Automation in FX markets; Giancarlo warns EU to stay off clearing turf; Rolet’s awkward departure

Nov 7, 2017

First Read

ABN AMRO Loves Fidessa
By John Lothian – JLN

The romance between ABN AMRO Clearing (ACC) and Fidessa is a strategic and growth-oriented one and the relationship is driven by James Fairweather.

James Fairweather is the global head of execution services at ACC . He is driving this installation and rollout of Fidessa’s systems at ACC.

ABN AMRO Clearing is hoping to expand beyond active traders into services for corporate clients and even prime broker services, and Fairweather said Fidessa’s platform is the right fit for the job.

“The breadth of technology was better with Fidessa,” Fairweather said on Monday from London in a telephone interview. He noted Fidessa has previously offered fragmented solutions including an in-house platform, the ACC Global Gateway.

For the rest of the commentary, go HERE


Hits & Takes
By JLN Staff

HKEX’s 2016 Annual Report has won the Gold Award in the General Category of the 2017 HKMA Best Annual Reports Awards.

The World Federation of Exchanges will host its IOMA conference in Chicago next year, April 11-13.~JK

Click here to download NEX’s report on the future of European Government Bonds. –JJL

Asia Pacific Financial News from John Lothian News – November 5, 2017~JJL

All of the winners from Waters Technology’s Buy-Side Awards can be found here.~SD

It’s not your imagination – depending on your location and provider, the internet was a little hinky in the United States yesterday around midday. –SD


Bitcoin a new asset class, not a crypto-currency: CME’s Melamed
Tomo Uetake, Hideyuki Sano – Reuters
Bitcoin is likely to become a new asset class in its own right, such as gold or stocks, which can be traded by major investors and regulated, not simply a crypto-currency, Leo Melamed, Chairman Emeritus of CME Group (CME.O), said on Tuesday.

***** Leo Melamed told me the same thing last week and asked me to keep an open mind about bitcoin. I will, but I will also ask a lot of hard questions, because that is what I do.~JJL


‘Janesville’ wins the FT and McKinsey Business Book of 2017; Amy Goldstein becomes first solo female winner for her gritty tale of a Wisconsin town
Andrew Hill in New York – FT
A deeply reported story about the impact of factory closure on a US community is this year’s Financial Times and McKinsey Business Book of the Year. Janesville by Amy Goldstein was awarded the £30,000 prize at a ceremony in New York on Monday. The book examines the consequences of General Motors’ decision to close an assembly plant in Janesville, Wisconsin, in 2008. It traces the fate of workers and their families, local politicians, unions and companies in the region.

**I wonder if Paul Ryan read it?~JK


Cboe Global Markets Announces Planned Chief Financial Officer Retirement and Successor Appointment
Cboe Global Markets announced the planned retirement of its Executive Vice President, Chief Financial Officer (CFO) and Treasurer, Alan Dean, at the end of December 31, 2017, after 38 years of service to the company. Cboe plans to promote Brian Schell, currently Deputy CFO, to Executive Vice President, Chief Financial Officer (CFO) and Treasurer, effective January 1, 2018.

***** You can’t retire from Cboe unless you have been there for more than 35 years.~JJL


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Monday’s Top Three
Monday’s top read stories were led by our curiosity – just who is creating offshore accounts, other than Apple, which says it wasn’t? This New York Times’ story Paradise Papers Shine Light on Where the Elite Hide Their Money is just the start of this story. Second went to the other departing CEO, Xavier Rolet, in Bloomberg’s Rolet’s Exit From LSE Gets Complicated as Hohn Seeks U-Turn. Third was a tie between the Wall Street Journal’s piece on the guy who posed as a reporter for the Wall Street Journal in To Meet Carson Block, He Posed As Journal Reporter…And Got Caught. That story tied with the fallout story from the great Saudi leadership shakeup in Bloomberg’s Alwaleed, Caught in Saudi Purge, Has Assets Across the World


MarketsWiki Page of the Day: William C. Dudley
The Federal Reserve Bank of New York announced on November 6, 2017 that William C. Dudley will retire as president and chief executive officer in mid-2018 in order to ensure a successor is in place well before the end of his term in Jan. 2019.


