Bank of England orders Euroclear to bolster resilience after 2020 outage

Jun 25, 2021

First Read

$49,706/$300,000 (16.6%)


Hits & Takes
John Lothian & JLN Staff

I now have a nice gentle electric current buzzing through my lower half to help mask the pain signals being sent by my nerves down there. The full impact of the weeklong trial does not hit until about Monday when some of the hidden electric signals will take full effect. The results so far are good, though when I move suddenly I can get a bit of a jolt from the stimulator as it adjusts to my new position.

I am fairly optimistic at this point that this stimulator solution can provide me with some relief from the chronic back pain I have been experiencing, which has gotten worse during the pandemic. I am somewhat limited in what I can do for the next week while the trial is going on since I am told not to bend, lift or twist, or what they call BLT.

The goal is to reduce my pain and reduce my dependence on pharmaceutical solutions to manage it. I am blessed with good doctors and Elmhurst Memorial Hospital, the number one large community hospital in the U.S., to help me.

This weekend we will publish the second episode of the relaunched “The Spread” video series about the options markets. So far we are getting a feel for the content and some new presentation styles, but what is lacking is the usual humor embedded into the content. Don’t worry, we will get our sense of humor back soon enough.

Cboe Global Markets‘ new headquarters in the Old Post Office building in Chicago is a finalist for the Architizer A+ Awards. — Cannon Design

Michael Smyth of IEX has a post on their blog talking about how midpoint trading on IEX Exchange has improved since the introduction of D-Limit order type. — Medium

The FIA Japan Commodity Committee has just released a summary of its recent activities and discussions. If you are interested in participating in their committee activities, please contact the chair or the FIAJ Office. — FIA Japan

Symphony CEO Brad Levy will keynote at the ‘Now You Can’ festival to discuss the acceleration of Low-Code No-Code in Financial Markets. Register HERE.

Michael J. Walsh, managing director of research and public policy at IncubEx, has a commentary on Medium titled “Part of the Climate Solution Is Found In Our Past.” — Medium

Quantitative Brokers is now supporting CME’s Bitcoin Futures and Micro Bitcoin Futures.

If you know someone interested in a STAC Fund Scholarship, HERE are details.

Phillip Capital has a new theme for their corporate brainstorming event, which is “One Phillip.” To emphasize this they are having soccer jerseys made up with the theme on them. Mine should be a double extra large tall, if they are giving them away. — LinkedIn

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.

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 CME Group shared an update on recent record CME SOFR futures trading activity.
Following last week’s FOMC meeting, CME SOFR futures saw record volumes as participants managed positions across the short-term interest rates curve. 5-day ADV surged to 223K contracts, including record days of 275K contracts on June 16 (FOMC day), and 340K contracts on June 18. For more information on the CME’s SOFR futures, you can go here.~SR


Viewpoint – FIA Tech grows up
Walt Lukken, FIA President and CEO
June is the month when millions of young people graduate and enter the next phase of their lives. Earlier this month, I attended my oldest son’s high school graduation, and the experience filled me with both pride and trepidation. Watching this young man grow up has been the pride of my life. While I am sad he’s leaving home (he’s off to Boston College in the fall), I know that big things await him and that his growth requires us to let him go off in the world.
I thought about this graduation analogy when FIA announced a major milestone in the development of FIA Tech, our subsidiary that provides technology services to the listed derivatives industry.

***** FIA Tech got some big boy pants.~JJL


Hedge Funds Launch Effort to Boost Image as D.C. Scrutiny Mounts
Robert Schmidt – Bloomberg
Trade group unveils new ad campaign targeted at Capitol Hill; New strategy represents a shift for secretive fund industry
Hedge funds have long stayed out of the political fray. Now, as lawmakers and regulators increasingly put the firms in their sights, the secretive industry is reversing course. The main hedge fund lobbying group — which represents 135 funds including Citadel, Elliott Management Corp. and Renaissance Technologies — is launching a multi-million dollar campaign Thursday to better explain to Washington what its members actually do.

****** They have a lot of work to do on this. Stay away from the “We are doing God’s work” theme. It is already taken.~JJL


Phantom Goldman Banker Is Bait in Swiss Trader Kidnapping ‘Trap’
Gaspard Sebag – Bloomberg
Trader once worth $96 million was held for six days near Paris; ‘You were programmed to be killed,’ kidnappers told him
When Yomi Rodrig got into the old, dirty-looking car parked on a quiet street in a western Paris suburb on a rainy evening in January 2015, he had an uneasy feeling something wasn’t quite right. “But then I told myself ‘it can’t be,'” the 63-year-old Geneva-based trader said in a Paris courtroom during the trial this month of his alleged kidnappers. “That’s how it started.”

***** Wait, a Goldman banker is The Phantom?~JJL


ASX Boss Says His DLT Settlement System Will Be Bigger Than All of Crypto Market; “We are moving … three trillion dollars of securities onto this system and that is larger than the whole global crypto world,” said Stevens.
Sebastian Sinclair – Coindesk
The head of the Australian Securities Exchange (ASX) has thrown down the gauntlet on cryptocurrency’s $1.3 trillion market during a virtual technology summit. According to a report by the Australian Financial Review on Thursday, Dominic Stevens said his exchange’s distributed ledger technology-based (DLT) settlement system was set to handle more value than all public blockchains housing crypto.

****** And I have some land in Florida for sale that would make a great water park!~JJL


Thursday’s Top Three
Our top story Thursday was the press release Digital Asset partners with Nasdaq to bring Daml to the Nasdaq Marketplace Services Platform. Second was the Financial Times opinion piece from Jemima Kelly, Why we shouldn’t listen to crypto ‘experts’. Third was Drought Indicators in Western U.S. Flash Warnings of the ‘Big One’, from Bloomberg Green.


MarketsWiki Stats
26,427 pages; 233,952 edits
MarketsWiki Statistics


Lead Stories

Bank of England orders Euroclear to bolster resilience after 2020 outage; Glitch in key part of market infrastructure caused central bank to push back bond sale
Philip Stafford – FT
The Bank of England has ordered Euroclear to improve its technology and operational resilience after a blockage last year in a crucial portion of the plumbing that underlies markets scuppered a planned gilt purchase auction.

