptocurrencies Are Cooling, Just Ask The World’s Biggest Contract Chipmaker
Ralph Jennings – Forbes
The world’s biggest contract chipmaker recently informed investors that sales were slowing due to “falling demand” for the microprocessors that specialize in blockchain mining. Almost two weeks ago, Taiwan Semiconductor Manufacturing Co. (TSMC) had to lower this year’s sales growth forecast to 6.5% from earlier estimates of between 7% and 9%.

UK FCA To Potentially Ban Sale Of Cryptocurrency Derivatives
Alliance News – Morningstar
The UK financial watchdog has said it could potentially “prohibit” the sale of derivatives based on cryptocurrency to mitigate the risks involved in the cryptoasset market.

Blockchain’s potential will continue to spur public and private investment
Eric C. Jansen – CNBC
The many big companies disrupted by blockchain have now made it a priority to harness this technology. As is typically the case when faced with disruption, large companies are seeking to defend their territory by adopting the very tool that threatens them.

The Alt-Right’s Favorite Social Network Gab’s Plan To Use Blockchain To Make Itself Indestructible
Michael del Castillo – Forbes
There’s no better example of the power, and the terror, inspired by blockchain than, the social network used by the accused Pittsburgh synagogue gunman to threaten Jews.

Bitcoin is probably bad for the planet, but exactly how bad remains to be seen
Rob Verger – Popular Science
Bitcoin needs electricity to exist. The currency requires computers that perform complicated math, which demands massive amounts of electricity. An alarming new—albeit disputed—study forecasts that the future energy use of all that computing power, just from Bitcoin alone, could spur the planet to warm, over the next 11 to 22 years, above the 2-degree-Celsius goal set by international climate scientists.

Early bitcoin investors count winnings on its 10-year anniversary
Reuters via CNBC
Seven years ago, Marshall Hayner gave his grandfather one bitcoin, worth about $30. On the paper wallet he fashioned to commemorate the gift, the U.S. entrepreneur and software developer wrote: “Do not open until $100,000.”


Colin Powell, Madeleine Albright Denounce Trump: U.S. Now a ‘Society Based on Insults, on Lies’
Daniel Moritz-Rabson – Newsweek
Former Secretaries of State Colin Powell and Madeleine Albright denounced President Donald Trump’s immigration policies and the state of domestic affairs on Tuesday, CNN reported.

How Vilification of George Soros Moved From the Fringes to the Mainstream
Kenneth P. Vogel, Scott Shane and Patrick Kingsley – NY Times
Hours after he was informed last week that an explosive device had been delivered to his suburban New York home, George Soros, the billionaire investor and Democratic donor, got on a call with colleagues to discuss yet another threat: the authoritarian Hungarian government’s crackdown on a university he had founded.

Trump Makes the Case for a Democratic Congress; His anti-immigration ploys show the need for checks and balances.
Michael R. Bloomberg – Bloomberg
At a time when the nation is reeling from a horrific attack against a religious group that killed 11 Americans, and from a bomber who targeted people for their politics, President Trump has chosen to inflame rather than heal — for the most cynical of reasons: He hopes to boost the election prospects of Republicans. Politics doesn’t get much more dishonest and depraved than this.

Trump Says Steel Was ‘Dead’ Before His Presidency. It Wasn’t.
Joe Deaux and Toluse Olorunnipa – Bloomberg
Nucor and Steel Dynamics were in good shape before Trump; U.S. steel prices are higher than anywhere else in the world
President Donald Trump claimed on Wednesday that the U.S. steel industry was “dead” before he took office and that his predecessor Barack Obama had “shut it down.”

Democrats are playing ‘defense’ against the GOP’s Wall Street deregulation agenda, Sen. Sherrod Brown says
John Harwood – CNBC
CNBC’s John Harwood on Friday talked with Sen. Sherrod Brown, D-Ohio, who is up for re-election on Nov. 6. Here, they discuss regulating Wall Street.


Day Trader in UBS Insider-Trading Trial Says He Had Many Sources
Franz Wild – Bloomberg
A day trader charged with insider trading shared information with a wide network of wealthy colleagues and financial journalists, not just the former UBS Group AG compliance officer he’s on trial with, his lawyer said.

SEC Issues Statement On Certain Provisions Of Business Conduct Standards For Security-Based Swap Dealers And Major Security-Based Swap Participants
The Securities and Exchange Commission today announced that it has voted to issue a statement setting forth the Commission’s position, for a limited time period, that certain actions with respect to specific provisions of its Business Conduct Standards for Security-Based Swap (SBS) Dealers and Major Security-Based Swap Participants will not provide a basis for a Commission enforcement action. The statement also addresses the Commission’s position on the ability of parties to security-based swaps to rely on written representations previously provided in relation to swaps, also for a limited time period.

