Banks Face U.K. Grilling in Probe Over Big Gender Pay Gaps

May 16, 2019

First Read

How to Improve Gender Equality; Accepting the Challenge to Go 50:50
John Lothian – Publisher – John Lothian News

I have been challenged by a senior woman in the derivatives industry to promote gender equality in my newsletter. For as much as I do to support women in the industry and in general, evidently I need to do more. Life is like that, you can always do more.

A story yesterday in the Washington Post about the media world featured a television anchor from the BBC who realized there were too many men, or men exclusively, on programs and not enough women. So this anchor decided to make it 50:50 for men and women appearing on his shows and this has turned into a global phenomenon.

For the rest of the commentary, click HERE

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Hits & Takes
JLN Staff

Editor’s Note: Quick clicking readers of the newsletter might have been stymied when trying to view yesterday’s video – Collateral Management: Doing More, Spending Less – Steve Husk, CloudMargin. All is well with the video player now. Apologies to any confused readers.~SD

Yesterday, Jim Downs of Connamara Systems swung through the office for an interview that will be part of the Open Outcry Traders History Project. Downs was a market maker on on the Cboe floor through most of the ’80s and ’90s – from single stocks, to OEX, to SPX. I found an old news clip pertaining to a floor story he mentioned about the Super Bowl Shuffle (of ’85 Bears renown). Thanks for the time, Jim!~SD
(Click for larger image)

CFTC Commissioner Brian Quintenz channelled Kurt Vonnegut Jr. in his comments opposing the ICE speed bump rule saying it seeks to “equalize downward.”~JK

The dates for the MarketsWiki Education series in Chicago are July 16 and 17. Mark your calendars and get ready to sign up your interns starting June 1. Stay tuned for more details.~JJL

A Morgan Stanley reader told me that they can’t read the JLN articles because we use a link shortener. We recommend readers with problems like this to subscribe from home as well as at work. You can also find an article by taking the headline and putting it into a search bar of a browser.~JJL

The first video of the 2019 Options Exchange Leader Series filmed at this year’s Options Industry Conference can be found below. Other videos to look forward to will feature BOX’s Ed Boyle, Cboe’s Arianne Criqui, Nasdaq’s Greg Ferrari and NYSE’s Ivan Brown.~SD

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New Product, New Exchange, and Equities on the Way for MIAX
JohnLothianNews.com
MIAX has done nothing but make moves of late. The exchange group launched options on SPIKES (a volatility index based on options on the SPDR S&P 500 ETF Trust), opened the U.S. options industry’s 16th exchange (MIAX Emerald), announced it would partner with the Minneapolis Grain Exchange to list futures on SPIKES, and said it would be launching an equities exchange.

In this first video from the 2019 Options Exchange Leader Series, MIAX Executive Vice President of Strategic Planning and Operations Shelly Brown talks about MIAX’s efforts in 2019 as well as a few lingering issues the options industry needs to address to continue the momentum generated by a banner 2018.
Watch the video »

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Free Markets and the Future of Blockchain
J Christopher Giancarlo – Coindesk
This will be the last time I speak to you from the CFTC. Nevertheless, before I go, I wanted to share some thoughts, which I have been saving. My five years at the Commission have been an immense privilege. In the time that I have served, I have learned a lot about the issues facing America’s farmers, ranchers, producers, energy firms and other users of commodity futures who depend on the CFTC-regulated markets for their risk management needs.
bit.ly/2WdqrYo

***** The end of the Chris Giancarlo era at the CFTC.~JJL

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Women-led hedge funds try to crack the boys’ club; Female asset managers struggle to attract investments even as they outperform their male peers
Lindsay Fortado – FT
When she launched an event for female hedge fund managers seven years ago, Tracy Castle-Newman, a managing director at Morgan Stanley, struggled to find any.
/on.ft.com/2W1HUmr

***** Women traders rock!~JJL

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Ex-UBS Compliance Officer Says Burner Phone Gift Was ‘Strange’
Franz Wild – Bloomberg
Fabiana Abdel-Malek on trial in London for insider trading; Abdel-Malek, co-defendant Walid Choucair deny charges
A former UBS Group AG compliance officer charged with insider trading said she was surprised when her daytrading co-defendant asked her to limit their contact to a burner phone that he handed her after nights out in a London nightclub.
/bloom.bg/2EazgaV