MarketsWiki Statistics Sponsored by Level Trading Field
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Level Trading


Lead Stories

Humans Are Becoming Less Important in the World’s Biggest Market
Lananh Nguyen – Bloomberg
More automation planned by 94% of FX trading heads: survey; Trend comes as market faces fallout from rigging scandals
The $5.1 trillion-a-day currency market is losing its human touch. That’s the conclusion of trading and foreign-exchange heads surveyed by the organizers of the TradeTech FX conference in Miami. Of the 100 North America-based respondents, 94 said they aimed to automate more of their foreign-exchange trading operations in the next three years.

CFTC chairman warns EU to stay off clearing turf; CFTC’s Giancarlo stated stricter rules on overseeing non-EU clearing houses will damage US derivatives markets.
Joe Parsons – The Trade
The chair of the derivatives watchdog in the US has warned his European counterparts not to overreach with its proposed rules to enhance oversight of non-EU clearing houses.

Don’t Leave Me This Way, Xavier Rolet; Rolet’s departure was an awkward trade-off. It now needs to be reviewed.
Chris Hughes – Bloomberg
The London Stock Exchange Group Plc needs to be a bastion of good governance. Embarrassingly, it has got into a pickle over its succession planning for esteemed CEO Xavier Rolet.

Dick Fuld’s Matrix Expands Into Private Equity, Short-Selling
Max Abelson – Bloomberg
Richard “Dick” Fuld, who led Lehman Brothers Holdings Inc. as it collapsed, said his asset management firm is rebranding and expanding into private equity offerings and a hedge-fund strategy.

World stocks break 500 barrier, oil camps at two-and-a-half year high
Marc Jones – Reuters
The global rally in stocks showed no sign of slowing on Tuesday, as upbeat investors pushed the most widely-tracked index of world stocks up for a ninth straight day and sailing past the 500 point barrier.

European equity investors start adapting to Mifid II rules; Fund managers wanting to buy and sell large blocks already using waiver rule
Philip Stafford – FT
European equity investors are beginning to adapt to new rules designed to bring transparency to the trading of large blocks of shares that in recent years has migrated off stock exchanges to dark pools.

Cargill fined $10m for misreporting swaps sales; CFTC ruling sheds light on the new legal ground created by Dodd-Frank reforms
Gregory Meyer in New York – FT
Cargill, the agricultural commodities powerhouse, is among a handful of commercial companies registered as a swap dealer, a designation typically held by Wall Street banks.

A Brexit Glitch That Could Hurt Europe; A disorderly departure would make it harder to wind down failing banks.
The Editors – Bloomberg
Few doubt that the British economy will be severely hurt if the U.K. leaves the European Union without a new agreement on trade and regulation. But there are risks for the EU, too. One that’s received too little attention concerns bank resolution.

Barclays fails to end U.S. ‘dark pool’ class action
Jonathan Stempel – Reuters
Barclays Plc has failed to persuade a U.S. appeals court to unwind a class action lawsuit accusing the British bank of defrauding shareholders about its private “dark pool” trading platforms.

How Mifid II can rehabilitate sellside research; Europe’s new investment market rules will focus on the economics of paid-for analysis
Philip Augar – FT
I have a Mr Miquel on the line. He is not very happy.” My first ever piece of investment research had just been published and until I received that chilling call from him one morning in 1979, I had never spoken to the senior partner of Fielding Newson Smith, the broking firm where I worked.

U.S. backers boost stakes in Chicago bourse bid stalled over China ties
John McCrank – Reuters
U.S. investors have agreed to increase their stake in a deal to buy the Chicago Stock Exchange (CHX) to prevent the politically sensitive bid, led by China-based investors, from falling apart, sources familiar with the matter said.

