A ‘Mind-Boggling’ Individual Investor Boom Stirs Up Markets in Asia; Brazil’s Covid Crisis Is a Warning to the Whole World, Scientists Say

Mar 4, 2021

First Read

$30,926/$300,000 (10.3%)
Michael Dawley

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Hits & Takes
John Lothian & JLN Staff

Former CFTC Chairman Heath Tarbert will step down from the commission on Friday, after having served two years with the CFTC, 18 months as chairman, he wrote in a tweet from his soon to be decommissioned @ChairmanHeath Twitter account. Thank you to former Chairman Tarbert for his service.

Unfortunately, I will always remember him for his leadership during a time when Jitesh Thakkar’s CFTC civil case was continued after the DOJ lost their criminal case against Thakkar. Thankfully, the Thakkar case was resolved, but it should have just been dropped. For all his great leadership at the commission, he missed this opportunity to rectify this injustice the right way.

One of a very few things that Commissioner Heath Tarbert leaves undone is a conclusion to the long-fought federal futures market manipulation case, CFTC v Kraft and Mondelez, which dates from 2015. It was “all over but the shouting” in the litigation when Tarbert came to the commission. 45 days later Tarbert’s very public shouting about the CFTC’s settlement led a federal judge promptly to vacate the settlement agreement, which had gagged the commissioners. With two of the commissioners bucking the chairman – also very publicly – the episode presaged a number of substantive disagreements among commissioners during Tarbert’s chairmanship.

Former Acting CFTC Chairman and now FIA President & CEO Walt Lukken also has a message for the industry, this one in a video inviting you to attend this year’s FIA Boca-V. He personally invites you to join FIA for the virtual International Futures Industry Conference this March 16-18. Boca-V will also feature a celebration of the newest inductees into the Futures Hall of Fame, sharing their experiences in their own words in videos shot by FIA and edited by John Lothian Productions.

The Republic of Starbucks and the Republic of Target have declared that masks are still required in stores in the state of Texas, despite the “Neanderthal thinking” move by the Texas Governor.

Diane Eastabrook, the longtime and now former Chicago bureau chief/correspondent for PBS Nightly Business Reports, is now a staff writer at Haymarket Media US, which covers home health care and hospital at home.

Chicago was founded 188 years ago on this day, March 4, 1844. I was born 128 years later in 1961. It is not surprising that I was born with big shoulders and live in Elmhurst, the town where Chicago poet Carl Sandburg lived.

Former Goldman Sachs futures powerhouse Michael Dawley catapulted the JLN MarketsWiki Education GoFundMe campaign over the $30,000 mark on the GoFundMe.com website, giving me a very nice birthday gift. His donation takes us over the 10% level for the campaign on the website. Mike is a friend and longtime JLN reader and supporter. He served as FIA chairman for several years and terms, and was a driving force for the merger of the FIA and the FOA and the creation of FIA Global. He is a former chairman of the NFA board of directors and is still a member. When he retired from Goldman, he was honored at Boca with a video shot by John Lothian Productions at the conference. He is a man of many talents and interests and we thank him for his generous gift. Thank you to Mike and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign.

I have an apology to offer. Gary Flagler of MexDer gave to the JLN MarketsWiki Education GoFundMe campaign sometime back and I missed mentioning it here. Gary is a longtime friend of JLN and former executive with JP Morgan. He is an omnipresent participant in industry events and an enthusiastic proponent of our markets, especially MexDer’s and their owners. He also happens to be a fellow Purdue University graduate and looks great in black and old gold. Thank you to Gary and my apologies for missing his donation.

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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Joseph Schifano of Eventus Systems has an article in TabbForum titled, “What’s Different About Trade Surveillance for Digital Assets? Same Game (mostly), Different Players,” in which he explores digital asset surveillance programs. Membership in TabbForum is required to read the article, but it’s free to sign up.~SR

On Episode 11 of Nasdaq’s TotalMarkets podcast, Nasdaq Chief Economist Phil Mackintosh speaks with Andy Nybo, managing director with Burton-Taylor International Consulting, about the state of market data, retail trading, and how proposed market structure changes may adversely affect investors. You can listen to the podcast here.~SR

Ripple is piloting a new private distributed ledger for central banks launching central bank digital currencies (CBDCs), according to a blog post published on their site yesterday. “The CBDC Private Ledger meets even the highest of security standards for Central Banks with each having complete sovereignty and ability to customize based on their own unique privacy and policy requirements,” the post said. It also mentions several times that Ripple’s private ledger has been running for 8 years “without incident,” and that the platform was used to launch Ripple’s own digital asset, XRP – the sale of which the SEC is currently scrutinizing in a lawsuit.~MR

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Walt Lukken: Your personal invitation to Boca-V!
JohnLothianNews.com

FIA President and CEO Walt Lukken personally invites you to join FIA for the virtual International Futures Industry Conference this March 16-18. Boca-V brings you three days of interactive programming including keynote sessions with acting CFTC Chairman Rostin Behnam, FT columnist Rana Foroohar, EC Commissioner Mairead McGuinness, MicroStrategy chairman and CEO Michael Saylor, and Google Cloud vice president Derek White. Global exchange leaders from Cboe Global Markets, CME Group, Eurex, ICE, London Stock Exchange Group, Nasdaq, and SGX will also discuss trends and opportunities related to markets, innovation, and sustainability. Boca-V will also feature a celebration of the newest inductees into the Futures Hall of Fame, sharing their experiences in their own words. Learn more at FIA.org/boca and register!

Watch the video »

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No such thing as a free trade: How Robinhood and others really profit from ‘PFOF’—and why it harms the markets
Shawn Tully – Forbes
Doug Atkin and Bernie Madoff were engaged in a screaming match as two senior officials watched in wonder at the Washington, D.C., office of the Securities and Exchange Commission. On this day in 1991, the future Ponzi schemer was there to defend a new practice he had pioneered and that was attracting huge volumes of trades from retail brokers. It was called “payment for order flow,” known on Wall Street as PFOF.
/jlne.ws/3e26Oeh

*****Bernie Madoff was the initiator of Payment For Order Flow? That is not good.~JJL

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Aquarius Financial Technologies partners with CQG; CQG’s strategic partnership will enable Aquarius to launch its first institutional grade cryptocurrency exchange in Q3 2021
Aquarius Financial Technologies Ltd.
Aquarius Financial Technologies Ltd. (Aquarius), a next generation trading technology provider, today announced a strategic partnership with CQG, a leading global provider of high-performance technology solutions for traders, brokers, commercial hedgers, and exchanges. The partnership will support Aquarius’ vision to launch an institutional-grade global cryptocurrency exchange using CQG’s proprietary technology.
/prn.to/30ds08Q

*****Why would you do a deal with Aquarius during the sign of Pisces? It is fishy!~JJL

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A Modern Power Grid Can Deliver More Than Just Resiliency
Vinson & Elkins
V&E Energy Regulatory Update
Texas has proven that a commitment to market solutions and diverse electrical infrastructure can be a recipe for success. Under the restructuring of the power market and initiatives like the competitive renewable energy zone, we saw investment take off and energy prices fall. Texas has greatly benefited from its competitive energy market with power prices consistently below the national average. Electricity rates were $0.003 per kilowatt-hour lower than the U.S. average between 2002 and 2017.1
/bit.ly/2MOu308

*****More thought leadership from Allan Schoenberg’s new law firm employer.~JJL

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Wednesday’s Top Three
Our top story Wednesday was Bloomberg’s A $21 Trillion Treasuries Mystery Is Bedeviling Global Markets, about last week’s “startling gyrations” in U.S. Treasury yields. Second was another Bloomberg story, Coinbase Is a $100 Billion Crypto Cult. Third was the Financial Times’ Hey Citi, your bitcoin report is embarrassingly bad.

