Hits & Takes
John Lothian & JLN Staff
The FIA has published an important opinion piece on climate change and the market’s role in helping fight it.
The CFTC has reinstated TeraExchange, LLC as a Swap Execution Facility.
The FTSE Mondo Visione Exchanges Index burst through the 70,000-point mark today, Monday, 31 August, ending the day at a closing all-time high of 70,221.41.
American Airlines and Delta Airlines matched United Airlines move to eliminate change fees for flights. Good news, but I’m not sure when I will fly again, or change flights for that matter.
A belated happy birthday to Walter Thomas (“Tom”) Price, III, who turned 80 on August 30. Tom is the founder of The Price Group and my former employer. He is a mentor from whom I learned much. He allowed me to use those lessons and incubate John J. Lothian & Company, Inc. in the offices of The Price Group and helped turn it into what it is today. He is also one of the kindest persons I have ever known. Happy Birthday Tom!
The barbershop in the building adjacent to the Cboe, JR Lala, has closed for good. I have used this barber shop since the 1980s, when it was in the Broker’s Building.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The Security Traders Association (STA) is holding its 2020 Market Structure Conference virtually from Oct. 7 – Oct. 8, with a focus on listed options. It will kick off with a fireside
chat between Cboe Global Markets’ Chairman, President & CEO Ed Tilly, and Cboe EVP, Head of Markets Bryan Harkins. The registration Fee is $295 per person, but employees of government agencies and sponsoring firms attend at no cost. You can go here to register. Firms interested in sponsoring must be confirmed by Tuesday, Sept. 8.~SR
Chicago NORML: Social Equity Licenses Just the Start
Stephen Simpson, executive secretary of the cannabis advocacy group Chicago NORML, spoke with John Lothian News about the group’s social equity agenda and why the imminent awarding of 75 new dispensary licenses is just one item on a long checklist.
FIA publishes policy paper on climate-related risks for financial markets and the global economy
FIA today published a new policy paper in consultation with its members across the cleared derivatives industry on climate-related risks for financial markets and the global economy. The paper, “How derivatives markets are helping the world fight climate change,” focuses on how the industry is already addressing this issue, and highlights potential partnerships with the public sector to help build a more sustainable economy in the long term.
*****I want to know more about this.~JJL
US Stocks Summertime Sizzle
US equity markets have made a steady climb in recent months, with notable gains in the US large-cap Russell 1000® Index and US small-cap Russell 2000® Index in July and August. And this trend may or may not continue into the Fall as we reach an inflection point for U.S. investors, according to data and insight from global index provider FTSE Russell.
****It was hot and dry in August in Chicago, and stocks sizzled.~JJL
We’re All Socially Awkward Now; Deprive people of interactions with peers, and their social skills will atrophy. This is yet another side effect of the pandemic.
Kate Murphy – NY Times
As the school year begins amid a global pandemic, many are concerned about the negative impact that virtual or socially distanced learning may have on children’s developing social skills. But what about grown-ups? It seems adults deprived of consistent and varied peer contact can get just as clumsy at social interactions as inexperienced kids.
*****I was awkward before, but none so much as when I was growing 8 inches in 18 months and earth shoes were a thing.~JJL
QAnon lures adherents by acting like a game; US political conspiracy’s appeal draws on techniques pioneered by Dungeons & Dragons
Izabella Kaminska – FT
A strange subset of geek culture is threatening to destabilise society by taking over the internet and blurring the line between reality and fantasy. A type of online information warfare, its objective is to sow discord and distrust. Yet it is masquerading as a live action role playing game, or Larp, and much of the population doesn’t even know it is happening.
*****The game that started in Lake Geneva, Wisconsin is the basis for QAnon. That actually makes a lot of sense.~JJL
America Is Running Low on Monkeys
Sarah Zhang – The Atlantic
In the past seven months, more than 100 COVID-19 vaccines, therapies, and drugs have been pushed into development. But for any of these treatments to make it to humans, they usually have to face another animal first: a monkey. And here, scientists in the United States say they are facing a bottleneck. There just aren’t enough monkeys to go around.
***** You used to be able to buy barrels of monkeys. What happened?~JJL
Monday’s Top Three
Our top story Monday was John Lothian’s OneChicago To Close On September 18 For Trading. Long Live OneChicago. Second was Don Wilson changes course on Gold Coast landmark from Crain’s Chicago Business. Third was John Lothian’s other OneChicago commentary, OneChicago And Single Stock Futures Helped Make The John Lothian Newsletter.
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CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.
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A Robot to Suppress ‘Bogus’ Traders Is in Works in South Korea
Heejin Kim – Bloomberg
AI to help detect unfair use of algorithmic trading in markets; Bourse has temporarily hired outside experts to develop model
South Korean regulators are turning to artificial intelligence to help detect illegal use of algorithmic trading in financial markets. The Korea Exchange has temporarily hired outside experts to develop a model to monitor algo trades, according to Lee Jong-pil, an official at the bourse. They are expected to complete studying the model by October, and the exchange will then test and decide whether to use it, he added.
MEMX launch date pushed back to later this month; New exchange group launched by various major financial institutions has said it will now begin trading on 21 September.