*** “Yeah, I’d love to meet up! Just go to the park and sit on a bench. I’ll be sitting on the bench behind you. Just whisper softly and don’t turn around. Look forward to seeing you!”~SD

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JPMorgan App Draws Millennial Investors With Lure of Free Trades
Lananh Nguyen – Bloomberg
JPMorgan Chase & Co.’s investing app is attracting newbies. Half of customers opening accounts on the bank’s You Invest platform are millennials, according to Kunal Vaed, head of digital self-directed investing at JPMorgan. Some have been tempted to sign up by the bank’s offer of 100 free trades, he said Wednesday at the Digital Wealth conference in Fort Lauderdale, Florida.
/bloom.bg/2WezSH3

***** I opened an IRA account via my phone to trade on the JP Morgan app. It was super easy to do.~JJL

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Meat Giant Tyson Says Swine Fever Impact Could Last Years
Isis Almeida and Mario Parker – Bloomberg
A deadly pig disease spreading through China, the largest pork consumer, will create global protein shortages and probably impact markets for years, according to meat giant Tyson Foods Inc.
African swine fever could have a much longer effect than just 12 months of additional Chinese protein demand, Chief Financial Officer Stewart Glendinning said in an interview from a BMO conference in New York.
/bloom.bg/2Q5c1DY

**** “…benefiting Tyson and its competitors such as Pilgrim’s Pride Corp. and Sanderson Farms Inc.” ~SR

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Wednesday’s Top Three
Nothing grabs attention like a James Bond-esque headline like our top story on Wednesday from Bloomberg The Spectacular Implosion of Dr. Cho’s ‘Nefarious Network’. Second was Bloomberg’s Paul Tudor Jones Kills Night King of Poverty at Robin Hood. If you don’t read the story, just click for the picture of Tudor Jones dressed as Jon Snow – a picture is worth a thousand reruns of GoT. Third was CNBC’s Judges mulling challenges to commodity spoofing trading cases. From that article, the US Department of Justice has brought 10 spoofing cases in the past five years against 14 defendants.

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MarketsWiki Stats
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MarketsWiki Statistics

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CryptoMarketsWiki Website»

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

Recently updated pages include
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Lead Stories

Banks Face U.K. Grilling in Probe Over Big Gender Pay Gaps; Goldman Sachs, HSBC and Barclays are among the lenders that may be summoned to a cross-party inquiry this summer.
David Hellier – Bloomberg
The biggest banks in the U.K. are among the worst offenders in paying women less than men and face being summoned to explain themselves, according to Nicky Morgan, the Conservative member of Parliament who will chair hearings this summer into the finance industry’s alarming gender pay gap.
/bloom.bg/2WatPTu

Major banks fined over EUR1 billion for role in FX trading cartel; European Commission has fined Barclays, RBS, Citigroup, JP Morgan and MUFG a total of EUR1.07 million for involvement in FX trading cartel.
Hayley McDowell – The Trade
Five major investment banks have been handed fines totaling more than EUR1 billion by authorities in Europe for taking part in cartels to rig the foreign exchange spot market for 11 currencies.
bit.ly/2WeBTmB

First ‘Speed Bump’ Coming to U.S. Futures Markets
Alexander Osipovich – WSJ
A futures exchange is set to blunt the advantages of ultrafast traders by imposing a split-second delay on some trades.
Intercontinental Exchange Inc., known as ICE, can launch the first “speed bump” in U.S. futures markets after the Commodity Futures Trading Commission didn’t block the proposal.
/on.wsj.com/2LLthzD

****For excellent commentary on why this move by ICE, and latency protections in general, could be beneficial, see our recent video with CTC’s Steve Crutchfield – The Thorny Speed Bump Question. You can find the CFTC’s statement on the “passive order protection (POP)” functionality here.~SD

FIA PTG Response to CFTC’s Division of Market Oversight Statement on the Certification of ICE Futures U.S. Passive Order Protection Functionality
FIA PTG
The FIA Principal Traders Group issued the following comment in response to the Commodity Futures Trading Commission’s Division of Market Oversight statement on the ICE Futures U.S. Passive Order Protection functionality:
bit.ly/2HsFtQx