City veteran Donald Brydon adept at fighting his corner
Martin Waller – The Times
Donald Brydon, CBE, is exactly the sort of City grandee who might be expected to run an institution such as the London Stock Exchange. Mr Brydon, 72, who replaced Chris Gibson-Smith, a BP veteran, at the LSE in July 2015, was chairman of the Royal Mail when his appointment was announced and his list of chairmanships includes Sage Group, the computer software business, and Smiths Group, the diversified engineer.

Calls for delay on CAT
Nicole Bullock – FT
Some of the major players involved in a much-delayed surveillance system to monitor trading in the world’s largest equity market want it to face further delays. The operating committee of the CAT, or consolidated audit trail, say that the exchanges and other groups known as SROs “are discussing with the [Securities and Exchange] Commission staff an extension for the various phases of the implementation of the CAT. We believe that a new, extended timeline is in the best interests of all parties involved.”

ICO market ‘very young’ so we are still the best place to raise cash, Nasdaq exec says; Nasdaq is still the best place to raise money despite the rise of ICOs, Bruce Aust, vice chair of the U.S. stock exchange, said
Arjun Kharpal – CNBC
Nasdaq markets are still the best place for a company to raise money despite the rapid rise of the initial coin offering (ICO) in the cryptocurrency world, the vice chairman of the U.S. stock exchange told CNBC on Tuesday.

Tricky Balancing Act Faces New York Fed Search Committee; The panel searching to replace William Dudley is looking for a successor to lead a Fed bank that has come under greater scrutiny since the financial crisis
Nick Timiraos – WSJ
Help Wanted: A senior executive with a keen knowledge of markets and economics, but who isn’t too close to Wall Street because he or she will be responsible for regulating some of the world’s biggest banks.

Exchanges, OTC and Clearing

TCI turns “inactivist” investor with LSE campaign
Peter Thal Larsen – Reuters Breakingviews
TCI made its name attacking failing chief executives. The activist investor’s latest campaign, however, displays a soppier side: it is so pleased with departing London Stock Exchange boss Xavier Rolet that it wants him to stay in the job, while demanding that Chairman Donald Brydon step down instead. The risk of a public board spat, though, is that both men end up leaving.

ASX on a gallop but it might be wise to hold your horses
Elizabeth Knight –
Had you blinked around 11am you would have missed one of the most significant events in Australian capital markets in years – the stock market hit the 6000-level, the highest it has been since the global financial crisis.

HKEX To Introduce Realtime DVP For Northbound Stock Connect Trading On 20 November
Hong Kong Exchanges and Clearing Limited (HKEX) announced today (Monday) that Realtime Delivery versus Payment, or Real-time DVP, money settlement in Renminbi, Hong Kong dollars and US dollars will be introduced for the Northbound related transactions of Stock Connect, its mutual market access programmes with the Shanghai and Shenzhen stock exchanges, on 20 November 2017.

LSE ‘out of the race’ to buy Irish Stock Exchange
The Times
A preferred bidder for the Irish Stock Exchange could be finalised as early as the end of this month, with London Stock Exchange Group no longer expected to be in the fray to acquire the 224-year-old bourse.

Nasdaq Withdraws Another Information Leaking Product
Themis Trading Blog
Nasdaq just filed with the SEC to withdraw the provision/selling of its Market Analytics Data Package that includes the Market Velocity and Market Forces data products.

Bucharest Stock Exchange appoints interim general director
Romania Insider
The Bucharest Stock Exchange has appointed Marius-Alin Barbu as interim general director. Barbu is the current deputy general director.

TMX Group Equity Financing Statistics – October 2017
TMX Group today announced its financing activity on Toronto Stock Exchange and TSX Venture Exchange for October 2017.