Annabel Smith – The Trade
Upcoming US equities exchange MEMX has pushed its launch date back to later this month after confirming it needs more time for testing and connectivity. MEMX was due to go live on 4 September after delaying its original launch date of 24 July because of disruptions caused by the global coronavirus pandemic but has confirmed it will launch on 21 September.
*****Six weeks before the election is a good time to start, unless you can start sooner.~JJL
How China Made the Netherlands Question Its Free-Market Beliefs
Diederik Baazil – Bloomberg
The Dutch government has intervened from photonics to dredgers; China strategy, ASML case, U.S. pressure all seen as key moves
When the Dutch government invested in home-grown chipmaker Smart Photonics this summer, it was a departure for a country with a hands-off approach to business. A small company with big plans, Smart Photonics was struggling to attract financing to scale up production of its next-generation chips, whose applications include self-driving cars and datacenters.
Robinhood facing SEC probe over March outage
Robinhood Markets, the fintech startup credited with helping popularize trading among millennials, is being investigated by the Securities and Exchange Commission and the Financial Regulatory Authority over its handling of a system outage in March, Bloomberg News reported on Monday. One area of focus for the investigation is Robinhood’s lack of customer response, the report said, citing people with direct knowledge of the discussions.
Zoom Again Lifts Full-Year Outlook as Sales Surge During Pandemic; Remote working and distance learning are fueling investor enthusiasm in the video-conferencing platform
Kimberly Chin – WSJ
Zoom Video Communications Inc. ZM 8.63% again raised its full-year outlook for a second time during the pandemic, cementing its position as one of the biggest corporate winners from the shift to working from home and remote schooling.
Why Samsung’s Billionaire Scion Is Facing Jail Again
Samsung Group’s billionaire scion, Jay Y. Lee, is embroiled in an increasingly contentious legal dispute with South Korean prosecutors over allegations of bribery and corruption. The clash, which dates back to 2015, centers on whether Lee and Samsung used illegal means to help him take control of the conglomerate founded by his grandfather. A Sept. 1 indictment on charges including breach of duty and violating capital market and auditing laws means the head of the world’s biggest electronics company will likely be on trial for years and could end up behind bars again.
Euro-Area Inflation Turns Negative in Worrying Sign for ECB
Carolynn Look – Bloomberg
Prices fell 0.2% in August from a year ago vs. est 0.2% gain; PMIs suggest firms bracing for near-term weakening of demand
Consumer prices in the 19-nation euro area are falling for the first time in four years, highlighting that a recent rebound in economic activity hasn’t managed to offset the pandemic’s profound impact on demand. The inflation rate came in at -0.2%, missing economists’ median estimate for a reading of +0.2%. Core inflation hit a record low, in part dragged lower by discounting during summer sales.
Banks Awash With Spare Cash Send ECB Funding Rate to Record Low
James Hirai, John Ainger, and William Shaw – Bloomberg
Euro area’s incoming ESTR benchmark breaks October record; Flood of cheap stimulus loans from the ECB sets tone amid lull
A closely-watched euro-area interbank borrowing rate fell to a record, dragged down by all the money sloshing around the economy. The Euro Short-Term Rate, known as ESTR, slid 0.5 basis points to minus 0.557%, the lowest level since the measure was introduced last year.
China Broker Pressured Hong Kong Staff on Virus Test, Union Says
Alfred Liu, Karen Leigh, and Natalie Lung – Bloomberg
H.K. Chief Executive Lam makes appeal for more participants; Less than 10% of population registered for tests as of Tuesday
China’s Founder Securities Co. drew criticism from a labor union for pressuring its staff in Hong Kong to participate in the government’s campaign to get everyone in the financial hub tested for the coronavirus. Founder Securities went as far as telling employees to present their test results to the broker’s human resources department, the Hong Kong Financial Industry Employees General Union said in a letter to the Beijing-based firm’s Hong Kong office on Monday. The union, which posted the letter on its Facebook page, criticized the move in light of the testing program’s voluntary nature and said employees should be free to get tested based on their actual needs and wishes.
Godiva’s Owner to Step Up Chocolate Production
Ercan Ersoy and Taylan Bilgic – Bloomberg
Yildiz focusing on boosting output as virus boosts demand; Turkish firm plans to push ahead with sale of non-core assets
The Turkish owner of Godiva chocolates and McVitie’s biscuits is placing on hold a plan to sell some of its assets and will instead increase food production to meet rising demand due to the coronavirus pandemic.
Tit for Tat for TikTok
Beijing’s sudden imposition of technology export rules, which may delay or even kill the sale of TikTok to an American buyer, is a new front in China’s intensifying economic battle with the U.S. Other companies are preparing for collateral damage.
Coronavirus, Hurting Jobs and Loans, Has Indians Selling the Family Gold; Demand for jewelry made of the precious metal has plunged across the country during the pandemic, and many are hocking their gold
Eric Bellman and Vibhuti Agarwal – WSJ
Investors across the globe are hoarding gold in the Covid-19 pandemic. In normally gold-obsessed India, there’s a glut, as struggling families stop buying and start hocking jewelry. International investors have lifted the price of gold to all-time highs this year, trying to get their hands on more gold coins, bars and exchange-traded funds. Many are seeking shelter in the commodity from the storm of coronavirus and geopolitical concerns, such as the U.S.-China relationship to November’s U.S. presidential election.