Boom in Dodgy Wall Street Deals Points to Market Trouble Ahead
Drew Singer, Davide Scigliuzzo, and Molly Smith – Bloomberg
Junk bond issuance is surging as Uber, Lyft IPOs flop badly; People ‘going to get burned,’ says Wall Street veteran Front
The fourth-quarter stock market rout that wiped out $12 trillion in shareholder value and sparked a bout of Christmas Eve panic may have quickly been forgotten by most Americans, but not by the salespeople and financial engineers of Wall Street.
/bloom.bg/2Wez1pP

EU Regulators Reveal Quirky Details of FX Riggers’ Online Chatrooms
Gaspard Sebag – Bloomberg
European Union regulators revealed quirky details as they fined five banks more than $1 billion: the names of the online chatrooms traders used to collude on foreign-exchange trading strategies.
/bloom.bg/2WawvAA

‘Spoofing’ showdown: Two judges are set to rule on a weapon used by prosecutors in commodity trading cases
Dan Mangan – CNBC
Decisions expected soon by two judges could restrict federal prosecutors’ ability to criminally charge people for the futures trading tactic known as spoofing.
/cnb.cx/2Ho629y

US regulator throws sand in the wheels of high-frequency traders; Decision by CFTC could open door for more moves to slow down derivatives market
Richard Henderson – FT
The highly profitable world of high-frequency trading is under threat after the US derivatives regulator allowed a futures exchange to slow down activity on its platform.
/on.ft.com/2W1t8Mx

Rout at Mizuho Securities as senior fixed income traders disappear
eFinancialCareers
Something is afoot at Mizuho Securities in London. Following the disappearance of London-based head of fixed income Zahra Peerbhoy in February, insiders say other heads of businesses have vanished too.
bit.ly/2Q4VrnB

Big banks to fight Mifid push for extra transparency in FX markets; Lenders say additional disclosures required would be cumbersome to provide and of little value
Eva Szalay – FT
Some of the biggest banks in the $5tn-a-day currency markets plan to use a prominent lobby group to push back at rules requiring them to disclose the charges they impose on customers, lining up a potential clash with regulators.
/on.ft.com/2W4OA2Z

Gender Equality Has Gone Backwards in London: Intellect Design CEO
Bloomberg Surveillance
Janet Thomas, risk treasury and market chief executive officer at Intellect Design, discusses gender inequality in U.K. business and advancements in fintech.
/bloom.bg/2W6jmZq

Brokers Brave China’s FX Market Crackdown in Hunt for Household High Rollers
Samuel Shen and Vidya Ranganathan – Reuters
Lured by hopes that China’s retail investors could become major players in global currency markets, foreign brokers are brazenly chasing business in a gray area of the country’s online trading sector, even as Beijing vows to wipe out such activities.
bit.ly/2LOqo17

Opinion: Why words matter in CFTC enforcement of “insider trading”; Ex-CFTC lawyer warns agency would better serve derivatives markets with a focus on “misappropriation” instead
insider trading books dictionary
Neal Kumar of Willkie Farr & Gallagher via MarketVoice
Neal Kumar is an associate in the corporate and financial services department of Willkie Farr & Gallagher. He represents financial institutions, energy and agricultural companies, trade associations, and hedge and private equity funds, in a variety of regulatory, enforcement, and transactional matters involving commodities and derivatives. Before going into private practice, he worked at the Commodity Futures Trading Commission as a counsel in the Office of the General Counsel.
bit.ly/2LNTfme

Exchanges, OTC and Clearing

CME Group Hits New Open Interest Record of 138.2 Million Contracts
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, announced total open interest reached a record 138,185,824 contracts on May 14, 2019. The previous record was 138,041,727 contracts set on March 15, 2018.
bit.ly/2W4Sitr

CurveGlobal expands SONIA interest rate futures; CurveGlobal has said it will launch one month SONIA interest rate futures on 29 July this year.
Hayley McDowell – The Trade
Interest rate derivatives platform provider CurveGlobal has said it will expand its range of Sterling Overnight Index Average (SONIA) interest rate futures at the end of July to meet client demand.
bit.ly/2W7PQT2

Intercontinental Exchange Chairman & CEO Jeffrey C. Sprecher to Present at the Thirty-Fifth Annual Bernstein Strategic Decisions Conference on May 30
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Jeffrey C. Sprecher, Chairman and CEO, will present at the thirty-fifth annual Bernstein Strategic Decisions Conference. The presentation will take place on Thursday, May 30 at 2:00 p.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE’s website at http://ir.theice.com/.
bit.ly/2LJa5m2