SGX reports market statistics for October 2017
Securities – Total Securities market turnover value was at S$24.0 billion, up 10% month-on-month (m-o-m) and up 22% year-on-year (y-o-y), over 21 trading days. There were 20 trading days in September 2017 and 21 in October 2016.
Derivatives – Total Derivatives volume was 14.9 million, down 7% month-on-month (m-o-m) and up 29% year-on-year (y-o-y).

Cboe Global Markets Reports Third-Quarter 2017 Results
Revenue Less Cost of Revenue of $269.7 Million, up 98 Percent, Reflects the Bats Acquisition


SIA and R3 Partner to Accelerate the Adoption of Blockchain Applications by 600 Banks and Corporates
SIA and R3 have launched a strategic partnership aimed at speeding up the global development and adoption of blockchain applications by leveraging SIAnet’s 600 nodes provided to financial institutions, corporates and public administrations.

EU competition commissioner launches fierce attack on big tech; Margrethe Vestager criticises Google, Facebook and Apple for abusing market dominance
Aliya Ram in Lisbon – FT
Margrethe Vestager has hit out at technology companies for undermining democracy and allowing “fear” and “greed” to drive anti-competitive behaviour, in some of her strongest criticisms of the industry since taking over as EU competition commissioner.

Hackers can gain access to your computer monitor ó a cybersecurity expert shows us how easy it is
Chris Snyder – Business Insider
Everyone knows your computer can be hacked, but did you know your monitor might also be used against you? Ang Cui from Red Balloon Security has figured out a way to hack into a popular Dell monitor and manipulate what you see on your screen. Using this type of attack, a user could easily be tricked into revealing personal, private information. Here’s how it works. Following is a transcript of the video.

Charles River partners with OpenDoor for fixed income liquidity; Clients using the Charles River IMS will gain access to OpenDoor’s daily anonymous auctions.
By Hayley McDowell – The Trade
Charles River has teamed up with OpenDoor to provide its clients with OpenDoor’s all-to-all market service for off-the-run US Treasuries.


U.K. Is Such a Mess, Not Even Analysts Can Agree What’s Going on
Nikos Chrysoloras -Bloomberg
Britain’s political landscape is so chaotic that even those trying to cut through the noise –and provide clarity to investors — can’t agree on what is going on.

The Trump administration made a subtle shift in its language on the Asia-Pacific and it could unnerve China
Tara Francis Chan – CNBC
“Indo-Pacific” is the official term the Trump administration is now using for Asia.

‘Open Sesame:’ Lobbyists cheer warmer welcome in Trump White House
Ginger Gibson – Reuters
During the eight years of the Obama administration, business lobbyists often found the gates to the White House closed tight.

The Richest One Percent of America Gets Half the Trump Tax Cuts
Jonathan Chait – New York Magazine
When analysts calculated, a month ago, that the preliminary framework of the Republican tax plan would overwhelmingly benefit the rich, Republicans insisted these were vicious lies, because the details on the proposal had not yet been finalized. Number-crunchers were “claiming to be clairvoyant about details of the Republican reform ‘framework’ that haven’t been proposed,” huffed the Wall Street Journal editorial page. House Ways and Means Committee chairman Kevin Brady complained that any calculations relied on “a variety of overreaching and unrealistic assumptions about policy decisions members of Congress still have to make.”

Offshore cash helped fund Steve Bannon’s attacks on Hillary Clinton; Robert Mercer, whose spending assisted Donald Trump’s election win, used tax haven of Bermuda to avoid US taxes
Jon Swaine – The Guardian
Eighteen months before guiding Donald Trump to election victory, Steve Bannon delivered the opening shot in the ruthless Republican campaign to paint their Democratic opponent as corrupt.

The Case of Wilbur Ross’ Phantom $2 Billion
Dan Alexander – Forbes
Fresh off a tour through Thailand, Laos and China, United States Secretary of Commerce Wilbur Ross Jr. picked up the phone on a Sunday afternoon in October to discuss something deeply personal: how much money he has. A year earlier, Forbes had listed his net worth at $2.9 billion on The Forbes 400, a number Ross claimed was far too low: He maintained he was closer to $3.7 billion. Now, after examining the financial-disclosure forms he filed after his nomination to President Donald Trump’s Cabinet, which showed less than $700 million in assets, Forbes was intent on removing him entirely.