Key to Preventing Covid-19 Indoors: Ventilation; Reopening schools and businesses should upgrade air systems, open windows and take other measures to ensure clean air, scientists say
Caitlin McCabe – WSJ
Add this to the Covid-19 prevention toolbox: strong ventilation. After urging steps like handwashing, masking and social distancing, researchers say proper ventilation indoors should join the list of necessary measures. Health scientists and mechanical engineers have started issuing recommendations to schools and businesses that wish to reopen for how often indoor air needs to be replaced, as well as guidelines for the fans, filters and other equipment needed to meet the goals.
Early vaccine approval is biggest test yet for FDA chief; Head of US medicines watchdog hits back at accusations of responding to political pressure from Trump
Kiran Stacey – FT
Eight months into his tenure as head of the US Food and Drug Administration, Stephen Hahn is trying to press the reset button after he gave a press conference that went so badly wrong he had to spend several days correcting the record.
Europe’s fractured contact tracing linked to post-holiday Covid-19 surge | Free to read; Experts forecast another virus peak due to holidaymakers’ ‘return contagion’
Donato Paolo Mancini, Ian Mount and Leila Abboud – FT
In early August, seven groups of young people returned home from Croatia, Greece and Malta to the Italian province of Padua, one of Europe’s early battlegrounds against Covid-19, and tested positive for the virus.
Hong Kong Covid-19 mass testing sows distrust among activists; Pro-democracy campaigners stoke fears DNA samples will be sent to Beijing
Nicolle Liu and Alice Woodhouse – FT
Hong Kong’s attempt to launch mass testing for coronavirus has morphed into a public vote on the government’s legitimacy after opposition politicians called on the public to boycott the programme.
Law firms launch new round of cost cuts as pandemic bites; Some begin redundancy process as state support schemes end and business fails to pick up
Kate Beioley – FT
International law firms with UK offices have been forced to trigger a fresh wave of cost-cutting measures in response to the coronavirus pandemic as government support schemes come to an end.
How Do People Catch Covid-19? Here’s What Experts Say
Jason Gale – Bloomberg
In most cases, it’s impossible to pinpoint how someone caught SARS-CoV-2. The coronavirus that causes Covid-19 is too small to see with the naked eye, so its infectious journey can’t be tracked from one person to another. That leaves scientists and health authorities gleaning the most likely transmission pathways from the available evidence and what’s known about how other respiratory pathogens spread. Close personal contact with infected people via mouth and nose secretions was thought to be the dominant mode of infection. But emerging data have also implicated the tiny particles emitted when an infected person speaks, sings or even just breathes normally. Here’s an explanation of the established route of contagion and other pathways under investigation.
Russia Passes 1 Million Covid-19 Cases as Schools Reopen
Jake Rudnitsky and Stepan Kravchenko – Bloomberg
Schools opened Tuesday, raising fears a new spike could come; Several countries in Europe are facing second wave of epidemic
Russia became the fourth country to pass 1 million confirmed cases of Covid-19, joining the U.S., India and Brazil, on the day schools across the country reopened for the new academic year. The government’s virus response center reported 4,729 new coronavirus infections Tuesday, bringing the total to 1,000,048. The number of new daily cases has gradually declined from a peak of more than 11,000 in May.
A cheap, simple way to control this pandemic exists; It is not a ‘moonshot’ — RT-LAMP mass tests could curb the global spread of viruses
Julian Peto – FT
Four years ago, an international committee convened by the US National Academy of Medicine warned of the global threat of a new virus. It identified the threat potential of new coronaviruses and highlighted the relatively trivial costs of preventing pandemics — especially compared to, say, spending on defence or financial stability.
Exchanges, OTC and Clearing
Japan Exchange Group released Trading Overview in August 2020.
Cash Equity Market – In August 2020, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.4025 trillion; The daily average trading value for the ETF market was JPY 236.8 billion.
Derivatives Market – In August 2020, total derivatives trading volume was 28,000,093 contracts.
SGX and GF Securities to promote greater connectivity between Singapore and China’s capital markets
Singapore Exchange (SGX) has signed a Memorandum of Understanding (MOU) with GF Securities Corporation (GF Securities), one of the leading securities brokerage houses in China, to promote greater connectivity between Singapore and China’s capital markets.
SGX, in collaboration with HSBC and Temasek, completes pilot digital bond for Olam International
SGX’s digital asset issuance, depository and servicing platform was used to launch and settle in parallel, the first digital bond issuance for Olam International; This marks the first step towards wider use of smart contracts and distributed ledger technology (DLT) for the Asian bond market
Singapore Exchange (SGX), working together with HSBC Singapore and Temasek, has completed its first digital bond issuance on SGX’s digital asset issuance, depository and servicing platform, successfully replicating a S$400 million 5.5-year public bond issue and a follow-on S$100 million tap of the same issue by Olam International.
