Biden Picks Citi Executive, Ex-Senate Aide for GOP Seats at CFTC

Dec 16, 2021

First Read

New FTSE Russell Research Links ESG Performance With Pandemic Preparedness
By Suzanne Cosgrove – John Lothian News

The long-running pandemic has thrown much of the global economy off-kilter in the last two years, but some sectors have nonetheless thrived – ESG among them. Capital linked to FTSE Russell’s sustainable Investment indexes, for example, has grown to more than $167 billion, according to the company’s year-end insight from Arne Staal, the CEO of FTSE Russell.

The year 2021 “will be remembered as the year that climate-themed investing went truly mainstream,” Staal said. “We saw billions flow into climate-themed strategies in equity and fixed income markets to adjust for climate risks and opportunities.”

A recent study sponsored by FTSE Russell, “An ESG Analysis of the COVID-19 Crisis,” took a look at the same topic, but from a different vantage point. It investigated possible links between ESG and responses to the pandemic, and asked if ESG’s resilience could be one of the keys to managing COVID’s many challenges.

To read the rest of this story, go here.


Hits & Takes
John Lothian & JLN Staff

U.S. President Joseph Biden announced two new nominees to the Commodity Futures Trading Commission: Summer Mersinger and Caroline Pham. They join Rostin Behnam and TARP Special Inspector General Christy Goldsmith Romero and Emory University law professor Kristin Johnson as nominees for the Commission. Should they join Behnam in being confirmed, the CFTC will be back at full strength at the commissioner level. Behnam was confirmed last night.

To cheer up the nation, the Whitehouse issued this warning last night, “Protecting Against Malicious Cyber Activity before the Holidays.”

Chairmen emeritus are in the news, some good, some not as good. CME Chairman Emeritus Leo Melamed continues his book campaign and is the subject of a Forbes piece titled “6 Timeless Lessons From Leo Melamed’s Book: Man Of The Futures.”

J. Christopher Giancarlo, who has self-named himself chairman emeritus of the CFTC, was taken to task for the made up moniker in a Bloomberg story titled “CryptoDad’s New Title Implies He Works in Government. He Doesn’t.” I first mentioned the title “CFTC Chairman Emeritus” in a hit and take piece back on September 9, 2021 with the comment, “I missed the memo on this.”

Actually, I think Chris could well be awarded that title for all his good work at the CFTC; however, I would also give it to James Newsome

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


6 Timeless Lessons From Leo Melamed’s Book: Man Of The Futures
Adam Sarhan – Forbes
Leo Melamed has one of the most inspiring stories in the history of capital markets. He is known as the God Father of financial futures (he created stock market futures, currency futures, treasury futures, CME’s electronic trading platform Globex, and he helped build transform the Chicago Mercantile Exchange into a global powerhouse). In Leo’s most recent book, Man of The Futures, he shares some of the highlights of his exceptional journey and this is easily one of my favorite books of all time. I have had the great honor and pleasure to interview Leo on my Podcast – here and every time I speak to him I learn a lot.

***** One timeless lesson from Leo is promote, promote and promote. Don’t stop promoting.~JJL


CryptoDad’s New Title Implies He Works in Government. He Doesn’t
Robert Schmidt – Bloomberg
J. Christopher Giancarlo no longer runs a high-profile Wall Street regulator, but he found a way to keep some of the prestige of his old job: adopting the made-up title, “chairman emeritus.” The moniker has surprised former political appointees at the U.S. Commodity Futures Trading Commission, where Giancarlo was President Donald Trump’s first chairman. While some ex-officials see the move as a questionable Trumpian attempt at self promotion, others say it crosses ethical lines by suggesting he maintains ties to a powerful watchdog for digital coins and the $610 trillion derivatives market.

****** Chris works for a secret part of the government that gives out special titles. I want “Cranky Crypto Uncle.”~JJL


A Wild, Emotional Year Has Changed Investing—Maybe Forever; Everyone seemed to become a trader, taking chances on outlandish ideas as excitement and fascination mixed with fear and greed.
Michael P. Regan – Bloomberg
There was a huge merger in 2021: the combination of popular culture and modern finance. Tom Brady and Matt Damon were suddenly shilling for cryptocurrency exchanges. Digital tokens that started off as elaborate pranks represented tens of billions of dollars of paper wealth. And cartoon pictures of apes were selling for millions of dollars on something called the nonfungible token market, which almost no one had heard of in the long-ago days of 2020.

***** We are all traders. We always were all traders, some just only trade over-the-counter markets. Sometimes those are commodities, sometimes bespoke items.~JJL


FOW names Eurex Bitcoin ETN Futures “Most Innovative Contract of the Year 2021”
The futures contracts offer direct exposure to the price of Bitcoin with three distinct advantages. First, it is fully backed by Bitcoin as the ETN is a paper claim into a certain number of Bitcoins. Secondly, it is secure; the underlying securities are in custody with Clearstream Banking, and BitGo. Finally, there is complete regulatory clarity. The underlying ETN and the future are regulated instruments traded on a regulated market, said Randolf Roth, member of the Eurex executive board.

****** Congratulations to Eurex on this win.~JJL


Kraft will pay you $20 not to make cheesecake for Christmas
Danielle Wiener-Bronner – CNN
Kraft is using its cream cheese shortage as a marketing opportunity.
For just a few days this holiday season, a limited number of people will be able to spend $20 on dessert and charge it to Kraft, owner of Philadelphia Cream Cheese. The premise: People who can’t bake cheesecakes because they can’t find cream cheese can get another baked good on Kraft’s dime.