SEC Adopts Rules to Modernize Property Disclosures Required for Mining Registrants
The Securities and Exchange Commission today announced that it has voted to adopt amendments to modernize the property disclosure requirements for mining registrants, and related guidance, under the Securities Act of 1933 and the Securities Exchange Act of 1934. The amendments will provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions. The amendments also will more closely align the Commission’s disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards.

MiFID II: ESMA Publishes Data For The Systematic Internaliser Calculations For Equity, Equity-Like Instruments And Bonds
The European Securities and Markets Authority (ESMA) has published today data for the systematic internaliser calculations for equity, equity-like instruments and bonds under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).

CFTC: DSIO Issues No-Action Relief Regarding Futures Commission Merchant’s Deposit Of Customer-Owned Securities As Margin With UK Broker
The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a no-action letter to provide relief to a futures commission merchant (FCM) from certain requirements regarding the holding of customer-owned securities as margin for trading on foreign futures and options markets under CFTC regulations. This letter supersedes CFTC Letter No. 16-88 and was issued due to certain changes in the facts and circumstances represented in letter 16-88 resulting from changes to European laws.

CFTC’s Office Of The Chief Economist Issues Report On Initial Margin Phase 5
The Office of the Chief Economist (OCE) of the Commodity Futures Trading Commission (CFTC) today issued, “Initial Margin Phase 5,” a report about uncleared margin rules, which goes into effect on September 1, 2020.

Statement from CFTC Chairman J. Christopher Giancarlo Regarding FCM’s Deposit of Customer-Owned Securities as Margin with UK Broker Relief
Today’s no-action relief reflects the CFTC’s continuing efforts to accommodate, where appropriate, cross-border derivatives activity in a changing global regulatory landscape.

Remarks of CFTC Commissioner Rostin Behnam at the ASIFMA 2018 Annual Conference: Developing Asia’s Capital Markets, Singapore; FinTech, Friction, and Formula 1: A Learning Journey
Thank you for the kind introduction. It is a pleasure and honor to join you today. I want to thank Mark Austen and the Asia Securities Industry and Financial Markets Association (ASIFMA) for inviting me to both deliver remarks and provide some perspectives on the global regulatory agenda. Before I begin, please allow me to remind you that the views I express today are my own and do not represent the views of the Commodity Futures Trading Commission (CFTC or Commission) or my fellow Commissioners.

Broker-Dealer, Investment Adviser Firm, Agent and Investment Adviser Representative, and Branch Renewals for 2019
The 2019 Renewal Program begins on November 12, 2018, when FINRA makes the Preliminary Statements available to all firms in E-Bill. Preliminary Statements are not mailed to firms.

Realising the benefits of purposeful leadership
Speech by Jonathan Davidson, Director of Supervision – Retail and Authorisations at the FCA, delivered at the CCTA 2018 Conference, Nottingham.

Cryptobourse (clone)
Fraudsters are using the details of firms we authorise to try to convince people that they work for a genuine, authorised firm. Find out more about this ‘clone firm’.

Investing and Trading

Equity and Quant Hedge Funds Hit Hardest by Stock Market Rout
Saijel Kishan and Suzy Waite – Bloomberg
Hedge funds globally lost 4.9% this month, Morgan Stanley says; But macro strategies have emerged as the rare bright spot
October’s stock rout is inflicting the most pain on equity and quant hedge funds.
As the U.S. stock market headed for its worst month in seven years, equity funds have slumped 6.8 percent through Monday, Morgan Stanley’s prime brokerage group said in a report. That brings the year’s losses to 5.9 percent.

LGIM dismayed by MSCI ‘U-turn’ on unequal share-voting
Mark Cobley – Financial News London
Legal & General Investment Management, one of the largest index fund managers in the world, has come out firmly against a decision by MSCI, the large index provider, not to penalise companies that breach the principle of one share, one vote.

Stalwart Hedge Funds Test Their Clout With Clients
Juliet Chung – WSJ
Some of the rare hedge funds earning their keep are about to make it harder on investors.
Israel Englander’s $35.9 billion Millennium Management and Kenneth Griffin’s $31 billion Citadel LLC are rolling out changes that could result in investors facing a longer path to get their money out of a fund or having to pay higher fees.
Millennium has told investors that early next year they will get back any profits from this year. To reinvest that cash with Millennium, clients will need to sign up for a new share class whose terms mean it would take five years to get all their money back—compared with a year now.

Yellen says rising deficit is unsustainable: ‘If I had a magic wand, I would raise taxes’
Fred Imbert – CNBC
“If I had a magic wand, I would raise taxes and cut retirement spending,” Yellen told CNBC’s Steve Liesman at the Charles Schwab Impact conference in Washington, D.C., who characterized the U.S. debt path as “unsustainable.”

Capital-starved mining sector creates ‘buyer’s market’ for investors
Melanie Burton – Reuters
Specialist mining investors have found a “buyer’s market” for projects as the mining sector struggles to compete for funding with new industries, multiple industry executives said at a conference this week.