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MarketsWiki Stats
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MarketsWiki Statistics

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

A ‘Mind-Boggling’ Individual Investor Boom Stirs Up Markets in Asia; Like in the U.S., investing apps have attracted individual traders with time on their hands thanks to the Covid-19 pandemic
Frances Yoon – WSJ
Stock trading has surged across Asia, as markets have recovered from the shock of the Covid-19 pandemic, with many younger individual investors piling into shares for the first time. Activity on the region’s two busiest stock markets, in Shanghai and Shenzhen, has risen toward levels last registered in China’s 2014 and 2015 boom. Trading on exchanges in Seoul and Hong Kong has broken records. Shares are also changing hands in huge numbers in Taiwan, India and some smaller markets like Indonesia and Vietnam.
/on.wsj.com/3uOUdRH

Brazil’s Covid Crisis Is a Warning to the Whole World, Scientists Say; Brazil is seeing a record number of deaths, and the spread of a more contagious coronavirus variant that may cause reinfection.
Manuela Andreoni, Ernesto Londoño and Letícia Casado – NY Times
Covid-19 has already left a trail of death and despair in Brazil, one of the worst in the world. Now, a year into the pandemic, the country is setting another wrenching record. No other nation that experienced such a major outbreak is still grappling with record-setting death tolls and a health care system on the brink of collapse. Many other hard-hit nations are, instead, taking tentative steps toward a semblance of normalcy.
/nyti.ms/3uTlxOz

CME Group Announces First Trades of Global Emissions Offset (GEO) Futures
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that its Global Emissions Offset (GEO) futures have launched and are available for trading. The total volume for the first two trading days was 81 contracts across five different contract months, with participation on screen and through the block market from nine firms, including Macquarie Group, Hartree Partners and Mercuria. The first trades took place on Sunday, February 28 and were executed by Evolution Markets Inc.
/bit.ly/388Qjcx

London Goes Radical to Take On New York and Amsterdam; A review on how to revitalize the capital markets doesn’t just make policy prescriptions. It wants a more amenable regulatory approach.
Chris Hughes – Bloomberg
A long awaited review into how the U.K. can reinvigorate its capital markets has not held back. It goes further than addressing inconsistencies in the current regime for initial public offerings and special purpose acquisition companies. The smorgasbord of policy prescriptions make sense, but the vision of a generally more flexible and amenable regulator warrants caution. First, consider the necessary steps needed to make the City of London competitive with New York and Amsterdam. Former EU commissioner Jonathan Hill’s report sensibly backs allowing dual-class shares with a five-year limit and other constraints. Founder-managers of companies would finally be able to maintain control if they list on London’s “premium” market segment. It’s a pragmatic compromise on the U.K.’s one-share one-vote doctrine that will give investors more choice at an acceptable cost in terms of temporarily limited outside influence.
/bloom.bg/2MOfGcc

Brexit Antagonism Escalates Again as EU, U.K. Go Another Round
Ian Wishart – Bloomberg
Spat over Northern Ireland most serious in series of disputes; Relations beset by wrangling, from financial services to trade
When the U.K. and European Union shook hands on a trade deal late last year, few expected the new relationship to be plain sailing. And as with many divorces, antagonism between the sides has refused to fade. Among the most sensitive issues is Northern Ireland, and tensions ramped up considerably this week when the U.K. announced it will ignore some crucial obligations under the Brexit deal and the EU responded with a dramatic threat of legal action.
/bloom.bg/3rksMNh

Robinhood Traders Are Risking Enormous Wealth Destruction, Bernstein Says; Charlie Munger, mocked on social media, is right to criticize short-term trading in hot stocks, according to the investment management firm.
Suzanne Woolley – Bloomberg
Don’t mock the wisdom of Charlie Munger. That’s the message of a research report released Wednesday by the founder of investment management firm Richard Bernstein Advisors. Munger — Warren Buffett’s nonagenarian business partner — faced blowback on social media after he compared the frenzy of trading by inexperienced investors on Robinhood Markets to gamblers using the stock market to place bets like they would on racehorses. He also warned that it wouldn’t end well.
/bloom.bg/389WVr4

Robinhood Faces a Feared Regulator With Even More Tools Than the SEC; William Galvin of Massachusetts, long a nemesis of Wall Street, is suing the brokerage, which he says is taking advantage of young, inexperienced investors.
Matt Robinson, Prashant Gopal – Bloomberg
William Galvin is as old school as they come, even for a state securities regulator. Galvin, 70, drives an Impala, uses a flip phone, and leaves the emailing and tweeting to his staff. But he may turn out to be the worst nightmare of Robinhood Markets, the company whose zero-commission brokerage app captivates millennial and Gen Z investors?. Galvin is the secretary of the commonwealth of Massachusetts, a position he’s held since 1995, when the founders of Robinhood were still in grade school. In that time, Galvin turned the office that oversees elections, historic preservation, and record-keeping into a financial regulator that’s sometimes ahead of its national counterparts. He’s won penalties from such Wall Street giants as Morgan Stanley and Goldman Sachs, as well as local icons like the mutual fund manager Putnam Investments.
/bloom.bg/2OmbhNY

Flash rally in Bank of Japan shares leaves brokers perplexed; Central bank’s stock, which is highly illiquid and offers no dividend, is up 90% this month
Leo Lewis – FT
Shares in the Bank of Japan surged on Thursday for a fourth consecutive session, putting them more than 90 per cent up for the week and leaving brokers struggling to explain the rally.
/on.ft.com/3sPoX2Z

The Billionaire Behind the Biggest U.S. Tax Fraud Case Ever Filed; Prosecutors accused Robert Brockman, a litigious, sometimes penny-pinching software entrepreneur, of hiding $2 billion from the Internal Revenue Service
Miriam Gottfried and Mark Maremont – WSJ
More than 20 years ago, a group of former salesmen for Houston software entrepreneur Robert Brockman sued their old boss, claiming in court that he had deprived them of commissions by directing a portion of customer payments to a Cayman Islands entity.
/on.wsj.com/3ea4l1w

Financial bubbles also lead to golden ages of productive growth; The ESG stock frenzy of today, however egregious, may yet translate into a better tomorrow
John Thornhill – FT
Sir Alastair Morton had a volcanic temper. I know this because a story I wrote in the early 1990s questioning whether Eurotunnel’s shares were worth anything triggered an eruption from the company’s then boss. Calls were made, voices raised, resignations demanded.
/on.ft.com/3091s8M

Texas Power Grid Operator Fires CEO; Board votes to terminate Bill Magness weeks after state’s power grid experienced massive blackouts and nearly collapsed
Russell Gold – WSJ
The board of the Texas electric-grid operator fired Chief Executive Bill Magness, less than a month after the state’s power grid experienced massive blackouts for several days and came within minutes of collapse.
/on.wsj.com/30bAkWD

The EBA Highlights Key Money Laundering And Terrorist Financing Risks Across The EU
Mondovisione
The European Banking Authority (EBA) yesterday published its biennial Opinion on risks of money laundering and terrorist financing (ML/TF) affecting the European Union’s financial sector. The ML/TF risks identified by the EBA include those that are applicable to the entire financial system, for instance the use of innovative financial services, while others affect specific sectors, such as de-risking. The list also includes ML/TF risks that emerge from wider developments such as the COVID-19 pandemic that has an impact on both firms’ AML/CFT compliance and competent authorities’ supervision. The Opinion, therefore, sets out recommendations to competent authorities aimed at closing these gaps.
/bit.ly/3kL8ZUO