Hedge funds rethink tactics after $12bn hit from meme stock army; Short sellers on guard over risk that day trader sprees could trigger ‘extinction-level events’
Laurence Fletcher and Madison Darbyshire – FT
Hedge funds that bet on falling share prices are stepping up their efforts to spot the next GameStop after this year’s “meme stock” bonanza left the industry nursing billions of dollars of losses in just six months.

Symphony acquires Cloud9 Technologies to expand into voice trading; The acquisition of Cloud9 aims to make Symphony the leading provider of front-office communications technology.
Annabel Smith – The Trade
Communication technology platform backed by major banks, Symphony, has acquired voice trading communications specialist Cloud9 Technologies in a bid to expand into voice trading. Symphony said the consolidated offerings would combine voice trading with natural language processing (NLP) and automation. Terms of the deal were not disclosed, but Symphony added this is the first of several expected acquisitions

LCH expands RepoClear buy-side clearing model; Early supporter of sponsored clearing at LCH RepoClear Insight Investment has already gone live with additional funds as model is extended.
Annabel Smith – The Trade
UK clearinghouse LCH has extended its sponsored clearing model for repo trading to more buy-side firms with early supporter Insight Investments already live with additional funds. Regulated investment funds including authorised designated investment companies, unit trusts, and common contractual funds are now eligible for sponsored clearing at RepoClear.

Why the Richest Americans Can’t Give Money Away Fast Enough; Billionaires’ personal fortunes are rising faster than their pace of donations. Does that mean they need to step it up?
Ben Steverman, Amanda L Gordon, and Sophie Alexander – Bloomberg
America’s wealthiest have been getting a lot of unsolicited advice lately about their philanthropy, especially since the pandemic inflated the fortunes of the top 0.1% while devastating the broader economy. Their critics’ loudest complaint: You should be giving your money away much faster. Since splitting from the world’s richest man in 2019, MacKenzie Scott has shown how it might be done. The ex-wife of Inc. founder Jeff Bezos has donated $8.5 billion in about 12 months, distributing the cash among hundreds of small organizations typically overlooked by big donors.

Dozens of groups brought to market via Spacs to enter key Russell index; One in five additions to Russell 3000 benchmark went public via blank-cheque company
Miles Kruppa and Ortenca Aliaj – FT
Dozens of companies that entered US markets through deals with blank-cheque vehicles in the past year are set to graduate into the Russell 3000 index on Friday evening, giving a potential boost to the fortunes of electric vehicle developers and other speculative ventures.

Wall Street’s biggest hiring trends: here’s where recruiting is heating up, and which firms are nabbing top talent
Insider has been tracking Wall Street hiring and talking with recruiters and insiders about the biggest trends. Top healthcare bankers are in high demand, with one recruiter describing search requests from clients as being “extremely, extremely active.” Banks are racing to lateral hire analysts. And credit traders are locking in guaranteed pay at new gigs after putting up a big year.

Credit Suisse’s New Boss Should Scare Investment Bankers; Horta-Osorio wants to rehabilitate the firm’s battered reputation but that may require only a few adjustments to reality. Just look at Deutsche Bank.
Marcus Ashworth – Bloomberg
A company’s reputation is to all intents largely perception — but to get it to a better place, the reality has to be somewhat altered. No major bank’s reputation this year has suffered more this year than Credit Suisse Group AG. Incoming chair Antonio Horta-Osorio is tasked with restoring the Swiss institution to its former poise. But he doesn’t actually have to do major surgery — just make all the right noises.

Prop Trader Hudson River Reaps $1 Billion in Frenzied Quarter
Tom Maloney and Katherine Doherty – Bloomberg
The meme-stock mania can be risky for retail investors and hedge funds alike, but the volume and volatility that comes with it have been a bonanza for one group of Wall Street professionals.

U.K. Says Equivalence With EU Unlikely in All Areas of Finance
Joe Mayes – Bloomberg
Sign up for our Beyond Brexit weekly newsletter, follow us @Brexit and subscribe to our podcast. The EU is unlikely to grant U.K.-based financial firms automatic market access in all areas post-Brexit, according to a top British minister.

Robinhood CEO calls for changes to exchange pricing rules
John McCrank – Reuters
U.S. securities rules should be changed to allow stock exchanges to quote bids and offers in price increments of less than a penny so they can better compete with wholesale brokerages for retail orders, Robinhood Chief Executive Officer Vlad Tenev said on Thursday.

Robinhood’s IPO Plans Slowed By SEC Review
Katie Roof, Crystal Tse and Annie Massa – Bloomberg
Robinhood Markets Inc., which had sought to go public this month, has seen its listing plans slowed in recent weeks by a back-and-forth with regulators over its prospectus, according to people familiar with the matter. The U.S. Securities and Exchange Commission has been asking Robinhood about its growing cryptocurrency business, one of the people said, asking not to be identified because the matter is private.

Robinhood to restrict users who ‘flip’ IPO shares
Online brokerage Robinhood Markets Inc, which recently launched an offering for retail investors to buy shares in initial public offerings, is encouraging users not to sell shares within the first 30 days of offerings. On its website and in a recent note to customers, Robinhood warned that investors who sell or “flip” their IPO shares could be restricted from participating in future IPO deals for two months.

Wall Street’s biggest hiring trends: here’s where recruiting is heating up, and which firms are nabbing top talent
Insider has been tracking Wall Street hiring and talking with recruiters and insiders about the biggest trends. Top healthcare bankers are in high demand, with one recruiter describing search requests from clients as being “extremely, extremely active.” Banks are racing to lateral hire analysts. And credit traders are locking in guaranteed pay at new gigs after putting up a big year.