Nodal Exchange Named ‘Commodity Exchange of the Year’ by Energy Risk
Financial Post
As part of EEX Group, Nodal Exchange has established its strong position in the North American monthly power futures market with 39% market share of traded volume in April 2019 (up from 21% a year ago) and 37% market share of open interest as of April 30, 2019 (up from 29% a year ago).
bit.ly/2Q2fumT

The European elections 2019; Setting the course for a strong Europe
Deutsche Börse Group
The European elections in 2019 are the ninth direct elections to the European Parliament. The result will set the political direction of the European Union (EU) for the next five years – not only concerning the responsible decision-makers but also regarding the political agenda. In addition, there are challenges for the future of the EU, such as the impact of Brexit, increasing populism and general scepticism towards the EU. In many areas, the overall policy direction and the way these challenges are addressed are decided in Brussels rather than at national level. This year’s elections are therefore of utmost importance in setting the course for all EU citizens. The outcome of the elections also has an influence on the renewal of the European Commission.
bit.ly/2W74SZl

Fintech

TopstepTrader Teams Up with TradeStation to Bring Funding Opportunity to Futures Traders
PRNewswire via Yahoo
TopstepTrader, a financial technology firm based in Chicago, IL that evaluates futures traders’ performance in real-time simulated accounts, today announced a strategic agreement with TradeStation Technologies, Inc., the software technology affiliate of the award-winning* TradeStation online trading broker-dealer and futures commission merchant. The collaboration enables futures traders of all skill levels to participate in a simulated TradeStation trading environment with the opportunity to earn a Funded Account by TopstepTrader and keep the first $5,000 in profits and 80% thereafter.
/yhoo.it/2Hsj4Tq

Investec shuts robo-advice service due to ‘low appetite’; Closure follows a similar move by UBS last year and illustrates problems faced by the sector
Kate Beioley – FT
Investec has become the second asset manager in less than a year to close its online robo-advisory investment service after admitting appetite was too “low”, writing off more than £20m in operating losses and software costs.
/on.ft.com/2W4Lufl

Cryptocurrencies

Bitcoin Rally Is Masking Capital Flight From Crypto Exchanges
Olga Kharif – Bloomberg
Investors seen flocking to Bitcoin as Tether concern lingers; More than $1.7 billion pulled from Bitfinex, analyst says
Lost among the current bout of cryptocurrency euphoria is the fact that capital outflows are exceeding inflows on some of the biggest digital-asset exchanges.
/bloom.bg/2vZcEWq

Bitcoin Rally Is Masking Capital Flight From Crypto Exchanges
Olga Kharif – Bloomberg
Lost among the current bout of cryptocurrency euphoria is the fact that capital outflows are exceeding inflows on some of the biggest digital-asset exchanges. While that may sound counter intuitive to the basic laws of supply and demand with prices of Bitcoin and other tokens surging, it’s not that rare an occurrence in a market that has been dogged by allegations of fraud and manipulation over its decade long existence.
/bloom.bg/2vZcEWq

Just 376 People Found to Own a Third of All Ether Cryptocurrency
Matthew Leising – Bloomberg
Just 376 people hold a third of all Ether, the cryptocurrency that powers the Ethereum blockchain, according to new research by Chainalysis Inc. Large holders are known in the crypto market as “whales,” which Chainalysis defines as individuals who hold their assets in digital wallets and not on an exchange, Kim Grauer, a senior economist at the company, said in an interview. By comparison, 448 people own 20 percent of all Bitcoin, she said.
/bloom.bg/2VKwUdX

Can Bitcoin Win the Digital Payments ‘Gauge War’?
Simon Johnson – Coindesk
The promise and potential of bitcoin as a technology is frequently described in terms of a platform. On top of bitcoin’s permissionless blockchain, the argument goes, all kinds of things could be built to reduce the power and profit of trusted intermediaries. If you fear and resent monopolies, particularly those that are becoming more obnoxious as the digital age progresses, this is an alluring future.
bit.ly/2W3Topv

‘Crypto Dad’ Pens Heartfelt Open Letter Ahead of CFTC Exit
Paul de Havilland – CCN
J. Christopher Giancarlo, Chairman of the US Commodity Futures Trading Commission (CFTC), is preparing to step aside after five years on the job. The regulator, lovingly nicknamed “Crypto Dad,” penned a heartfelt open letter to the blockchain world ahead of his exit from the agency.
/yhoo.it/2LJZw28

