Startups Aim to Overhaul Treasury Trading; Ill. lawmakers make case for financial transactions tax

Mar 18, 2019

First Read

The Small Exchange: Building a new ecosystem for the little fish
Jim Kharouf, JLN

It’s about time this industry got smaller.

It’s no secret futures markets have been built largely for the average multinational commercial operation, well capitalized market markers, hedge funds, CTAs and proprietary trading groups. Retail participants, despite the rise of “mini” contracts pioneered by the CME, are generally thought of as perch swimming with sharks, whales and barracudas – bait.

But The Small Exchange is aiming to change that by offering a slate of retail sized futures contracts to retail traders on equity indexes, bonds, FX, energies and metals. Contracts will be priced in dollars and cents and sized so that individual investors can trade them within their portfolios. Trading will be done on The Small Exchange’s self-developed trading and matching engine, designed specifically for this market. A clearinghouse has been identified but not announced yet. The exchange made a little more progress this past week at the FIA Boca conference with the announced connection to CQG and trade surveillance with Eventus Systems.

If all goes according to plan – and it’s currently working with the Commodity Futures Trading Commission – the exchange hopes to launch in Q3 this year.

To read the rest of this story, go here.

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Boca Bits – FIA Boca 2019 Day Three and Recap
Chuck Mackie, JLN via Medium

The final day of FIA Boca is always the “poor relation” when it comes to content and attendance, and that was further exacerbated this year as the golf event was moved from Friday morning to Thursday afternoon, prompting a lighter agenda and smaller crowds for the final conference sessions. Still, the final day covered the extremely topical subjects of politics and cryptocurrency/DLT so there was a lot to talk about.

Overall, FIA Boca was a bit smaller this year and the bitcoin frenzy that permeated 2018 is a thing of the past, but conference attendees voiced confidence and optimism regarding the state of the industry and generally reported that the business climate at FIA Boca was as good as it has been in years.

To read the rest of this report, go here.

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Hits & Takes
JLN Staff

Yesterday afternoon there was a preview showing of Jordan Melamed’s documentary, “FuturesPast” in Glenview, Ill., my childhood hometown. The documentary is a project long in development, that still is not ready for commercial release.

Leo Melamed, Jordan’s father, who is the focus of part of the documentary, said this was three movies merged into one. Part one is about the end of open outcry trading. Part two is about Jordan and Leo’s rather dysfunctional relationship. And part three is about the life story of Jordan as he moves from trader to movie maker.

Jordan captured the end of open outcry well with his one-of-a-kind trading floor footage and trader interviews. He also captured the fury of his relationship with his father.

In comments after the showing of the movie, Jordan said the movie was about the end of shouting, both in open outcry and with his father, with whom he has seemingly reconciled.

Dave Wescott helped underwrite this movie, but it still needs some additional funding to complete the commercializing stage. You can help get this movie out and show support by signing up for the email list at www.futurespastmovie.com. The email signup is at the bottom of the front page of the website.~JJL

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Speaking of trading movies, The Hummingbird Project is generating some buzz, at least in our industry. Released on Friday and starring Jesse Eisenberg, Alexander Skarsgard, and Salma Hayek, the film covers the struggles of two cousins (Eisenberg and Skarsgard) who want to build a fiber optic cable between New Jersey and a fictionalized Kansas exchange. Is it any good? I don’t know. But I do know the WSJ has it framed properly – Who Wants to See a Movie About High-Frequency Trading? High-Frequency Traders.~SD

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What OCC has achieved under Donohue; Letter to the editor: Under the executive chairman’s leadership, OCC is transforming how it does business to better serve the users of its markets, writes Senior VP David Prosperi.
Crain’s Chicago Business
I am responding to “A storied name in Chicago trading stumbles” (March 1) to highlight the progress and momentum achieved by Options Clearing Corp. under Craig Donohue’s leadership as executive chairman.
bit.ly/2JlOWNx

***** OCC’s David Prosperi gives a spirited defense of Craig Donohue. Everyone should have a David Prosperi.~JJL

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The need for weed: why Wall Street is getting hooked on cannabis; Hedge funds, investors and mutual funds are piling in after Canada allowed recreational usage
Nicole Bullock – FT
Wall Street is developing a bit of a drug habit. Nelson Peltz, the veteran activist investor, signed on this week as a strategic adviser to Aurora, a Canadian cannabis producer, picking up a load of stock options in the process. News of the appointment sent Aurora’s New York-listed shares up 14 per cent, bringing gains for the year to more than 80 per cent.
/on.ft.com/2TTrY4p