Jamie Dimon insists his workers return to the office. That’s a bit rich
Quentin Fottrell – MarketWatch
It’s time to hire a dog walker, and change out of your Lululemon LULU, +0.70% sweats. That’s the message JPMorgan Chase’s chief executive, Jamie Dimon, has sent employees. In a memo signed by Dimon and sent to employees this week, the company said that it was mandatory for all employees to disclose their COVID-19 vaccination status by June 30, and that employees should return to the office by July 6. Those who are unvaccinated or choose not to answer the vaccination question will have to wear a mask, adhere to social-distancing guidelines and get tested for COVID-19 weekly.

Commodity Committee Activities
FIA Japan
The Commodity Committee was reorganized last October with the participation of well experienced industry representatives in both the domestic and global commodity markets. Currently, the committee activities have been conducted by 6 committee members participating from the trading and FCM sides, 2 observers from the Exchange sector, in addition to 2 industry experts supporting the committee as advisors.


Nearly all COVID deaths in US are now among unvaccinated
Carla K. Johnson, Mike Stobbe – AP
Nearly all COVID-19 deaths in the U.S. now are in people who weren’t vaccinated, a staggering demonstration of how effective the shots have been and an indication that deaths per day — now down to under 300 — could be practically zero if everyone eligible got the vaccine.

Is Covid’s Impact on the Brain as Alarming as It Sounds? Even mild cases can cause significant brain changes, research shows, making “living with Covid” a risky and dangerous strategy.
Sam Fazeli – Bloomberg
Recent research from the U.K. on the health effects of Covid-19 found that even mild cases could cause significant changes to the brain. Sam Fazeli, a Bloomberg Opinion contributor who covers the pharmaceutical industry for Bloomberg Intelligence, answers questions about this development and the implications of the findings. The conversation has been edited and condensed.

Thai Covid Panel Skips Bangkok Lockdown, Limits Labor Camps
Prim Chuwiruch and Randy Thanthong-Knight – Bloomberg
Thailand’s national Covid-19 panel announced a one-month clampdown on movements from all residential camps for construction and factory workers in metropolitan Bangkok and four other provinces, as infections continue to climb and medical facilities reach capacity.

Africa Could Produce Covid-19 mRNA Vaccines Within 15 Months
Antony Sguazzin – Bloomberg
Afrigen was selected by the WHO to host mRNA transfer hub; Company is part owned by Avacare, based in Cape Town
A facility in Cape Town could produce Africa’s first vaccines using messenger RNA, the breakthrough science of the global inoculation effort against Covid-19, within 15 months of signing a technology transfer agreement.

JPMorgan Asks Some Hong Kong Staff to Get Vaccinated by June 30
John Cheng – Bloomberg
Non-Vaccinated staff will need to get tested every two weeks; Financial hub is seeking to boost a lagging vaccination rate
JPMorgan Chase & Co. asked staff with client-facing roles or critical day-to-day functions in Hong Kong to get vaccinated against Covid-19 or subject themselves to testing every two weeks.

Sydney Locks Down as Delta Covid-19 Variant Spreads; Parts of Australia’s most populous city will go into lockdown for at least a week
Rhiannon Hoyle – WSJ
Parts of Australia’s largest city will go into a rare lockdown for at least a week as officials seek to stamp out an outbreak of the highly infectious Delta variant of the coronavirus. People who live or work in four areas in and near downtown Sydney and the iconic Bondi Beach have been ordered to stay home from Friday night to stem the spread of the virus first detected in the city last week.

Exchanges, OTC and Clearing

Starting tomorrow, BME and BBF Fintech bring together start-ups and entrepreneurs for Hack & Disrupt!; Javier Hernani, CEO of BME, will reflect on innovation and financial markets during the first hackathon focused on the world of fintech and insurtech, to be held in Bilbao
The event will be attended by Ainara Basurko, Member of the Provincial Council of Bizkaia, and Xabier Otxandiano, Councillor of Bilbao City Council; More than 100 people have registered for the event, which is sponsored by BBK, Plaza Financiera Bilbao and SIX’s startup accelerator, F10
Tomorrow, Friday 25 June, Hack & Disrupt! will kick off in Bilbao! The event, organised by BME and BBF Fintech, is the first hackathon focused on the international fintech and insurtech sector to focus on sustainable finance and innovation. The gathering will bring together companies, entrepreneurs and startups in a hybrid format (online and in-person) to solve global technological challenges as a team. The event’s sponsors are BBK, Plaza Financiera Bilbao and SIX’s startup accelerator, F10.

Nasdaq partners with Digital Asset to expand marketplace services platform; Clients will be able to leverage applications in the multi-party application platform Daml and connect them to the Nasdaq platform under Digital Asset partnership.
Annabel Smith – The Trade
US exchange Nasdaq has partnered with Digital Asset to bring Daml smart contract applications to mutual clients on Nasdaq’s software-as-a-service (SaaS) digital asset exchange platform. Through the partnership, mutual clients will be able to access applications built in the multi-party application platform, Daml, and connect them to Nasdaq’s Marketplace Services Platform.

Bike24 Holding AG new in the Prime Standard of the Frankfurt Stock Exchange
Deutsche Börse Group
Bike24 Holding AG (ISIN: DE000A3CQ7F4 ) has been listed in the Prime Standard of the Frankfurt Stock Exchange since today . The initial price of the share was 15.30 euros, the issue price 15.00 euros.

DEE Tech, 1st tech SPAC in France, lists on Euronext Paris; SPAC listing raises EUR165 million; 9th SPAC listing on Euronext this year and 3rd SPAC listing on Euronext Paris in 2021
Euronext today congratulates DEE Tech, a Special Purpose Acquisition Company (SPAC) specialising in the tech sector, on its listing on the professional compartment of Euronext’s regulated market in Paris (ticker code: DEE).

HKEX Names New Group Chief Compliance Officer
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Friday) pleased to announce the appointment of Mr Adam Singer as HKEX Group Chief Compliance Officer. Mr Singer will work across HKEX to lead, and oversee, the Group’s compliance function, further strengthening the Group’s compliance practice.

Performance Bond Requirements: Agriculture, Energy and FX margins – Effective June 25, 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.

