A $21 Trillion Treasuries Mystery Is Bedeviling Global Markets; Gensler pledges market structure review after GameStop turmoil

Mar 3, 2021

First Read

$29,926/$300,000 (10.0%)
Wendy Chan

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Hits & Takes
John Lothian & JLN Staff

ICE veteran Chief Financial Officer Scott A. Hill is retiring after 14 years at the firm. He will be replaced by Warren Gardiner, ICE’s vice president of investor relations. Congratulations to Scott on a great run at ICE.

Microsoft founder Bill Gates and Iron Man, AKA Robert Downey Jr., are investing together on an electric motor start-up.

Are you looking forward to FIA’s Boca-V like I am? The JLN team is all set to cover the conference and provide recaps of the different panels and speakers. You can register for Boca-V at www.fia.org. Tell them John Lothian sent you.

Tradeweb today reported total trading volume of $20.4 trillion (tn) for February 2021 across their electronic marketplaces for rates, credit, equities and money markets. Average daily volume (ADV) for the month was a record $1.06tn, an increase of 19.9 percent (%) year over year (YoY).

Wendy Chan, the head of marketing for Vela, is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Wendy and JLN first crossed paths when she was with Sungard. She has a challenging job at the fast growing Vela, which is an independent provider of data and execution technology for global multi-asset electronic trading. Thank you to Wendy and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

My 90-year-old mother received her first COVID-19 shot yesterday in Florida. My older brother, a pharmacist, has received both his shots. My cousin’s wife also received her first shot. Progress is being made.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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Women In Listed Derivatives (WILD) is holding a “Conjunction Function” on March 8, 2021 (International Women’s Day, btw) via Zoom from 12:30 PM – 1:30 PM. The announcement says “Conjunction Function is about bringing the WILD community back together. Regroup with us online to discuss with your peers what’s changed – social distancing amid a global pandemic – and what hasn’t – the importance of staying connected, advocating for yourself, being a good coworker & leader.” The discussion will use break-out rooms to facilitate small group discussions led by a moderator. It is free, and you can register here. ~SR

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Intercontinental Exchange Announces the Retirement of Chief Financial Officer Scott A. Hill Following 14 Years of Distinguished Service; Warren Gardiner, Currently ICE’s Head of Investor Relations, to Succeed Hill as CFO
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced that Chief Financial Officer Scott Hill plans to retire on May 14, 2021, capping a 14-year career at ICE that saw the firm expand consistently through organic growth and acquisitions, delivering a compound annual growth rate in adjusted earnings per share of 16% during Hill’s tenure. Warren Gardiner, ICE’s Vice President of Investor Relations, will assume the CFO role following ICE’s 2021 Annual Meeting of Shareholders on May 14. Mr. Hill will continue to serve as an advisor to the company through February 2023.
/jlne.ws/3kEXXQW

*****Another part of the core team is leaving ICE after the departure of Kelly Loeffler, who joined Bakkt and then became a U.S. Senator for a spell.~JJL

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Coinbase Is a $100 Billion Crypto Cult; The largest U.S. digital-asset exchange is an odd business with many unusual risks.
Jared Dillian – Bloomberg
Coinbase Global Inc. plans to go public under a direct listing that values the largest U.S. digital-asset exchange at almost $100 billion. The service the company offers is the same basic principle as a stock brokerage, giving retail investors access to the cryptocurrency markets, but that’s where the similarities end. Coinbase has frequent service outages, nonexistent customer service and sky-high transaction costs. All of these are disadvantages are well known, and yet it remains the most viable option for individual investors.
/jlne.ws/3e42lrj

*****Bitcoin is going up, pass the Kool-Aid.~JJL

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Marc Lasry, Chris Giancarlo Invest in Crypto Firm BlockTower
Olivia Raimonde – Bloomberg
Avenue Capital’s Lasry is also co-owner of NBA’s Bucks; Giancarlo was referred to as ‘crypto dad’ while at CFTC
Billionaire hedge-fund manager Marc Lasry and former U.S. Commodity Futures Trading Commission Chairman Christopher Giancarlo have invested in crypto-asset and blockchain investment firm BlockTower Capital.
/jlne.ws/2O0UY9o

*****Giancarlo had a great vetting operation at the CFTC in LabCFTC, so this investment should be good.~JJL

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Return-to-Office Plans Are Set in Motion, but Virus Uncertainty Remains; Many employers are not making a decision until many workers are vaccinated. And some are making plans for “hybrid” work arrangements.
Julie Creswell, Gillian Friedman and Peter Eavis – NY Times
A year and a pandemic ago, over 100,000 people filled the central business district in Charlotte, N.C., pouring out of offices, including several recently built skyscrapers, and into restaurants, bars and sports venues. Then as the coronavirus sent employees to their homes, much of the city center quickly went quiet and dark.
/jlne.ws/2PuUyst

*****This is one of the biggest questions I struggle with other than how to bring peace to the world.~JJL

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Tuesday’s Top Three
Our top story Tuesday was the Financial Times’ opinion piece from Jemima Kelly, Hey Citi, your bitcoin report is embarrassingly bad. It is subtitled “Truly one of the most shocking bits of ‘research’ we have ever seen from an investment bank.” Second was The World Federation of Exchanges Publishes Women Leaders List for 2021, from the World Federation of Exchanges. Third was Bloomberg’s Cboe Seeks Approval to List Trailblazer Bitcoin ETF in U.S.

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Lead Stories

A $21 Trillion Treasuries Mystery Is Bedeviling Global Markets
Liz McCormick, Tracy Alloway, and Stephen Spratt – Bloomberg
Last week was latest case of bid-and-offer gap blowing out; Calls for changes to the Treasury market’s structure grow
Bond traders have been saying for years that liquidity is there in the world’s biggest bond market, except when you really need it. Last week’s startling gyrations in U.S. Treasury yields may offer fresh backing for that mantra, and prompt another bout of soul-searching in a $21 trillion market that forms the bedrock of global finance. While stocks are prone to sudden swings, such episodes are supposed to be few and far between in a government-debt market that sets the benchmark risk-free rate for much of the world.
/jlne.ws/3bWbqjo

Gensler pledges market structure review after GameStop turmoil; Biden’s pick for top job at SEC says he would look into payment for order flow
Kiran Stacey – FT
Joe Biden’s nominee to lead the US stock market regulator has promised a review of fees paid by large Wall Street firms to retail brokerages in the wake of chaotic trading in companies such as GameStop. Gary Gensler said on Tuesday that if confirmed as head of the Securities and Exchange Commission he would want to look into payment for order flow, in which retail brokerages receive fees from market makers to handle their trades.
/jlne.ws/3b7VCe4

Pandemics and the paradox of human progress; The more we destabilise the planet in the name of advancement, the more pathogens will emerge
David Pilling – FT
The Australian virologist Sir Frank Macfarlane Burnet declared in 1962 that one of the most important social revolutions in history was the “virtual elimination” of infectious diseases. Burnet won the Nobel Prize for medicine; he was a brilliant man. But he was wrong.
/jlne.ws/386dKmK

What central banks ought to target; Amid a wide range of options, inflation targeting remains the simplest and least bad
Martin Wolf – FT
What should central banks target? Since the early 1990s the answer has increasingly been “consumer price inflation”. But this has never been unchallenged. Today, there are four alternative positions. One thinks central banks should target asset prices. Another thinks they should target a “just” interest rate. Yet another thinks they should target real activity. The last thinks they should target some other nominal goal, such as the price level or nominal gross domestic product. These are important debates. But the reality remains: central banking is art, not science. The art must be guided by sensible goals coupled to deep awareness of uncertainty.
/jlne.ws/38nxxOT

Fed Dials Up Pressure on Wall Street to Ditch Discredited Libor
William Shaw, Lananh Nguyen, and Matthew Boesler – Bloomberg
Benchmark underpins trillions of dollars of financial assets; Regulators are probing banks on their transition progress
The Federal Reserve is intensifying its scrutiny of banks’ efforts to shed their reliance on the London interbank offered rate, and has begun compiling more detailed evidence on their progress, according to multiple people with knowledge of the matter.
/jlne.ws/2NYY1Pp