***** Great headline to push a $20-off coupon for other products.~JJL


Wednesday’s Top Three
Our most-read story Wednesday was Bloomberg’s Best Books 2021: The 49 Most Fascinating, Mind-Blowing, Challenging, Hilarious, and Urgent Titles of the Year. On the list are books by Walter Isaacson, Michael Lewis, Colm Tóibín, Katie Couric, Steven Pinker, Colin Jost, and Matthew McConaughey, whose book is on the list twice. Second was U.S. SEC to tighten insider trading rules, boost money market fund resilience, from Reuters via Yahoo News. Third was How Covid Changed the American Workforce, an opinion piece from The Wall Street Journal.


MarketsWiki Stats
26,677 pages; 236,577 edits
MarketsWiki Statistics


Lead Stories

Biden Picks Citi Executive, Ex-Senate Aide for GOP Seats at CFTC
Benjamin Bain, Josh Wingrove, and Lydia Beyoud – Bloomberg
Mersinger and Pham to fill two Republican vacancies at agency; If confirmed nominees would bring regulator to full strength
The Biden administration is planning to nominate a Citigroup Inc. lawyer and a former Republican Senate aide to fill the GOP’s two seats on the U.S. Commodity Futures Trading Commission, setting the stage for the main U.S. derivatives regulator to be at full strength next year. The White House said in a statement that it’s set to select Summer Mersinger, who now serves as chief of staff to CFTC commissioner Dawn Stump, and Caroline Pham, a managing director at New York-based Citigroup, to join a key Wall Street regulator.

President Biden Announces Key Nominees and an Appointee to Board and Commission Roles
Today, President Joe Biden announced his intent to nominate the following individuals to serve in key roles:
Summer Mersinger, Nominee for Commissioner of the Commodity Futures Trading Commission
Caroline Pham, Nominee for Commissioner of the Commodity Futures Trading Commission

Fired JPMorgan Trader Shows It Pays to Win Your Old Job Back
Ellen Milligan – Bloomberg
Re-hiring can mean millions more than unfair-dismissal award; U.K. tribunals cap winnings at 90,000 pounds in such cases
Fired employees often want nothing more to do with their old boss, but high earners in the U.K. might just want to fight to get that job back. For one JPMorgan Chase & Co. trader in London, getting a court ruling that he should be re-hired after a 2020 dismissal means millions of pounds of back pay. That compares with only winning a claim of unfair dismissal in the U.K., where payouts are usually capped at just under 90,000 pounds ($119,600).

NatWest’s anti-money laundering failures laid bare in gold dealer case; ‘Someone was walking through the streets with black bin liners of cash,’ says prosecutor
Jane Croft and Siddharth Venkataramakrishnan – Bloomberg
The sight of people lugging £700,000 in black bin bags through a West Midlands shopping centre to a NatWest branch was just one startling red flag among multiple warning signs the UK bank missed in failing to prevent a £365m alleged money laundering scheme. Over a period of five years Fowler Oldfield, a Yorkshire gold dealer with a predicted annual turnover of £15m, deposited £365m with NatWest — including £264m in cash.

Crypto challenge needs more than an ad man’s touch; The FCA will have to play a greater role in regulating digital currencies
Cat Rutter Pooley – FT
Advertising is a powerful tool. The UK advertising watchdog’s power is less clear. The Advertising Standards Authority is cracking down on crypto, again. The problem is that no one else in the UK really is. The ASA on Wednesday formally rebuked seven crypto businesses for breaching advertising industry standards. It had already warned companies against underplaying the risks of investing in a volatile asset class, misleading investors and trivialising crypto in early July.

Reddit Files Confidentially for IPO; Social-media company says in blog post it filed paperwork with SEC to go public
Sarah E. Needleman – WSJ
Reddit Inc. said it has confidentially filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering, an announcement that comes at the tail end of a banner year for stock-market debuts. The company said in a blog post that it had started the paperwork with the SEC but didn’t share any further details.

U.K. Fines GAM, Fund Manager Who Invested in Greensill Loans; Case was a harbinger for the problems Greensill would later cause, including its own collapse and the freezing of $10 billion worth of Credit Suisse investment funds
Julie Steinberg – WSJ
The U.K.’s Financial Conduct Authority fined Swiss asset manager GAM Holding AG and one of its former star bond-fund managers for conflicts of interests, resolving a longstanding case related to the company’s investments in loans generated by the now-defunct Greensill Capital.

SEC Floats Money-Market Fund Rules to Deter Investor Runs; Chairman Gary Gensler cites ‘dash for cash’ that occurred at the beginning of the Covid-19 pandemic
Paul Kiernan – WSJ
Wall Street regulators are set Wednesday to propose requirements for some money-market mutual funds to diminish investors’ tendency to flee the instruments during financial crises. Such rules would aim to prevent episodes like the ones that occurred during the past two recessions, in 2007-09 and 2020. The Federal Reserve backstopped the funds after they were hit with a surge of redemption requests that caused credit markets to seize up.

SEC proposes greater transparency for swaps at centre of Archegos collapse; US regulator weighs additional disclosures for security-based swaps as well as new rules for money market funds
Stefania Palma and Eric Platt – FT
US markets regulators have proposed rules to inject more transparency into the derivatives that blew up hedge fund Archegos Capital, which would compel investors to disclose swaps positions that have allowed them to build up unseen holdings in public companies.