175 Institutions Now Trading Cryptocurrency With LMAX Digital
David Kimberley – Finance Magnates
A year after launching, things are looking good at LMAX Digital. Operated by LMAX Exchange Group, the cryptocurrency exchange provides institutions with access to the digital assets markets. And, according to a statement released by the firm on Wednesday, there are now 175 companies trading with LMAX Digital, proving that there is a genuine appetite for cryptocurrencies amongst financial institutions.
bit.ly/2LJpZwP

Currency Fears Drive Chinese Into Bitcoin
Jeff Kauflin – Forbes
While nearly 5,000 cryptocurrency fans gleefully gathered at the Consensus conference in New York this week, investors on the other side of the globe appeared to be the ones pulling the levers behind bitcoin’s seven-day, 40% price surge.
bit.ly/2JF20fH

This app lets you use bitcoin at Whole Foods, Nordstrom and other retailers
Kenneth Underwood – Yahoo Finance
As bitcoin soars, retailers are looking to get in on the action. Starting this week big name retailers including Whole Foods (AMZN), Gamestop (GME) and Nordstrom (JWN) will start accepting cryptocurrency as a form of payment in their stores via a new mobile payments app called Spedn by payment network Flexa. Spedn allows consumers to use things such as bitcoin (BTC-USD) and ether (ETH-USD) to make purchases in stores.
/yhoo.it/2Hk8MFP

2020 Presidential Hopeful Andrew Yang Says Regulators ‘Owe’ Clarity on Rules for Crypto Industry
Nikhilesh De – Coindesk
Presidential contender Andrew Yang took the stage at Consensus 2019 on Wednesday, facing a friendly (if not slightly boisterous) crowd as he discussed bitcoin, blockchain and his bid for the White House. Amid jokes about a possible YangCoin, Yang essentially pitched himself as a sympathetic friend of the crypto community in an appearance that came weeks after his campaign issued a policy statement on digital asset regulation.
bit.ly/2LM18sk

Blockchain Infrastructure Firm Blockstream Launches Security Token Platform
Adrian Zmudzinski – Cointelegraph
Blockchain infrastructure firm Blockstream announced the launch of its security token platform in a press release shared with Cointelegraph on May 15. Per the announcement, the new Liquid Securities platform is a solution for businesses to issue security tokens on the Liquid Network. Blockstream Chief Security Officer Samson Mow claims that while businesses are willing to issue tokenized securities, platforms such as Ethereum are not the right choice because of their scalability, privacy and reliability limitations.
bit.ly/2Q4Yqg5

Is Blockchain The Perfect Match For Supply Chain?
Chao Cheng-Shorland – Forbes
Before founding my current company, a large part of my career was a long-term romance with supply chain. It all started in the mid- to late-1990s when a major client of the IT consulting firm I was working for was planning to start a multi-year supply chain program. I was sent to the client, which happened to be Australia’s largest building materials company, to take on the technical lead role to help design, build and automate their entire supply chain across quarry, cement, concrete, asphalt and transport.
bit.ly/2LHm7MD

Just 376 People Found to Own a Third of All Ether Cryptocurrency
Matthew Leising – Bloomberg
New study says so-called whales don’t move Ether prices much; Bitcoin price found to be good indicator of where Ether trades
Just 376 people hold a third of all Ether, the cryptocurrency that powers the Ethereum blockchain, according to new research by Chainalysis Inc.
/bloom.bg/2W9mdRj

Institutional Crypto Trading: Gearing up for the next phase
Peggy Sullivan- Vela
Imagine if, at some point in the future, someone was to write the history of cryptocurrencies. Would that person look back at the current moment and see it as a turning point, as the start of the era when crypto went mainstream?
bit.ly/2VF0VeP

Politics

Elizabeth Warren slams top bank regulator over Wells Fargo mess
Kevin Dugan – NY Post
A top US bank regulator said Wednesday he will help vet Wells Fargo’s next chief executive — even as he got ridiculed by US Sen. Elizabeth Warren for his past oversight of the beleaguered bank.
/nyp.st/2W7QVdA