Goldman’s Chief Lawyer Departs With Senior Exits Growing at Bank
Sridhar Natarajan – Bloomberg
Seymour, famous for prosecuting Martha Stewart, leaving firm; Former Obama White House counsel Kathy Ruemmler will take over
Karen Seymour, who sent Martha Stewart to prison as a prosecutor and then went on to help Goldman Sachs executives stay out of trouble, is exiting the bank.
/jlne.ws/3e1yq37

Gensler Targets Broker ‘Gamification’ After Trading Tumult
Benjamin Bain and Robert Schmidt – Bloomberg
Biden’s SEC pick also pledges to review payment for order flow; Recent market volatility will continue to be a focus for SEC
Gary Gensler pledged to scrutinize trading apps that have exploded in popularity, signaling the Biden administration’s pick to lead the U.S. Securities and Exchange Commission plans to confront issues central to wild stock swings that have shocked Wall Street and Capitol Hill.
/jlne.ws/3bXH7sz

US Treasury bond wobble heightens concerns over health of $21tn market; Latest liquidity shock lifts pressure on American regulators to address market function issues
Colby Smith and Eric Platt, and Robin Wigglesworth – FT
The severity of last week’s US government bond sell-off has rekindled concerns about the health of the world’s largest and most important debt market, adding urgency to regulators’ efforts to address cracks that have emerged during periods of stress.
/jlne.ws/3ecDZLY

A $300 Billion Quant Trade Wins in ‘Almost Unbelievable’ Market
Justina Lee – Bloomberg
CTAs post one of their best months as commodities soar; Quantica says it’s ‘truly trend following at its best now’
Wall Street’s great reopening trade is reviving a $300 billion quantitative strategy that’s surfing the reflation-driven momentum across global markets.With rising expectations on economic growth fueling trends in everything from Treasuries and oil to stocks, Commodity Trading Advisors just notched one of their best months since 2000.
/jlne.ws/3b7mLOb

New York’s Bankers Still Tower Over Europe; Europe’s investment banks did well just to keep pace with Wall Street over the past two years. It will be a hard trick to repeat.
Elisa Martinuzzi – Bloomberg
A blockbuster year for securities trading in 2020 helped some of Europe’s investment banks gain market share as they compete against bigger Wall Street rivals. But the titans of U.S. finance — led by JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley — also expanded, meaning the bigger picture of New York dominance is still the same.
/jlne.ws/3sJZqYX

Greensill Capital prepares to file for insolvency; Apollo Global Management is in talks to buy up parts of the business
Robert Smith and Kaye Wiggins – FT
Greensill Capital is preparing to file for insolvency in the UK, capping a spectacular unravelling for the finance company backed by SoftBank and advised by former prime minister David Cameron. The planned filing comes as US private equity firm Apollo Global Management races to strike a deal to buy the most attractive parts of Greensill, one of the world’s biggest providers of supply chain finance, according to people familiar with the matter.
/jlne.ws/2PysTHf

Greensill and supply-chain finance: how a contentious funding tool works; Technique has troubled regulators, rating agencies and accountants
Robert Smith – FT
Since it was founded a decade ago, Greensill Capital has grown explosively to become one of the biggest providers of supply-chain finance. But the group, which is backed by SoftBank and advised by former UK prime minister David Cameron, is now racing to strike a rescue deal after Credit Suisse froze $10bn of funds linked to the firm.
/jlne.ws/3uRqPu0

Rio Tinto chairman to stand down amid outcry over cave blasts; Simon Thompson admits failings after miner’s destruction of sacred Aboriginal site last year
Jamie Smyth and Neil Hume – FT
Rio Tinto chairman Simon Thompson will step down within the next year in response to the outcry over the mining company’s destruction of a 46,000-year-old sacred indigenous site in Western Australia last year.
/jlne.ws/3uYkdKv

How the Oil Market Bounced Back From a Year of Crisis; A fall in stockpiles, restraint among U.S. producers and the speedy recovery in Asian demand have driven the rally
Joe Wallace – WSJ
Oil prices have staged a rapid recovery since the biggest crisis to strike the energy industry in decades. The Organization of the Petroleum Exporting Countries and its allies stepped in last spring to backstop the market by slashing production in the teeth of a collapse in crude prices. This week, the cartel is expected to reach a deal on unwinding some of those cuts.
/jlne.ws/385N5GM

China’s Tencent Becomes an Investment Powerhouse, Using Deals to Expand Its Empire; The tech giant has investments worth an estimated $259 billion in Chinese and overseas startups
Quentin Webb and Jing Yang – WSJ
A tech-market boom has yielded huge gains for China’s Tencent Holdings Ltd. TCEHY -1.52% , which has invested in hundreds of up-and-coming businesses and is now sitting on a portfolio worth roughly a quarter of a trillion dollars.
/jlne.ws/2O06Zft

Pandemic sees electronic fixed income trading skyrocket in 2021; Research by Greenwich Associates estimated that the average daily e-trading volume reached a new record of $10.6 billion in January earlier this year.
Annabel Smith – The Trade
Remote working conditions and volatility caused by the pandemic have caused electronic trading volumes to skyrocket in 2021, according to a report by Greenwich Associates. The statistics from Greenwich confirmed that the average daily volume for fixed income electronic trading had reached a new record of $10.6 billion in January earlier this year.
/jlne.ws/3uT3MPA

Non-cleared margin logjam looms after squandered delay; Fewer than half of phase five firms have submitted documentation necessary to open custody accounts
Helen Bartholomew – Risk.net
Buy-side firms could struggle to meet the already delayed deadline for complying with the fifth wave of the non-cleared margin rules after many of them wasted a 12-month extension granted by regulators in response to the Covid-19 pandemic.
/jlne.ws/385XPVH

BlackRock Details Changes to Handling Discrimination Complaints
Annie Massa – Bloomberg
BlackRock Inc. is changing how it handles harassment issues, after two former employees said they faced discrimination at the firm. The world’s largest asset manager will create a separate team to make sure investigations into employee complaints stay on task and timely, BlackRock’s head of human resources, Manish Mehta, wrote in a memo Tuesday. BlackRock will arrange follow-up meetings for employees who raise discrimination and other complaints, for two years after an investigation closes.
/jlne.ws/386v8I2

Coronavirus

Criticized Indian Vaccine Already in Use Found 81% Effective
Chris Kay – Bloomberg
Interim data released from Covaxin’s final phase human trial; Bharat Biotech’s vaccine granted emergency approval in January
An Indian coronavirus vaccine that generated controversy when it was granted emergency approval before finishing its final stage testing has shown to provide strong protection against Covid-19 in an interim analysis of an advanced clinical trial.
/jlne.ws/38nq2rd

Stockholm Endures 100% Spike in Covid Cases as Third Wave Hits
Charles Daly and Niclas Rolander – Bloomberg
Swedish health officials said Stockholm has succumbed to a resurgence of the pandemic, after infections soared 100% over the past three weeks. “We have a third wave of transmissions — it’s here now,” Johan Bratt, the acting health and medical care director for the Stockholm region, said at a press briefing on Wednesday.
/jlne.ws/3sQNDZ7

Turkish Trials Show China’s Sinovac Shot to Be 83.5% Effective
Tugce Ozsoy – Bloomberg
Turkish trials found China’s Sinovac inoculation to be 83.5% effective against the coronavirus, a level of protection that’s lower than the country’s initial predictions but significantly above Brazilian estimates.
/jlne.ws/2PqqttX

Covid vaccines show few serious side-effects after millions of jabs; Surveillance of AstraZeneca and Pfizer recipients in UK reports minor complaints but few severe reactions
Clive Cookson – FT
Despite concerns about possible side-effects as Covid-19 vaccines are rolled out around the world, evidence from the UK’s well-advanced vaccination programme suggests recipients of the leading jabs have little to fear.
/jlne.ws/3uSqUxB