Derivatives Trade Association ISDA to Develop Common Standards for Crypto Assets
Jamie Crawley – Coindesk
ISDA published a white paper Tuesday aiming to characterize the different features of crypto assets and their relevance to existing contractual standards, and identify events that might cause problems with derivatives pegged to crypto assets. The events highlighted by ISDA include forks, airdrops, cyberattacks and changes in law or regulation. The paper also seeks to explore how digital assets can be valued and what happens when that valuation cannot be obtained.

London Holds On to Europe IPO Crown as Rival Venues Close In
Swetha Gopinath – Bloomberg
London was Europe’s top venue for initial public offerings in 2021, a status that may be tested as high-profile flops and continental rivals step up the pressure. IPOs in Britain raised 16.7 billion pounds ($22 billion) this year, beating Stockholm’s tally of 127 billion kronor ($14 billion) and Amsterdam’s 11 billion-euro ($12.5 billion) haul. But the numbers mask London’s increasingly precarious position.

Dispatches from the Frontier of NFTs, Crypto, and Meme Stocks
In 2021, a new generation of investors went from dabbling in retail trading to laser-eyed enthusiasts with a passion for “monkey internet pictures.”
Misyrlena Egkolfopoulou, Claire Ballentine – Bloomberg
Bloomberg Wealth reporters spoke to investors about what drew them into the complex and risky new markets that have defined 2021. They talked about wanting to pay bills or build a financial cushion, but also about the ideas that gripped them, from the metaverse to digital art. We also checked in with a personal finance expert who’s seen some of this before. These interviews have been edited for length and clarity.

EU Leaders Set to Ask for Deeper Monitoring of Carbon Market
Ewa Krukowska and Nikos Chrysoloras – Bloomberg
EU Commission may be invited to react on CO2 trading if needed; Prices have surged at record pace because of the energy crisis
The European Union’s heads of government are set to invite the bloc’s executive to improve monitoring of the EU carbon market, where a rally has sparked concerns about speculation and the impact on inflation amid an energy crisis.

How Banks Win When Interest Rates Rise; Banks are hungry for higher rates, which let them charge more on loans. But don’t expect deposit rates to budge.
David Benoit – WSJ
Banks yearning for interest rates to rise appear on the verge of getting their wish. Federal Reserve officials on Wednesday signaled they were prepared to raise interest rates at least three times next year in response to rising inflation, a faster timeline than was expected a few months ago.

Trading associations hit out at European Commission’s consolidated tape revenue scheme; Among the concerns raised are renumeration plans for compensating data contributors to a tape and the ongoing issue of market data costs.
Annabel Smith – The Trade
The European Fund and Asset Management Association (EFAMA) and the European forum of European Securities Associations (EFSA) have released a joint statement expressing concerns over the European Commission’s consolidated tape plans. Both warn the tape creates an unlevel playing field and gives incumbent exchanges an unfair revenue advantage.


Omicron spreading rapidly in U.S. and could bring punishing wave as soon as January, CDC warns; But federal and some pharmaceutical executives signal they do not currently favor revising vaccines, saying existing regimen plus boosters are effective
Lena H. Sun, Joel Achenbach, Laurie McGinley and Tyler Pager – Washington Post
Top federal health officials warned in a briefing Tuesday morning that the omicron variant is rapidly spreading in the United States and could peak in a massive wave of infections as soon as January, according to new modeling analyzed by the Centers for Disease Control and Prevention.

U.K. Covid Cases Hit Record High as Omicron Spreads
The U.K. has reported the most Covid cases since the beginning of the pandemic. Bloomberg Quicktake’s Alex Webb explains the actual infection number might be much higher.

New York Area Bears the Brunt of Omicron on Top of Delta; What happens during the collision of two variants when the public’s reserve of trust and patience has been exhausted?
Faye Flam – Bloomberg
The change of expert opinion was sudden. Researchers at Harvard Medical School now say the omicron variant, not delta, is likely fueling the current surge in Covid-19 cases in the northeastern U.S. That’s cause for alarm, because they still don’t know much about the variant, and it’s unclear how well vaccines will protect people. Harvard’s labs are optimized for speed but omicron is spreading faster than they can track it.

France to block entry to UK tourists as Omicron surges; Country will tighten border curbs from midnight on Friday to combat coronavirus variant
Leila Abboud and Victor Mallet – FT
France will block entry to UK tourists, tightening its border restrictions in an effort to slow the spread of the Omicron coronavirus variant. Travel from the UK will be largely limited to French nationals, residents and their families, although there are exceptions for students and some professions such as doctors who have a work-related reason to enter the country.

New York Businesses Weigh Mask, Vaccine Policies Under New State Rule; Gov. Kathy Hochul’s order requires employees, patrons to either be vaccinated or wear masks indoors as Covid-19 cases rise
Jimmy Vielkind – WSJ
New York businesses are grappling with how to comply with a new state requirement that all patrons either show proof of vaccination against Covid-19 or wear masks indoors. Many retailers and grocers readopted mask mandates when the regulation took effect Monday, according to industry groups. Some office-based companies had already required vaccinations for staffers, but others have reimposed mask requirements and others told unvaccinated workers they could no longer come to the office. Occupancy rates in New York City office buildings remain below 40%.

Exchanges, OTC and Clearing

Coinbase Backs NYSE Arca’s Push for Grayscale Bitcoin Trust Conversion to ETF
Michael Bellusci – Coindesk
In a letter to the U.S. Securities and Exchange Commission (SEC) on Tuesday, Coinbase urged
the agency to approve NYSE Arca’s application to convert the Grayscale Bitcoin Trust into an exchange-traded fund (ETF).