Revised Product Modification Summary: Amendments to and Delisting of Certain CME and CBOT Products in Connection with the Elimination of Most CME and All CBOT Open Outcry Trading Pits – SOFR – Effective June 28, 2021
CME Group
Amendments to and Delisting of Certain CME and CBOT Products in Connection with the Elimination of Most CME and All CBOT Open Outcry Trading Pits – SOFR – Revised.

Amendments to and Delisting of Certain CME and CBOT Products in Connection with the Elimination of Most CME and All CBOT Open Outcry Trading Pits and Related Frequently Asked Questions for Members and Member Firms
CME Group
(SER 8788R supersedes SER 8788 dated June 11, 2021 to advise that the Exchange has determined to withdraw the action regarding the elimination of the open outcry trading venue for Options on One-Month SOFR Futures and Options on Three-Month SOFR Futures at this time. The related Frequently Asked Questions further below has been modified accordingly. No other changes have been made to the original SER or related FAQ.)

Amendments to and Delisting of Certain CME and CBOT Products in Connection with the Elimination of Most CME and All CBOT Open Outcry Trading Pits and Related Frequently Asked Questions for Members and Member Firms
CME Group

CME Globex Notices: June 21, 2021
CME Group
Critical System Updates
CME Globex Performance Enhancements – This Week
CME FX Link Enhancements: New Zealand Dollar/US Dollar Spot FX Impact – This Week


German fintech rivals to merge in bid to create pan-European leader; Raisin and Deposit Solutions bury old rivalry in effort to corner market linking banks with depositors
Olaf Storbeck – FT
Raisin and Deposit Solutions, two of Germany’s largest fintechs and fierce rivals, have struck a merger aimed at creating a pan-European group that links banks with depositors.

Symphony to lead financial market communications with the acquisition of Cloud9 Technologies
Symphony – the leading financial markets’ infrastructure and technology platform – has acquired the trader voice and electronic communication company Cloud9 Technologies (Cloud9). With this acquisition, Symphony will take the lead in front office communications with new services and solutions combining trader voice with natural language processing (NLP) and automation. The combined offering will accelerate trade flows, improve transactional accuracy, and extend back office and remote worker use-cases.

The Federation of Euro-Asian Stock Exchanges (FEAS) Partners with KRM22 to organize Risk-Based Performance Management training seminars
The Federation of Euro-Asian Stock Exchanges is pleased to announce a partnership with KRM 22, a specialist software investment business led by industry experts, with an investment focus on risk management software and technology predominantly for capital markets, to deliver a thought-leadership series based on the Risk-Based Performance Management framework.

China Crushed Jack Ma, and His Fintech Rivals Are Next; Ant has lost at least $70 billion in value since its scuttled IPO, and companies from Tencent to are under pressure, too. The winners? The country’s state-backed banks.
Bloomberg Businessweek
It’s been eight months since Jack Ma, the most famous business executive China has ever produced, all but dropped from public view. Eight months and, by conservative estimates, some $70 billion.

Virtu to distribute key market data on blockchain through Pyth Network; Pricing and execution data across equities, FX, futures, and cryptocurrencies from Virtu will be available to Pyth Network in DeFi push.
Annabel Smith – The Trade
Virtu has agreed to contribute its market data across equities, FX, futures, and cryptocurrencies to the decentralised financial market data distribution Pyth Network. The high-speed trading firm joins existing Pyth Network members Jump Trading, which joined in April, and fellow high-speed firm GTS earlier this month.


Food Giant ADM Bolsters Its Defense Against Hacks, CEO Says; At The Wall Street Journal’s Global Food Forum, ADM’s top executive says he assumes company will be target
Jacob Bunge – WSJ
Agriculture company Archer Daniels Midland Co. ADM 0.70% is shoring up defenses against what it views as inevitable cyberattacks, its chief executive said. Chicago-based ADM has formed a ransomware task force and is running drills as incursions against food and agriculture companies have surged in recent years, including an attack in late May on meatpacking giant JBS SA.

Hush-Hush NSA Lifts Veil on How Businesses Help Fight Hacks
William Turton – Bloomberg
The U.S. National Security Agency, which is renowned for its secrecy, has opened its arms to the private sector and, at least for a day, the media.
The agency invited reporters on Tuesday to tour its Cybersecurity Collaboration Center, an unclassified space opened last year where private companies can swap information with the spy agency about cybersecurity threats and overseas hackers. It’s part of an effort by the agency to deepen its relationship with American companies in the hopes of thwarting cyberattacks in the U.S.

Rapid Digital Transformation Shifts Cybersecurity Priorities
Comcast Guest Blogger – Channel Futures
Cybersecurity is top of mind for everyone. For IT teams, the list of concerns has been magnified by a more dispersed workforce and the need to assess the risks associated with a proliferation of connected devices, the vanishing perimeter and the ever-changing threat landscape. The increased adoption of cloud computing also poses inherent challenges. All these variables force the need for organizations to transform their security postures to protect against cloud infrastructure vulnerabilities.

John McAfee, cyber security magnate, 1945-2021
Hannah Murphy – FT
In his 75 years, the pioneer of his eponymous antivirus software built and lost a fortune, recast himself as a libertarian politician, and then as a cryptocurrency hype man — all while having repeated brushes with the law.
His death came hours after the Spanish high court approved an extradition request from the US, where he faced tax evasion charges.

How Cyber Sleuths Cracked an ATM Shimmer Gang
Brian Krebs – Krebs on Security
In 2015, police departments worldwide started finding ATMs compromised with advanced new “shimming” devices made to steal data from chip card transactions. Authorities in the United States and abroad had seized many of these shimmers, but for years couldn’t decrypt the data on the devices. This is a story of ingenuity and happenstance, and how one former Secret Service agent helped crack a code that revealed the contours of a global organized crime ring.


Crypto Firms Fight for Top Talent With Hundreds of Openings
Kwan Wei Kevin Tan, Joanna Ossinger and Chanyaporn Chanjaroen – Bloomberg
Booming cryptocurrency firms say they’re struggling to find the right candidates to fill hundreds of positions as a frenzy of interest in digital currencies and other assets pits them against some of the world’s biggest financial institutions.