The EU’s vaccination rollout badly needs a revamp; Laggards can learn from more ambitious members of the bloc
The editorial board – FT
EU states have generally handled the coronavirus pandemic better than the UK and US — but not vaccinations. In terms of doses administered, they lag far behind. The oldest and most vulnerable people may now have been inoculated in most countries. But the slower vaccine rollout across the bloc will make it harder to bear down on infections, delaying the exit from lockdowns and curfews, and the resulting economic bounce.
/jlne.ws/3uRVbwg

Biden Expects U.S. to Have Covid-19 Vaccines for All Adults by End of May; Merck has agreed to help its competitor Johnson & Johnson produce vaccines, speeding up the production of shots
Tarini Parti and Sabrina Siddiqui – WSJ
President Biden said the U.S. would have enough Covid-19 vaccines for all American adults by the end of May, two months earlier than he had previously said, after regulators authorized the one-shot Johnson & Johnson JNJ -0.19% vaccine and Merck MRK 0.65% & Co. agreed to help produce it.
/jlne.ws/2NWzESA

‘It’s Like Buying Bruce Springsteen Tickets’: The Hunt to Find a Vaccine Shot; Throngs of people languishing without appointments are cold-calling pharmacies and driving from clinic to clinic, hunting for an extra dose.
Jack Healy – NY Times
After weeks of waiting, Judy Franke’s vaccine breakthrough came when her phone rang at 8 p.m. one freezing February night. There were rumors of extra doses at the Minneapolis convention center. Ms. Franke, 73, had an hour to get there. No guarantees. “I called my daughter and she said, ‘I’m putting my boots on right now,'” said Ms. Franke, a retired teacher with a weakened immune system. “You need to go find the vaccine because the vaccine’s not going to find you.”
/jlne.ws/3sLiW7v

In Quest for Herd Immunity, Giant Vaccination Sites Proliferate; A day at one mass site in Connecticut shows both the promise and the shortcomings of the approach, which is at the center of President Biden’s plan to bring the pandemic to an end.
Abby Goodnough – NY Times
With the nation’s coronavirus vaccine supply expected to swell over the next few months, states and cities are rushing to open mass vaccination sites capable of injecting thousands of shots a day into the arms of Americans, an approach the Biden administration has seized on as crucial for reaching herd immunity in a nation of 330 million.
/jlne.ws/3sPoMov

Exchanges, OTC and Clearing

MGEX Reports the Fifth-Best Month in its History
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), completed February 2021 with a total of 289,812 contracts traded, making it the fifth-best overall month in the history of the Exchange. Compared to February 2020, this past month saw an 11% increase in total volume. Additionally, this past month’s record numbers made it the best February in MGEX’s history.
/jlne.ws/302krBY

ICE Benchmark Association launches beta SONIA indexes for UK testing; The Indexes provide a daily value for accrued compound SONIA interest relative to the first day value of 100 on the date when the Bank of England took responsibility for SONIA.
Annabel Smith – The Trade
The ICE Benchmark Association (IBA) has launched an initial beta version of its ICE SONIA Indexes for testing purposes in the UK, its latest step in the transition from the LIBOR benchmark. IBA said the beta version had been developed to support the specific needs of the UK lending market, offering participants a simple means to calculate SONIA compound interest between any two index dates and associated interest accruals.
/jlne.ws/3e8lPuW

ICE Benchmark Administration Introduces ICE SONIA Indexes to Assist UK Lending Markets Transition to SONIA
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced that ICE Benchmark Administration Limited (“IBA”) has launched an initial, ‘beta’ version of ICE SONIA Indexes for information and testing purposes. IBA has also published a methodology paper introducing the Indexes.
/jlne.ws/3e1rHGp

State Street completes first trade with new FICC sponsored member ICE Clear US; The pair said that their partnership underscored the growing interest from the buy-side in Sponsored Repo services offered by State Street.
Annabel Smith – The Trade
Boston-based financial services giant State Street has completed its first trade with clearing house ICE Clear US, as a new member counterparty of its Sponsored Repo Programme. The trade between the two entities follows ICE recently signing on as a sponsored member of State Street Bank and Trust within the fixed income clearing corporation (FICC) Sponsored Repo Programme.
/jlne.ws/3sIi5V2

Euro-OAT Futures, Long-Term Euro-BTP Futures and Short-Term Euro-BTP Futures: Introduction of intra-day non-disclosure limits
Eurex
With effect from 1 April 2021, the Management Board of Eurex Deutschland decided to introduce intra-day non-disclosure limits for trades entered using the Eurex T7 Entry Services (TES) in Euro-OAT Futures, Long-Term Euro-BTP Futures and Short-Term Euro-BTP Futures.
/jlne.ws/3841vae

TMX Group CEO John McKenzie to Present at the Virtual 2021 RBC Capital Markets Global Financial Institutions Conference
TMX
TMX Group CEO John McKenzie will present at the virtual 2021 RBC Capital Markets Global Financial Institutions Conference on Tuesday, March 9, 2021 at 3:20 – 3:50 p.m. ET.
/jlne.ws/2Pxpb0n

ICE Announces Update on Murban Crude Oil Futures Ahead of Launch on March 29, 2021
MAR 03, 2021; ADNOC confirms removal of destination restrictions on Murban from June 2021; ADNOC Onshore launches monthly forward availability forecast report for Murban export volumes
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced an update on Murban Crude Oil Futures ahead of their launch on March 29, 2021, subject to regulatory approval.
/jlne.ws/2PuoOnk

Intercontinental Exchange Reports February 2021 Statistics
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today reported February 2021 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/2PpTtlv

Producers bullish about farmland values amid strong current conditions
CME Group
Farmers continue to report strong current economic conditions on their farms, according to the February Purdue University/CME Group Ag Economy Barometer. While the overall reading for the Ag Economy Barometer changed very little compared to January, down 2 points to a reading of 165 in February; the Index of Current Conditions remained near its all-time high at a reading of 200. Meanwhile, the Index of Future Expectations continued a four-month decline, down 20% from its October peak, to a reading of 148.
/jlne.ws/3sM2P9O

Notice of Summary Action
CME Group
MEMBER FIRM: Yuanta Securities Korea Co., Ltd.
RULE VIOLATION: Rule 576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
PENALTY: On February 10, 2021, Yuanta Securities Korea Co., Ltd. pursuant to Rule 512 (“Reporting Infractions”), was collectively issued a $2,000 fine for its violations of Rule 576 (includes Cases CME-DQA-21-0570, CME-DQA-21-0575, NYMEX DQA-21-0570, and NYMEX-DQA-20-0575), as follows: CME $1,000; NYMEX $1,000.
/jlne.ws/2O0eJ11

Fintech

Orient Futures Singapore and Trading Technologies Contract to Provide Connectivity to Chinese Derivatives Markets via the TT® Platform
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and Orient Futures International (Singapore) Pte. Ltd. (Orient Futures Singapore) a world-class broker based in Singapore, today announced they have contracted to deliver connectivity to the Chinese international derivatives markets through the TT platform.
/jlne.ws/3uKqedz

Why Fintech Battles Ahead Are About More Than Banks
Jennifer Surane – Bloomberg
The field known as fintech was pioneered by startups dreaming of toppling financial giants and democratizing access to credit. But now many of those behemoths have joined in. JPMorgan Chase & Co. has a history running back to the days of Alexander Hamilton, but it’s also got 50,000 employees working on its technology. It’s not just banking giants getting in on the fun. Recent steps by Walmart Inc., the world’s largest retailer, to create a fintech division has sent shivers across Wall Street. In another sign of fintech’s maturity, regulators are doing as much to shape its progress as coders or dreamers. Take Ant Group Co.’s plans for a public offering in November that was projected to value the app, which moves money for 1.3 billion people, at about $280 billion. That was before the Chinese government stepped in and derailed the listing.
/jlne.ws/3bTMU2s