SGX Index Edge to launch crypto indices in collaboration with CryptoCompare
New indices mark SGX Index Edge’s entry into the digital currency asset class, further broadening the range of iEdge indices that are available to its customers; First-of-its-kind collaboration in Asia-Pacific, specifically tailored for financial products in the region
Singapore Exchange (SGX) is collaborating with UK-based cryptocurrency market data provider CryptoCompare, to launch crypto indices under the SGX iEdge index suite, namely the iEdge Bitcoin Index and iEdge Ethereum Index, as the first batch of such indices.
Administrative Amendments to CME, CBOT and NYMEX Rule 588.H. (“Globex Non-Reviewable Trading Ranges”) Table for Certain Energy, Agriculture, Equity, and Weather Contracts
Effective trade date Tuesday, September 15, 2020, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”) and New York Mercantile Exchange, Inc. (“NYMEX”) (collectively, the “Exchanges”) will implement administrative amendments to the CME, CBOT and NYMEX Rule 588.H. (“Globex NonReviewable Trading Ranges”) table (the “Table”) for certain energy, agriculture, equity, and weather futures and options contracts (the “Contracts”).
Withdrawal of an Approved COMEX Copper Warehouse
Please be advised that ISTIM Metals LLC, an existing Warehouse for the storage of COMEX Copper, has requested from the Exchange that its facility located in Tooele, UT be withdrawn from its status as an approved COMEX Copper warehouse. This location will no longer be available for the storage of COMEX Copper deliverable against the respective futures contracts.
Performance Bond Requirements: Agriculture & Energy – Effective September 1, 2020
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.
Spot market sales statistics for August
Deutsche Börse Group
A trading volume of EUR 116.9 billion was achieved on Deutsche Börse’s cash markets in August (previous year: EUR 130.2 billion). Of this, Xetra accounted for 95.8 billion euros (previous year: 117.4 billion euros), which means that the average daily Xetra turnover was 4.6 billion euros. Turnover at the Frankfurt Stock Exchange was EUR 3.7 billion (previous year: EUR 3.0 billion) and EUR 17.3 billion (previous year: EUR 9.8 billion) at the Tradegate Exchange.
Eurex Exchange Readiness Newsflash | Updates September 2020
With this Newsflash, we would like to draw your attention to to the upcoming publications, events and necessary actions for the ongoing initiatives:
RTS Index celebrates 25 years
The RTS Index was launched on 1 September 1995, and quickly became the major benchmark of the Russian stock market. From a base value of 100, the index has grown more than 12 times since its inception, and currently stands at 1,280. The RTS Index reached its peak on 19 May 2008, hitting 2,487.92, and hit its lowest point on 5 October 1998, falling to 38.53. Its best year was 1999, when it rose 197% in 12 months.
Boerse Stuttgart Records August Turnover Of Over EUR 7 Billion – Equities, Securitised Derivatives And Etps Show Increase In Trading Volume Compared To August 2019
Based on the order book statistics, Boerse Stuttgart generated turnover of over EUR 7 billion in August 2020 – an increase of around 10 per cent compared to the same month of the previous year.
CloudMargin Named to 2020 CB Insights Fintech 250 List of Fastest-Growing Fintech Startups
Collateral Management Solution Provider Honored for Achievements in Regulatory & Compliance
NEW YORK / LONDON, 1 September 2020 – CB Insights today named CloudMargin, creator of the world’s first and only collateral and margin management solution native to the cloud, to the third annual Fintech 250, a prestigious list of emerging private companies working on groundbreaking financial technology. This marks the second consecutive time CloudMargin was named to the list, this year as one of 14 firms selected for the Regulatory & Compliance category.
XTX Markets releases new FX implementation shortfall algorithm; New principal FX execution algorithm from XTX Markets aims to reduce slippage on large orders for the buy-side.
Annabel Smith – The Trade
Market maker XTX Markets has released its new FX implementation shortfall execution algorithm aimed at reducing the overall slippage to arrival place. The single algorithm from XTX Markets includes a real-time visualisation function that allows traders to observe the market as an order is being executed. The principal FX algorithm will also allow users to adjust the speed or urgency of execution of an order while it is in progress, and set the limit prices.
Bloomberg and CFETS launch RFQ service for onshore Chinese bond trading; The CIBM-Direct RFQ tool from Bloomberg and the CFETS aims to further facilitate global investors trading onshore Chinese bonds.
Annabel Smith – The Trade
Bloomberg and the China Foreign Exchange Trade System (CFETS) have teamed up to expand access to onshore Chinese bonds for investors globally with a new request for quote (RFQ) service.
TRADE Calls: Eventus Systems – Marrying machine learning
Kiays Khalil – The Trade
Travis Schwab, CEO of Eventus Systems, joins The TRADE to discuss a recent report from the FICC Markets Standards Board on the use of machine learning to monitor markets, and explains the concept of marrying machine learning with human ability.
Nobody Wants An Online Bank (And Other Wisdom From Investing $100 Billion In Fintech)
Ron Shevlin – Forbes
Frank Rotman, Partner at QED Investors, posted a Twitter thread about venture investing, which included:
“Founders’ pitches describe a problem, their solution to the problem, and the financials the business will generate over time. Investors need to ask: How much can you learn, how quickly, and for how much money? There’s been a recent trend to raise a lot of money and then quickly add more capital at higher valuations. The critical question to ask: What has the company learned since the last valuation?”