Opinion/Commentary of Chairman J. Christopher Giancarlo: An EU Plan to Invade U.S. Markets
There’s been much worry about the impact of Brexit on British and European banking and capital markets. It may seem that U.S. markets are protected from that uncertainty, but they aren’t. If the European Union mishandles Britain’s exit, the consequences for U.S. businesses and consumers could be serious.

CFTC Commissioner Quintenz Names Margo Bailey Special Counsel
Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz announced today that Margo Bailey will serve as his Special Counsel.

MiFID II creates “much uncertainty” for EEA members
Asset Servicing Times
European Economic Area (EEA) members remain in the dark over the EU’s authority to impose the second Markets in Financial Instruments Directive (MiFID II) after the January 2018 deadline, according to Finanstilsynet, the Norwegian supervisory authority.
Finanstilsynet plans to implement MiFID II into law in line with next year’s deadline in order for Norwegian institutions to maintain parity with their peers based in member states, despite the the rules not being incorporated in the EEA agreement.

SEC Questions Miami Firm About Guggenheim Ties; Regulators queried connections to company that purchased an $85 million Malibu mansion
Justin Baer and Margot Patrick – WSJ
U.S. securities regulators recently asked a Miami wealth manager about its ties to both Guggenheim Partners LLC and a company that purchased an oceanfront home with Guggenheim Chief Executive Mark Walter, according to people familiar with the matter.

CFTC Orders Cargill, Inc. to Pay a $10 Mln Penalty for Providing Inaccurate Mid-Market Marks on Swaps, Which Concealed Cargill’s Full Mark-up, in Violation of Swap Dealer Business Conduct & Reporting Requirements, & for Supervision Failures
The Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges against Cargill, Inc. (Cargill), of Minnesota, for providing mid-market marks (marks) that concealed from counterparties and its swap data repository (SDR) its full mark-up on certain swaps, in violation of the Commodity Exchange Act (CEA) and Commission Regulations.

Why Wall Street Isn’t Picking Its Next Overseer: QuickTake Q&A
Matthew Boesler and Jeanna Smialek – Bloomberg
Federal Reserve Bank of New York President William Dudley is stepping down from his post in mid-2018, several months before his term expires in January 2019. Dudley’s departure comes as the central bank is already undergoing an enormous changing of the guard. U.S. President Donald Trump has just nominated Fed Governor Jerome Powell to replace Janet Yellen when she completes her term at the helm in February. The White House will still need to select a vice chair and three more governors, assuming Yellen leaves the Fed. The New York Fed presidency will be key, given that position’s role overseeing Wall Street and the wind-down of the Fed’s $4.5 trillion balance sheet.

CFTC Fines Cargill $10 Million Over Swaps Trades; Agribusiness company says it will make changes in customer reporting, internal controls
Gabriel T. Rubin – WSJ
The Commodity Futures Trading Commission fined Cargill Inc. $10 million for improperly valuing swap trades, a move that the regulator said caused the company’s revenue to appear higher than it should have been.

Obama Had a Way to Save Your Retirement. Here’s What Went Wrong
Megan Leonhardt –
More stress was the last thing Judith Hamill needed. She was already trying to sell a house, taking care of her beloved horse’s hospitalization, and coping with her stepmother’s death. Then, in early June, the North Carolina native received what she considered a surprising letter from her longtime brokerage firm.

U.S. Treasury’s First Director of Office of Financial Research to Leave Post; Richard Berner, whose term expires in 2019, to depart by the end of this year
Ryan Tracy and Nick Timiraos – WSJ
The head of the U.S. Office of Financial Research plans to leave by year’s end, adding to uncertainty for a young agency that faces proposed budget cuts and an inspector general’s probe into management and personnel issues.