Climate Change Emerges as a Compliance Focus for SEC; Environmental, social and governance funds attract increased scrutiny from the regulator
Dave Michaels – WSJ
Securities regulators are sharpening their focus on whether asset managers that tout funds as socially responsible are picking stocks that align with that cause, and whether the firms support environmentally-friendly policies at companies they have invested in.
/jlne.ws/3qa1GXS

Coinbase Transactions Under Review by U.S. Sanctions Enforcer; The cryptocurrency exchange said it disclosed certain transactions to the Treasury Department’s Office of Foreign Assets Control
Mengqi Sun – WSJ
Cryptocurrency exchange Coinbase Global Inc. said its services may have been used by individuals, entities or jurisdictions subject to U.S. sanctions regulations and has disclosed the activity to a federal agency.
/jlne.ws/3bfLO1F

Coronavirus

How the coronavirus devastated a generation
Chico Harlan and Stefano Pitrelli – Washington Post
In one of the hardest-hit parts of the West’s most aged nation, the coronavirus blitzed through a generation in a matter of weeks. It killed more than 100 of 400 residents in the local nursing home. It forced this city to rush-order eight refrigerated trailers to hold the corpses. It created a horrifying landscape of ambulances racing to the private homes of seniors, who were dying at a rate 400 percent above the norm.
/jlne.ws/3bhkn7X

Germany Clears Astra Covid Vaccine for Elderly, Minister Says
Tim Loh – Bloomberg
Commission revises guidance limiting dose to 18-64 year olds; Data suggest vaccine is suitable for people aged 65 and older
Germany has joined countries widening guidelines for AstraZeneca Plc’s coronavirus vaccine, based on incoming data that support giving the shot to the elderly. Germany’s immunization commission, known as STIKO, is also recommending Astra’s vaccine for people aged 65 and older, Health Minister Jens Spahn said in an emailed statement. That expands on a ruling that initially limited it to adults between the ages of 18 and 64.
/bloom.bg/3e9haZN

Where Are We in Finding the Coronavirus’s Origin?
Jason Gale – Bloomberg
More than a year after Covid-19 touched off the worst pandemic in more than a century, scientists have yet to determine its origins. The closest related viruses to SARS-CoV-2 were found in bats more than 1,000 miles from the central Chinese city of Wuhan, where the disease erupted in late 2019. Initially, cases were tied to a fresh food market and possibly the wildlife sold there. Other theories allege the virus accidentally escaped from a nearby research laboratory, or entered China via imported frozen food. Amid all the posturing and finger-pointing, governments and scientists agree that deciphering the creation story is key to reducing the risk of future pandemics.
/bloom.bg/3sNOae3

No need for lengthy trials of vaccine modifications, UK regulator says; Decision makes approval possible in as little as two weeks after final data is received from manufacturers
Anna Gross and Sarah Neville – FT
The UK regulator will not require “lengthy” clinical studies to assess Covid-19 vaccine modifications to tackle new variants, it announced on Thursday, with approval possible in as little as two weeks after final data is received from manufacturers.
/on.ft.com/3sS7tmq

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.
/bloom.bg/3qdVyO7

Exchanges, OTC and Clearing

Miami International Holdings Reports February 2021 Trading Results and Volume Records for MIAX Exchange Group
Miami International Holdings, Inc. t
Miami International Holdings, Inc. today reported February 2021 trading results for its three national securities exchanges – MIAX, MIAX Pearl and MIAX Emerald (together, the MIAX Exchange Group).
/jlne.ws/3kOIZI7

Euronext acquires remaining interest in iBabs; ACQUISITION OF THE REMAINING 40% INTEREST OF THE FAST-GROWING, INNOVATIVE BOARD PORTAL PLATFORM
Euronext
Euronext, the leading pan-European market infrastructure, today announced the acquisition of the remaining 40% interest in iBabs, a leading provider of dematerialised and secured board portal solutions for corporate and public organisations in Europe, held by the founders of the company who are now exiting the business after a successful transition period. As detailed at the time of Euronext’s acquisition of iBabs in July 2017, Euronext has exercised its call option on the remaining interest of iBabs for a consideration of EUR53.2 million1, on a debt-free-cash-free basis, representing an Adjusted EBITDA 2020 multiple of 10x.
/jlne.ws/3kICC9h

Cboe Wants to Ignore Years of Bungling How It Charged Traders
Nick Baker – Bloomberg
Exchange over-charged some stock traders, under-billed others; But it doesn’t want to deal with mistakes made before July
U.S. stock-market operator Cboe Global Markets Inc. wants to ignore years of messing up customer billing. The Chicago-based company, which is one of the three big operators of American equity exchanges, said in a regulatory filing on Tuesday that it discovered in October it had over-billed some traders and under-billed others for years.
/jlne.ws/2O0HXNh

Tradeweb hits record $1.06 trillion average daily volume in February; Total trading volume for February also rose to $20.4 trillion across electronic marketplaces at Tradeweb after it passed the $20 trillion mark for the first time in January.
Annabel Smith – The Trade
Fixed income trading platform provider Tradeweb hit a new record average daily volume (ADV) in February, reaching $1.06 trillion for the first time. The new record was up 19.9% in comparison with the same period from the year prior.
/bit.ly/3bWojdc

HAV lists on Euronext Growth Oslo
Euronext
The cleantech company HAV Group has today been admitted to trading on Euronext Growth (ticker code: HAV). HAV Group’s vision is to contribute to the green shift through solutions and products for the ocean industries. The company is the result of the spin-off of four subsidiaries from Havyard.
/bit.ly/3bZ7T3H

ICE Announces Record Activity in Gilts and Sterling Rates Complex
Gilts reach record Single Day Volume of 1.91M and record ADV of more than 459,000 contracts
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced record activity across its benchmark Gilts and Sterling rates complex as the market manages Sterling-related risk.
ICE Gilt futures and options, the highly liquid market benchmarks for UK Government Bonds, reached a Single Day Volume record of more than 1.91 million contracts and record Average Daily Volume (ADV) of more than 459,000 contracts during February.
/bit.ly/3kKtDUV

Eurex Exchange Readiness Newsflash | Updates March 2021
Eurex
With this Newsflash, we would like to draw your attention to the upcoming publications, events and necessary actions for the ongoing initiatives:
/bit.ly/38cvNYC

Siemens Energy AG new in the DAX; Porsche Automobil Holding, Beiersdorf AG, Encavis AG and Nordex SE now in the MDAX
Deutsche Börse Group
STOXX Ltd., the global index provider of Qontigo, announced changes in the DAX index family with effect from March 22, 2021 on Wednesday.
/bit.ly/3e8bteL

HKEX Consolidated Financial Statements For the year ended 31 December 2020
HKEX
/bit.ly/2NWOTe1

ASX Group Monthly Activity Report – February 2021
ASX
/bit.ly/2TwaCc9

TMX Group Consolidated Trading Statistics – February 2021
TMX
TMX Group Limited today announced February 2021 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.
/bit.ly/3sOoqyq

ICE Announces Record Activity in Gilts and Sterling Rates Complex; Gilts reach record Single Day Volume of 1.91M and record ADV of more than 459,000 contracts
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 record activity across its benchmark Gilts and Sterling rates complex as the market manages Sterling-related risk.
/bit.ly/2Py61Yi