US sets course for its next Middle Eastern war of choice; Dick Cheney’s heirs are laying the groundwork for an Iran conflict
Edward Luce – FT
Dick Cheney, the former US vice-president, said that if there was a 1 per cent threat of something happening, America should act as if it were a certainty. By that yardstick, the chances of a US war with Iran are now flashing red. Any such conflict could induce a geopolitical earthquake to exceed what followed the US-led invasion of Iraq.
/on.ft.com/2W1sbUt

Crypto Enthusiasts Now Have a Presidential Candidate Behind Them
Vildana Hajric – Bloomberg
Andrew Yang is seeking Democratic presidential nomination; Yang says crypto, blockchain need regulatory frameworks
There’s one Democratic presidential candidate who’s got the back of the crypto community. Andrew Yang, an entrepreneur who is running as a Democrat in the 2020 presidential race and who recently unveiled a digital-asset platform, said he’d like to see greater regulatory frameworks for the community and its underlying blockchain technology, which he thinks could help spur new innovation.
/bloom.bg/2W1qpTj

Regulation

EU fines five banks EUR1.1bn over foreign exchange cartel; Traders at RBS, Barclays, Citi, JPMorgan and MUFG used chat rooms to rig foreign exchange spot trading
Rochelle Toplensky – FT
Brussels has fined Barclays, RBS, Citigroup, JPMorgan and MUFG EUR1.07bn for participating in cartels to manipulate the foreign exchange market for 11 currencies, drawing a line under global regulatory investigations into the behaviour of their traders.
/on.ft.com/2W1HLiT

SEC proposes amendments, guidance for cross-border security-based swaps
Lena Powell – Wolters Kluwer: Jim Hamilton’s World of Securities Regulation
The SEC has proposed rule amendments and interpretive guidance to adjust the regulatory framework for cross-border security-based swaps transactions and market participants. The proposals would create exceptions for certain transactions from being counted toward the de minimis threshold for registration, business conduct, and reporting requirements; limit the requirement for non-resident entities to provide opinion of counsel letters regarding books and records access; and harmonize SEC rules with the CFTC’s approach to the statutory disqualification of non-domestic associated persons of CFTC-registered swap entities.
bit.ly/2HrJmVT

U.S. bank regulator will vet next Wells Fargo CEO
Pete Schroeder and Michelle Price – Reuters
A top U.S. bank regulator said on Wednesday it will vet Wells Fargo & Co’s pick for its next chief executive, a development that could complicate the scandal-hit lender’s efforts to find a permanent replacement for CEO Tim Sloan.
/reut.rs/2HxyyW2

CFTC’s Division of Market Oversight Issues Statement on the Certification of ICE Futures U.S., Inc. Submission CFTC
The Commodity Futures Trading Commission’s (Commission) Division of Market Oversight (DMO) today issued the following statement.
bit.ly/2HryhEb

Statement of Commissioner Brian Quintenz on the Certification of ICE Futures U.S., Inc. Submission No. 19-119
CFTC
“The year was 2081, and everybody was finally equal. They weren’t only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All the equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.”-Introduction to Harrison Bergeron, by Kurt Vonnegut, Jr.
bit.ly/2Wawk8k

Statement of Commissioner Dawn D. Stump on the Certification of ICE Futures U.S., Inc. Submission No. 19-119
CFTC
ICE Futures U.S., Inc. (“IFUS”) seeks to implement new Passive Order Protection (“POP”) Functionality in its Gold Daily and Silver Daily futures markets.[1] It has submitted the POP Functionality, or “speed bump,” to the Commission pursuant to the self-certification provisions of Sections 5c(c)(1)-(3) of the Commodity Exchange Act (“CEA”)[2] and Commission Regulation 40.6.[3]
bit.ly/2Wdo1sM

Statement of Commissioner Dan M. Berkovitz Regarding the ICE Futures U.S., Inc.[1] Passive Order Protection Functionality Rule
CFTC
I disagree with the self-certification of ICE’s new Rule 4.26(c), and its associated passive order protection (“POP”) functionality for the Exchange’s Gold Daily and Silver Daily futures markets.[2] POP is an issue of first impression in Commission-regulated markets: an asymmetric speed bump specifically designed to alter the competitive balance between market participants and trading strategies. Asymmetric speed bumps, such as POP, that purposely disadvantage particular trading entities, strategies, or technologies, are discriminatory, anti-competitive, and facially inconsistent with the fundamental objectives of the Commodity Exchange Act (“Act”) to promote “responsible innovation and fair competition . . . among market participants.” In these circumstances a compelling “explanation and analysis” of the proposed rule’s compliance with applicable provisions of the Act and the Commission’s regulations must be provided for the Commission not to find the rule inconsistent with the Act.[3] As discussed below, no such compelling explanation and analysis has been provided with respect to the POP rule.
bit.ly/2WeCvbT