Reporting software failures sees Morgan Stanley fined in the US; Morgan Stanley has been fined a total of $350,000 after the CFTC found it had omitted data from its Large Trader reports.
By Hayley McDowell – The Trade
Issues with proprietary reporting software used by Morgan Stanley have led to the investment bank being fined $350,000 in the US.

FINRA Unscripted: A Leader’s Perspective with FINRA Chief Economist Jonathan Sokobin
Listen to FINRA’s Chief Economist, Jonathan Sokobin, talk with FINRA’s head of communications, Josh Drobnyk, about the work his office does for FINRA. Sokobin also discusses his team’s recent work around microstructure and capital formationóand a related conference on market structure.

FCA response to Payment Systems Regulator’s paper on authorised push payment scams
The Financial Conduct Authority (FCA) has contributed to the Payment Systems Regulator (PSR) paper on ‘Authorised Push Payment Scams (link is external)’. This follows the Which? super-complaint regarding safeguards in the market for push payments.

Investing and Trading

‘Buy Bitcoin’ Overtakes ‘Buy Gold’ as Online Search Phrase
Eddie Van Der Walt – Bloomberg
U.K.’s BullionVault says bitcoin is another headwind for gold; Gold’s advance faltered amid stronger dollar and equity gains
Add bitcoin to the list of things denting gold’s appeal.

Hedge Funds Push the Price of Bitcoin to New Highs
Nathaniel Popper – NY Times
The chief executive of JPMorgan Chase, Jamie Dimon, has called Bitcoin a fraud and made it clear that he will not allow his bank to begin trading the virtual currency any time soon.

Inflation could blow multi-billion pound hole in UK finances
Tim Wallace – Telegraph
High inflation could cost the British Government tens of billions of pounds in extra interest payments because so much of its debt is index-linked.

A Study of the Classics – Part 1
Jamie Farmer – Indexology
During a recent retreat to the Blue Ridge Mountains, I picked up a copy of Outside Magazine’s 40th Anniversary issue. Nursing two fingers of bourbon, I paged through their feature on the seven most classic pieces of adventure gear. Generally, it’s a great list. Number 4, Ray-Ban Aviators? Absolutely. Number 7, Birkenstock sandals? Yeah…no. But then, I never was much of a fan of The Grateful Dead. Being an index geek, I found myself ruminating on the classics of indexing (yes, I’ll concede that’s a little sad).

Get Rid of Capitalism? Millennials Are Ready to Talk About It; As polls show young Americans souring on capitalism, a debate between economic philosophies draws a sellout crowd in New York.
Ben Steverman – Bloomberg
One of the hottest tickets in New York City this weekend was a discussion on whether to overthrow capitalism.

Short-Volatility Funds Are Being Flooded With Cash
Dani Burger – Bloomberg
Assets of inverse volatility ETFs rise to $2.4 billion; Volatility funds now bigger than those tracking many countries
Exchange-trade products betting that volatility will sink lower have never been more popular.
/’s startup raises $117 million, enters enterprise market
Salvador Rodriguez – Reuters, the tech startup founded by pop star and entrepreneur, has raised $117 million in venture funding, the company told Reuters on Monday as it announced its entry into the corporate computing market with a voice assistant for customer service.

Junk energy bonds near 7-month high in US
Eric Platt – FT
Junk energy bond prices in the US surged to the highest level in nearly seven months on Monday as crude oil prices rallied to a two year high.


Goldman Sachs’ chief risk officer retires
Philip Scipio – Reuters
Goldman Sachs chief risk officer Craig Broderick will retire after 32 years in January, according to an internal memo obtained by IFR. A Goldman Sachs spokesman confirmed the contents.

Wells Fargo targets post-boomer customers with robo-adviser
Dan Freed – Reuters
Wells Fargo Inc on Monday launched a new robo-adviser to give first-time investors a low-cost option to invest, joining other financial firms in the hunt for tech-savvy customers looking to enter the markets.