Cboe Global Markets Reports February 2021 Trading Volume
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today reported February monthly trading volume statistics across its global business lines.
/bit.ly/3uWHqMP

Nasdaq February 2021 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for February 2021 on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics.
/bit.ly/3eccqm6

Straits Times Index (STI) quarterly review – March 2021; No changes to the constituents of the STI
SGX
FTSE Russell announces that there will be no changes to the constituents of the Straits Times Index (STI), following the March 2021 quarterly review. The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) Frasers Logistics & Commercial Trust, Frasers Centrepoint Trust, Suntec REIT, Keppel REIT and NetLink NBN Trust. Stocks on the reserve list will replace any constituents that become ineligible as a result of corporate actions before the next review. A full list of STI constituents can be found on the website.
/bit.ly/3e5yoas

CME STP Notices: March 4, 2021
CME Group
CME STP
CME STP FIXML API Connectivity Documentation
New – BrokerTec Production Service Availability NEW
/bit.ly/3uWOSYC

CME Globex Notices: March 1, 2021
CME Group
Critical System Updates
Update – iLink 2 on MSGW – Decommission Reminder UPDATE
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
Update – iLink 3 SBE Schema Update – This Week UPDATE
Anchor Leg Pricing Enhancement – March 21
GLink Network Infrastructure Upgrade at Aurora Co-Location Facility – March 27
CME FX Link Enhancements – March 28
CME FX Link Enhancements: Drop Copy Impact – March 28
/bit.ly/3c0b5fA

Foreign Exchange (“FX”) Futures and Options Holiday Schedule for the 2021 Good Friday Holiday
CME Group
/bit.ly/3bYp8lP

Performance Bond Requirements: Interest Rate Margins – Effective March 04, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. Please email any questions to Clearing.RiskManagement@cmegroup.com
/bit.ly/3uSW9Z7

Position Limit and Large Trader Reporting Requirements in Connection with the Initial Listing of the Options on Standard and Poor’s 500 Stock Price Index Futures – Quarterly PM (European-Style) Contract
CME Group
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) Options on the Standard and Poor’s 500 Stock Price Index Futures – Quarterly PM (European-Style) contract (the “Contract”) on trade date Monday, March 8, 2021 (see SER-8719R published February 19, 2021), please note below and in Exhibit B of CME Submission No. 21-070 the corresponding all-month position limit (Rule 559), aggregation allocations (Rule 559.D) and reportable level (Rule 561) for the Options.
/bit.ly/2NRHb5f

Recognition under EU Benchmark Regulation
JPX
Tokyo Stock Exchange Inc. (TSE) calculates and publicizes stock indices as well as provides financial instruments markets for trading of securities. In 2018, the European Union (EU) enforced benchmark regulation (EU Benchmark Regulation), and for what EU considers as financial benchmarks of third countries, the regulation will be applied after the grace period ends (see “Reference” below), and to date, TSE has been proceeding with procedures to obtain approval (Recognition) from EU authorities in accordance with Article 32 of the EU Benchmark Regulation.
/bit.ly/389lF2x

Availability of English Disclosure Information by Listed Companies
JPX
With the aim of further encouraging disclosure and provision of corporate information in English and improving convenience for overseas investors, TSE provides a list of “Availability of English Disclosure Information by Listed Companies” based on voluntary responses from listed companies on whether they disclose information such as financial results, corporate actions, and notices of general meetings of shareholders in English.
/bit.ly/3v2jvfh

CME Group Inc. Announces First-Quarter 2021 Earnings Release, Conference Call
PR Newswire (press release)
CME Group Inc. will announce earnings for the first quarter of 2021 before the markets open on Wednesday, April 28, 2021. Written highlights for the quarter will be posted on the company’s website at 6:00 a.m. Central Time, the same time it provides its earnings press release. The company will also hold an investor conference call that day at 7:30 a.m. Central Time, at which time company executives will take analysts’ questions. A live audio Webcast of the conference call will be available on the Investor Relations section of the company’s website, www.cmegroup.com. Following the conference call, an archived recording will be available at the same site. Those wishing to listen to the live conference via telephone should dial 1-800-367-2403 if calling from within the United States or 1-334-777-6978 if calling from outside the United States, at least 10 minutes before the call begins.
prn.to/3qhGDm4

Spectrum Markets Hits Two Million Trades
Mondovisione
Spectrum Markets, the pan-European trading venue for securitised derivatives, announced it has now executed more than two million trades, representing a total volume of 585 million securitised derivatives traded. This major milestone comes less than 18 months after it first launched, with Spectrum’s 24/5 trading hours continuing to prove particularly popular.
/bit.ly/30bAmOf

Fintech

Eleva Capital overhauls fixed income investment and trading processes with SS&C; The SS&C Eze Suite will manage its fixed income trading, order management, compliance checks, operations and accounting at Eleva Capital.
Annabel Smith – The Trade
Paris and London-based investment manager, Eleva Capital, has overhauled its fixed income processes by implementing the Eze technology platform from SS&C Technologies. Eleva Capital will use the Eze Investment Suite across its expanded fixed income offering to manage its order management, trading, modelling and simulations, cash projections, compliance checks, operations and accounting.
/bit.ly/2Py4dP0

Broadridge AI bond trading platform secures patent for proprietary technology;The patent covers LTX’s proprietary RFX technology from Broadridge, aimed at improving liquidity, efficiency and execution offered by broker-dealers to the buy-side.
Annabel Smith – The Trade
The artificial intelligence (AI) powered corporate bond trading platform from Broadridge, LTX, has secured a patent for its AI digital trading protocol technology. Named RFX, the digital proprietary trading protocol is designed to improve liquidity, efficiency, and execution offered by broker-dealers to their buy-side clients while also minimising information leakage.
/bit.ly/3kLHmes

TRG Screen acquires Jordan & Jordan’s market data compliance & reporting unit; TRG will combine J&J’s six-year-old MDR managed service for data reporting with its own similar ADR declarations service.
Max Bowie – Waters Technology
New York-based market data cost and inventory management software vendor TRG Screen has acquired the Market Data Reporting (MDR) data compliance and reporting tool—plus its clients and associated staff members—from data and management consultancy Jordan & Jordan for an undisclosed sum.
/jlne.ws/2PyW0tR

Foxberry launches indexing and analytics platform: foxf9® – preparing clients for a sustainable world of hyper customisation
Foxberry (press release)
Foxberry, the provider of financial indices and front o?ice technology for the financial sector, today announced the launch of its indexing and analytics platform foxf9®, which will empower financial institutions to respond to an era of sustainability driven investing, hyper customisation and an increased focus on value-added content differentiation. foxf9 is an open architecture platform. This allows customers to use multiple data sources, including other index providers’, as well as incorpo- rate ESG and sustainability data from numerous sources in combination with their own analysis for index development and analytics.
bit.ly/3e5COOA

TRG Screen Announces Acquisition Of Jordan & Jordan’s Market Data Reporting (MDR) Business
TRG Screen (press release)
TRG Screen, the leading provider of enterprise subscription spend management solutions, today announced it has acquired the Market Data Reporting (MDR) business from Jordan & Jordan (J&J). Market Data Reporting from J&J is a managed services solution focused on providing reporting and related services to ensure compliance with licensing, provisioning, distribution and reporting policies. The acquisition of MDR complements and augments TRG Screen’s existing managed services business, particularly the Axon Declaration Service (ADS).
prn.to/3e76Lhh