A contest to control crypto is under way; Central banks and other established institutions pit themselves against looser crowd-like networks
Gillian Tett – FT
Human society, the historian Niall Ferguson says, oscillates between the dynamic of a metaphorical “tower” and the “square”. Sometimes institutions or leaders control social groups in hierarchical ways, just as church towers overshadowed medieval European cities.

Andreessen Horowitz increases crypto bets with new $2.2bn fund; Launch of third fund for digital assets a vote of confidence in sector facing regulatory scrutiny
Eva Szalay and Miles Kruppa – FT
Andreessen Horowitz, the venture capital firm that has backed Facebook and crypto exchange Coinbase, raised $2.2bn for its third fund focused on digital assets, more than doubling its initial target in a sign of strong demand from institutional investors.

South Korea seizes crypto assets in clampdown on ‘tax dodgers’
Edward White – FT
A television host and a doctor are among thousands of wealthy South Koreans whose cryptocurrency holdings have been seized in a tax sting as a crackdown intensifies in one of the world’s most active markets for trading digital assets. More than Won53bn ($47m) of bitcoin, ethereum and other crypto assets were confiscated from 12,000 people accused of tax evasion following a months-long probe, according to officials from the Gyeonggi provincial government, which oversees the greater Seoul area. Governments worldwide have sought to take a more active role in regulating cryptocurrencies in response to a years-long boom in unregulated trading and mining.

The arrival of digital currencies is getting closer; Central banks are coming off the fence to take the battle to Big Tech
Martin Sandbu – FT
I have long been an enthusiast for central bank digital currencies (CBDCs). Last October I stuck my neck out to predict the eurozone would introduce one by the end of 2025, on the back of an interview with Fabio Panetta, the executive board member who heads the European Central Bank’s work on a digital euro. I may still be proven wrong on that particular call, but there is no doubting that the central banking community, in general, is accelerating down the path towards official electronic cash.

Most wealth managers look the other way as clients bet on cryptos; Advisers remain sceptical in the main about bitcoin and similar assets
Stefan Wagstyl – FT
Thomas Perfumo makes no apologies for criticising wealth managers who won’t consider cryptocurrencies on the grounds that they don’t understand them — or their valuations.

Bitcoin Millionaires Aren’t What They Used to Be; After a 50% slump, the cryptocurrency’s speculative investment story won’t be so contagious.
Lionel Laurent – Bloomberg
“Psst, I’m buying Bitcoin” sounded like a hot tip during lockdown, but not anymore. In the (almost) six months it’s taken for the cryptocurrency to soar past $30,000 to $63,000 and back again — it’s now hovering around $33,000 — a lot has changed in the real and virtual world. And, despite the insistence of the laser-eyed crowd who claim they’re holding on no matter what, not all of it is good for cryptocurrency.

Your NFT Sold for $69 Million—Now What? Beeple Turns to a New Project, and Old Masters; The artist has laid low since Christie’s sold his work
Kelly Crow – WSJ
Digital designer and artist Mike Winkelmann, who goes by Beeple, sparked a global frenzy for non fungible tokens, or NFTs, after Christie’s sold his digital collage for $69 million in March—but since then he’s maintained a relatively low profile, stoking curiosity about his next big move.


Klobuchar Says ‘Small But Mighty’ Group Is Out to Bust Trusts
Emily Chang and Anna Edgerton – Bloomberg
Senator Amy Klobuchar presented a bullish case for revamping antitrust enforcement in the U.S., citing bipartisan determination to address competition across the economy. She said there is a “small but mighty group that works on this, both Democrats and Republicans,” committed to pushing the best antitrust proposals through Congress.


Commissioner Stump to Keynote at ISDA’s Derivatives Trading Forum: Political Change and the Pandemic

Founder of scandal-hit Singapore oil trader faces 105 new charges; Hin Leong collapse has left banks facing potential losses of hundred of millions of dollars
Stefania Palma and Neil Hume – FT
The founder of Hin Leong Trading has been hit with more than 100 new charges, increasing pressure on the Singapore tycoon at the centre of an oil dealing scandal that has left banks facing hundreds of millions of dollars in potential losses.

Archegos’s Banks Facing DOJ Antitrust Probe Into Collapse
Sridhar Natarajan, David McLaughlin and Tom Schoenberg – Bloomberg
U.S. investigators who focus on corporate collusion are examining how global banks handled multibillion-dollar trades with Archegos Capital Management that sent stocks into a spiral and burned other shareholders.

Gary Gensler Says SEC Is Focusing on SPACs and Retail Trading Apps
Avi Salzman Barron’s
Gary Gensler, the chairman of the Securities and Exchange Commission, said on Wednesday that the agency was taking a closer look at some of the hottest trends in investing — SPACs and retail trading apps — out of concern that smaller investors are getting a raw deal.

Gensler Says Assets Worth Trillions May Need Tighter Rules
Benjamin Bain, Jonathan Ferro, and Tom Keene – Bloomberg
SEC chief warns about disclosures tied to SPACs, equity stakes; He says staff is reviewing ways to toughen regulations
Trillions of dollars in assets need more sunlight and may require tighter rules, a problem highlighted by this year’s disruptions in financial markets, Securities and Exchange Commission Chair Gary Gensler said Wednesday.

Danske Bank Charged by Police for Violating Market Abuse Laws
Christian Wienberg – Bloomberg
Danske Bank A/S has been charged by Danish police for allegedly violating rules intended to protect investors from market manipulation. Denmark’s biggest bank, which is separately being investigated in the U.S. and Europe amid an ongoing money-laundering case, says it received notice of preliminary charges from the Danish State Prosecutor for Serious Economic and International Crime, or SOIK. The case relates to two potential violations of market abuse regulations, according to an emailed statement on Friday.