A great question. It begs a broader question, though:
What have VCs and fintech entrepreneurs learned after the last five years’ rounds of financing?
Colo. ‘true lender’ settlement is path forward for bank-fintech partnerships
Peter Weinstock, Marysia Laskowski and Eric Flynn – American Banker
A landmark settlement that Colorado authorities recently reached with two marketplace lenders and their bank partners has created a much clearer framework in determining who is a true lender for the life of a loan in fintech-bank partnerships.
The settlement involving the Colorado attorney general and the administrator of the Colorado Uniform Consumer Credit Code might only apply to the lenders involved but the framework addresses years of legal battles over who is a true lender when the loan is transferred through multiple parties — a question that has intensified as more banks partner with online lenders.
Quantum operating system trialled successfully; Riverlane’s ‘universal’ Deltaflow.OS could establish UK’s standing in the technology
Siddharth Venkataramakrishnan – FT
A Cambridge university spinout has completed a successful trial of a quantum “universal operating system” months after receiving a grant to install it across the UK’s quantum computers.
Former Co-Head of Hong Kong IPO Appraisal Joins Crypto Company
Eric Lam – Bloomberg
Lin Shi, a former Hong Kong stock exchange executive who helped to vet initial public offerings, has joined a cryptocurrency platform that is seeking to provide securitized token listings.
Porkchop and Whale Coins Surge in New Phase of Crypto Frenzy
Olga Kharif – Bloomberg
More than 500 tokens added in last month, listing tracker says; Defi applications are a big factor in the latest boom
Risk is running rampant in financial markets. Stocks trade at dot-come-era valuations, the IPO pipeline is full, SPACs are back, Bitcoin’s headed toward a record. And right on cue, here come the crypto opportunists. Fueled by a spike in speculative appetite, cryptocurrency entrepreneurs are offering new digital coins at a torrid pace reminiscent of the Bitcoin boom three years ago. Among the freshly listed: Porkchop, Davecoin, Spaghetti, Newtonium and Whale. Many have no obvious utility, but investors have poured billions into them up in hopes of riding one to an easy profit.
DeFi: The Hot New Crypto Trend Of 2020
Tatiana Koffman – Forbes
If you have ventured into crypto-twitter lately, you have probably stumbled upon discussions about DeFi and terms like ‘yield-farming’, ‘YAM’ and ‘yearn’. If this left you scratching your head, you are not alone.
They say, the next big thing often starts out looking like a toy. And this just may be true of DeFi.
On quantitative easing, crypto and modern monetary theory
Marc Fleury – Coiontelegraph
With the COVID-19 crisis showing no signs of abating in the United States, central banks around the world have deployed financial airbags in the form of quantitative easing, and they plan to do a lot more. Modern Monetary Theory has taken center stage, and we are witnessing it in action. It’s a sight that will leave you awestruck: like witnessing the financial version of the first atomic explosion of Los Alamos and the Manhattan Project.
Japanese crypto traders focusing on bitcoin: data
Most Japanese crypto traders who have entered the market in the last year may be investing exclusively in bitcoin.
According to data published on August 19 by the Japan Virtual and Crypto Assets Exchange Association (JVCEA), bitcoin’s dominance in the Japanese market reached more than 87% in April, Cointelegraph reports. No other token accounted for more than 6% of monthly volume traded. In the same month, the number of active accounts for spot crypto trading in Japan increased by 13,987, an all-time high at the time.
Justice Department Seeks To Recover Hacked Cryptocurrency Funds Tied To North Korea
Kelly Phillips Erb – Forbes
The Justice Department has announced action against two hacks of virtual currency exchanges by North Korean actors.
According to court documents, the actors stole millions of dollars’ worth of cryptocurrency and laundered the funds through Chinese over-the-counter (OTC) cryptocurrency traders. Now, the Justice Department is seeking to recover those funds through the filing of a civil forfeiture complaint.
Crypto Exchange Coincheck to Commence Trading of IOST
Celeste Skinner – Finance Magnates
Coincheck, Inc., a Japanese cryptocurrency exchange, announced this Tuesday that it will commence trading of a new cryptocurrency IOST next week on the 8th of September 2020.
Headquartered in Tokyo, Coincheck will be the first crypto exchange to offer to trade in IOST, a cryptocurrency which aims to realise mainstream adoption of blockchain technology.
Former Co-Head of Hong Kong IPO Appraisal Joins Crypto Company
Eric Lam – Bloomberg
Lin Shi, a former Hong Kong stock exchange executive who helped to vet initial public offerings, has joined a cryptocurrency platform that is seeking to provide securitized token listings.
Shi has become chief development officer at Hong Kong Digital Asset EX Ltd., according to a statement. She will oversee research and development, including securitized token offerings and other digital-asset trading products. Shi used to be co-head of IPO vetting at Hong Kong Exchanges & Clearing Ltd.
Tether is now planning to add support for ZK-Rollups to reduce pressure on Ethereum
Yogita Khatri – The Block
After integrating with OMG Network, stablecoin issuer Tether is now planning to add support for another Layer-2 scaling solution — ZK-Rollups.