PayPal Is in Talks to Acquire Crypto Storage Firm Curv
Jennifer Surane – Bloomberg
PayPal Holdings Inc. is in talks to acquire the startup Curv, which helps companies transfer and store digital currencies. The talks are early and could still fall apart, according to a person familiar with the matter, who asked not to be identified discussing internal deliberations. PayPal has been seeking to expand cryptocurrency offerings after the payments giant began providing customers the ability to buy, sell and hold certain digital currencies in its wallet. The firm plans to add those capabilities to its Venmo wallet in the coming months.
/jlne.ws/3sLBcxv

UK fintech bosses warn new rules will stifle start-ups; Tension brews between government view of sector as ‘strategically important’ and FCA duty to protect customers
Nicholas Megaw – FT
Tighter UK rules for fintech groups after the collapse of Wirecard will make it harder for start-ups to get off the ground and threaten the sustainability of smaller companies, some of the industry’s most senior executives have warned.
/jlne.ws/3uPdjXA

Jack Ma’s Ant forced into arms of banks he once dubbed ‘pawnshops’; Fintech will have to rely on state-owned behemoths under online lending reforms
Ryan McMorrow and Yuan Yang – FT
Jack Ma’s Ant Group has undercut, undermined and insulted China’s big state-owned banks for years. Regulators have now turned the tables on the financial technology group after forcing the company to pull its record $37bn initial public offering in November. Beijing is targeting the symbiotic relationship that has transformed China’s financial system by matching loans from small regional banks with 500m borrowers via Ant’s Alipay app, the country’s biggest payments platform.
/jlne.ws/388dG65

Wall Street Poaching Season Heats Up With Fintech and Funds on the Hunt
Anders Melin – Bloomberg
Goldman exits underscore unusually sweet opportunities in 2021; Financial startups need experts in the industry’s mechanics
To the outside world, Wall Street banks looked like great places to be last year, as they printed profits during the pandemic slump. To those inside, they now look like great places to leave, too. Technology upstarts and investment firms are offering some unusually attractive opportunities to seasoned Wall Street professionals, including shots at multiplying their paychecks — an allure all the greater after banks showed restraint in doling out rewards for 2020. Exits are now proliferating as bonus season wraps up.
/jlne.ws/3c1vHE2

Cryptocurrencies

Gensler Straddles Innovation and Enforcement in Senate Hearing
Nikhilesh De – Coindesk
“I’m neither a maximalist nor a minimalist but I do believe [blockchain is] a catalyst for change,” said Gary Gensler, the potential next Chairman of the Securities and Exchange Commission (SEC). Gensler was speaking to the Senate Banking Committee, which held a hearing Tuesday to consider his nomination to the SEC, along with President Joe Biden’s nominee to run the Consumer Financial Protection Bureau, Rohit Chopra. Gensler’s background suggests that he is both pro-crypto and pro-regulation, and it remains unclear if the industry will perceive him as friendly or overzealous on regulation. The hearing didn’t provide too many clues, as Gensler was careful to strike a balance between emphasizing regulating suspicious behavior as well as encouraging new innovations.
jlne.ws/3sOwW03

Australian Bitcoin Firm Iris Energy Upsizes Pre-IPO Round
Harry Brumpton – Bloomberg
Funding round expanded to A$40 million from A$20 million; Separately, firm hires Transgrid’s Jason Conroy as CEO
Australian Bitcoin-focused data center business Iris Energy has doubled a fundraising round to A$40 million ($31 million) ahead of a planned initial public offering. Iris expanded the offering on Wednesday following a A$13 million commitment from Platinum Asset Management, according to a letter to investors obtained by Bloomberg News. The firm had originally set a A$20 million target for its second pre-IPO fundraising. The company is planning its first-time share sale in the middle of this year.
/jlne.ws/3sIwrEW

Letter: UK can take the technological lead in fight against dirty money
Jeffrey Owens – FT
Your editorial “Fintech offers UK a way out of the Brexit bind” (FT View, March 1) and the article by Martin Sandbu (“We must clean up global finance to ‘build back better'”, Opinion, March 1) both failed to make the linkage between improving the competitiveness of the City and countering illicit financial flows. Distributed ledger technology (DLT), the technology behind blockchain that is increasingly used in the financial and tax sectors, and central bank-backed digital currencies (CBDC) together have the potential to both reduce frictions in payment systems and improve transparency. This could lead to a more effective response to cross-border money laundering and tax evasion which are the main components that make up illicit financial flows.
jlne.ws/30anOH8

Bitcoin Dips After Gensler Says SEC Must Root Out Crypto Fraud
Dave Liedtka – Bloomberg
Cryptocurrency enthusiasts exhibited a bit of nerves during Tuesday’s Senate confirmation hearing for Gary Gensler, the nominee for chairman of the U.S. Securities and Exchange Commission. Bitcoin dipped to the lowest levels of the day after Gensler said that insuring that cryptocurrency markets are free of fraud and manipulation is a challenge for the agency. The largest cryptocurrency declined as much as 3% to $47,341 in New York trading. It has jumped about 65% since December.
jlne.ws/386ogKO

PayPal to Buy Crypto Custody Firm Curv: Sources
Ian Allison – Coindesk
PayPal is said to be in the process of buying Curv, a technology firm that powers the secure storage of cryptocurrency, according to three sources familiar with the situation. Israeli news outlet Calcalist reported Tuesday that Curv was being sold for between $200 million and $300 million, without naming the buyer. “PayPal is buying Curv for $500 million,” a source from within the digital asset custody space told CoinDesk on Monday. “From where I’m hearing it, I’m pretty sure it’s true.”
jlne.ws/3b9IlBF

Crypto tax startup TaxBit raises $100 million in round backed by PayPal, Bill Ackman and more
Saniya More – The Block
Utah-based crypto tax and accounting startup TaxBit has raised more than $100 million in a Series A round. First reported by Forbes, the round was led by investment companies Paradigm and Tiger Global, with participants including PayPal Ventures, Coinbase Ventures and Winklevoss Capital. The startup offers cryptocurrency tax software for crypto users, exchanges and vendors. According to TaxBit CEO Austin Woodward, the money raised will be used to invest in software tools to ease operations as well as to expand internationally. He said the funding will ultimately allow the startup to provide corporations with a “traditional enterprise resource planning tool” which will help companies better manage and optimize crypto transactions.
jlne.ws/3rcwJnj

Dogecoin Bounds Onto 1,800 ATMs in the US
Sebastian Sinclair – Coindesk
Fans of the popular canine-themed cryptocurrency dogecoin can now make purchases at 1,800 ATM locations in the U.S. According to a Tuesday tweet by ATM provider CoinFlip, DOGE can now be purchased with cash across its network, as the company makes the most of DOGE’s surging popularity. DOGE was launched in 2013 and quickly grew in popularity thanks to its cute Shiba Inu logo and meme-loving community.
jlne.ws/3rdQydT

Billionaire Lasry, Ex-CFTC Head Giancarlo Invest in Crypto Firm BlockTower
Kevin Reynolds – Coindesk
Hedge-fund manager and sports-team co-owner Marc Lasry and former U.S. Commodity Futures Trading Commission Chairman Christopher Giancarlo have taken stakes in crypto-asset and blockchain investment firm BlockTower Capital, Bloomberg reported. Financial terms weren’t disclosed. While Lasry heads investment firm Avenue Capital, his stake is on his own behalf, Bloomberg said citing people familiar with the matter. Lasry is also co-owner of the Milwaukee Bucks, a National Basketball Association team. Giancarlo, who has also been an executive at swaps brokerage GFI Group, was known as “crypto dad” during his tenure as CFTC head from 2017-2019. He is co-founder of the Digital Dollar Foundation. Giancarlo confirmed the investment but declined to comment further, Bloomberg said.
jlne.ws/3barnTO