Deutsche Börse completes acquisition of a majority stake in Crypto Finance
Deutsche Börse
Deutsche Börse completes acquisition of a majority stake in Crypto Finance
The aim is to build a European regulated and integrated ecosystem for investing, trading and post-trading of digital assets; Deutsche Börse will contribute expertise, resources and capital to continuously expand crypto finance services and drive global expansion; Eric Leupold becomes President appointed by the Board of Directors
Deutsche Börse has completed the takeover of a majority stake in Crypto Finance, a FINMA-regulated provider for trading, custody and investment in digital assets. The agreement was signed in June and concluded on December 15, 2021.

Deutsche Börse completes acquisition of digital asset trading and brokerage; Its acquisition of Crypto Finance was announced in June and will expand Deutsche Börse’s offering in the space amid growing institutional demand.
Annabel Smith – The Trade
Deutsche Börse has become the latest major exchange to move into digital assets after completing its acquisition of trading and brokerage firm Crypto Finance. Originally announced in June earlier this year, the deal completed on 15 December and gave Deutsche Börse a majority stake in the company laying out the foundation for an “independent, transparent, and highly scalable ecosystem for digital assets under European regulation”.

S.I.F. Italia S.p.A. lists on Euronext Growth Milan
36th listing of 2021 on Euronext Growth Milan; S.I.F. Italia S.p.A. is the 200th listing on Euronext markets in 2021; S.I.F. Italia S.p.A. brings the total number of companies listed on Euronext Growth Milan to 167; Total placement volume of the offering equal to EUR2.7 million; Milan – 16 December 2021 – Borsa Italiana, part of the Euronext Group, today congratulates S.I.F. Italia S.p.A. on its listing on Euronext Growth Milan.
S.I.F. Italia S.p.A. provides services for the management and administration of real estate complexes in Italy. S.I.F. Italia S.p.A. represents the 36th listing since the beginning of the year on Borsa Italiana’s market dedicated to small and medium sized companies and it brings the total number of firms currently listed on Euronext Growth Milan to 167.

Deutsche Börse starts a new series of seminars for private investors in January
Deutsche Börse Group
Evening seminars “Your way to the stock market” take place from January to May 2022; Seminars especially for women in March and May 2022; Crypto seminar and ESG – sustainable investing in April and May 2022
At the beginning of next year, Deutsche Börse will organize new seminars for private investors online and on site in Eschborn through its Capital Markets Academy. The program also includes evening seminars on crypto investments and sustainable investing. The evening seminars starting in January are followed by seminars especially for women in March and May.

TMX Group Releases Report on the Task Force on Climate-related Financial Disclosures, Achieves Carbon Neutrality
TMX Group today released its inaugural Task Force on Climate-related Financial Disclosures (TCFD) Report, detailing TMX Group’s climate-related risks and opportunities. The report, which covers TMX Group’s financial year ended December 31, 2020, also outlines how the company is actively addressing its carbon footprint while supporting Canada’s capital markets’ transition to a low-carbon economy.

ICE Announces Annual Reconstitution Changes in the ICE Biotechnology Index
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced the annual reconstitution of the ICE Biotechnology Index (ICEBIO), which is effective before the open of trading on Monday, December 20, 2021.

Equinix Collaborates with Nasdaq to Scale Digital Infrastructure
Agreement supports the build out of cloud infrastructure in Carteret, New Jersey data center
REDWOOD CITY, Calif., Dec. 15, 2021 /PRNewswire/ — Equinix, Inc. (Nasdaq: EQIX), the world’s digital infrastructure company™, today announced a multi-year partnership with Nasdaq, Inc. (Nasdaq: NDAQ) to scale the Equinix NY11 data center in Carteret, New Jersey to support the build out of Nasdaq’s cloud infrastructure.

Regulator’s Column: What SGX RegCo expects on the conduct of general meetings amid the ongoing COVID-19 situation
This Regulator’s Column seeks to provide the expectations of the Singapore Exchange Regulation (“SGX RegCo”) on the conduct of issuers’ general meetings amid the extension of the temporary legislative relief [1]. Such legislation allows entities to hold general meetings via electronic means amid the COVID-19 situation, and will continue to be in force until revoked or amended by the Ministry of Law [2].

— EBS Market Integration Notice 16 Dec 2021 — CME
— CME Globex Notices: December 13, 2021, Three-Month SOFR Futures vs Eurodollar Futures on CME Globex – January 9, EC Calendar Spread Leg Pricing Methodology Change – January 23 — CME
— CME STP Notices: December 16, 2021 — CME


Goldman Sachs says the metaverse has got to run on blockchain, and heralds crypto tech as a huge disruptor
Harry Robertson – Business Insider
Goldman Sachs has said crypto technology will be at the heart of the metaverse, as it will allow people to securely own digital items across different virtual worlds. The Wall Street bank’s analysts, led by Rod Hall, heralded blockchain tech as “one of the most disruptive technology trends” since the early days of the internet, in a note published Tuesday.

T. Rowe Price selects FlexTrade EMS solution to support fixed income business; FlexTRADER execution management system (EMS) for fixed income, FlexFI, will help the asset manager tap into tap into liquidity in today’s fragmented fixed income markets.
Annabel Smith – The Trade
Buy-side giant T. Rowe Price has integrated the FlexFI fixed income solution, to support its institutional fixed income business, including managing its trading. FlexFI is part of FlexTrade’s execution management system FlexTRADER. The solution offers a single source multi-asset EMS and a centralised hub for execution, data, analytics, reporting, and automation.