Cryptocurrencies

tZERO ATS Partners with Commercial Real Estate Issuance Platform Earn.re; Partnership Connects tZERO ATS to Potential Issuers on Earn.re’s Tokenization & Issuance Platform
tZERO
tZERO, a leader in blockchain innovation and liquidity for digital assets, announced today that its subsidiary, tZERO ATS, a FINRA member broker-dealer that operates an alternative trading system (ATS), has partnered with Earn.re (Earn), a commercial real estate tokenization and finance platform. This partnership will enable Earn’s network of U.S.-based commercial property issuers to elect to provide secondary liquidity for their digital securities on tZERO ATS. This is subject to tZERO ATS’s due diligence of the individual securities, applicable regulatory requirements, and any required technology integrations.
/jlne.ws/3sMcltk

Bitcoin: Mother Of All Bubbles, Or Revolutionary Breakthrough
Uri Berliner – NPR
If you think America’s politics are polarizing, consider Bitcoin. The price of a single Bitcoin today hovers around $50,000. Ten years ago, in its infancy, it was around a buck. The digital currency’s meteoric rise has minted millionaires and energized true believers around the world. That’s only convinced skeptics that Bitcoin is the mother of all bubbles.
n.pr/3riudf1

Crypto.com Launches $200M Fund for Crypto Startups
Jamie Crawley – Coindesk
Crypto.com is launching a $200 million fund dedicated to investing in crypto startups, CoinDesk can exclusively reveal.
/yhoo.it/3qfdRCN

Renegade Crypto Exchange Enlists Mainstream CEO for Makeover
Zheping Huang – Bloomberg
New chief Höptner brings BitMEX closer to regulators; Derivatives exchange considers spot trading and brokerage
Alexander Höptner was leading the Börse Stuttgart when he jumped at the chance to take a top job with BitMEX, a pioneering cryptocurrency exchange known for its high-risk offerings. Just a few months later, the people who hired him found themselves fugitives wanted by the U.S. government. Federal prosecutors in New York charged outspoken co-founder Arthur Hayes and other senior officers at the company with failing to deploy an adequate anti-money laundering operation at the derivatives trading platform. Hayes, along with fellow owners and co-founders, resigned from his day-to-day leadership duty at the exchange’s holding company.
/bloom.bg/3uN8G0e

BitMEX’s Arthur Hayes Proposes Surrender to U.S. Authorities
Olga Kharif and Chris Dolmetsch – Bloomberg
The former CEO discussed surrendering April 6 in Hawaii; Federal authorities claim he violated anti-money laundering law
Arthur Hayes, the former chief executive of crypto exchange BitMEX who is wanted by the U.S. government, proposed to surrender to authorities in Hawaii on April 6, according to a court filing. Hayes is currently in Singapore, but has discussed surrendering in Hawaii and appearing remotely in a New York court, said Jessica Greenwood, assistant U.S. attorney in Manhattan, according to a transcript of a Feb. 9 hearing. She said arrangements are under discussion that would allow Hayes to live abroad and to travel to the U.S. for court appearances. If there’s a trial, Hayes would come to New York, Greenwood said.
/bloom.bg/3uVKgle

*****See also: “BitMEX CEO Arthur Hayes May Surrender to US Law Enforcement Next Month,” by Nikhilesh De at Coindesk; and “U.S. prosecutors discussing surrender agreement with former BitMEX CEO Arthur Hayes,” by Michael McSweeney at The Block.~MR

Crypto fund manager Bitwise hires former federal prosecutor as general counsel
Ryan Weeks – The Block
Bitwise Asset Management, the crypto-focused fund manager, has hired Katherine Dowling as its first general counsel. Dowling, a Harvard Law School alumnus, spent more than a decade as an assistant attorney in the economic crimes unit of the United States Attorney’s Office in San Francisco, where she prosecuted crimes including insider trading and Ponzi schemes, according to her LinkedIn profile. Dowling also served stints at Credit Suisse and, more recently, at a handful of venture capital and private equity firms. She begins at Bitwise on March 5.
bit.ly/3uSTj6p

JPMorgan Survey: 78% of Institutional Investors Don’t Plan to Invest in Crypto
Jamie Crawley – Coindesk
A large majority of institutional investors don’t plan to invest in or trade cryptocurrency, according to research by JPMorgan. Of the 3,400 investors surveyed, 78% said it was unlikely their firm will invest in or offer trading services for crypto, Business Insider reported Wednesday. However, 58% of respondents believe that crypto is “here to stay,” compared to 21% calling it a “temporary fad.” The respondents represented 1,500 different institutions, with 89% saying saying their firm does not currently invest in or trade crypto.
bit.ly/3c4Kuhc

Kraken CEO Says He’d Only Want to Go Public at a Valuation Above $10B
Sebastian Sinclair – Coindesk
Kraken’s co-founder and CEO Jesse Powell says his exchange may seek a public listing “sometime next year” but that there are “no guarantees.” Appearing on Bloomberg TV on Wednesday, Powell was asked whether he would take his company public at a $10 billion valuation. “We are certainly on track though $10 billion dollars is a low valuation,” said Powell. “I wouldn’t be interested in issuing shares at that price.” Powell’s statement comes as rival exchange Coinbase is being valued as high as $100 billion.
bit.ly/3rcHJRs

Crypto ATMs ‘increasingly’ used to launder money, according to DEA report
MK Manoylov – The Block
Drug traffickers increasingly relied on cryptocurrency-based transactions and technology in 2020 — due in part to the COVID-19 pandemic, according to a new report from the Drug Enforcement Administration’s Strategic Intelligence Section. Per the agency’s findings in the 2020 National Drug Threat Assessment, published on March 2, the pandemic halted cross-border shipments, particularly between the U.S. and Mexico, which led to large amounts of money stuck in the U.S. that still needed to be given to international narcotics sellers. Crypto ATMs offered one way for money to move across borders without couriers having to physically transport it, according to the report.
bit.ly/389iZC1

Ripple’s Chris Larsen Files Motion to Dismiss SEC Case Over XRP Sales
Sebastian Sinclair – Coindesk
Ripple’s executive chairman has asked a U.S. court to dismiss a U.S. Securities and Exchange Commission (SEC) lawsuit alleging securities violations relating to sales of the XRP (+0.19%) cryptocurrency. According to a legal letter informing Judge Analisa Torres at the U.S. District Court for the Southern District of New York of a motion to dismiss, lawyers say the SEC’s amended complaint “still fails to state a claim against Mr. Larsen.” In December, the SEC sued Ripple, CEO Brad Garlinghouse and Larsen alleging they had not registered XRP as a security or sought an exemption, and had sold over $1.3 billion in the cryptocurrency to retail investors.
bit.ly/2OnwZ44

IRS clarifies that buying and holding crypto doesn’t require 1040 reporting
Aislinn Keely – The Block
A new clarification from the Internal Revenue Service (IRS) indicates that buying and holding cryptocurrency with government-issued money does not need to be reported on the 1040 form. Last December, the tax authority announced it would move its crypto question to the top of the 1040 form. Putting the question front and center means crypto holders are less likely to be unaware of their tax obligations. The question asks “At any time during 2020, did you receive, sell, or otherwise acquire any financial interest in any virtual currency?”
bit.ly/2MPLhdA

Politics

For the EU to Survive, It Can’t Keep Failing; If the bloc is to remain a union, it has to stop floundering over vaccines, Russia and everything else.
Andreas Kluth – Bloomberg
On March 4, two European leaders will touch down in Israel for a visit that should worry Europhiles and delight Euroskeptics. Neither Austrian Chancellor Sebastian Kurz nor Danish Prime Minister Mette Frederiksen would state it so openly, but both are losing faith in the European Union’s ability to vaccinate the bloc’s people fast enough. So they’re talking to Benjamin Netanyahu, prime minister of Israel (which leads the world in vaccinations), about ventures that could, in a pinch, get jabs into Austrian and Danish shoulders.
/bloom.bg/3kVMPPX