Jury Rules in SEC’s Favor, Finds Brokerage Firm and Two of Its Executives Liable for Fraud
SEC
Jurors in Manhattan federal court today returned a verdict in the Securities and Exchange Commission’s favor against a brokerage firm and two of its executives.
bit.ly/2W1CasQ

May 2019 Disciplinary Actions
FINRA
FINRA has taken disciplinary actions against the following firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB).
bit.ly/2W8uhls

ASIC Annual Forum 2019 – ASIC Chair’s introductory comments
ASIC
A speech by ASIC Chair, James Shipton at the ASIC Annual Forum 2019, Sydney, 16 May 2019
bit.ly/2W8u6GO

ASIC bans former Kaz Capital adviser for six years
ASIC
ASIC has banned Mr David Stephen Cornford of Centennial Park, New South Wales, from providing financial services for six years. Mr Cornford was employed as an adviser at Kaz Capital Pty Ltd between 2014 and 2017.
bit.ly/2W5YgdI

Investing and Trading

Bond Traders Need to Up Their Game as AI Systems Get Smarter
Katie Linsell – Bloomberg
ING, Nivaura among firms increasing scope of machine learning; Replacement of humans with machines still seen as long way off
Money is pouring into artificial intelligence in bond markets, challenging bankers and investors to adapt their skills in everything from issuing to trading securities.
/bloom.bg/2W9DFoP

Longest Pound Slide Since 2000 Shows Brexit Respite All But Over
Charlotte Ryan – Bloomberg
Prime Minister May faces calls to set date for stepping down; Pound hurt by both Brexit woes, global trade tensions: Nomura
The pound headed for the longest losing streak against the euro since the turn of the century as rising U.K. political risks fanned concern about the nation’s ability to achieve an orderly Brexit.
/bloom.bg/2W4Hc7J

Institutions

Citigroup Hit Hardest as EU Fines Banks $1.2 Billion in FX Probe
Aoife White and Stephanie Bodoni – Bloomberg
EU says traders colluded in online chats on trading strategies; RBS, JPMorgan, Barclays, MUFG also fined; UBS escapes penalty
Citigroup Inc., Royal Bank of Scotland Group Plc and JPMorgan Chase & Co. are among five banks that agreed to pay European Union fines totaling 1.07 billion euros ($1.2 billion) for colluding on foreign-exchange trading strategies.
/bloom.bg/2W4MNuN

War Zone Childhood Inspired Hedge Fund Quant’s Contrarian Wagers; Nigol Koulajian’s $1.35 billion Quest Partners is ready to profit whenever volatility strikes the complacent herd.
Vincent Bielski – Bloomberg
Nigol Koulajian, founder of New York-based Quest Partners, has beaten rival hedge fund managers over two decades by refusing to follow them into crowded trades. Since the financial crisis, commodity-trading advisers (CTAs), which specialize in trading futures or options, have piled into long-term bullish bets, riding the market up in search of steady gains. That’s left them vulnerable to big losses when volatility strikes—the very moments when Koulajian’s $1.35 billion quant firm cleans up.
/bloom.bg/2W5etzW

The woman who nailed the 2018 stock-market volatility blowup has kicked off an actively managed ETF
Mark DeCambre – MarketWatch
Nancy Davis, the chief investment officer and founder of advisory firm Quadratic Capital, is the brain behind a new exchange-traded fund on Wall Street that aims to offer investors ways to bet on inflation, the shape of the so-called yield curve and a sharp rise in interest rates.
/on.mktw.net/2Q8uyPN

Legg Mason Needs Activist Help, Again; Activist investor Nelson Peltz, who already helped turn around Legg Mason once, has again taken a stake in the asset manager
Aaron Back – WSJ
Legg Mason LM 4.61% is once again in the crosshairs of activist investor Nelson Peltz, who has a long history with the firm. While the Baltimore asset manager would do well to listen to some of his advice, turning around its fortunes once again will take even bolder action this time around.
/on.wsj.com/2W1BDXS