JP Morgan joins Trumid fixed income platform; The investment bank joins Trumid shortly after the credit trading platform secured an additional $208 million in a funding round in October.
Annabel Smith – The Trade
JP Morgan has become the latest major institution to join the fixed income electronic trading platform, Trumid, and its client network. Using Trumid’s Attributed Trading Protocol, JP Morgan will directly offer liquidity to its institutional client base.

Apple is delaying return to office indefinitely: report
Apple is delaying its return to office plans indefinitely, Bloomberg News reported, while the company said it has temporarily closed three stores in the US and Canada after a rise in COVID-19 cases and exposures among the stores’ employees. The company’s employees were previously set to return to offices on February 1, according to the report, citing a memo sent by Chief Executive Officer Tim Cook.

Coinbase Transparency Report -Q1-Q3, 2021
Paul Grewal, Chief Legal Officer – Coinbase
Coinbase is proud to publish our third Transparency Report. This report covers the period between January 1 through September 30, 2021*. As Coinbase continues to grow and offer services in new markets, the number of legitimate information requests we receive from law enforcement agencies and other government agencies will increase accordingly. As such, moving forward, we will publish these reports on an annual basis.


Cybersecurity experts debate concern over potential Log4j worm
Jonathan Greig – ZDNet
As the fallout from the Log4j vulnerability continues, cybersecurity experts are debating what the future might hold.
Tom Kellermann, VMware’s head of cybersecurity strategy, said the Log4j vulnerability is one of the worst vulnerabilities he has seen in his career — and one of the most significant vulnerabilities ever to been exposed.

Cybersecurity Still A Challenge, And Improving Resiliency Is Essential
Steve Culp – Forbes
As 2021 draws to a close, cybercrime remains one of the dominant topics of concern for organizations. In fact, according to our research, the number of cyberattacks continue to increase (up 31% in 2021 over 2020) and companies are worrying more about indirect attacks — successful breaches to the organization through the supply chain— which have increased from 44% to 61%. As a result, security investment continues to also go up, with more than 82% of our survey respondents saying their IT security budgets have increased in the last year.

These cybersecurity threats will keep CEOs restless in 2022
Giacomo Lee – Verdict
To predict cybersecurity trends in 2022, it helps to look at the recent past. In 2021, we’ve seen the Colonial Pipeline attack against oil infrastructure in the US, the biggest ever cyberattack in food production which blighted JBS, the Kaseya ransomware attack by REvil and the Health Service Executive attack on the Irish healthcare system. Such incidents should remind businesses that, firstly, no sector is safe from cybercriminals.

Gavel to Gavel: Cybersecurity and the law – 2021 in review
Susan Lindberg – The Journal Record
2021 started with a bang. Hundreds of companies and government agencies reeled from the attack on SolarWinds. When the attack was discovered in December 2020, malware embedded in the software provider’s code had already caused widespread security compromise to SolarWinds’s customers.
In March, a ransomware attack on the U.S.’ most important fuel pipeline disrupted gasoline supply, affecting prices along the East Coast. The attacks were attributed to nation-states and international organized crime groups.

Analyzing the Impact of the Many New Rules of Cybersecurity
Association of Certified E-Discovery Specialists (ACEDS) – JDSupra
The federal government is trying to find as many ways as possible to handle the cybersecurity crisis facing the United States. While it is unlikely that Congress will pass a comprehensive federal cybersecurity law for the private sector, the Executive Branch, and its many agencies, they are issuing directives and guidelines with far-reaching impacts. Additionally, states across the nation are passing their own data protection and cybersecurity laws with whiplash speed. The U.S. doesn’t have a federal cybersecurity law, but the new regulatory and state landscape is changing the way companies do business. This basket weave of new laws provides a boost to existing cybersecurity guidelines. However, the industry standard for almost all organizations is the National Institutes of Standard and Technology (NIST) Cybersecurity Framework and NIST Privacy Framework.


The IRS wants to know about your crypto transactions this tax season
Greg Iacurci – CNBC
The tax season is fast approaching — and the IRS has its eye on crypto investors. Form 1040, which U.S. taxpayers use to file an annual income tax return, has a question about “virtual currency” near the top of the first page. Investors must report taxable 2021 transactions involving bitcoin, ethereum, dogecoin and other cryptocurrencies to the federal government.

Coinbase says connectivity issues fixed, investigating delays
Coinbase Global Inc said on a Twitter post on Wednesday it has resolved the connectivity problems that denied customers access to the cryptocurrency platform. Coinbase said it is still investigating delays with some transactions and will provide updates soon. These issues come less than a day after a display error on its trading platform and crypto wallet caused customers to see inflated prices for non-tradable crypto assets.

India’s Biggest Crypto Exchange Saw 17-Fold Jump in Trading Volume in 2021
Omkar Godbole – Coindesk
WazirX, India biggest cryptocurrency exchange, witnessed record-breaking activity this year, as investors from smaller cities in the South Asian country jumped on the digital-asset bandwagon despite lingering regulatory uncertainty and market volatility. Mumbai-based WazirX, which is an affiliate of the giant crypto exchange Binance, registered annual trading volume of over $43 billion, marking a stunning 1,735% growth over 2020, according to a report published by the exchange and shared with CoinDesk on Thursday.