***** We are working on a panel discussion on this subject for this summer and a white paper with anonymous sources.~JJL

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Bridging the Week March 11 – 15 and March 18, 2019 (Positioning for New Position Limits Proposal; Custody and Cryptoassets; Supervision for Swap Dealers)
Gary DeWaal – Bridging the Week
Last week, J. Christopher Giancarlo promised a “workable” revised position limits proposed rule before he leaves as chairman of the Commodity Futures Trading Commission sometime this summer. Separately, the Securities and Exchange Commission’s Division of Investment Management sought comments on how its Custody Rule applies to cryptoassets.
/goo.gl/xec4an

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Fourth Annual BNP Paribas Open Scholarships Awarded to Local High School Students; BNP Paribas Open Scholarship Program Doubles In Size and Expands To Four Students
BNP Paribas and Bank of the West, global leaders in supporting both amateur and professional tennis, have awarded the fourth annual BNP Paribas Open Scholarships to Daniel Ramirez (Desert Mirage High School); Maria Lopez (Desert Mirage High School); Emily Santillanes (Coachella Valley High School); and Gilberto German (Coachella Valley High School).
bit.ly/2FgRZm9

***** BNP is 40-Love with this initiative.~JJL

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Half of Insider-Trading Defendants Net Less Than $60,000; They typically make relatively modest gains, and many are friends and relatives of company employees close to market-moving information, research shows
Dave Michaels – WSJ
Insider trading evokes images of Wall Street whizzes whispering lucrative secrets, but many offenders are friends and family members of company employees who score modest illegal gains, according to new research.
/on.wsj.com/2TVNIwK

***** How much is your reputation and life worth? It has to be more than $60K.~JJL

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Friday’s Top Three
Our top story of the day on Friday was Jim Kharouf’s JLN piece Pardon our dust: Crypto markets still have some building to do. Second was Coindesk’s Cboe Exchange Puts Brakes on Bitcoin Futures Listing. Third was
Crain’s Chicago Business’ Griffin mulled moving Citadel HQ out of Chicago. Apparently, Griffin actually found Chicago’s business environment better than New York’s.

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Lead Stories

Startups Aim to Overhaul Trading in World’s Biggest Debt Market; A handful of startup trading platforms is trying to reshape the $15 trillion U.S. Treasurys market
Matt Wirz – WSJ
A handful of startup trading platforms is trying to reshape the $15 trillion U.S. Treasurys market. Although Treasurys are the world’s largest securities market, most investors looking to trade must request individual price quotes from traders, known as “dealers,” which are typically big banks or investment houses.
/on.wsj.com/2TNaIOv

Illinois lawmakers make case for financial transactions tax
Cole Lauterbach – Illinois News Network
Supporters are making a case for instituting a new tax on financial transactions in the state of Illinois. The legislation would require a $1 fee on any financial transaction done in the state with the exception of securities held in a retirement account or a transaction involving a mutual fund.
bit.ly/2Jo6sRl

Fidelity National Information Services to Buy Worldpay for $35 Billion; Deal marks one of the biggest transactions in the fast consolidating payments sector
Ben Dummett – WSJ
Fidelity National Information Services Inc. said Monday it has agreed to acquire Worldpay Inc. for about $35 billion in cash and stock, creating a global payments giant in a bid to reach more customers as merchants and their clients complete an increasing number of transactions online.
/on.wsj.com/2TVKSrA

CME says euro trading has moved to Amsterdam ahead of Brexit
Reuters
Euro-denominated government bond, repurchase agreement and foreign exchange trading at CME Group has moved from London to Amsterdam to avoid disruption from Brexit, the exchange said on Monday.
/reut.rs/2TXcQ68

When Bakkt? Bitcoin Futures Market’s Approval Appears Stuck in Limbo
Nikhilesh De – Coindesk
More than six months since Intercontinental Exchange (ICE) revealed its vision for Bakkt, the hotly anticipated bitcoin futures market is still awaiting regulatory approval.
bit.ly/2TVlodM

ECB attacks EU plans for boosting supervision of clearing houses; Proposals leave bank without powers to repel crises and violate its independence, say officials
Jim Brunsden and Claire Jones – FT
European Central Bank officials have strongly criticised EU plans for boosting supervision of clearing houses, saying they leave it without crucial powers to fend off crises in the EUR660tn market for euro-denominated derivatives and violate its independence.
/on.ft.com/2TUKxVU