JPMorgan Says Investors Should Prepare for Rising Odds of Trump Win
Joanna Ossinger – Bloomberg
Kolanovic cites protests and potential poll inaccuracies; Covid-19 trends may drive sentiment too, strategist said
Investors should position for the rising odds of President Donald Trump winning re-election, according to JPMorgan Chase & Co. Betting odds that earlier had Trump well behind challenger Joe Biden are now nearly even — largely due to the impact on public opinion of violence around protests, as well as potential bias in polls, said strategist Marko Kolanovic.
Trump Had One Good Response to Covid-19. His Party Killed It; Aid to the unemployed saved us from disaster. Now it’s gone.
Paul Krugman – NY Times
For the most part, America under Donald Trump’s leadership has offered an object lesson in how not to handle a pandemic. Delay and denial deprived us of any chance of containing the coronavirus’s early spread; impatience and further denial led to a huge second wave of infections. As I pointed out in a previous column, a great majority of U.S. Covid-19 deaths have taken place since April 17, the day Trump tweeted out his support for demonstrators demanding that states end restrictions on high-risk activities.
Shinzo Abe’s Departure Throws Wrench Into U.S.-Japan Ties; Military deals and coordination on China will be early tests for Japan’s new prime minister, with Yoshihide Suga emerging as front-runner
Alastair Gale in Tokyo and William Mauldin in Washington – WSJ
Shinzo Abe worked relentlessly at building close ties with American leaders, at Trump Tower and on the golf course with President Trump, and before then at Hiroshima and Pearl Harbor with President Obama.
California Lawmakers Back Mandate for Racial Diversity on Corporate Boards; Experts say newly passed legislation runs afoul of constitutional principles and could be challenged in court
Anne Steele. – WSJ
California lawmakers stoked change in company boardrooms two years ago when they mandated seats for women at the table. Now they are backing a similar measure to boost racial diversity on corporate boards.
Are the markets going to miss Trump? A Biden presidency could curb the dominance of US tech stocks
John Redwood – FT
The world will look very different if Joe Biden wins the US presidency this November. Investors in world markets have got used to Donald Trump’s provocative tweets and strong personal interest in the strength of the US share index. While many have not liked his approach to international politics and fretted about his tariffs, trade wars and a new cold war with China, they have enjoyed his tax cuts and his remorseless promotion of jobs and growth.
Trump Calls Companies Supporting Black Lives Matter ‘Weak’
Justin Sink – Bloomberg
President Donald Trump called companies supporting the Black Lives Matter movement “weak” and said they’re led by “weak people.” Since George Floyd’s death in the custody of Minneapolis police in May, many major corporations have moved swiftly to embrace Black Lives Matter and the racial equity principles it represents. Trump made clear on Monday in an interview on Fox News that he doesn’t support the movement.
The pandemic will define the Treasury secretary’s legacy, for better or for worse.
By James B. Stewart and Alan Rappeport -NY Times
When the pandemic hit, the task of saving the economy was an opportunity for Treasury Secretary Steven Mnuchin to transform himself from an unremarkable Treasury secretary into a national hero. Mr. Mnuchin, a former banker and film financier, sought advice from his former Goldman Sachs colleagues, a cable-TV host, a Hollywood superagent, a disgraced Wall Street tycoon and Newt Gingrich. Unburdened by his own ideology and with a detail-disoriented boss, Mr. Mnuchin worked with Democrats to devise and pass the landmark stimulus bill.
Proposed Rule Change to Temporarily Amend FINRA Rules 1015, 9261, 9524 and 9830 to Permit OHO and NAC Hearings Under Those Rules to Be Conducted by Video Conference
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to temporarily amend FINRA Rules 1015, 9261, 9524 and 9830 to grant FINRA’s Office of Hearing Officers (“OHO”) and the National Adjudicatory Council (“NAC”) authority to conduct hearings in connection with appeals of Membership Application Program decisions, disciplinary actions, eligibility proceedings and temporary and permanent cease and desist orders by video conference, if warranted by the current COVID-19-related public health risks posed by an in-person hearing. The temporary amendments become operative on September 30, 2020, and are in effect through December 31, 2020, pending any future extensions.
Holiday Reminder Regarding FINRA Market Transparency Reporting Systems
In observance of Labor Day, FINRA’s Market Transparency Reporting Systems will be closed on Monday, September 7, 2020. Affected applications include:
FINRA Reminds Firms of Their Supervisory Responsibilities Relating to CAT
FINRA is issuing this Regulatory Notice as part of its continuing efforts to provide members with guidance on requirements relating to the Consolidated Audit Trail (CAT), and FINRA Rule 6800 Series (the “CAT Rules”). In particular, FINRA is reminding members of their supervisory responsibilities under the CAT Rules and FINRA’s Supervision Rule (Rule 3110). Members may wish to consider whether the practices and recommended steps described below are applicable to their own circumstances and would enhance their supervisory systems and compliance programs.1
ESMA publishes list of thresholds for shareholder identification
The European Securities and Markets Authority (ESMA), the EU’s securities and markets regulator, has today published a document listing the thresholds above which shareholders can be identified in the various Member States of the European Union (EU).