Britain Plans for a Big Summertime Blowout; The U.K.’s vaccine rollout laid the foundations for Rishi Sunak’s budget, but what happens after the post-lockdown party?
Therese Raphael – Bloomberg
Wednesday’s U.K. budget offered yet more in the way of pandemic pain medication, but thanks to the success of Britain’s vaccination program, Chancellor of the Exchequer Rishi Sunak could make a start at mapping out a post-Covid order. The short-term, at least, is looking rosier for Britain.
/bloom.bg/3kKsBrZ

Greensill’s demise shines spotlight on government ties; With links to a former prime minister, the Australian financier was close to the UK’s corridors of power
Cynthia O’Murchu, Jim Pickard, Arash Massoudi and Robert Smith – FT
Gathered at Westminster Abbey in June 2019 to celebrate the life of Jeremy Heywood, former head of the civil service, were five prime ministers — and a banker from Bundaberg. Lex Greensill, who had arrived in the UK from Australia in 2001 as a 24-year old sugar cane farmer’s son, was now firmly embedded in the British establishment.
/on.ft.com/384KnRR

US Congress must ‘learn from ugly episode’ of GameStop trading; Former BoE deputy governor Paul Tucker urges greater scrutiny of clearers and brokers
Philip Stafford – FT
Former Bank of England deputy governor Paul Tucker has written to the US Congress urging it to “learn from an ugly episode” surrounding January’s frenzied trading in GameStop shares, and to examine whether standards for the broker and clearing house central to the drama were sufficiently robust.
/on.ft.com/3c4AmoX

Regulation

TRG Screen acquires Jordan & Jordan’s market data compliance & reporting unit; TRG will combine J&J’s six-year-old MDR managed service for data reporting with its own similar ADR declarations service.
Max Bowie – Waters Technology
New York-based market data cost and inventory management software vendor TRG Screen has acquired the Market Data Reporting (MDR) data compliance and reporting tool—plus its clients and associated staff members—from data and management consultancy Jordan & Jordan for an undisclosed sum.
/jlne.ws/2PyW0tR

‘Wash Trades’ Lead to Market-Abuse Fine for Ex-Stifel Trader
Jonathan Browning – Bloomberg
Adrian Horn fined $73,000 by U.K. Financial Conduct Authority; Trades were designed to keep company in FTSE All Share Index
U.K. financial regulators fined and banned a former senior trader at Stifel Nicolaus Europe Ltd. for market abuse after he was found to have manipulated a client’s stock. Adrian Horn was fined 52,500 pounds ($73,000) after the Financial Conduct Authority determined he was effectively trading with himself. Horn carried out the practice, known as “wash-trading,” to try to boost activity and ensure the client remained in the FTSE All Share Index, the FCA said.
/bloom.bg/3rksqWX

Ex-Steinhoff CEO Said to Be Charged in German Criminal Probe
Karin Matussek and John Bowker – Bloomberg
Markus Jooste faces German charges over accounting violations; Oldenburg prosecutors confirmed charges against four people
Former Steinhoff International Holdings NV Chief Executive Officer Markus Jooste is among four people charged in Germany for accounting crimes, a person familiar with the investigation said.
/bloom.bg/3sN5Run

Milan Shuts Down Schools, Tightens Curbs on Surging Covid Cases
Tommaso Ebhardt – Bloomberg
New restrictions for the financial hub one year after lockdown; Italy nears 3 million coronavirus cases, 100,000 virus deaths
Almost one year after the Italian financial capital became the first European region to enter into a hard lockdown, the city is facing again major restrictions. All schools will be closed until March 14. No one will be able to leave town if not for business and health reasons. Milan citizens won’t be allowed to reach their holiday houses. Bars and restaurants will remain closed while shops can stay open.
/bloom.bg/3bdjOf1

GameStop booster ‘Roaring Kitty’ testifies before Massachusetts regulators
Reuters
Keith Gill, the social media persona known as “Roaring Kitty,” whose online posts helped spark January’s trading frenzy in GameStop shares, appeared before Massachusetts securities regulators on Wednesday to testify as part of an examination into his activities.
/bit.ly/2O3SeZ5

ASIC commences civil penalty proceedings against Statewide Superannuation for misleading or deceptive correspondence
ASIC
ASIC has commenced proceedings in the Federal Court against Statewide Superannuation Pty Ltd (Statewide), for false or misleading representations made about the insurance cover held by members of the Statewide Superannuation Trust (Fund). Statewide is the trustee of the Fund.
/bit.ly/3uRhXo5

Industry funding: 2019-20 Cost Recovery Implementation Statement
ASIC
ASIC today published the final 2019-20 Cost Recovery Implementation Statement (CRIS). The CRIS provides regulated entities with details of ASIC’s forecast regulatory costs and activities by industry and subsector.
/bit.ly/2Pupd9b

Klaus Löber participates in Joint Conference of the Deutsche Bundesbank, European Central Bank and Federal Reserve Bank of Chicago
ESMA
The Chair of ESMA’s CCP Supervisory Committee, Klaus Löber, today delivered a speech at the Third Annual Joint Conference of the Deutsche Bundesbank, European Central Bank and Federal Reserve Bank of Chicago on CCP Risk Management.
/bit.ly/2NZXNrr

Communication Between Adult Protective Services (APS) and Professional Reporters of Financial Exploitation
FINRA
Panelists explore the evolving regulatory structure surrounding senior investor protections and the challenges facing financial services professionals when developing an effective, efficient and integrated protection framework.
/bit.ly/3sKY4xd

SEC Investor Advisory Committee to Meet Remotely On March 11
SEC
The Securities and Exchange Commission’s Investor Advisory Committee will hold a public meeting on March 11 by remote means. The meeting will begin at 10:00 a.m. ET, is open to the public via live webcast, and will be archived on the committee’s website for later viewing.
/bit.ly/3sPa9Bv

SEC Division of Examinations Announces 2021 Examination Priorities
Enhanced Focus on Climate-Related Risks
SEC
The Securities and Exchange Commission’s Division of Examinations today announced its 2021 examination priorities, including a greater focus on climate-related risks. The Division will also focus on conflicts of interest for brokers (Regulation Best Interest) and investment advisers (fiduciary duty), and attendant risks relating to FinTech in its initiatives and examinations. The Division publishes its examination priorities annually to provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets.
/bit.ly/3uSdiSX

NFA warns of fraudulent phishing emails purporting to be from NFA
NFA
Last year, NFA warned Member firms of an increase in fraudulent phishing emails in the financial industry. At that time, we were not aware of a specific NFA-related phishing attempt. NFA learned today, however, of an ongoing phishing campaign that involves fraudulent emails purporting to be from NFA staff, including Valerie O’Malley (see Sample Phishing Email below), Regina Thoele and Jennifer Sunu. Other staff member names may be used as well. These emails have a source domain name “@nfa-futures.org” and request an immediate response. They also may include an attachment.
/bit.ly/389Ea7e

2021 fines
UK FCA
This page contains information about enforcement fines published during the calendar year ending 2021. The total amount of fines so far is £52,500.
/bit.ly/3kGTq0o

FCA fines and prohibits trader for market abuse
UK FCA
The FCA has fined Mr Adrian Geoffrey Horn, formerly a market making trader at Stifel Nicolaus Europe Limited (‘Stifel’), £52,500 for market abuse and prohibited him from performing any functions in relation to regulated activity.
/bit.ly/3qhfOyk