Commerzbank and Deutsche begin merger talks; Germany’s two largest listed lenders evaluate tie-up after government signals support
Olaf Storbeck and Arash Massoudi – FT
Deutsche Bank and Commerzbank have formally opened talks on a controversial merger that would reshape Germany’s financial sector and create the eurozone’s second-largest lender by assets.
/on.ft.com/2TRylFz

Amsterdam’s Webb Traders buys smaller UK peer in Brexit hedge; Dutch electronic group secures approval of GST Capital purchase and gains London access
Philip Stafford – FT
Webb Traders, a Dutch electronic trader, has secured its hedge against the UK’s departure from the EU by purchasing smaller UK peer GST Capital.
/on.ft.com/2TPgRcZ

UK financial regulators are not as tough as they pretend; Cases of Metro Bank and equity release mortgages show reluctance to admit policy mistakes
Jonathan Ford – FT
People worry a lot about “regulatory capture” and how watchdogs can be turned by the very firms they’re supposed to be regulating. But a less observed phenomenon is no less pernicious. It’s when through some subtle medium ó perhaps government influence or intellectual fashion ó they somehow capture themselves and can’t easily change course.
/on.ft.com/2TS1Jvk

This Is How The Online Brokerage Business Changed Over The Last 20 Years
Tracy Alloway and Joe Weisenthal – Bloomberg
The online brokerage business burst on the scene alongside the internet bubble of the late 90s, as at-home traders were lured to try their hand at winning big in the stock market. These days, investors are inundated with the message that they shouldn’t try stock picking, and that they should engage in passive, low cost strategies instead. So how has the online brokerage business adapted? On this week’s episode of the Odd Lots podcast, we speak with longtime industry veteran Chris Larkin, who is now the Senior Vice President of Trading at E*Trade, about what he’s seen during his career in the business.
/bloom.bg/2VTK8Bb

Canadian Dealmaker David Sidoo Pleads Not Guilty in College Scandal
Janelle Lawrence and Patricia Hurtado – Bloomberg
The college-admission cheating scandal that erupted Tuesday saw its first plea from one of the parents, who are accused of paying as much as $6.5 million in fees and bribes to get their kids into school.
In federal court in Boston on Friday, Canadian dealmaker David Sidoo pleaded not guilty to conspiracy to commit mail and wire fraud.
/goo.gl/5FxoV6

Deutsche Bank Rejects Reinvigorating Retention Bonuses
Sonali Basak – Bloomberg
Deutsche Bank AG is rebuffing pressure from top performers to restructure retention bonuses after the awards tumbled in value last year and opened the way for more defections, according to people familiar with the matter.
/goo.gl/sNdkNt

Buy-side drives growth in CLS FX settlement; CLS says that asset managers are more focused on mitigating settlement risk as it sees uptake in clients using its CLSSettlement service.
Hayley McDowell – The Trade
Foreign exchange (FX) settlement provider CLS has reported a growth in new business driven by buy-side institutions as firms seek to mitigate settlement risk across FX trading activities.
bit.ly/2TTsY8F

Glory Days to Job Cuts: Deutsche Bank-Commerzbank Over 150 Years
Nicholas Comfort – Bloomberg
Deutsche Bank AG and Commerzbank AG said they’re officially starting talks on a deal that could combine the two largest publicly-traded — and most storied — banks in Germany.
/bloom.bg/2TPEGkT

Wall Street Has Been Unscathed by MeToo. Until Now.
David Gelles – NY Times
On Dec. 14, 2017, Sara Tirschwell was called into an unscheduled meeting with the general counsel and chief compliance officer of her employer, the giant asset-management firm TCW. Ms. Tirschwell, 53, was an experienced investor who had been hired the previous year to raise and run a new distressed debt fund for TCW. Entering the conference room, high above Midtown Manhattan, she wasn’t sure what the meeting was about. It didn’t take long for her to find out: She was being fired.
/nyti.ms/2FhpFjJ

Investors to lose millions from ‘mini-bond’ firm’s collapse
Dylan Lobo – CityWire
Investors face losing around £236 million after mini-bond investment firm London Capital & Finance (LCF) fell into administration.
bit.ly/2JlJiex