Some Value Funds Are Stuffed With Cash as Stocks Surge; At some point equities will slump, managers say, and they’ll be ready to scoop up the bargains. Meanwhile, they’re sweating it out.
Charles Stein – Bloomberg
Charles de Vaulx knows keeping 40 percent of his fund in cash is hurting results. But as far as he’s concerned, there aren’t many stocks to buy. “Being fully invested has zero appeal right now because stocks are so expensive,” says de Vaulx, whose $8.3 billion IVA Worldwide Fund trails the MSCI All-Country World Index by a big margin this year. “We are willing to underperform while the party goes on.”

Dick Fuld makes quiet comeback on Wall Street; Matrix wealth management group expands into private equity and short selling
Ben McLannahan in New York – FT
Richard “Dick” Fuld, the man who drove Lehman Brothers to the biggest corporate collapse in history, is making a quiet comeback on Wall Street.

Goldman Sachs Names Stephanie Cohen as Head of Strategy; She replaces Stephen Scherr, who will focus on consumer division
Liz Hoffman – WSJ
Goldman Sachs Group Inc. is naming a new head of strategy as it looks to incubate new businesses and find different sources of revenue to replace trading revenue that’s unlikely to return in force.

Bridgewater Paid Over $1 Million to Employee Pushed Out After Relationship With Dalio’s Right-Hand Man; World’s largest hedge fund also heard from another female worker that top executive Greg Jensen had groped her buttocks
Rob Copeland – WSJ
Bridgewater Associates paid a settlement to a woman who was pushed out after engaging in a consensual relationship with top executive Greg Jensen, and shortly after heard from another female employee that Mr. Jensen had groped her buttocks, according to people familiar with the matter.


Saudi crown prince’s arrests are a risky gamble
Associated Press Analysis
Saudi Arabia’s young Crown Prince Mohammed bin Salman has taken his riskiest gamble yet with the stunning arrests of top princes, military officers, government officials and influential businessmen in the kingdom.
The sweep, which the government says is aimed at eliminating corruption, also appears to be aimed at stamping out potential rivals or critics of Prince Mohammed, popularly known as “MBS” and the son of King Salman.

Arab Stocks Sink Most in World as Rising Political Tension Bites
Dana El Baltaji and Filipe Pacheco – Bloomberg
Saudi Arabia’s equity index declines as much as 3.1 percent; Kuwait’s SE Price Index is the world’s worst performer
Stock indexes across the Gulf were among the world’s worst performers after a crackdown in Saudi Arabia and heightened geopolitical tension rattled investors.

Saudi Crackdown Widens as More Bank Accounts Said Frozen
Matthew Martin, Glen Carey and Vivian Nereim – Bloomberg
Banks told to freeze accounts of dozens, hundreds more on list; Princes, businessmen, officials arrested in anti-graft drive
Saudi Arabia’s surprise crackdown, which led to the arrests of princes, billionaires and officials over the weekend, is expanding beyond those previously detained in what authorities described as an anti-corruption drive.

Saudi Arabia – Your keys to the kingdom
FTSE Russell Blog
The oil-rich Kingdom of Saudi Arabia has not historically been reliant on international investment to bolster its economy. However, when oil prices experienced a sustained low in 2015, Saudi Arabia’s fiscal deficit reached an all-time high. In response, the Kingdom announced a national transformation plan called “Vision 2030,” which outlines a path to boost and diversify the Saudi Arabian economy and place its stock market more in line with international standards. FTSE Russell has been monitoring the Kingdom’s progress and is developing index solutions to address these changes.

JPMorgan sees more Saudi firms looking at overseas listings after Aramco
Saeed Azhar, Tom Arnold – Reuters
JPMorgan (JPM.N) is in early talks with Saudi Arabian companies about overseas listings, its investment bank chief said, raising the possibility that more firms could join oil giant Saudi Aramco (IPO-ARMO.SE) in seeking an international flotation.