Kentucky Lawmakers Approve House Bill Providing Tax Break for Crypto Miners
Sebastian Sinclair – Coindesk
In a 19-to-2 vote, House lawmakers in Kentucky have approved a bill that could draw cryptocurrency mining operations to the state. According to a report from the Lexington Herald on Tuesday, the House budget committee approved House Bill 230, which removes sales tax obligations from electricity purchased for use by cryptocurrency mining businesses. The bill now moves to the upper house for review, joining the Senate’s own tax break for cryptocurrency mining operations: Senate Bill 255. Kentucky uses omnibus branch-wide budget bills, known as general appropriation bills, for its legislative process.
jlne.ws/3e1A6K1

Ethereum now an option on Amazon’s managed blockchain service
MK Manoylov – The Block
Amazon Web Services (AWS), the cloud computing platform providing subsidiary out of the multinational technology company Amazon, announced today that Ethereum is now available on its Amazon Managed Blockchain service. AWS users can now set up Ethereum nodes and join the public Ethereum main network on the Amazon Managed Blockchain. “With this launch, AWS customers can easily provision Ethereum nodes in minutes and connect to the public Ethereum main network and test networks such as Rinkeby and Ropsten,” Amazon said in its blog post. “With Amazon Managed Blockchain, customers get secure networking, encryption at rest and transport, secure access to the network via standard open-source Ethereum APIs, fast and reliable syncs to the Ethereum blockchain, and durable elastic storage for ledger data.”
jlne.ws/3bWjsIT

Gary Gensler’s view of bitcoin hinges on a 55-year-old financial rule
Roya Wolverson – Quarts
Cryptocurrency enthusiasts have been eyeing Joe Biden’s pick to run the US Securities and Exchange Commission for clues about how he might regulate the technology. In his confirmation hearing today, nominee Gary Gensler suggested that more government oversight of cryptocurrencies was in the offing.
/jlne.ws/2NPyzfv

Biden’s SEC pick: Some crypto markets ‘rife with fraud and scams’
Brian Cheung – Yahoo Finance
Gary Gensler, President Joe Biden’s pick to head the Securities and Exchange Commission (SEC), told Congress Tuesday that the “greater challenge” in bitcoin and cryptocurrencies is protecting investors.
/jlne.ws/3sFqSa8

Valid Points: What Coinbase’s Public Listing Means for Eth 2.0
William Foxley and Christine Kim – Coindesk
There’s a lot riding on the success of Ethereum 2.0, including the crypto-industry’s largest U.S.-based exchange going public. Last week, Coinbase released its S-1 filed with the U.S. Securities and Exchange Commission (SEC). In it, the exchange listed potential adverse factors against its business, such as the doxxing of pseudonymous Bitcoin creator Satoshi Nakamoto, negative perceptions of cryptocurrencies and the growth of cryto-native finance platforms generally referred to as decentralized finance (DeFi).
/jlne.ws/3e6Jyf4

Politics

The EU Should Ditch Its Fiscal Rules and Try This; All sorts of financial rules are becoming too rigid and complex for the real world. There’s a better way to regulate.
Andreas Kluth – Bloomberg
If you thought the European Union’s bickering about fiscal policy was bad in recent decades, get ready for an epic squabble once this pandemic is over. Owing to the coronavirus, the EU’s rules on debts and deficits have been suspended and most member states have vastly overshot their normal limits. But at some point next year we’ll have to talk about how fast to apply the rules again. Given the extraordinary macroeconomic situation, it’ll be tempting to tweak them — for the umpteenth time.
/jlne.ws/3uJg4K2

Biden’s SEC nominee vows review of GameStop trading issues, climate disclosures
Pete Schroeder, Chris Prentice – Reuters
U.S. President Joe Biden’s pick to head a key market regulator promised on Tuesday a thorough review of issues raised by the GameStop Corp stock frenzy and suggested companies may have to disclose their potential risks from climate change.
/jlne.ws/3qe1TJw

Biden’s Picks for Financial Regulator Jobs Emphasize Transparency and Fairness; Nominees to lead the Securities and Exchange Commission and the Consumer Financial Protection Bureau faced questions about the limits of their power but said they wouldn’t shy from flexing it.
Stacy Cowley, Matthew Goldstein and Ephrat Livni – NY Times
President Biden’s picks to lead two important regulatory agencies — the Securities and Exchange Commission and the Consumer Financial Protection Bureau — stressed twin goals of transparency and oversight of powerful interests on Tuesday, emphasizing that those who break laws must be held accountable for their actions.
/jlne.ws/3uSeoOo

Russian Vaccine Purchase Sparks Government Crisis in Slovakia
Andrea Dudik and Peter Laca
Igor Matovic – Bloomberg
Email
Slovakia’s decision to purchase coronavirus vaccines from Russia sparked a political crisis that’s threatening to tear apart the ruling alliance. The smallest coalition party is weighing whether to quit the coalition led by Prime Minister Igor Matovic and the leader of the SaS party demanded a cabinet revamp. While Matovic would retain a parliamentary majority if either of the groups leaves, both of them exiting would force him into a minority and could bring down the government.
/jlne.ws/3uPUMuj

Tempers fray over France’s vaccine strategy; Emmanuel Macron’s government under fire for handling of jabs and lockdowns
Victor Mallet and Leila Abboud and John Burn-Murdoch – FT
France’s vaccination campaign, which has been heavily criticised for its slow progress, is beginning to reduce Covid-19 infections, hospitalisations and deaths among people over 80. But with cases rising among younger adults, the government must decide whether more restrictions are needed to contain the spread of the virus.
/jlne.ws/388bbRf

US and Asia allies plan Covid vaccine strategy to counter China; Biden administration in talks with Japan, India and Australia to distribute jabs across region
Demetri Sevastopulo and Amy Kazmin – FT
The US is working with Japan, India and Australia to develop a plan to distribute Covid-19 vaccines to countries in Asia as part of a broader strategy to counter China’s influence. The White House has held discussions with other members of the Quad, a diplomatic and security initiative between the countries, in recent weeks, according to six people familiar with the talks.
/jlne.ws/3sI84as

Energy is the spark that blows up Amlo’s Mexico plans; López Obrador’s policies fatally undermine the oil and electricity companies he needs for funds
Pamela Starr – FT
Andrés Manuel López Obrador, Mexico’s controversial president, has embarked on a programme of national change he grandly calls the “Fourth Transformation”. Underpinning this historic overhaul are a costly series of infrastructure investments and an array of welfare initiatives. So far, they have been paid for by a shift in government spending and increased tax collection. However, sustaining these programmes will require new revenue sources and, as he has promised not to raise taxes or take on additional debt, that leaves just one option: Mexico’s two state-owned energy companies. This is where his whole project falls apart.
/jlne.ws/3sQTQ7n

Gensler Straddles Innovation and Enforcement in Senate Hearing; Gary Gensler was careful to strike a balance between emphasizing regulating suspicious behavior as well as encouraging new innovations.
Nikhilesh De – Coindesk
“I’m neither a maximalist nor a minimalist but I do believe [blockchain is] a catalyst for change,” said Gary Gensler, the potential next Chairman of the Securities and Exchange Commission (SEC). Gensler was speaking to the Senate Banking Committee, which held a hearing Tuesday to consider his nomination to the SEC, along with President Joe Biden’s nominee to run the Consumer Financial Protection Bureau, Rohit Chopra.
/jlne.ws/3sOwW03

Regulation

Gold Coast brothers charged with failing to comply with notices
ASIC
Sonny Micheal Nugent and his brother, Ashley Kevin Nugent, both from the Gold Coast, Queensland, appeared on 01 March 2021 in Southport Magistrates Court charged with failing to comply with notices issued under the ASIC Act.
/jlne.ws/3uReEx1

ESMA proposes improvements to Transparency Directive after Wirecard case
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has written to the European Commission (EC) with its proposals to improve the Transparency Directive (TD) following the Wirecard case. The letter addresses provisions related to enforcement of financial information.
/jlne.ws/383xKqg