Exchanges, OTC and Clearing

Cboe drops bitcoin futures as cryptocurrency interest wanes; Exchange loses battle for market share with crosstown Chicago rival CME
Philip Stafford and Gregory Meyer – FT
Cboe Global Markets, the first big US derivatives exchange to offer bitcoin futures, has announced it will pull the plug on the fledgling market a little over a year after its debut.
/on.ft.com/2TZy9Eo

‘No Change’ to Bitcoin Futures Plans, CME Says, as Cboe Pulls Back
Anna Baydakova – Yahoo
It’s business as usual for CME Group’s bitcoin futures market, despite a retrenchment by rival derivatives exchange operator Cboe Global Markets.
/yhoo.it/2JjOsYh

EBS Quant Analytics Platform Introduces FX Market’s First API Streaming Service
CME Group
EBS, a leading provider of electronic trading platforms and technology services in foreign exchange markets, today announced it will launch a new API streaming service on the EBS Quant Analytics platform (previously known as NEX Quant Analytics), the FX market’s largest and most comprehensive community-based analytics tool.
bit.ly/2U0Sc5n

Selection of ETFs Eligible for ETF Market Making Incentive Scheme Version 2
JPX
As previously announced, Tokyo Stock Exchange (TSE) will update its ETF Market Making Incentive Scheme to Version 2 from April 1, 2019 with the aim of further improving the liquidity of the ETF market.
bit.ly/2TSEZeF

Symposium Co-hosted by JFSA-JPX on “TCFD- The Power of the TCFD Framework in Company-Investor Dialogue”
JPX
On February 12, 2019, Japan’s Financial Services Agency (JFSA) and Japan Exchange Group, Inc. (JPX) co-hosted a symposium at Tokyo Stock Exchange, entitled “TCFD- The Power of the TCFD Framework in Company-Investor Dialogue”.
bit.ly/2U0Sg57

SGX and The Straits Times partner to enhance investors’ understanding and use of equity research content
SGX
Singapore Exchange (SGX) and The Straits Times (ST) are rolling out an initiative to equip investors with a deeper understanding on the use of equity research tools.
bit.ly/2TUf4mQ

Fintech

Payments group Worldpay to be taken over in $43bn deal; Financial services technology group FIS seeks scale with acquisition
Nicholas Megaw, Arash Massoudi and Sarah Provan – FT
FIS, a US-based financial services technology company, has unveiled plans to buy Worldpay in a $43bn deal that would create one of the largest providers of the plumbing and infrastructure that powers banks and payments.
/on.ft.com/2TPF82z

FIS’s $34 Billion Bid for Worldpay Drives Payments Deal Spree
Giles Turner and Keith Campbell – Bloomberg
Worldpay holders to get stock and cash, hold 47% of new firm; Deal unveiled as Nexi announces $3 billion IPO in Milan
Fidelity National Information Services Inc. agreed to acquire Worldpay Inc. for about $34 billion in cash and stock, the biggest deal ever in the international payments sector.
/bloom.bg/2TVJvJs

JPMorgan Hack Suspect Is Helping the U.S. Here’s What He May Offer
Helena Bedwell, Christian Berthelsen and Michael Riley – Bloomberg
Shalon could be guide to Russian hacking, money laundering; His father, a Georgian lawmaker, discusses case on local TV
He’s the accused mastermind of one of the biggest hacks ever. He and his crew allegedly pilfered information from more than 80 million JPMorgan Chase & Co. clients and ran online gambling, stock manipulation and money laundering schemes around the world.
/bloom.bg/2TY3AyA

Cryptocurrencies

Citi Scraps Its Plan for a JPM Coin-Like Bank-Backed Cryptocurrency
Ian Allison – Coindesk
In light of the splash JPMorgan made recently with its plan for a bank-backed cryptocurrency, it’s worth remembering another big institution first tested a token to connect global payments – back in 2015.
bit.ly/2TSOZV5

Australian Government to Help Fund Trade Mission to CoinDesk Consensus
Yogita Khatri – Coindesk
Australia’s government has committed AU$100,000 (US$71,139) funding for a blockchain industry trade mission to CoinDesk’s Consensus event in May.
bit.ly/2TUg7mM

Bitcoin And Crypto Billionaires Defy Price Downturn With Bold Bets
Billy Bambrough – Forbes
Bitcoin, the world’s first and largest cryptocurrency which has been struggling to justify its price recently, has found many new supporters amid its long-running bear market. But the loudest voices of support are coming from those who have been in the bitcoin and cryptocurrency industry for some time. The bitcoin price has slumped over the last 15 months, falling from all-time highs of near $20,000 to around $4,000, and causing a bitter crypto winter to grip the sector.
/bit.ly/2W9nCUb