Vietnam’s neighbors, ASEAN, targeted by hackers: report
Reuters Staff
A hacking group previously linked to the Vietnamese government or working on its behalf has broken into the computers of neighboring countries as well as a grouping of Southeast Asian nations, according to cybersecurity company Volexity.

Emerging-Market Hedge Funds Are Having to Turn New Clients Away
Suzy Waite and Nishant Kumar – Bloomberg
Macro money pools focused on exotic economies outperform peers; Even prospect of withdrawal of QE hasn’t dimmed their allure
Cheap money may have buoyed emerging-market macro hedge funds toward their ninth straight annual advance, but that doesn’t mean investors are expecting an exodus as the world’s central bankers start turning off the taps.

Bitcoin proves hard to kill in China; Over-the-counter market for cryptocurrency grows after authorities close exchanges
Gabriel Wildau in Shanghai – FT
Chinese investors are still trading bitcoin and buying initial coin offerings, suggesting authorities in Beijing are struggling to clamp down on cryptocurrencies just weeks after announcing that public exchanges would be shut down.

Men Linked to 1MDB Financier Failed in Bid to Buy Bank; Mauritius regulator blocked transaction, told FBI about bid involving ex-Goldman partner connected to Malaysian Jho Low
Bradley Hope, Simon Clark and Tom Wright – WSJ
Two men with links to the alleged mastermind of a multibillion-dollar Malaysian financial scandal launched a bid last year to buy a controlling stake in a bank in Mauritius.


There’s a Space Race in Frankfurt for Post-Brexit Bank Offices
Jack Sidders and Steven Arons – Bloomberg
U.S. banks are scouting for office space in German city; Goldman Sachs is said to agree option for additional space
With talks about Brexit largely deadlocked, banks have begun putting their contingency plans into action. The focus: Frankfurt.

Dublin calls for 5-year Brexit transition period; Coveney rails against ‘game of chicken’ as Irish concerns of collateral damage mount
Arthur Beesley in Dublin – FT
Ireland has called for a transition period of up to five years after the UK leaves the EU in March 2019, in a sign of Dublin’s mounting concern that it will suffer collateral damage from Brexit.

No Relief on Offer for U.K. Executives Angry Over Brexit Fumbles
Alex Morales and Joe Mayes – Bloomberg
CBI speeches by May, Corbyn fail to impress industry leaders; No good options for unhappy businesses preparing for EU exit
With their anxiety spiraling over Brexit, Britain’s business leaders weren’t impressed by the pitch from the Conservative premier — or the Labour leader who wants her job.

50 Banks Have Discussed Brexit Moves With Supervisors
Nicholas Comfort – Bloomberg
Firms are “improving their understanding” of issues: Nouy; License applications from about 20 banks are in the works
Daniele Nouy, head of supervision at the European Central Bank, said about 50 banks have discussed their Brexit business-relocation plans with authorities in the European Union.

Paris, Frankfurt Try to Grab Lucrative Legal Action From London
Karin Matussek and Gaspard Sebag – Bloomberg
For decades, London has been the place to go for big commercial disputes in Europe. Even when companies based outside Britain sue one another, the cases are argued in London, such as one brought by UBS AG against Leipzig’s water utility and another by Franco-Belgian bank Dexia SA against the Italian city of Prato. With Britain preparing for Brexit, European judicial systems are trying to lure those cases to their own courtsóby copying some U.K. legal practices and even offering proceedings in English.


Maybe Social Media Is Broken; How can you stop people from sharing biased and misleading stuff?
Cathy O’Neil – Bloomberg
Revelations about Russia’s use of Facebook, Google and Twitter to sow discord in the U.S. have led to a lot of discussion about how to keep propaganda out of our social media feeds. Proposals include abandoning “likes,” making people use their real names, and regulating, altering or even eliminating the algorithms the companies use to decide who sees what.

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