Fed’s Powell says he doesn’t see cryptocurrencies as ‘financial stability concern’
Frances Yue – MarketWatch
Federal Reserve Chairman Jerome Powell said Wednesday that he doesn’t view cryptocurrencies as a “financial stability concern”. What they are, however, in the U.S. central-bank chief’s view, is “really speculative assets.” Powell, speaking at a press conference Wednesday after the Fed said it would accelerate the pace of its tapering of bond purchases and penciled in three hikes of its benchmark interest rate next year, added: “I do think [crypto assets] are risky, [as] they’re not backed by anything. And I think there’s a big consumer issue for consumers who may or may not understand what they’re getting.”

Crypto Wealth Is Minting The Next Generation of Super Spenders
Albertina Torsoli – Bloomberg
Local ‘superspenders’ are more affluent now, Jefferies says; ‘Post-pandemic winner’ LVMH stands to benefit, analyst writes
Luxury investors worried about China have elsewhere to look nowadays for new pockets of growth: the U.S. Part of the outperformance of luxury stocks such as Hermes International this year is due to the strength of U.S. demand for pricey handbags, jewels and designer clothes. It’s not all about post Covid-19 pent-up demand though, according to Jefferies International Ltd.

No NFT, no comment — how digital art dominated 2021; In a year of tech innovation, buyers and sellers have had to grapple with new systems of value and ownership — or lose out
Melanie Gerlis – FT
Surplus wealth, in-person activity and the three letters N, F and T have motored the lively art market through the challenges of 2021. That the rich have got richer through the Covid-19 pandemic and accompanying stock market gains has been well documented. Now, added to the existing billionaires and millionaires, are newcomers from booming economies in Asia, millennial entrepreneurs and a dominant breed of fintech-savvy crypto investors, happy to ride the highs and lows of this volatile arena.


Bitcoin Is Free and Fair but Not Progressive; A number of Democratic politicians have taken aim at the cryptocurrency when they might support it.
Daniel Kuhn – Coindesk Insights
Strictly speaking, Bitcoin is for everyone. I like to think about this decentralized network as a type of public commons – it’s an open ledger that anyone can append, anyone can access, anyone can take part in. (I do.) It’s bigger than any single individual, corporation or government. To this extent, Bitcoin is one of the fairest – perhaps the most fair – monetary networks today.

Energy Crisis in Europe Intensifies With Russian Troops on Ukraine Border; Cold weather and fear of a Russian invasion of Ukraine send natural-gas prices into overdrive
Joe Wallace – WSJ
Winter has arrived for energy markets in Europe as fears of disruption from the military buildup on Russia’s border with Ukraine and falling temperatures catapult prices higher. Cold-weather forecasts launched natural-gas prices to record highs this week and propelled electricity markets to levels rarely experienced in Germany, France and the U.K.

EU aims to scrap long-term gas supply contracts; Bloc wants to end reliance on suppliers such as Russia in effort to meet greenhouse gas targets
Mehreen Khan and Nastassia Astrasheuskaya – FT
Brussels has proposed a ban on long-term contracts to import natural gas into the EU beyond 2049 in an attempt to end the bloc’s reliance on foreign producers led by Russia. The European Commission on Wednesday unveiled an update of its gas market rules, which includes a prohibition on member states entering gas contracts with non-EU countries that run beyond 2049 — the last year before the EU aims to hit its net zero greenhouse gas emissions target.

Russia Puts The Blame On Europe As Energy Crisis Worsens
The European Union (EU) is reportedly reconsidering its position on extending long-term natural gas contracts beyond 2049 as part of reforms in its natural gas market to meet the net-zero by 2050 goal. Should the European Commission’s proposal be endorsed by EU heads of state and government this week, putting a timeline to the end of long-term gas contracts would open another rift with Russia, which provides one-third of Europe’s gas supply via pipelines under long-term deals.

Melania Trump Joins Crypto Frenzy With Release of First NFT
Kasia Klimasinska and Jennifer Jacobs – Bloomberg
Melania Trump will sell her first non-fungible token during this holiday season. The NFT, Melania’s Vision, uses watercolor art that “embodies Mrs. Trump’s cobalt blue eyes, providing the collector with an amulet to inspire,” according to emailed statement.

The antitrust fight may have killed one of Silicon Valley’s most powerful lobbying groups
Jon Swartz – MarketWatch
The antitrust fight may have just killed one of Silicon Valley’s most powerful lobbying groups. The Internet Association — which had around 40 members, including Alphabet Inc.’s Google GOOGL, +1.76% GOOG, +1.65%, Inc. AMZN, +2.50%, Meta Platforms Inc. FB, +2.37%, and smaller tech companies — announced Wednesday it is shutting down at the end of this year. The Washington, D.C.-based organization had struggled to stay above the fray in the antitrust debate, as it sought to juggle the concerns of small tech companies about how larger companies use their power and the need of Big Tech to fight off antitrust complaints from rivals and governments.


CFTC’s Interest Rate Benchmark Reform Subcommittee Issues User Guide for the Transition of Exchange-Traded Derivatives Activity to SOFR
The Interest Rate Benchmark Reform Subcommittee, a subcommittee of the Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC), today issued a user guide for the transition of newly-executed exchange-traded derivatives from LIBOR to the Secured Overnight Financing Rate (SOFR) pursuant to the MRAC’s approval of the SOFR First Initiative at its July 13, 2021 meeting. Acting Chairman Rostin Behnam is the sponsor of MRAC.