Crypto Investment App Donut Raises $1.8 Million in Seed Funding
Yogita Khatri – Coindesk
Cryptocurrency investment app provider Donut has raised $1.8 million in a seed funding round. The Germany-based startup told CoinDesk on Thursday that the round was led by early-stage venture capital firm Redalpine. Other investors included technology venture funds EarlyBlock and Entrepreneur First, AngelList’s Philipp Moehring and Andy Chung, N26 bank board member Marcus Mosen, and others.
bit.ly/2TXarbC

I Got the Mark of the Beast – And It Will Hold My Bitcoin
Bailey Reutzel – Coindesk
“What happens when you need an MRI?” Someone answers for me: “You die an excruciating death… Actually, they remove them painfully quickly or the machine does.”
bit.ly/2TUhcek

SEC’s Crypto Czar: Stablecoins might be violating securities laws
Guillermo Jimenez – Decrypt
More stablecoin projects might soon find themselves in the SEC’s crosshairs.
bit.ly/2TSPVJ5

SEC Chairman Clayton on bitcoin: Buyer beware
By Joe Williams – Fox Business
Cryptocurrency backers are hoping the Securities and Exchange Commission Opens a New Window. will soon permit retail investors to trade bitcoin Opens a New Window. on the public markets Opens a New Window. , but the agency’s chief has a list of requirements that must be met before that happens.
/fxn.ws/2Jm72PL

OneCoin indictment includes securities fraud charge
Preston Byrne – The Block
As my friends and usual authors of this column Palley and Nelson can attest, long have attorney observers of the cryptocurrency space wondered how the U.S. Department of Justice would deal with allegedly fraudulent ICO schemes. To date, prosecutions of these schemes have been thin on the ground. With perhaps the exception of U.S. v. Homero Joshua Garza, which concerned a late 2014-early 2015 fraudulent bitcoin mining Ponzi scheme that also happened to have a “pegged stablecoin” called PayCoin attached to it, the DOJ has been remarkably quiet throughout the crypto boom and a perceived slew of what many practitioners argue are major, multibillion-dollar violations of U.S. securities laws.
/bit.ly/2HHFUYP

Politics

At Hedge Fund That Owns Trump Secrets, Clashes and Odd Math
By Katherine Burton, Sridhar Natarajan, and Shahien Nasiripour – Bloomberg
SEC has stepped up examinations of funds in opaque markets; Firm has also been ensnared in uproar over National Enquirer
The threat was blunt: Back off, or there will be trouble. The 2016 presidential campaign had just ended, and Michael Cohen was fresh off handling hush money for Donald Trump. Now he was working on behalf of Chatham Asset Management, a $4.3 billion hedge fund that owns the National Enquirer.
/bloom.bg/2TPnVq1

Trump’s First Veto Blocks the Congressional Resolution to Cancel His Border Emergency
Justin Sink and Bloomberg – Fortune
President Donald Trump issued his first veto Friday, rejecting Congress’s effort to cancel his declaration of a national emergency to pay for a wall on the U.S.-Mexico border, a centerpiece of his 2016 campaign.
/goo.gl/duQqoq

How white identity politics will shape the GOP’s future
Paul Waldman – The Washington Post
The manifesto left by the alleged shooter in the horrific mosque attack in New Zealand contained one mention of Donald Trump, in which the man expresses mixed support for our president. “As a symbol of renewed white identity and common purpose? Sure. As a policy maker and leader? Dear god no.” We don’t know what policies he was referring to, but for the moment I want to consider that “white identity” part, as it applies to both the present and the future of American politics.
/wapo.st/2Y1LfzY

Trump Vetoes Congressional Effort To Limit Border Wall Funding
Scott Horsley and Miles Parks – NPR
President Trump used his veto pen for the first time Friday, after Congress tried to reverse his national emergency declaration and rein in spending on a wall along the U.S.-Mexico border. Congressional critics do not appear to have the votes to override Trump’s veto. So, as a practical matter, the administration can continue to spend billions of dollars more on border barriers than lawmakers authorized, unless and until the courts intervene.
/n.pr/2W49Wdm

Regulation

ESMA registers Beyond Ratings SAS as credit rating agency
ESMA
The European Securities and Markets Authority (ESMA), the EU’s direct supervisor of credit rating agencies (CRAs), has registered today Beyond Ratings SAS as a CRA under the CRA Regulation.
bit.ly/2TSrA6s