Update on the Double Volume Cap
UK FCA
We have today published a revised version of our Statement of Policy about the use of a temporary power we have under UK Markets in Financial Instruments Regulation (MiFIR).
/bit.ly/3kJOFTK

British Columbia Securities Commission: Younger, FOMO-Inclined Adults View Social Media As Source For Investment Tips
Mondovisione
Younger adults and those who experience the fear of missing out (FOMO) are more likely to think social media is a good place to find investment opportunities, according to new research from the British Columbia Securities Commission (BCSC).
/bit.ly/30cm1kK

Investing and Trading

Investors push back against UK listings overhaul; Fund managers say proposals risk ‘watering down’ requirements for issuers
Philip Stafford and Attracta Mooney – FT
London’s biggest fund managers have pushed back against proposals to liberalise the City’s stock market listings regime, saying changes aimed at luring in technology businesses and special purpose acquisition companies risk “watering down” investor protections.
/jlne.ws/3e4VyOj

Day-Trading Reddit Users Nearly Crashed the Stock Market. Now They’re the Organizing Principle for a New ETF.
Andrea Riquier, MarketWatch
If you thought an ETF made up of the buzziest stocks, as determined by social-media chatter, seemed like the natural conclusion to late January’s Reddit-fueled roller-coaster ride through the stock market, you were right.
/bit.ly/3bfmlpl

Tune Out the Hyperinflation Hype. It’s Just Meme Economics; Talk that the U.S. is going the way of Zimbabwe or Venezuela is bunk—but bunk can move markets and influence policy.
Peter Coy – Bloomberg
We know from the past year that quite a few people inhabit alternate realities that float above the factual landscape like giant, impervious, untethered balloons. One unmoored balloon that’s reached enormous proportions recently is the specter of hyperinflation—the conviction that a reckless expansion in the money supply will trigger an endless cycle of currency depreciation and price hikes, turning the U.S. into the equivalent of Weimar Germany circa 1923, Zimbabwe circa 2020, or present-day Venezuela.
/bloom.bg/3kNY2Sj

Hippo Agrees to a Merger With Mark Pincus, Reid Hoffman SPAC
Katherine Chiglinsky – Bloomberg
Hippo Enterprises Inc., a home-insurance startup, agreed to go public through a merger with Reinvent Technology Partners Z, a special purpose acquisition company that counts Zynga Inc. founder Mark Pincus and LinkedIn co-founder Reid Hoffman as its lead directors.
/bloom.bg/3877CdO

Bank of Japan Shares Continue Baffling Surge, Nearly Doubling This Week
Gearoid Reidy – Bloomberg
The Bank of Japan’s stock jumped by the daily limit for a fourth straight session, almost doubling in value over the course of this week. While Thursday’s trading volume of 11,600 shares is minuscule compared to most other listed companies in Tokyo, it was the highest on record for Japan’s central bank, according to data compiled by Bloomberg.
/bloom.bg/3uSJXrj

Man Group Says U.S. Yields Put Emerging Bonds at Tipping Point
Ruth Carson – Bloomberg
Stretched valuations, inflation outlook also threats: Man GLG; EM bond index has already dropped almost 3% from January high
Emerging-market bonds are becoming increasingly vulnerable as Treasury yields climb with the level of 2% on the U.S. 10-year note likely to trigger major outflows, according to Man Group Plc, which oversees $124 billion.
/bloom.bg/3uS5hxl

Bitcoin and Robinhood will end badly for those who can least afford it
Nouriel Roubini – The Guardian
The US economy’s K-shaped recovery is under way. Those with stable full-time jobs, benefits, and a financial cushion are faring well as stock markets climb to new highs. Those who are unemployed or partially employed in low-value-added blue-collar and service jobs – the new “precariat” – are saddled with debt, have little financial wealth, and face diminishing economic prospects.
/bit.ly/3bgGWtq

SPACs are an inside joke on Wall Street, and the joke is on you;SPACs can operate like “venture capital in the public markets,” which may appeal to amateurs seeking their inner Elon Musk. But it rarely works out well for the retail crowd.
William D. Cohan – Fast Company
“Everyone’s raising a zillion SPACs,” a Manhattan billionaire tells me, referring to special purpose acquisition companies, the latest craze on Wall Street. He doesn’t want to be seen biting the hand that feeds him (and many others), and so he asks for—and receives—anonymity. “Every day there’s a SPAC merger,” he continues, amazed. “There’s a rumored SPAC merger. There’s another SPAC.”
/bit.ly/3bdCzyY

Hertz Stock Nosedives as Bankruptcy-Exit Plan Threatens to Wipe Out Holders; Shareholders receive no compensation under the car-rental company’s restructuring proposal
Caitlin McCabe – WSJ
Shares of Hertz Global Holdings Inc. HTZGQ -25.98% continued their tumble toward zero Wednesday, one day after the car-rental company unveiled a restructuring proposal to exit bankruptcy that will wipe out existing shareholders.
/on.wsj.com/3bkoqAp

Environmental, Social and Corporate Governance

Fathers of Carbon Market Say EU Needs Higher Pollution Costs
Ewa Krukowska -Bloomberg
Jos Delbeke and Peter Vis comment on rising emissions prices; Speculation by hedge funds helped drive prices to record
The European Union should not weaken the world’s biggest carbon market after prices surged to a record last month, according to two of its founding architects. Prices have jumped about 30% in the past six months, partly on speculation by hedge funds. While the sharp gain helps the environment by making power generation from fossil fuels more expensive, many European companies are getting increasingly concerned that surging costs will hurt their competitiveness.
/bloom.bg/3sKNk1R

Exxon vs activists: can disenchanted investors force change? CEO Darren Woods faces a campaign for board reform and a shift in strategy
Derek Brower and Justin Jacobs – FT
Twelve months ago ExxonMobil chief executive Darren Woods said his company was ready to “lean into” a softening market, spending big when rivals would not. “We invest countercyclically,” he said as he laid out an aggressive oil production growth plan and the hefty capital expenditure it would require.
/on.ft.com/3qij5xz

Bank of England given new mandate to buy ‘green’ bonds; Government makes environmental and climate goals an explicit part of monetary policy
Camilla Hodgson and Valentina Romei and Nathalie Thomas – FT
The Bank of England will change its approach to buying corporate bonds after the government said environmental and climate goals should now be explicitly considered part of monetary policy.
/on.ft.com/3c4Iohk

Italy announces its first foray into the red-hot market for green bonds
Fortune
Italy is making its first foray into the green bond market, the latest major debt issuer to tap into one of the fastest-growing sectors of finance. The nation is selling debt maturing in 2045 via banks, an unusual tenor that is expected to draw interest from domestic investors as well as specialist environmental funds. European nations are piling into the market as they seek to finance a greener recovery from the pandemic.
/bit.ly/3kJR9By

Historic drought deepens in the West as window for rain, snow closes
Becky Bolinger and Andrew Freedman – Washington Post
The year 2020 is going to be remembered for a lot of things, many of them not so good. Included in the not-so-good list is the drought that has plagued the West, lasting into 2021. According to the U.S. Drought Monitor, which has published weekly maps since 2000, the 2020 drought is the worst, in terms of its geographical scope, in more than 20 years.
/wapo.st/3rhAEiC