Upcoming Board Meeting
FINRA
This week, the FINRA Board of Governors will hold its first Board meeting of 2021. Highlighted below are several items the Board committees will consider.
/jlne.ws/3uKky3f

SEC Charges Seven Individuals for $45 Million Fraudulent Scheme
SEC
The Securities and Exchange Commission today charged seven individuals and a technology company in connection with a fraudulent scheme to gain control of Airborne Wireless Network, promote its stock, and defraud investors.
/jlne.ws/3sPwHCf

Rule Submission Letter: National Futures Association: Proposed Interpretive Notice entitled NFA
Compliance Rules 2-9 and 2-36: Members’ Use of Third-Party Service
Providers
NFA
/jlne.ws/3bYwZ2B

FCA confirms the increase in thresholds for contactless payments
UK FCA
The Financial Conduct Authority (FCA) has confirmed changes to its rules to allow for an increase in the single transaction contactless payment threshold from £45 to £100. The contactless threshold for multiple transactions will also increase from £130 to £300.
/jlne.ws/2Pw1pBZ

Retail Prices Index changes and DB pension transfer redress
UK FCA
We will amend our Finalised Guidance for firms on how to calculate redress for unsuitable DB transfers in mid-March 2021 to reflect Government changes to the way that the Retail Prices Index (RPI) inflation measure is calculated from 2030.
/jlne.ws/3bZDm5J

FCA welcomes Lord Hill’s Listing Review report
UK FCA
Lord Hill has published his recommendations from the UK Listings Review, which was launched by HM Treasury in November last year.
/jlne.ws/3uQywAI

SEC Probes Whistle-Blower’s Claims That Hedge Fund Harmed Yale
Matt Robinson and Janet Lorin – Bloomberg
Regulator questions Deccan fund about university’s investment; Firm hasn’t been accused of wrongdoing; review is preliminary
U.S. regulators are examining a whistle-blower’s claims that Deccan Value Investors harmed Yale University’s multibillion-dollar endowment when the Ivy League school pulled about $400 million from the hedge fund in 2019, said two people familiar with the matter.
/jlne.ws/3uYCdEz

Investing and Trading

‘Roaring Kitty’ no longer has financial broker license: filing
Reuters
The Massachusetts financial professional who gained notoriety as GameStop bull “Roaring Kitty” is no longer a broker registered with the Financial Industry Regulatory Authority, according to the organization’s online records.
/jlne.ws/3bTQucH

Hertz, the Original Meme Stock, Is Turning Out to Be Worthless
Steven Church – Bloomberg
Company saw stock soar as high as $5.53 after Chapter 11; Bankruptcy exit plan would leave nothing for shareholders
It’s the version of David versus Goliath that Wall Street will like. Day traders, snapping up penny stocks on the popular Robinhood app, sought to defy decades of convention and make money on bankrupt rental-car company Hertz. The craze sent shares soaring as much as 896%, prompting Hertz to briefly capitalize on the frenzy by issuing even more stock.
/jlne.ws/388jSuC

Reddit Traders Push Rocket Founder’s Fortune $25 Billion Higher; It’s the second big pop in wealth for Dan Gilbert in the past year, as shares of his mortgage lender soared 71% on day-trader speculation.
Devon Pendleton – Bloomberg
The net worth of Quicken Loans Inc. Chairman Dan Gilbert jumped by $25 billion Tuesday as shares of his mortgage lender Rocket Cos. skyrocketed on speculation it’s in the crosshairs of Reddit day traders. The move propelled Gilbert, 59 and now worth $64.1 billion, up 19 spots to No. 16 on the Bloomberg Billionaires Index of the world’s 500 wealthiest people, marking one of the biggest one-day moves in the listing’s nine-year history. His majority stake in Rocket, which closed the day up 71%, comprises 93% of his wealth.
/jlne.ws/3bYLrI8

Seven Ways to Trick Yourself Into Making Sound Financial Choices; Take advantage of insights from behavioral economists.
Peter Coy – Bloomberg
We spend too much and don’t save enough. We pay interest on credit cards. We buy shares in GameStop Corp. at the top of the market. We are, in short, human. Fortunately, there are hacks that can help us get our financial lives under control with minimal time and effort. Here are tricks for beginners:
/jlne.ws/3eaSOPv

Forget GameStop. If You Want Real Risk, Invest in Supercars; Pump the brakes if you’re expecting a return on your vehicle investment
Kyle Stock – Bloomberg
Everyone notices the doors, but few pay much attention to the sills. In 1954, Mercedes-Benz unveiled its sinuous 300SL coupe with “gull-wing” doors that hinged vertically from the vehicle’s roof into the sky. They were unlike anything the car world had seen. They were also a bit of an afterthought. Equally vanguard was the chassis, a bundle of thin, hollow steel tubes welded into an intricate lattice of triangles. It was airplane stuff, years ahead of the heavy boxed beams that Detroit and Stuttgart had long relied on.
/jlne.ws/3uOh5Rd

End of ‘liquidity premium’ to unleash shareholder activism; Companies will face questioning from investors on how to allow allocate excess funds
Ethan Klingsberg – FT
Publicly traded companies are increasingly hearing privately from investors that the era of the “liquidity premium” is coming to an end. This fading of the valuation boost for companies with good access to liquid sources of funding has significance for investor relations, executive teams and boards of directors.
/jlne.ws/3sLggGZ

CPP-Backed Sports Gambling Firm in Deal Talks With Boehly SPAC
Gillian Tan and Crystal Tse – Bloomberg
Horizon Acquisition Corp. II raised $525 million in October; Sportradar’s backers include Michael Jordan, Mark Cuban
Swiss gambling data company Sportradar AG is in talks to go public through Todd Boehly’s special purpose acquisition company Horizon Acquisition Corp. II, according to people with knowledge of the matter.
/jlne.ws/3bZ58Q4

Barstool’s Portnoy Touts Buzz-Focused ETF with Team Owner, Hedge Fund Manager
Brendan Coffey – Yahoo Sports
Barstool Sports founder turned day-trader Dave Portnoy has a new investment to promote—an ETF, of which he’ll get a cut for every investor’s dollar.
/jlne.ws/3sM6zba

Environmental, Social and Corporate Governance

Why the Biggest U.S. ESG Fund Has No Direct Renewable Holdings; “We hesitate to overplay the ESG hand,” says Parnassus Core Equity Fund Co-Manager Ben Allen.
Tim Quinson – Bloomberg
America’s biggest ESG fund has no direct investments in renewable energy companies. Yes, you read that right. Instead, the $25 billion Parnassus Core Equity Fund holds stocks like Linde Plc, an industrial gas company, Deere & Co., the largest manufacturer of agricultural machinery, and Xylem Inc., which makes water and wastewater pumps for municipal customers. It also owns big stakes in technology behemoths Microsoft Corp. and Amazon.com Inc.
/jlne.ws/384Mx3T

Climate Activist Who Took On BlackRock Now Takes Aim at Vanguard; Casey Harrell battles ALS as he starts his latest environmental campaign against fund managers.
Alastair Marsh – Bloomberg
Casey Harrell, the campaigner whose sustained pressure was instrumental in pushing BlackRock Inc. to act against climate change, approaches his work as if locked in a race against time. That was true even before the 42-year-old environmental activist was diagnosed last year with amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease. Harrell’s latest effort, focused on Vanguard Group Inc., is likely to be his last.
/jlne.ws/2PqpiL3

China Turns the Screws on Renewables Just When It Needs Them
Bloomberg News
Government proposes auctions for new solar, wind licenses; Shares of developers fall as proposal seen squeezing profits
After shortchanging renewable energy developers for years to the point where it owes billions of dollars in unpaid subsidies, the Chinese government is now proposing that those companies may have to cancel part of the debt if they want to keep building new projects.
/jlne.ws/3uP9fXk