Dead Banker’s Aides Guilty Over Secret Credit Suisse Stash
Gaspard Sebag – Bloomberg
Lawyer and wealth manager given suspended sentences, fines; Banker had moved nearly $1.5 million from undeclared account
Late M&A banker Jean-Marc Forneri’s Swiss lawyer and wealth manager were found guilty of helping him conceal assets and dodge taxes in a French crackdown on those seen to facilitate financial crime. The Swiss lawyer, John Metzger, was given an 18-month suspended sentence and a fine of 300,000 euros ($359,000) by the Paris criminal court on Thursday and the wealth manager, Michel Glas, got a one-year suspended term and a 150,000 euro penalty.

SEC’s Peirce Stresses Positive Potential of DeFi
Markets Media
Hester Peirce, commissioner at the US Securities and Exchange Commission, said decentralised finance has a lot of positive potential and that she wants the regulator to provide a framework, rather than relying on enforcement actions.
Peirce was interviewed at the Shining a Light on Digital Asset Markets 2021 conference on June 23.

Ex-Goldman Banker Settles SEC Ghana Bribery Case; Asante Berko was accused of facilitating as much as $4.5 million in bribes
Dylan Tokar – WSJ
A former Goldman Sachs Group Inc. banker has settled a claim by U.S. regulators that he arranged for millions of dollars in bribes to be paid to government officials in Ghana to help a client win a power-plant contract.

ASIC tips for managing after a natural disaster
The recent storms across Victoria, storms caused widespread devastation and resulted in tens of thousands of claims to insurers. Warren Day, ASIC’s Victorian Regional Commissioner and Chief Operating Officer, joined ABC Melbourne Drive’s host, Raf Epstein, to discuss how to manage after a natural disaster, where to find help and dealing with your insurer.

ASIC bans Hobart adviser for four years
ASIC has banned Hobart-based financial adviser Hannah Jennings from providing financial services, carrying on a financial services business and controlling an entity that carries on a financial services business for four years. ASIC found that Ms Jennings failed to act in the best interests of her clients by providing advice that was inappropriate in light of her clients’ relevant personal circumstances.

Episode 65: Crypto-assets for first time investors
In this episode, Communications Adviser Louise Tapsell discusses crypto-assets for first time investors with Hema Raman, Crypto-Asset Coordinator at ASIC. If you’re thinking about investing in crypto-assets, hear from ASIC on what to think about and look out for before you invest.

ASIC applies to appoint provisional liquidators to Semantic Software Asia Pacific Limited
ASIC has applied to the New South Wales Supreme Court for the appointment of provisional liquidators to Semantic Software Asia Pacific Limited (Semantic). In particular, ASIC alleges that Semantic, an artificial intelligence development company based in North Sydney: – has failed to lodge financial statements with ASIC, failed to hold annual general meetings and failed to keep accurate financial records and minute books;

SEC Awards More Than $1 Million to Whistleblower
The Securities and Exchange Commission today announced an award of more than $1 million to a whistleblower whose information and assistance led to multiple successful SEC enforcement actions. The whistleblower provided SEC staff with valuable information and ongoing assistance, which included participating in interviews with the staff.

ESMA registers European DataWarehouse GmbH and SecRep B.V. as Securitisation Repositories
The European Securities and Markets Authority (ESMA) has approved the registrations of the first two securitisation repositories (SRs) under the Securitisation Regulation (SECR). The registration decisions will become effective on 30 June 2021.

FINRA Orders Merrill Lynch, Pierce, Fenner & Smith, Inc. to Pay $8.4 Million in Restitution to Customers for Supervisory Failures Involving Unit Investment Trusts
FINRA announced today that it has ordered Merrill Lynch, Pierce, Fenner & Smith, Inc. to pay more than $8.4 million in restitution to more than 3,000 customers who incurred potentially excessive sales charges in connection with early rollovers of Unit Investment Trusts (UITs). FINRA also fined the firm $3.25 million for failing to reasonably supervise early UIT rollovers.

Pooled Money: Understanding Unit Investment Trusts
Coin of Silver American Money with words In God We Trust © V. Erickson
“Don’t put all your eggs in one basket.” That timeless adage tidily sums up the concept of diversification — a way investors can manage risk in their portfolios by spreading out their investments both among and within different asset classes. When it comes to financial products that offer diversification, you have no shortage of choices. Unit investment trusts are just one of those options.

Investing and Trading

Big Oil CEOs Join Traders in Seeing Possibility of $100 Oil
Kevin Crowley and Francois de Beaupuy – Bloomberg
The bosses of some of the world’s biggest oil companies said crude prices are likely to keep rising because a lack of investment will curtail future supply.

Bond Anomalies Have Been Around Since Napoleon; Smart beta works for fixed-income as well as stocks, a new paper based on more than two centuries of data argues.
John Authers – Bloomberg
Smart Beta for Bonds: The First 220 Years
Let’s assume that you have to invest in bonds. There are obvious reasons why you might not want to do this at present, with historically low yields, but many investors have no choice but to make large allocations to fixed-income. How best to do it? And how to make some sensible decision between bonds without incurring too many costs?

What Does It Take to Truly Feel Wealthy? Even millionaires don’t believe they’re wealthy. Here’s some advice for avoiding the trap of never feeling satisfied with what you have.
Erin Lowry – Bloomberg
I moved to New York City a decade ago at the tender age of 22. I worked three jobs that first year to make ends meet and didn’t earn more than $25,000. I remember thinking, “If I could make $80,000, I could really enjoy living in this city.”

Millionaire Investors Have ‘No Choice’ But to Take On More Risk; The Tiger 21 founder says his network’s members are running from low interest rates. They’re even buying crypto.
Suzanne Woolley – Bloomberg
Most of the members of Tiger 21, a network of more than 900 wealthy investors, are entrepreneurs who made their money in the private markets. Now they’re betting more on public markets than they have in 11 years. Members’ portfolios were 25% invested in public equity in the first quarter, up from 22%, and the allocation to private equity was down four percentage points to 22%, said Michael Sonnenfeldt, founder of the network of entrepreneurs, investors and executives who have an average of $100 million in assets.