Institutions

Hedge funds cash in on the ‘great reflation trade’; High-profile managers profit from this year’s tumble in global bond prices
Laurence Fletcher – FT
Hedge funds’ bet that US President Joe Biden’s $1.9tn stimulus package will help drive a resurgence in inflation is starting to pay off, with several big-name managers raking in large gains at the start of 2021. Managers including Caxton Associates, Odey Asset Management and QMA Wadhwani are chalking up juicy returns as expectations of faster price rises send government bond prices tumbling.
/on.ft.com/2NZRYu5

Schroders avoids dividend cut as assets under management hit record high; London-listed investment manager enjoys 15 per cent rise in AUM despite pandemic disruptions
Chris Flood – FT
British investment group Schroders avoided a dividend cut as its assets under management rose to a record level last year, despite disruptions to its business because of the pandemic.
/on.ft.com/3cg7N8f

Regions

Greensill Problems Spread to German Municipality’s Treasury
Steven Arons, Nicholas Comfort, and Stephan Kahl – Bloomberg
The widening fallout from Greensill’s problem hit the German municipality of Monheim am Rhein. The city has 38 million euros ($46 million) invested at Greensill Bank which was placed under a moratorium on Wednesday, according to a spokesman, who said it may not be able to recover the money.
/bloom.bg/30ikDwN

North America’s Biggest Bet on Downtowns Shifts to the Suburbs; Developers want to keep Canada’s building boom going, even as millennials flee cities.
Ari Altstedter – Bloomberg
Few countries have done as much to cater to the millennial generation’s desire for downtown living as Canada, where gleaming new apartment towers crowd city skylines and once-languishing neighborhoods have been reshaped by an influx of young people. nThe country’s three largest metropolitan areas — Toronto, Montreal and Vancouver — built more apartment units per capita than almost every other large North American city over the past decade. But the Covid-19 pandemic and its attendant remote-work revolution now have urbanites leaving in record numbers, emptying condo towers and sending rents tumbling for thousands of mom-and-pop investors who took part in the boom.
/bloom.bg/3ec2RUe

Back-to-Back Defaults in China Shrugged Off in Credit Market
Rebecca Choong Wilkins – Bloomberg
Prices largely steady despite struggles at some weak firms; Recent missed payments likely won’t cause contagion: analyst
Just two months into 2021 some of the worst fears for Chinese credit are starting to flare, and yet you’d barely know it looking at the broader market. Average spreads on Chinese 3- and 5-year top-rated notes over equivalent government notes have tightened recently, with the latter nearing the lowest since early 2020 on Wednesday, Chinabond indexes show. Gauges of local government financing vehicle bonds had spreads holding steady despite some weakness emerging among individual notes.
/bloom.bg/3bXBSJy

Brexit

U.K. Gets Post-Brexit EU Court Rebuke Over Air Pollution
Stephanie Bodoni – Bloomberg
The U.K. was handed a stinging rebuke from the European Union’s top court for failing to clean up the dirty air in big cities from London to Glasgow. In the first EU court ruling since the U.K.’s Brexit transition ended, judges at the Luxembourg-based tribunal concluded that Britain had “systematically and persistently” exceeded annual limits on nitrogen oxide in 16 zones across the country. “Arguments put forward by the U.K. cannot justify such long time periods for bringing to an end” the ongoing violations, the EU Court of Justice said in a binding decision Thursday.
bloom.bg/3rtE421

Brexit: EU says UK grace period extension breaches international law
John Campbell – BBC News
The EU says a UK move to unilaterally extend grace periods for Irish Sea border checks will be a breach of international law. Northern Ireland has remained a part of the EU’s single market for goods so products arriving from GB undergo EU import procedures. The grace periods mean procedures and checks are not yet fully applied. The first of these periods will expire at the end of March, but the UK has said it will be extended until October. European Commission Vice President Maroš Šefcovic said the move amounted to “a violation of the relevant substantive provisions” of the Brexit deal on Northern Ireland, known as the NI Protocol.
bbc.in/3bfDWgD

Leavers will forever blame Brussels for Brexit’s failure; Hubris, resentment and insecurity still loom large in Britain’s attitude to the EU
Philip Stephens – FT
It has been two months since the UK discarded the last vestiges of its membership of the EU and it’s tempting to ask, what’s changed? Boris Johnson promised liberation. In the gushing rhetoric of the prime minister, the UK would recapture the spirit of its seafaring ancestors. Instead, the prevailing emotion among ministers and Conservative MPs is resentment. “Global Britain”, it seems, remains under threat from a malevolent EU.
on.ft.com/2MOq0Ru

First Brexit, then Covid: can Eurostar get back on track?
Henry Mance – FT
In an office near St Pancras ­station, Jacques Damas is holding a train magazine and preparing for a train journey. The 63-year-old chief executive of Eurostar has worked in railways for his entire career. But if you suggest that he might be passionate about trains, he seems almost affronted. “I do not have a private [toy train] network in my house! I’m not in this category. For me, you must not have a personal passion, which becomes an obstacle to reality.” When Eurostar recruits staff, it is wary of applicants who are train enthusiasts. “A good railwayman is someone who evolves,” says Damas, an angular, grey-haired and sometimes theatrical Frenchman. “Those who are absolutely passionate about the last century — no, we are no longer in steam trains.”
on.ft.com/2MKnBqP

Brexit-Free Budget Drops EU Access for Finance Down the Agenda
Harry Wilson and Silla Brush – Bloomberg
A widening gap between Britain and the European Union over finance regulation is starting to emerge, with a post-Brexit alignment dropping down the U.K. agenda. In policy statements Wednesday, Chancellor of the Exchequer Rishi Sunak outlined measures to increase London’s competitiveness, including easier listing standards and a likely cut in bank levies. There was no discussion of trying to win Brussels’ endorsement for the regulatory equivalence that big firms like HSBC Holdings Plc say is vital. Underscoring the divergence, Jonathan Hill, the former European Commission official who led London’s review of listing rules, said he doubted the EU would grant equivalence, so there was little point in hoping for it. The U.K. shouldn’t “sit here waiting and hoping that the EU will give us some of these decisions that some people are hoping for, these equivalence decisions,” Hill told the BBC Wednesday. “They aren’t going to do that.”
bloom.bg/3uVQkdu

Brexit has put UK financial services on the back foot, says consultant
Simoney Kyriakou – FT
Brexit and the failure of any deal on regulatory equivalence has created a “tense” relationship that will affect UK financial services companies, a specialist has warned. Speaking at the ProtectX2021 virtual conference, Iain Anderson, chief executive of public policy consultancy Cicero/AMO said this presented a challenge but also an opportunity to shape the rules. He said: “The early days since a deal has been done has been difficult. I tell people Brexit is for life, not just for the past few years, so we need to [get] trade and co-operation agreements right. “However, there is virtually nothing in the agreements about financial services and the mood music between the UK and Europe is quite tense.”
/bit.ly/3kGRapW

EU Vows to Fight U.K.’s Brexit Maneuver in Latest Clash
Ian Wishart and Joe Mayes – Bloomberg
The European Union said it will take legal action against the U.K. for breaching their Brexit deal, as tensions between the two sides escalated. European Commission Vice President Maros Sefcovic said the British decision to take unilateral action on trade rules relating to Northern Ireland marks the second time Prime Minister Boris Johnson has declared his intention to breaching international law. “This also constitutes a clear departure from the constructive approach that has prevailed up until now,” Sefcovic said in a statement. The move puts the U.K. and EU on a collision course after a testing first two months of their new relationship. Sefcovic held talks on Wednesday with U.K. minister, David Frost, the former chief Brexit negotiator who replaced Cabinet Secretary Michael Gove last month as minister responsible for relations with the EU.
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