The EU isn’t thrilled about the US’s investigation into rare earth magnets
Mary Hui – Quartz
In September, the US commerce department launched an investigation into the national security impact of imports of neodymium-iron-boron (NdFeB) permanent magnets, the most widely manufactured rare earth magnet. Governments, businesses, and experts submitted public comments to weigh in on whether the US should slap tariffs on imports of NdFeB magnets as a way of counteracting the security risks of being overly reliant on imports from foreign countries, especially China. Under Section 232 of the Trade Expansion Act, the president can impose tariffs on products that the commerce department deems to be imported “in such quantities or under such circumstances as to threaten to impair the national security.” Among the comments submitted by the Nov. 12 deadline, the European Union came out most strongly in opposition to any kind of US tariffs on NdFeB magnets, which have a broad range of military and civilian industrial uses.

Oluwapelumi Adejumo – FX Empire
Contrary to its initial plans, India might delay passing its proposed cryptocurrency bill into law; this means that the proposed framework might not be introduced to the parliament during the winter session. This new information was revealed by a senior government official who chose to remain anonymous.

Watchdog Warns Westpac, Aware Super on Poor Pension Performance
Matthew Burgess – Bloomberg
Australia’s prudential regulator unveils performance heatmaps; APRA also cites higher costs and fees in some choice plans
Australia’s pension regulator has warned Westpac Banking Corp., Aware Super and Insignia Financial Ltd. to lift performance in some multi-asset investments as it forces firms to improve, merge or shut.

UK regulator fines GAM and former star trader after bond scandal; Financial Conduct Authority says Swiss asset manager and Tim Haywood failed to manage conflicts of interest
Laurence Fletcher, Laura Noonan and Robert Smith – FT
The UK’s Financial Conduct Authority has fined Swiss fund group GAM and its former star fund manager Tim Haywood, following a scandal that rocked the firm and centred on debt tied to metals magnate Sanjeev Gupta and Australian financier Lex Greensill. The regulator said on Thursday that it had fined GAM £9.1m for failing to manage conflicts of interest, while Haywood faced a penalty of £230,037 for failing to manage conflicts of interest and breaching GAM’s gifts and entertainment policy.

Court freezes funds and assets of Ascent Investment and Coaching and its Western Australian director
ASIC has obtained interim orders from the Federal Court freezing the assets of Ascent Investment and Coaching Pty Ltd (Ascent) and its director, Michael Jefferson Dunjey of Applecross, Western Australia. ASIC’s application for these orders was made while ASIC investigates concerns that: funds may have been raised through misrepresentations made to investors; investor funds may have been improperly dealt with; Ascent may have been operating an unregistered managed investment scheme.

SEC Proposes Rules to Prevent Fraud in Connection With Security-Based Swaps Transactions, to Prevent Undue Influence over CCOs and to Require Reporting of Large Security-Based Swap Positions
The Securities and Exchange Commission today voted to propose rules to prevent fraud, manipulation and deception in connection with security-based swaps, to prevent undue influence over the chief compliance officer (CCO) of security-based swap dealers and major security-based swap participants (SBS Entities), and to require any person with a large security-based swap position to publicly report certain information related to the position.

SEC Approves 2022 PCAOB Budget and Accounting Support Fee
The Securities and Exchange Commission today voted to approve the 2022 budget of the Public Company Accounting Oversight Board (PCAOB) and the related annual accounting support fee. “Finance is about trust, and the PCAOB has a critical role to play in ensuring that public company financial disclosures can be trusted by investors,” said SEC Chair Gary Gensler. “This budget would enable the Board to live up to its potential as envisaged under the Sarbanes-Oxley Act.”

Wedbush Securities Charged with Unregistered Sales of Microcap Securities and Failing to Report Suspicious Transactions; Broker-dealer to pay more than $1.2 million
The Securities and Exchange Commission announced today that Wedbush Securities Inc., a California-based broker-dealer, has agreed to pay more than $1.2 million to settle charges arising from the unlawful unregistered distribution of nearly 100 million shares of more than 50 different low-priced microcap companies, and from Wedbush’s failure to file suspicious activity reports (SARs) pertaining to those transactions.

Statement on PCAOB Budget and Accounting Support Fee Request for 2022
Chair Gary Gensler – SEC
Today, the Commission is considering the 2022 budget and accounting support fee request for the Public Company Accounting Oversight Board (PCAOB). I support this $310 million budget and annual support fee request — an 8 percent increase over 2021 — because the PCAOB requires additional resources to perform its work on behalf of the public every day.

PCAOB Budget Statement
Commissioner Hester Peirce – SEC
Thank you, Chair Gensler. Welcome Acting Chairperson DesParte. I do not have any questions about the budget, but do have one admonition for you and the rest of the board installed last month by the Securities and Exchange Commission (“SEC”). Earlier this year, the Commission precipitously fired the Public Company Accounting Oversight Board (“PCAOB”) chairman and told the three remaining board members that, if they wanted to finish out their terms (one of which had only just begun), they had to go through the application process all over again.[1] Those actions incapacitated the PCAOB by leaving it with just one board member for a time. I voted to reinstate Mr. DesParte and install four new board members so the board could function.[2] I intend to work with the new board to ensure that the PCAOB fulfills its statutory mandate of promoting informative, accurate, and independent audit reports for public companies and SEC-registered broker-dealers.