Former JPMorgan Banker Charged With Bribing Client; City’s antigraft watchdog says former banker offered to employ the son of a logistics company chairman
Joanne Chiu – WSJ
A Hong Kong anticorruption body charged a former executive at JPMorgan Chase JPM -0.38% & Co. with bribery, saying she bribed the chairman of a logistics company by offering to employ his son at the bank.
/on.wsj.com/2WauVP6

FTSE 100 Gender Pay Gap Highlights Lack of Female Executives
Bloomberg Surveillance
Bloomberg’s Annmarie Hordern examines the gender pay gap among FTSE 100 companies.
/bloom.bg/2W78bzB

Regions

Turkey’s ‘low’ FX reserves leave country vulnerable, Moody’s warns; Heightened dollar borrowing obscures fall in foreign currency war chest to new low
Laura Pitel and Adam Samson – FT
Turkey’s foreign exchange reserves have fallen to a fresh 2019 low once short term borrowing is stripped out, new data showed on Thursday, as Moody’s issued a warning over the country’s mounting vulnerabilities.
/on.ft.com/2W6l7G0

China Has a $3.65 Trillion War Chest to Counter U.S. Tariffs
Bloomberg News
China has fiscal expenditure left the size of German GDP; Mizuho says China has stronger control on economy than U.S.
Beijing’s main defense against trade-war fallout this year is more likely to come from the finance ministry than the central bank, no matter what President Donald Trump says.
/bloom.bg/2W1AzDm

China vows a “fight to the end” in trade feud with America; War of words points to escalation risk, but there are some hopeful signs
The Economist
THOUGH CHINA runs a massive trade surplus with America, over the past year it has run a massive rhetoric deficit. During that period President Donald Trump has tweeted about China 133 times; Chinese leaders, by contrast, have mostly kept mum about the trade dispute with America
/econ.st/2W63bLI

Brexit

Top banking regulator stresses UK should not be ‘rule taker’ post-Brexit
Caroline Binham – FT
The UK’s top banking supervisor has added his voice to the chorus of policymakers and regulators warning that the UK should not be a “rule taker” after Brexit.
/on.ft.com/2W4ECyJ

Tories lose fifth of their voters to Nigel Farage’s Brexit Party in new poll blow for Theresa May
Joe Murphy – The Evening Standard
Theresa May’s plea for more time at No 10 was hit today by a bombshell poll showing Conservative support plunging to its lowest level for 17 years.
The exclusive Ipsos MORI survey for the Evening Standard revealed the Government’s ratings in freefall and the Conservatives’ vote share in a general election down 13 points in one month to a shocking low of 25 per cent.
bit.ly/2Eb35Za

Miscellaneous

Business at Trump’s Doral club is declining
David A. Fahrenthold and Jonathan O’Connell – Washington Post
Late last year, in a Miami conference room, a consultant for President Trump’s company said business at his prized 643-room Doral resort was in sharp decline.
At Doral, which Trump has listed in federal disclosures as his biggest moneymaker hotel, room rates, banquets, golf and overall revenue were all down since 2015. In two years, the resort’s net operating income — a key figure, representing the amount left over after expenses are paid — had fallen by 69 percent.
/wapo.st/2HrRntX

****Despite the presence of the Options Industry Conference.~SD

One news anchor decided to put more women on air. Now his idea has gone global.
Margaret Sullivan – Washington Post
Ros Atkins, who hosts the popular BBC news show “Outside Source,” had long realized that he was giving men more on-air time than women — and so were most other media decision-makers.
/wapo.st/2LPMuAe

Bloomberg LP Expands Parental Leave Policy from 18 to 26 Weeks of Fully-Paid Leave for Primary Caregivers
Bloomberg
Bloomberg LP is expanding its parental leave policy from 18 weeks of fully-paid leave to 26 weeks effective immediately, founder Michael R. Bloomberg announced to employees today. The policy is gender neutral and establishes a new global minimum standard for primary caregivers.
/bloom.bg/2LNUPoa

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Floor Traders Clash With NYSE

Get a FREE 90 day trial of John Lothian Newsletter First Read Mr. Heath Tarbert Chairman, Commodity Futures Trading Commission Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 July 12, 2019 Dear Chairman Tarbert:...

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