FINRA Updates the OTCBB/OTC Equities High Price Dissemination List
FINRA
FINRA is publishing its quarterly OTCBB/OTC Equities High Price Dissemination List for the fourth quarter of 2018. This updated list of OTC equity securities eligible for trade report dissemination for trades of fewer than 100 shares is effective as of March 15, 2019. To view changes, visit the Daily List: Security Attribute Changes page, select the “Unit of Trades” filter and enter March 14, 2019 as the “Start” date and March 15, 2019 as the “End” date.
bit.ly/2TZzICg

March 2019 Disciplinary Actions
FINRA
FINRA has taken disciplinary actions against the following firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB).
bit.ly/2TRCdGB

SEC Charges Registered Investment Adviser and Former Chief Operating Officer With Defrauding Client
SEC
The Securities and Exchange Commission today charged Talimco LLC, a registered investment adviser, and Grant Gardner Rogers, the former chief operating officer of the firm, with manipulating the auction of a commercial real estate asset on behalf of one client for the benefit of another.
bit.ly/2TV1H5V

SEC Staff to Hold Fintech Forum to Discuss Distributed Ledger Technology and Digital Assets
SEC
The Securities and Exchange Commission today announced that its staff will host a public forum focusing on distributed ledger technology (DLT) and digital assets on May 31, 2019. The forum is being organized by the agency’s Strategic Hub for Innovation and Financial Technology (FinHub) and was announced in connection with the launch of FinHub last year. FinHub is committed to active engagement with market participants on new financial technologies. The forum is the second such forum to be hosted by the agency, will feature panelists from industry and academia, and is designed to foster greater communication and understanding around issues involving DLT and digital assets. Panelists will explore such topics as initial coin offerings, digital asset platforms, DLT innovations, and how these technologies impact investors and the markets.
bit.ly/2TTb1Hl

ASIC remakes ‘sunsetting’ class order about warrants and out of use notices
ASIC
ASIC has remade Class Order [CO 08/781] Warrants: Out-of-use notices, which was due to expire on 1 April 2019. The new instrument, ASIC Corporations (Warrants: Out-of-use notices) Instrument 2019/148, continues to provide issuers of warrants relief from the requirement in the Corporations Act to notify ASIC when a warrant ceases to be available in certain circumstances. The relief is provided only to issuers of warrants offered under a Product Disclosure Statement (PDS) or Supplementary PDS covering two or more warrant products.
bit.ly/2TRBgOx

SEC Halts ‘Money Doctor’ Radio Host’s Ponzi Scheme: Enforcement; Also, Wedbush Securities was fined for failure to supervise a rep who was running a pump-and-dump scheme.
By Emily Zulz – Think Advisor
The Securities and Exchange Commission charged Texas resident William Neil “Doc” Gallagher ó the self-styled “Money Doctor” featured on three Dallas-area radio stations ó in an emergency action to shut down a $19.6 million Ponzi scheme targeting elderly investors’ retirement funds.
bit.ly/2Jkn8ta

Switzerland: FINMA Adjusts Sandbox, Fintech Licenses
JD Alois – Crowdfund Insider
The Swiss Financial Market Supervisory Authority (FINMA) has published a set of adjustments regarding their policy for their Fintech License and Sandbox structure. In June of 2018, the Swiss parliament introduced a new licensing category for Fintech companies. The following August FINMA launched a consultation on the proposal. On 1 January 2019, the Fintech license was introduced by the Swiss parliament. Recently, the Swiss Federal Council adjusted the provisions concerning the sandbox.
/bit.ly/2W4QEV3

Investing and Trading

Calpers Wants to Double Down on Private Equity; A proposed venture would divert as much as $20 billion to new investments in technology startups and privately held businesses
Heather Gillers – WSJ
A new strategy to invest more deeply in private equity is roiling the nation’s largest public pension fund. Three of 13 directors who oversee the California Public Employees’ Retirement System raised questions last month about the transparency and scope of a proposed venture that would divert as much as $20 billion over the next decade to new investments in technology startups and privately held businesses.
/on.wsj.com/2Jht9GO

ESG has no financial benefit for infrastructure groups, study finds; Research into unlisted companies challenges common view that better standards can affect returns
Jennifer Thompson – FT
Better environmental, social and governance standards have no effect on the financial performance of private infrastructure companies, research has found.
/on.ft.com/2U0Qfpz