ESMA publishes Call for Evidence in the context of the review of transparency requirements for equity and non-equity instruments
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a Call for Evidence (CfE) in the context of its intention to review Commission Delegated Regulation (EU) No 2017/587 (RTS 1) and Commission Delegated Regulation (EU) No 2017/583 (RTS 2) starting from Q4 2020-Q1 2021. RTS 1 and RTS 2 contain the main implementing measures in respect of the MiFID II/MiFIR transparency regime for equity and non-equity instruments.
Lee Jae-yong, Samsung’s De Facto Leader, Is Indicted Again; Prospects of the case heading to the country’s Supreme Court are particularly high, legal experts say
Elizabeth Koh – WSJ
South Korean prosecutors on Tuesday indicted Samsung’s de facto leader Lee Jae-yong on charges alleging he manipulated stock prices and violated the country’s capital-markets laws, raising the possibility that the business tycoon could return to prison.
Samsung heir Lee Jae-yong faces charges of stock manipulation; Latest allegations prompt concern among investors in world’s biggest maker of computer chips and smartphones
Song Jung-a in Seoul – FT
South Korean prosecutors have indicted Lee Jae-yong, the de facto head of Samsung, on charges of stock manipulation relating to the controversial 2015 merger of two Samsung units and over allegations of a $3.9bn accounting fraud at the group’s biopharmaceutical unit.
CFTC Provides Additional Relief to Market Participants Transitioning from LIBOR
The Commodity Futures Trading Commission today announced that the Division of Swap Dealer and Intermediary Oversight, Division of Market Oversight, and Division of Clearing and Risk have each issued revised no-action letters providing additional relief to swap dealers and other market participants related to the industry-wide initiative to transition from swaps that reference the London Interbank Offered Rate (LIBOR) and other interbank offered rates to swaps that reference alternative benchmarks.
CFTC Reinstates TeraExchange, LLC as a Swap Execution Facility
The Commodity Futures Trading Commission has issued an Order of Reinstatement to TeraExchange, LLC restoring its registration status as a Swap Execution Facility (SEF). The order, effective today, was issued in accordance with Section 5 of the Commodity Exchange Act and CFTC Regulations 37.3(b) and 37.3(d).
SEC Updates List of Firms Using Inaccurate Information to Solicit Investors
The Securities and Exchange Commission today announced that it updated its list of unregistered entities that use misleading information to solicit primarily non-U.S. investors, adding 23 soliciting entities, eight impersonators of genuine firms, and seven bogus regulators.
Investing and Trading
Copper Hits Two-Year High on China Rebound; Strong Chinese manufacturing data and a weakening dollar prop up copper prices
Joe Wallace – WSJ
Copper prices jumped to a two-year high Tuesday on evidence that China’s economic recovery motored ahead in August, as well as a weakening dollar. Three-month copper forwards on the London Metal Exchange, the benchmark in international metal markets, rose 1.2% to $6,754 a metric ton—their highest level since June 2018. Nickel, zinc, lead and other industrial metals also advanced.
Buffett’s Japan investment is a bet on inflation and volatility; The country’s trading houses provide exposure to commodities and corporate restructuring
Michael Mackenzie – FT
Warren Buffett buys companies with solid business models that are not fully appreciated. In other words, companies that appear cheap. Japan’s five major trading houses — Mitsubishi Corp, Mitsui & Co, Sumitomo, Itochu and Marubeni — fit the bill in terms of being cheaply valued, having been hit hard by the global pandemic and collapse in commodity prices earlier this year. The Sage of Omaha has disclosed a $6.3bn investment in the quintet, and signalled he will upsize it.
Retail stock market investors should note professionals’ caution; Derivatives reflect risk of heavy selling that could overwhelm smaller players
Mohamed El-Erian – FT
Retail investors have been flocking to equity markets as an unrelenting five-month surge in valuations suggests stocks are immune to the damage being inflicted on the economy by the Covid-19 pandemic.
Environmental, Social and Corporate Governance
How investor pressure prompted oil majors to wake up to climate change; Major writedowns by BP and Shell in part a response to demands from asset managers increasingly interested in sustainable investing
Attracta Mooney – FT
When BP and Royal Dutch Shell announced plans to slash billions of dollars off the value of their assets this summer in response to the coronavirus pandemic and climate change, many of their biggest shareholders were sanguine about the hit.
Tesla’s nickel quest highlights metal’s environmental burden; Waste linked to mining of key EV battery component threatens marine life
Henry Sanderson – FT
Elon Musk’s call for miners to dig more nickel for Tesla’s batteries faces its biggest test in Indonesia, where companies in the world’s top producing nation are planning to dump millions of tonnes of waste into the sea.
Trump Plan to Block Green 401(k)s Stirs Fund Industry Fury; Fidelity Investments says the Labor Department proposal isn’t “well grounded or supported.”
Tim Quinson – Bloomberg
The world’s largest asset managers are speaking out against a Trump administration plan that would make it more difficult for them to incorporate environmental, social and governance factors when making investment decisions, a move that could limit green investing in 401(k) plans.