Wall Street Lobbies to Bring More ESG Funds Into 401(k)s; Money managers are pushing for a revision of a Labor Department rule that effectively bars socially focused funds from many retirement plans
Dawn Lim – WSJ
Money managers are lobbying to scrap a Trump-era rule that makes it difficult for 401(k) plans to invest in socially focused funds. The Labor Department rule, announced in October, imposed restrictions on what can and can’t be offered as company 401(k) funds. One result is that plans can’t use funds with nonfinancial goals as default investments for employees.
/jlne.ws/3bYSDUE

Robert Downey Jr. and Bill Gates Bet On Electric Motor Startup; California-based Turntide Technologies raised $80 million for its motors that reduce electricity use
Akshat Rathi – Bloomberg
As much as half of the world’s electricity is consumed by motors. They power everything from fans to electric cars and pumps to industrial machinery. Making them more efficient could go a long way in reducing emissions of planet-warming greenhouse gases.
/jlne.ws/3bW8kMn

Big Oil Is Unwilling to Bet on the Future of Crude; The reserves-to-production ratio, which gauges long-term prospects across the industry, has fallen below critical levels.
David Fickling – Bloomberg
For a century, there’s been a key metric for judging the direction of the oil industry: The number of years it would take for wells to run dry.
/jlne.ws/2NPAv7L

Hydrogen Is ‘Jump Ball’ in Global Clean-Energy Race, Kerry Says
Jennifer A Dlouhy and Will Wade – Bloomberg
Climate envoy touts oil-industry opportunity at CERAWeek; Says tensions with China won’t block aggressive climate action
The U.S. oil and gas industry should embrace “huge opportunities” in producing and transporting hydrogen, with the potential for that cutting-edge energy source to fuel long-haul trucks and supply power globally, presidential climate envoy John Kerry said Tuesday.
/jlne.ws/3bZo9BM

A $9 Billion Mizuho Fund Sparks Review of Japan ESG Labels
Takashi Nakamichi and Takako Taniguchi – Bloomberg
FSA looking at new labeling rules to avoid ‘greenwashing’; Morgan Stanley-managed fund had provided limited ESG details
A popular ESG fund in Japan managed by Morgan Stanley and sold by Mizuho Financial is triggering an industry-wide review by regulators who are looking into new rules for mutual funds to protect investors from possible “greenwashing.”
/jlne.ws/3uNCwBL

Institutions

Fidelity boosted by market gains and retail investor activity; Family-owned financial group posts record operating profit for 2020
Michael Mackenzie – FT
Fidelity made a record operating profit in 2020 as the Boston-based financial group benefited from strong gains across global markets and a retail investor boom.
/jlne.ws/3bWNY5l

Credit Suisse’s Greensill Mess Spoils Restart for CEO Gottstein
Marion Halftermeyer – Bloomberg
CEO may face renewed questions after $10 billion funds frozen; Bank is said to have extended $140 million loans to Greensill
The rapid unraveling of Lex Greensill’s trade finance empire is leaving one of his biggest backers with some unpalatable choices. Credit Suisse Group AG, which set off a cascade of events Monday by freezing about $10 billion of funds that it ran with Greensill, is having to pick between saddling fund investors with potential losses, or taking the assets on its own books and irking shareholders and regulators. The bank was pulled even deeper into the scandal when it emerged that it had also extended $140 million in loans to Greensill, according to a person familiar with the matter.
/jlne.ws/3v0jIQ2

Deutsche Bank’s DWS Rolls Out New Hierarchy, Scraps Job Titles
Steven Arons – Bloomberg
Deutsche Bank AG’s asset manager is scrapping the role of managing director as it looks to flatten hierarchies and link career progression to performance instead of tenure. DWS Group on Wednesday replaced all corporate titles with functional role descriptions, Executive Office Head Bjoern Pietsch, one of the leaders of the project, said in a telephone interview.
/jlne.ws/3sF59z6

Bundesbank Won’t Distribute Profit for First Time Since 1979
Carolynn Look – Bloomberg
Central bank boosts risk provisions by 2.4 billion euros; Weidmann sees no reason to fundamentally question outlook
Germany’s central bank won’t distribute a profit to the government for the first time since 1979 as it braces for “considerable” risks related to pandemic stimulus programs. The Bundesbank revealed Monday that it topped up provisions by 2.4 billion euros ($2.9 billion) last year to protect itself from defaults and interest-rate risks. The report comes after some European Central Bank policy makers sounded the alarm over a rise in bond yields across the 19-nation euro zone, holding out the prospect of faster asset purchases.
/jlne.ws/3uRpeEw

Pru says pandemic has changed how life insurance is sold ‘forever’; UK-based insurer plots digital future in Asia as it presses ahead with demerger
Alistair Gray – FT
The way life insurance policies are sold has changed “forever” because of the pandemic as agents who have worked face-to-face for decades have switched to video, Prudential’s chief executive has said.
/jlne.ws/2PvP1Sv

Bond ETFs might have short changed market makers during 2020 panic; BIS study suggests fund providers offered lower-quality paper to fill redemption baskets
Steve Johnson – FT
Bond ETFs may have prevented runs on their funds during last year’s market panic by short-changing the market makers and investment banks that service them, according to the Bank for International Settlements.
/jlne.ws/2PjRpeP

Goldman Sachs executive exodus gains steam as top lawyer exits
Thornton McEnery – NY Post
The exit door at Goldman Sachs is getting quite a workout. The megabank’s head lawyer, Karen Seymour, is reportedly on her way out — marking the third high-profile departure this week. The reason for her departure is unknown, but it might complicate Goldman CEO David Solomon’s work to remake the one-time trading juggernaut into a more accessible and transparent institution.
/jlne.ws/3sQYKkN

Citi’s global head of electronic equities markets departs; John Lowrey has left the US investment bank after over five years as global head of electronic markets to start up a consulting firm, The TRADE understands.
Annabel Smith – The Trade
The global head of electronic equities markets at Citi has left the US investment bank after over five years, to start up a consulting firm aimed at advising FinTech entrepreneurs. According to John Lowrey’s social media profile, he left the investment bank in December last year to become founder and president of Imbrium Consultants.
/jlne.ws/388l3dL

BNP Paribas Asset Management Appoints New Global Head Of Stewardship
Mondovisione
BNP Paribas Asset Management (‘BNPP AM’) announces the appointment of Michael Herskovich as Global Head of Stewardship within its Sustainability Centre. Michael is based in Paris and reports to Jane Ambachtsheer, BNPP AM’s Global Head of Sustainability. Michael replaces Helena Viñes Fiestas, who will be leaving BNPP AM after 10 years to take up a new role as a board member of the Comisión Nacional del Mercado de Valores (‘CNMV’), the Spanish securities market regulator. Helena will join the CNMV in Madrid on 1 May.
/jlne.ws/3bUGDU5

UBS Seeks to Raise Stake in China Joint Venture to 67%
Cathy Chan – Bloomberg
UBS partners are looking to sell a combined 16% stake; UBS will not pursue full ownership by buying government stake
UBS Group AG plans to deepen its control over its Chinese securities unit as two of its partners in the venture are seeking to sell their stakes.
/jlne.ws/385zWxw

Citibank Seeks Freeze on Erroneous Transfers During Appeal
Malathi Nayak – Bloomberg
Citigroup Inc. asked a federal judge to freeze more than $500 million the bank mistakenly sent to Revlon Inc. creditors, saying the money could be distributed while it appeals his ruling that it’s not entitled to the funds.
/jlne.ws/383EPa0

Goldman to Swell to Record Size in Singapore With 100 Tech Hires
Chanyaporn Chanjaroen and Ambereen Choudhury – Bloomberg=
Bank to add 100 positions, taking headcount to over 1,000; Asia operations contributed 14% of global revenue in 2020
Goldman Sachs Group Inc. plans to add about 100 staff in Singapore, taking its headcount in the Southeast Asian financial hub to a record, following a tumultuous period in the region.
/jlne.ws/3uOGuKs