Transcript: Hyun Song Shin on CBDCs and the Future of Central Banking
Joe Weisenthal and Tracy Alloway – Bloomberg
We’re in a historic moment for central banks. Not only is the economic situation virtually unprecedented, but we’re seeing major changes in the realms of money and payments. On this episode, we speak with Hyun Song Shin, economic adviser and head of research at the Bank for International Settlements. You can find the episode here. Transcripts have been lightly edited for clarity.

Spac boom is creating ‘castles in the sky’, Jim Chanos warns; Veteran short seller is betting against some Spac companies as market draws scrutiny from regulators
Harriet Agnew and Ortenca Aliaj – FT
The Spac boom will hand investors “a pretty expensive lesson” as the race to go public via blank-cheque vehicles creates “castles in the sky”, a leading short seller has warned.

Advisers launch a tech revolution to tap the wider market; Wealth managers create ‘hybrid’ services that combine low-cost digital advice with face-to-face options
Joshua Oliver – FT
Wealth managers aim to attract a broader range of UK customers with inexpensive, online financial advice services that break the mould in an industry traditionally focused on a well-heeled slice of the population.

Rise of ESG renews debate over whether passive funds can deliver; Some analysts argue that active managers have much greater capacity to do good because they can sell their holdings
Anna Devine – FT
Passive providers will struggle to gain traction in some strategies focused on good environmental, social and governance (ESG) outcomes, because active managers have an edge in the area of stewardship, according to some analysts.

Value for money a priority for wealth managers’ clients; Lockdown has given customers the opportunity to scrutinise fees and charges
James Pickford – FT
The financial turbulence unleashed by the pandemic has prompted clients of wealth managers to scrutinise not only the performance of their investments but also the value of the services they pay for.

Choosing a wealth manager in the post-Covid world; Investors face a maze of performance claims, service promises and fast-changing technology options
Stefan Wagsty – FT
At the start of the pandemic, Britain’s wealth managers assumed they would be in for a torrid time, as financial markets crashed and worried clients swamped the phone lines.

Thermal-Coal Prices Hit Decade High Amid Gas Shortage; Rebounding electricity usage and scanty rainfall in China have added fuel to the rally
Joe Wallace – WSJ
Coal prices have climbed to their highest level in a decade, making the fuel a hot commodity in a year when governments are pledging reductions in carbon emissions. A shortfall of natural gas, rebounding electricity usage and scanty rainfall in China have lifted demand for thermal coal. Supplies have been crimped by a closed mine in Colombia, flooding in Indonesia and Australia and distorted trade flows caused by a Chinese ban on Australian coal.

Environmental, Social and Corporate Governance

D.E. Shaw Names Second Woman to Hedge Fund’s Executive Committee
Hema Parmar – Bloomberg
D.E. Shaw & Co. appointed investor relations head Alexis Halaby, a managing director, as the sixth member of the hedge fund’s executive committee. Halaby, 39, is the second woman to join the group, which is responsible for making strategic decisions, according to a spokesman for New York-based D.E. Shaw.

Ethical Lending Sweeps Into Europe’s Leveraged Loan Market
Ruth McGavin and Jacqueline Poh – Bloomberg
ESG-linked loans for junk firms are eight times more than 2020; Privately-owned leveraged companies need to disclose ESG data
Lenders to sub-investment grade companies in Europe are seeing a surge in the number of loans where the interest rate is linked to sustainability targets. Deals worth more than 25 billion euros ($29.9 billion) that came to market this year will pay less if the borrower hits environmental, social and governance goals — or more if they miss. That’s an eight-fold jump from less than 3 billion euros for the whole of last year, data compiled by Bloomberg show.

Bank risk officers put climate at top of agenda; Plus, sustainable golf, minority founders’ funding woes, Lego’s plastic solution
Billy Nauman and Patrick Temple-West – FT
For most of my life, I have not been a fan of golf. With all the elitism and environmental issues and myriad other problems, it certainly ranks among the least ESG-friendly sports. And that’s not to mention how dreadfully boring it always seemed on TV.

ESG stays on trend despite data minefield; Managers struggle to see through the thicket of ethical standards and metrics to assess the impact of their investments
Sarah Murray – FT
Affluent clients of wealth managers are increasingly demanding that their money be aligned with their values, pushing their advisers to make investments in tune with their environmental, social and governance (ESG) concerns.

Environmental Investing Frenzy Stretches Meaning of ‘Green’; Seabed miner positions itself as an ecological crusader with a planned $2.9 billion valuation, even as oceanographers warn of ruined habitats
Justin Scheck, Eliot Brown and Ben Foldy – WSJ
The first time Gerard Barron tried to mine the sea floor, the company he backed lost a half-billion dollars of investor money, got crosswise with a South Pacific government, destroyed sensitive seabed habitat and ultimately went broke. Now he’s trying again, but with a twist: Mr. Barron is positioning his new seabed mining venture, The Metals Company, as green, to capitalize on a surge of environmentally minded investment.


Fearing predators, Credit Suisse seeks new look or even merger-sources
Pamela Barbaglia and John O’Donnell and Brenna Hughes Neghaiwi – Reuters
Credit Suisse rocked by Archegos, Greensill scandals; Leadership eyes overhaul, may shrink investment bank; Shake-up could lead to UBS merger – sources (Adds stock price reaction)
Credit Suisse’s top management are under pressure to come up with an overhaul plan for the scandal-hit Swiss bank that could include a potential merger with rival UBS, three people familiar with its thinking told Reuters.

US banks gear up for buyback bonanza after passing stress tests; Federal Reserve releases analysis showing lenders can withstand almost $500bn of losses
Joshua Franklin and Imani Moise – FT
The US Federal Reserve further loosened restrictions on dividends and buybacks imposed on America’s biggest banks during the Covid-19 pandemic, as it released an analysis showing the lenders could suffer almost $500bn in losses and still comfortably meet capital requirements.

Nomura CEO Paid $2.9 Million in Year Capped by Archegos Saga
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Brokerage was one of the hardest hit by the Archegos collapse; Before Archegos, Okuda enjoyed a bumper inaugural year as CEO
Nomura Holdings Inc.’s Kentaro Okuda was paid 320.4 million yen ($2.9 million) during his first year as chief executive officer that concluded with the implosion of Archegos Capital Management.