Renewable energy transition demands investment not disinvestment; Norway’s sovereign wealth fund is misguided in cutting its oil and gas holdings
Nick Butler – FT
The proposal from Norway’s sovereign wealth fund to sell off its investments in companies that explore for oil and natural gas has been welcomed by some of the environmental lobby groups campaigning for disinvestment from the hydrocarbon-based economy.
/on.ft.com/2TY4wTC

Goldman Sachs and Morgan Stanley Turn Bullish on Europe
Marcus Bensasson – Bloomberg
Europe’s economy hasn’t given investors much cheer over the past year, but some are saying there are positive surprises in store.
/bloom.bg/2Jhun4S

Institutions

The Fortress Investment Group’s new hire has stunned Wall Street
Kevin Dugan – NY Post
A high-profile hire at a subsidiary of Wes Edens’ $42 billion asset management firm Fortress Investment Group is raising eyebrows on Wall Street.
/nyp.st/2U0RGUZ

Fund managers raise their game on home-grown talent; Diversity and richer ways of working beat big cheques and job-hopping
Amin Rajan – FT
Intrepid job hopping has been the norm in the global fund industry for the best part of a decade. While markets boomed, staff training was not a priority: large cheques were the key weapon in the battle for talent.
/on.ft.com/2TVgc9M

Rubicon Fund Management shuts its flagship hedge fund; Move comes after poor run and amid tough conditions for ‘macro’ bets on stocks, bonds and currencies
Laurence Fletcher – FT
Rubicon Fund Management, one of the oldest hedge fund managers in London, is to shut its flagship fund after a run of poor performance.
/on.ft.com/2U0PHQx

Alan Miller: the star stockpicker who switched to ETFs; Now better known as Gina’s husband, the CIO of SCM campaigns for fund transparency
Jennifer Thompson – FT
In an industry where familiar female faces are in a minority, Alan Miller has no problem with being less recognisable than his spouse.
/on.ft.com/2TXcNr1

JPMorgan Says Tesla Options Understate Risks in SEC Vs. Elon Musk
Joanna Ossinger – Bloomberg
Derivatives market has no volatility premium for legal events; Buy puts to monetize the mispricing, strategist Quigg says
Tesla Inc. is facing multiple legal events and rising key-man fears regarding billionaire CEO Elon Musk that aren’t being adequately priced into options, according to JPMorgan Chase & Co.
/bloom.bg/2TOTekI

Neuberger Berman Climate Review Finds Big Holes in Readiness
Emily Chasan – Bloomberg
Asset management firm has three climate scientists on staff; ‘Developed markets are not on track,’ firm’s head of ESG says
Neuberger Berman began a comprehensive review of its $304 billion portfolio last year, specifically to understand how their investments will be affected by climate change. The verdict is in, and it isn’t good.
/bloom.bg/2TUJzsK

Deutsche Bank Asset Management Arm Gets Allianz Interest
Steven Arons, Jan-Henrik Foerster, Harry Wilson and Dinesh Nair – Bloomberg
Insurer is said to seek combination of asset-management arms; Move could help Deutsche Bank finance merger with Commerzbank
Allianz SE is exploring the possibility of a combination of its asset management arm with Deutsche Bank AG’s DWS Group to create a national champion in active money management, according to people familiar with the matter.
/bloom.bg/2TPge37

Deutsche Bank Cleared Key Merger Hurdle With Green Light on Cuts
Nicholas Comfort, Steven Arons and Birgit Jennen – Bloomberg
Finance Ministry signaled it won’t block deep job reductions; Plenty of stumbling blocks remain in talks with Commerzbank
After months of informal talks and weeks of increasingly fevered speculation, Deutsche Bank AG Chief Executive Officer Christian Sewing finally got the green light he needed to proceed with negotiations on a tie-up with crosstown rival Commerzbank AG.
/bloom.bg/2JlxiK1

JPMorgan Chase is investing $350 million to get workers ready for the future
By Julia Horowitz, CNN Business
New York (CNN Business)JPMorgan Chase CEO Jamie Dimon talks a lot about the need to train workers for the jobs of the future. Now the bank says it will spend $350 million over the next five years to make it happen.
/cnn.it/2TU9kJD