New York Warns Hedge Funds: Pay Taxes ‘Like Everybody Else’
Katherine Burton – Bloomberg
New York has a warning for hedge fund managers: Pay your taxes like everybody else. Officials delivered the message as they announced that Thomas Sandell and his hedge fund, Sandell Asset Management Corp., would pay $105 million to New York, the biggest fine of its kind in the state, after being accused of faking a move to Florida to avoid paying state and city taxes in 2017 on deferred fee revenue of nearly half a billion dollars.
/jlne.ws/3sJwEaN

JPMorgan Seeks to Reduce Office Space in Two Manhattan Towers
Natalie Wong and Michelle F Davis – Bloomberg
Space in Financial District, Hudson Yards is up for sublease; Pandemic has pushed employers to re-evaluate real estate needs
JPMorgan Chase & Co. is marketing big blocks of office space in Manhattan as companies re-evaluate their need for real estate amid the Covid-19 pandemic, according to people with knowledge of the matter.
/jlne.ws/3bPXUxu

Regions

Ex-Russian Minister Nets $11 Billion With a SPAC; The blank-check trend is cementing the wealth and voting power of founders and early financial backers, such as Arrival’s Denis Sverdlov.
Chris Bryant – Bloomberg
the time a start-up has gone public, a founder can count themselves lucky if they still own 20% of the shares. It’s striking then that the boss of Britain’s Arrival Ltd., Russian tycoon and ex-politician Denis Sverdlov, will control 76% of its stock after the maker of electric vans and buses completes a merger with a special purpose acquisition company (SPAC) in the coming weeks. The stake, owned by Sverdlov’s Luxembourg investment company Kinetik Sarl, is valued at about $11 billion even though Arrival hasn’t begun manufacturing vehicles yet.
/jlne.ws/3sKpG5r

Berlin’s Rent Controls Are Proving to Be a Disaster; A year ago, the leftist government of Germany’s capital region imposed central planning on the city’s housing market. That was a bad move.
Andreas Kluth – Bloomberg
If populism on the political right corrupts democracies, populism on the left ruins economies. For the latest evidence take a closer look at the housing market of the German capital, Berlin. A year ago, a rent cap took effect in the city that was unprecedented in Germany. For all apartments built before 2014, rents were frozen at whatever they were on Jun. 18, 2019. Tenants in those units can also force landlords to lower rents defined as “excessive.”
/jlne.ws/3e5kc19

Internet Shutdowns Plunge Millions into ‘Digital Darkness’
Marc Daniel Davies – Bloomberg
India tops shutdown list again with 109 shutdowns in 2020; Blocked web access cost global economy $4 billion last year
India led the world last year in internet shutdowns that affected hundreds of millions of people, as governments cracked down on political rivals and tried to suppress protests. At least 155 internet shutdowns in 2020 disrupted access for people in 29 countries, according to a report on Wednesday from digital rights group Access Now. That included 28 full internet blackouts that plunged people and in some cases entire cities, into “digital darkness,” the report said. Most recorded incidents took place in Africa, the Middle East and South Asia.
/jlne.ws/3uNmgRj

Brazil Economic Team Enlists Investor Help as Rate Bets Soar
Aline Oyamada, Rachel Gamarski, and Martha Viotti Beck -Bloomberg
Rates curve begins to price 75 basis-point Selic hike in March; Fiscal concern and worsening pandemic take a toll on markets
Brazil’s economic team is enlisting investors to help it defend a rule that caps public spending, as growing fiscal concerns sink local markets and push traders to bet on the most aggressive interest rate hike in a decade.
/jlne.ws/3e1DAw0

Hong Kong Needs More Unicorns So It Has to Join the SPAC Race; The blank check companies could increase the hot IPOs available to investors so the throngs don’t all go chasing a small number of good deals.
Shuli Ren – Bloomberg
New York is the place where more startups — from EV battery makers to flying cars — have gone public by way of the boom in SPACs, or special purpose acquisition companies. Once listed, SPACs are on the lookout to place their vast sums in promising enterprises (which then don’t have to go through the complex initial public offering process). At the current rate, the world’s new generation of unicorns will all be listed in New York via SPACs. The city is once again the IPO center of the world.
/jlne.ws/3c1w6X4

Extreme Weather Puts $84 Billion of Indian Bank Debt at Risk
Archana Chaudhary – Bloomberg
Leading nonprofit disclosure platform releases annual report; 87% of companies say climate risks have affected operations
An increase in extreme weather events such as floods, droughts and cyclones risk souring debt worth more than 6.19 trillion rupees ($84 billion) at India’s biggest financial institutions.
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Brexit

London Office Values Could Gain 25% Over Next Five Years
Jack Sidders – Bloomberg
Post-Brexit comeback should see capital outpace Europe: DWS; Recovery in rents predicted to support office price increases
London’s office market is set to awaken from its slumber. Values in the U.K. capital should jump about 25% over the next five years, outpacing other European capitals, according to DWS researchers. The price gap that’s opened up since the Brexit referendum will narrow thanks to the U.K.-European Union trade deal and economic prospects for London that now makes the city look cheap by comparison, the firm said in a report Wednesday.
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UK fishing sector sees more job losses if post-Brexit export troubles not tackled soon
Maytaal Angel – Reuters
Britain could lose more jobs in its fishing sector if the current delays and increased costs involved in exporting to the EU post-Brexit are not ironed out soon, industry groups told British government officials on Tuesday.
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Northern Ireland’s position ‘rock solid’ in UK, says Johnson, promising to fix post-Brexit trade
Reuters
Prime Minister Boris Johnson said on Wednesday Britain would leave nothing off the table in talks with the European Union to improve post-Brexit trade with Northern Ireland, saying the province’s position in the United Kingdom was “rock solid”.
/jlne.ws/3sNpaUy

Britain to ease listing rules to buttress London after Brexit
Huw Jones – Yahoo Finance
Britain will modernise its listing rules to attract more high-growth and “blank cheque” SPAC company flotations to London, Finance Minister Rishi Sunak said after a government-backed review said the capital was on the back foot after Brexit.
The London Stock Exchange is facing tougher competition from NYSE and Nasdaq in New York, and from Euronext in Amsterdam since Britain fully left the European Union on Dec. 31.
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Insights Special Edition: Trade and Cooperation – The Final Phase of Brexit
Skadden, Arps, Slate, Meagher & Flom LLP – JDSupra
On December 24, 2020, the United Kingdom and the European Union concluded one of the largest trade deals in history, the EU-UK Trade and Cooperation Agreement (TCA). While the TCA regulates a number of important areas, it does not address in detail significant aspects of the UK economy, including the services sector, which represents the largest portion of the UK GDP. In this publication, we discuss key areas of the TCA of relevance to our clients, identify important issues that remain largely unregulated and examine other topics of note.
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Brexit: Agriculture minister hits back at executive approval calls
Conor Macauley – BBC News
NI’s agriculture minister has said he will be bring many issues to the executive if all Northern Ireland Protocol decisions need approved by ministers. Gordon Lyons made the remarks in the assembly on Tuesday. The DUP minister has been criticised over a decision to halt work on post-Brexit border control posts. Opponents said as the decision cut across several departments it ought to have been agreed by the executive. Mr Lyons told MLAs there “is the opinion that issues that are cross-cutting in this way should come to the executive”. He did not specify whether that opinion had been expressed by NI’s Attorney General Brenda King at Monday’s executive meeting.
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Miscellaneous

Boy Scouts Will Sell Nearly 60 Norman Rockwell Works to Pay Sex-Abuse Claims; The Boy Scouts of America, which is facing more than 82,000 sex-abuse claims, said in a court filing that it would establish a settlement fund of at least $300 million.
Neil Vigdor – NY Times
The association between the Boy Scouts of America and Norman Rockwell spanned more than six decades, yielding dozens of commissioned coming-of-age portraits that evoke virtue, bravery and Americana. But now faced with tens of thousands of sex-abuse claims, the debt-saddled organization is poised to do the unthinkable: Sell its collection of Rockwell’s art.
/jlne.ws/3e6fPTI

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