Robinhood, Schwab and Other Brokers Resolve Online Glitches
Annie Massa – Yahoo Finance
Robinhood Markets and three other online brokers said they resolved disruptions on their platforms Monday after a morning of glitches affected thousands of customers.
Robinhood, which had problems related to equities, options and cryptocurrency trading, said shortly after noon in New York that the issues were fixed. TD Ameritrade Holding Corp., Vanguard Group and Charles Schwab Corp. also reported difficulties, including slowness with websites and mobile apps, that resulted in user complaints.
How The First Black-Owned Bank With $1 Billion In Assets Can Close The Racial Wealth Gap
Kori Hale – Forbes
The first Black-owned bank to reach $1 billion in assets has been created, due to the merger of City First Bank of D.C. in Washington and Los Angeles-based Broadway Federal Bank. Both banks had been working on this deal for a year and the newly created lender will focus on housing, small businesses, and nonprofits. Will this financial institution be able to provide a much needed boost for the Black economy, as these banks typically do not have the amount of deposits that their larger counterparts do, thus limiting the amount of lending activity and community investment they can do?
Return to Big Offices? Why Bank Branches May Get a New Lease of Life
The COVID-19 pandemic has accelerated the shift to online banking in Europe, but it has also given some suburban branches an unexpected new purpose – as alternative office spaces for staff reluctant to commute to big HQs in city centres.
Lenders have been slowly cutting the number of often unprofitable branches for years, but opposition from unions and politicians over leaving people without access to a physical outlet meant many were unable to cut on the scale they wanted.
Dubai to tap bond markets after Covid-19 funding squeeze; First debt sale since 2014 expected to reach $2bn, reflecting strong demand
Simeon Kerr – FT
Dubai is preparing to return to global debt markets for the first time in six years as the Gulf emirate seeks to cushion the blow of the pandemic on its services-oriented economy.
Israel and UAE Focus First on Banking, Finance at Peace Talks
Alisa Odenheimer. – Bloomberg
Israel and the United Arab Emirates agreed to advance cooperation in banking and finance in the first protocol of understanding signed since the two countries began peace moves. A joint committee will study the dismantling of financial barriers to investment in each other’s markets, Israeli Prime Minister Benjamin Netanyahu’s office said. They’ll al
Thai Markets Rattled by Report of Finance Minister’s Resignation
Suttinee Yuvejwattana – Bloomberg
Thailand’s main stock index dropped and the currency pared gains on a report that Finance Minister Predee Daochai has tendered his resignation weeks after taking office because of ill health.
Venezuela Fuels an Amazon Gold Rush With Petrodollars Drying Up
Fabiola Zerpa – Bloomberg
Mining area has more than tripled since March 2019, NGO says; Officials redouble work on mining camps as oil output plummets
U.S. sanctions and a collapsing oil industry are prompting Venezuela to step up its push into gold mining, including in protected areas of the Amazon. The amount of land used for mining has more than tripled since March last year, according to a study by local non-profit Wataniba. Activity is poised to accelerate further after the authorization in April of new lots in five rivers.
Scoxit?: Boris Johnson’s Flailing Charm Offensive May Not Be Enough to Keep Scotland From Splitting
Isobel Thompson – Vanity Fair
Boris Johnson was forced to curtail a family holiday in Scotland after the press appeared, revealed the remote location of his holiday cottage, and interviewed a livid nationalist sheep farmer who accused the prime minister of pitching a voluminous cream bell tent in his field without permission. Perhaps it was inevitable that Johnson’s trip didn’t go to plan. Navigating both the final stretch of the Brexit process and the ongoing pandemic—which has claimed over 41,000 lives in the U.K. and plunged Britain into a chasmic recession—Johnson is currently grappling with another looming problem: Scotland is straining to break away from the United Kingdom. While 44% of Scots voted for independence in a 2014 referendum, recent polls indicate that 52.5% would now vote to sever the union, forming a consistent majority for the first time.
Ireland’s Donohoe calls for Brexit negotiators to redouble efforts
Jonathan Keane – CNBC
Irish Finance Minister Paschal Donohoe said Brexit negotiating teams should redouble their “creativity and commitment” in order to reach an agreement before the end of the year, with officials and governments currently preoccupied by the coronavirus pandemic.
Donohoe told CNBC Friday the importance of the EU-U.K. talks have been heightened by the global economy being gripped by Covid-19 developments in the last few months.
Volunteering is a great way to help others – and yourself; Those who are furloughed or unemployed find the experience is useful – and it boosts wellbeing
Susie Mesure – FT
Faced with redundancy and a gaping diary after Thomas Cook, her employer of four years, went bust, Alice Ratcliffe knew there was one thing she wanted to do: get involved with a charity.
Amazon Gets U.S. Approval for Drone Fleet, a Package-Delivery Milestone; Company joins UPS and Google’s Wing unit in tests involving customers, but routine use is years away
By Sebastian Herrera and Andy Pasztor – WSJ
Amazon. AMZN 1.45% com Inc. said Monday it received federal approval to establish a fleet of drones and will begin limited tests of package deliveries to customers in the U.S., although a number of key steps remain before widespread use of the technology will be allowed.