Nomura Loss Brings Underperforming European Business Into Focus
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Nomura Holdings Inc.’s underperforming European business, which saw wider losses in the fiscal second quarter, may be about to face another reckoning.

Lime Brokerage Announces Equity Market Access Through Goldman Sachs
Lime Brokerage, an agency-only brokerage firm and pioneer of ultra-low-latency trading technology, has teamed up with Goldman Sachs to leverage their Low Latency Direct Market Access Gateway to enhance Lime’s equity market access. This new offering compliments Lime’s extensive suite of multi-asset trading products which are designed for sophisticated automated traders, broker dealers, proprietary trading groups, clearing firms, global custodians, hedge funds, and exchanges.

AIG Surprises With Loss Tied to Costs From Storms in U.S., Japan
Katherine Chiglinsky – Bloomberg
American International Group Inc. reported a surprise third-quarter loss as natural disasters, old and new, hurt results.

Danske CEO Says Bank Is ‘Reconsidering’ How to Deal With Bonuses
Frances Schwartzkopff – Bloomberg
As Danske Bank A/S deals with the fallout of its money laundering scandal, management says it will need to take another look at how to handle bonuses.

New York hedge fund takes 3.1% stake in Deutsche Bank; Shares in German lender climb after hedge fund confirms investment to become fourth-biggest shareholder
Olaf Storbeck in Frankfurt – FT
A US hedge fund has taken a 3.1 per cent stake in Deutsche Bank, in a bet that Germany’s largest lender will finally emerge from years of losses and turmoil.

Janus Henderson suffers big drop in performance fees; Investors redeem $7bn in last two quarters as sentiment toward asset managers sours
Peter Smith – FT
Janus Henderson’s net income tumbled more than a fifth to $111m in the third quarter compared to the second as the London-based asset manager was hit by a sharp turnround in performance fees.

Active Bond Managers Find a Way to Beat the Market; The money managers are doing a better job of protecting their portfolios from rising interest rates
Asjylyn Loder – WSJ
Bargain shopping may not be the best idea when it comes to bond funds. Higher-priced portfolios pieced together by active money managers are handily beating the cheaper index-tracking competition, largely because they are doing a better job protecting their portfolios from rising interest rates.


Exclusive: German firms urged to cut dependence on China
Noah Barkin – Reuters
A new strategy paper from Germany’s influential BDI industry federation calls on firms to reduce their dependence on the Chinese market, according to a draft seen by Reuters, in a sign of rising concern over Beijing’s state-driven economic model.

This Chinese Bond Deal Should Give Investors the Shivers
Jacky Wong – WSJ
How’s this for a Halloween scare? One of the world’s most indebted companies has been tapping the markets for more funding. China Evergrande, the country’s leading property developer, on Wednesday raised $1.8 billion in three separate bond tranches, adding even more to its $100 billion debt pile.

Former Oil Company Director Pleads Guilty in Money-Laundering Probe; Abraham Edgardo Ortega will be sentenced in January after he admitted to taking $5 million in bribes
Samuel Rubenfeld – WSJ
A former executive director of financial planning at Venezuela’s state-owned oil company Petroleos de Venezuela SA, or PdVSA, pleaded guilty Wednesday to his role in a billion-dollar money-laundering scheme, U.S. prosecutors said.

China’s 100,000 Developers Are Bracing for a Giant Shakeout
Bloomberg News
Weaker players turn to asset sales in last-ditch bid for cash; M&A gathering pace as authorities mull ban on home pre-sales
The marketing materials for Ruyi Island, a man-made chunk of land about three miles (five kilometers) northeast of the capital of China’s Hainan province, depict a utopia for the wealthy. An artist’s impression shows families strolling along marina boardwalks strung with fairy lights and villas nestled around palm tree-lined lagoons.

Turkey Doesn’t Have to Be a Disaster for Banks; Investors are worried about the effect on bad loans, but experience in Brazil holds lessons
Paul J. Davies – WSJ
Bank investors seem to be spooked by Turkey, but they may be overreacting.


Brexit: tentative deal on financial services agreed
Pippa Crerar – The Guardian
Theresa May is reported to have struck a “tentative deal” with Brussels that would give the UK’s financial services sector continued access to European markets after Brexit.
The pound jumped after claims that the two sides were close to an agreement that would give UK companies access to European markets as long as British financial regulation remained broadly aligned to that of the EU.

Citigroup to move 63 jobs out of London over Brexit
Citigroup (C.N) said on Wednesday it was planning to move 63 jobs out of London, as it prepares for the possibility of a hard Brexit.

France and Italy dangle juiciest EU tax breaks for Brexit bankers; Incentives part of efforts to lure financial services jobs to continent
Niki Blasina, Monika Pronczuk and Bob Haslett – FT
France and Italy are offering the most generous tax breaks to London bankers moving to the European continent after Brexit, research compiled for the Financial Times shows.

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