Credit Suisse’s SPAC Bonanza Dries Up; In a year of crises, the Swiss bank had a booming blank-check business to fall back on. That has now slowed dramatically.
Margot Patrick – WSJ
Credit Suisse Group AG’s CS 3.82% business underwriting blank-check SPACs boomed to start the year. That helped offset other huge problems—most notably a $5.5 billion loss from the March collapse of Archegos Capital Management.

Deutsche Bank Overhauls Anti-Financial Crime Operations; The bank seeks a more holistic approach to tackling regulatory challenges instead of just fixing specific compliance shortcomings, an internal memo says
Dylan Tokar – WSJ
Deutsche Bank AG is making changes to its anti-financial crimes and compliance teams following years of regulatory scrutiny and enforcement actions, according to a recent internal memo. The changes, which go into effect July 1, are part of a shift away from fixing specific compliance shortcomings and toward tackling regulatory challenges in a more holistic and efficient manner, Deutsche Bank Chief Administrative Officer Stefan Simon wrote in the memo, which was viewed by The Wall Street Journal.


Unsolved murder of ‘diligent’ financier chills Lebanese bankers; Those working in the once prestigious sector are now blamed by many for the country’s financial crisis
Chloe Cornish – FT
At about 7am on a June day last year, veteran banker Antoine Dagher left home for one of Lebanon’s biggest banks, his employer for the past 20 years. But the head of Byblos Bank’s ethics and anti-fraud department never arrived.

Black Market Bullion Is in Crosshairs of Bolivian Lawmakers
Sergio Mendoza – Bloomberg
Bolivian lawmakers are debating a bill that would require all gold produced in the country to be offered to the central bank as the nation builds its reserves and cracks down on the illegal bullion trade. Local producers would need certification to sell abroad, and would first be required to offer their gold to the central bank at international prices in return for tax breaks, according to a copy of the draft bill. Exports would be permitted once the bank meets its annual buying limits.

ECB to Start Supervising Large Investment Firms as Law Changes
Nicholas Comfort – Bloomberg
The European Central Bank said it will start overseeing “systemic” investment firms as a long-planned legal change adds to responsibilities that have steadily expanded in recent years. Firms with more than 30 billion euros ($35.8 billion) of assets that underwrite or trade financial instruments on their own account will now have to apply for banking licenses under new legislation that takes effect this week, the central bank said in a statement on Friday.

U.K. Population Grew at Slowest Rate Since 2002 as Pandemic Hit
Andrew Atkinson. – Bloomberg
Almost 50,000 people left the U.K. in early months of lockdown; Government figures show 100,000 left London for other regions
The U.K. population grew at its slowest pace in almost two decades last year as the effects of the coronavirus pandemic took hold. The Office for National Statistics said the number of people living in the country rose to a record 67.1 million as of June 2020, an increase of 284,000 from mid-2019. The 0.4% increase was the smallest since 2002 and even lower than estimated in preliminary figures published two months ago.

China Banks Stockpile Record $1 Trillion of Foreign Exchange
Bloomberg News
Capital inflows open up liberalization window: Deutsche Bank; Inflows have risen as exports grow, overseas funds buy bonds
Chinese banks’ stockpile of foreign-currency deposits has surpassed $1 trillion for the first time, creating an opportunity for Beijing to allow greater freedom for capital to flow out of the country. The pool has been growing as surging demand for Chinese goods during the pandemic has beefed up foreign earnings of exporters, while the resilient economy and strengthening currency have lured overseas investors to sell dollars for yuan to buy Chinese stocks and bonds. Bank deposits in foreign currencies jumped more than $260 billion in the year through May, the most in data starting in 2002.

Mozambique: Standard Bank Suspended From Exchange Market
The Bank of Mozambique on Wednesday suspended one of the country’s largest commercial banks, Standard Bank, from all activities on the Interbank Exchange Market. The brief statement from the central bank gave no reason for the suspension but, according to Thursday’s issue of the independent newssheet “Carta de Mocambique”, it follows an inspection which gave rise to suspicions that Standard Bank had committed violations of banking rules, presumably concerning the exchange rates it was practicing.

North Korea pummeled by swings in currency and food prices; Kim Jong Un is expected to lean on hacking army as Covid pandemic piles on pressure
Edward White and Kang Buseong – FT
North Korea has been hit by sharp swings in currency and food prices as economic pressures stemming from the Covid-19 pandemic and international sanctions create new risks for Kim Jong Un.


A Red-Hot Corner of Wall Street Catapults Toward $1 Trillion Mark
Lisa Lee – Bloomberg
Wall Street is packaging leveraged loans into bonds at a record pace, stretching bankers, lawyers and debt graders to the limit while showing no signs of slowing.
Money managers that bundle and sell collateralized loan obligations are finding they have to make reservations with bond-rating firms months in advance to get a deal graded. Lawyers say they’re pulling all-nighters to keep up with the flood of documents needed to offer the securities to investors. And firms that arrange or buy the deals are trying to bolster their thinly-stretched staffs, creating a bidding war for talent amid an already limited pool of specialists.

John Lothian Newsletter

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Past JLN Newsletters

The Spread – July 30, 2021

The Spread – July 30, 2021

Earnings season in full bloom; Options lead year-to-date derivatives volume; Robinhood’s IPO; John gets real with Get Real VR: Conflicting factors underpin volatility; Cboe cleared for fall European competition; and the Cboe Options Institute’s Kevin Davitt talks about vega in this week’s “Term of the Week.”

The Four Biggest Ways That Robinhood Changed Investing

The Four Biggest Ways That Robinhood Changed Investing

First Read $51,906/$300,000 (17.3%) ++++ Options Continue to Lead Derivatives Volume Uptrend, but Q2 Lags, FIA Data Show Suzanne Cosgrove - John Lothian News Global futures and options volumes continued to trend higher in the first half of 2021 compared to both 2020...

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