Regions

Foreigners Spend Record on Saudi Shares as FTSE Begins Upgrade
Filipe Pacheco – Bloomberg
FTSE Russell starts benchmark inclusion process Monday; Net purchases by foreigners exceed $420 million in past week
Foreign investors increased purchases of Saudi equities last week to the highest value on record as they positioned for the kingdom’s inclusion in major benchmarks.
/bloom.bg/2TPF1nF

Kenyan Drought Leaves 1 Million People Needing Urgent Food Aid
Eric Ombok – Bloomberg
More than a million people in a dozen Kenyan counties are in urgent need of food assistance after below-average rainfall curbed farm output, according to the East African nation’s drought-management agency.
/bloom.bg/2TVfoSi

What’s Pulling at the Hong Kong Dollar’s Peg
Tian Chen – Bloomberg
Pegged to the U.S. dollar since 1983, the Hong Kong dollar is usually a dull currency. Except when it isn’t. While its trading band of HK$7.75 to HK$7.85 per U.S. dollar, set in 2005, has never been broken, it keeps getting tested. That forces the Hong Kong Monetary Authority, the de-facto central bank, to follow its mandate and intervene, raising questions about how long this can continue and the implications for Hong Kong’s wider economy.
/bloom.bg/2TUco8M

China’s Banks Have a Hidden Wave of Bad Debt; Factor in the amount of soured loans they stripped from their balance sheets last year, and the situation looks a lot more troubling.
By Christopher Balding – Bloomberg
China’s banks may have a flood of bad loans waiting in the wings. Not that you’d know it from looking at official levels for 2018, which suggest the problem was broadly contained. The reality is that newly soured debt was coming through the front door as fast as banks could shovel it out the back.
/bloom.bg/2TUjrhK

Malaysia to summon two Goldman Sachs units ahead of 1MDB case
Reuters
Malaysian prosecutors on Monday said they would issue summonses to units of U.S. investment bank Goldman Sachs in London and Hong Kong, requiring them to respond by June to criminal charges filed against them last year.
/reut.rs/2TVSla6

Can the world’s investors trust China’s wild stock markets?
Zhang Shidong – SCMP
Frank Chen is back to an old addiction: constantly checking his stock trading account on his smartphone and browsing websites for potentially market-moving news.
bit.ly/2JlJUAR

Brexit

Britain’s MPs must act in the national interest to resolve Brexit; Parliament should use a delay to find where a majority lies for an exit option
The Editorial Board – FT
British democracy faces a moment of acute crisis. The prime minister has lost control of the Brexit process. Her authority is ebbing away. Cabinet ministers are openly defying her. MPs have so far proved unable to take charge of delivering the result of the 2016 referendum. Yet two positives emerged from the mayhem of the past week. Parliament voted against leaving the EU without a deal, and in favour of extending the withdrawal process. That gives MPs a chance this week to begin charting a way out of the mire. To prevent a breakdown of public trust in the Westminster system, they must seize it.
/on.ft.com/2TN9kvh

Theresa May asks MPs for ‘honourable compromise’ on Brexit
BBC News
Theresa May has asked MPs to make an “honourable compromise” as she seeks to persuade them to back her Brexit deal at the third time of asking. Writing in the Sunday Telegraph, the prime minister said failure to support the deal would mean “we will not leave the EU for many months, if ever”. Mrs May is expected to bring her withdrawal agreement back to the Commons next week for a third vote. It comes after MPs this week rejected her deal and voted to delay Brexit.
/bbc.in/2Fk7Yjm

Nick Boles: Tory MP quits local party over Brexit
BBC News
Tory MP Nick Boles is resigning from his local Conservative association after clashing with them over Brexit. Mr Boles, who wants to remain as MP for Grantham and Stamford, has spoken out about leaving the EU with no deal. Local activists had wanted to deselect him as their candidate in the next general election because of his stance. In his letter, seen by the BBC, he said he was resigning with immediate effect and that a “division had opened up” between him and the local association.
/bbc.in/2HAIzUh

Miscellaneous

The Division 2 and the severing of politics from video games
Simon Parkin – The New Yorker
In February, the French video-game publisher Ubisoft sent an e-mail to its company mailing list with the subject “Come see what a real government shutdown looks like in the Private Beta.” The message came just after President Trump’s thirty-five-day closure of the U.S. government and was intended to promote The Division 2, the latest video game to emerge from the Tom Clancy-industrial complex. In it, players join a peacekeeping force that’s sent to Washington, D.C., after a terrorist attack incites anarchy and closes the government.
/bit.ly/2TK0eQK

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