Statement on the PCAOB 2022 Budget
Commissioner Elad L. Roisman – SEC
My thanks go to the staff in our Office of Chief Accountant for their work with the Public Company Accounting Oversight Board (“PCAOB”) on the 2022 budget. We will shortly have a new five-person Board in place, with a new Chair. I have confidence in each of the new and returning members, and I look forward to them getting down to work in the new year. Nevertheless, I remain deeply troubled by the lack of transparency and process with which the Commission removed and replaced the previous Board Chairman and sought to fill all five Directors’ seats, including those that were occupied by Directors whose terms had not ended.[1] I have expressed my views elsewhere,[2] so I will be brief today; but I do not want to brush my concerns under the rug.

Statement on the PCAOB’s 2022 Budget
Commissioner Allison Lee – SEC
The mission of the Public Company Accounting Oversight Board (PCAOB or Board) is set forth directly in its enabling statute. It is to oversee audits “in order to protect the interests of investors.”[1] Investor protection is not one of prong of the mission; it is the mission. It is the lens through which we gauge the Board’s success in its central endeavors – standard setting, inspections, and enforcement.

Statement on the 2022 Final Budget for the Public Company Accounting Oversight Board
Commission Caroline A. Crenshaw – SEC
Thank you to the team in the Office of the Chief Accountant and the Office of Financial Management for your continued and important work with the Public Company Accounting Oversight Board (“PCAOB”). I also want to thank Acting Chairperson Duane DesParte for his work throughout the budget process and for his leadership through this period of transition. And last, but far from least, I want to recognize the staff of the PCAOB for their expertise and work not only on the budget process, but also for their dedication to advancing the important work of the PCAOB.

More Statements by SEC Commissioners
— Dissenting Statement on Proposed Security-Based Swap Rules – Commissioner Hester M. Peirce
— Dissenting Statement on Proposed Security-Based Swaps Rules – Commissioner Elad L. Roisman
— Standing Up the Security-Based Swap Regime: Statement on Proposed Rules for Antifraud, Position Reporting and CCO Support – Commissioner Allison Herren Lee
— Statement on Re-Proposed Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps – Commissioner Caroline A. Crenshaw
— Statement on Money Market Fund Reform – Chair Gary Gensler
— Statement on Money Market Fund Reforms – Commissioner Hester M. Peirce
— Statement on Proposed Money Market Fund Reforms – Commissioner Elad L. Roisman
— Statement on Proposed Money Market Fund Reforms – Commissioner Allison Herren Lee
— Statement on Proposed Amendments to Money Market Fund Rules – Commissioner Caroline A. Crenshaw
— Statement on Share Repurchase Disclosure Modernization – Chair Gary Gensler
— Dissenting Statement on Buybacks Disclosure Proposal – Commissioner Hester M. Peirce
— Dissenting Statement on Proposed Rules Regarding Share Repurchases – Commissioner Elad L. Roisman
— Enhancing Transparency Around Stock Buybacks: Statement on Corporate Share Repurchase Proposal – Commissioner Allison Herren Lee
— Statement on Issuer Share Repurchase Disclosure Modernization – Commissioner Caroline A. Crenshaw
— Statement on Rule 10b5-1 and Insider Trading – Chair Gary Gensler
— Statement on Rule 10b5-1 and Insider Trading Proposing Release – Commissioner Hester M. Peirce
— Statement on the Proposed Rules Regarding 10b5-1 Plans – Commissioner Elad L. Roisman
— Stock Trading Plans Should Prevent – Not Enable – Insider Trading: Statement on Proposed Amendments to Rule 10b5-1 Commissioner Allison Herren Lee
— Statement on the Proposed Amendments to the Availability of the Affirmative Defense to Allegations of Insider Trading Provided by Exchange Act Rule 10b5-1 – Commissioner Caroline A. Crenshaw

ESMA publishes its Annual Report on waivers and deferrals
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its Annual Report on waivers and deferrals for equity and non-equity instruments covering the year 2020.

ESMA issues statement on supervision of the clearing and derivative trading obligations following the benchmark transition
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has released a public statement on the implementation of the changes to the clearing obligation (CO) and derivative trading obligation (DTO) in light of the benchmark transition.

FINRA Announces SFAC, Regional Committee and NAC Election Results and Appointments
FINRA recently held annual elections to fill vacancies on the Small Firm Advisory Committee (SFAC) and the Regional Committees.1 Additionally, at its December meeting, the FINRA Board of Governors (FINRA Board) also appointed several individuals to fill additional vacancies on the SFAC and the National Adjudicatory Council (NAC). This Notice lists the individuals recently elected and appointed to the SFAC, Regional Committees and NAC.

CFTC’s Interest Rate Benchmark Reform Subcommittee Issues User Guide for the Transition of Exchange-Traded Derivatives Activity to SOFR
The Interest Rate Benchmark Reform Subcommittee, a subcommittee of the Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC), today issued a user guide for the transition of newly-executed exchange-traded derivatives from LIBOR to the Secured Overnight Financing Rate (SOFR) pursuant to the MRAC’s approval of the SOFR First Initiative at its July 13, 2021 meeting. Acting Chairman Rostin Behnam is the sponsor of MRAC.

FCA publishes warning notice statements for GAM International Management and Timothy Haywood
The Financial Conduct Authority (FCA) has fined GAM International Management Limited £9.1m and Timothy Haywood £230,037 for conflicts of interest and gifts & entertainment matters. Both the Firm and Mr Haywood agreed to resolve all issue of fact and liability and so they qualified for a 30% discount. The financial penalties would have been £13m and £319,044 respectively, had they not agreed to resolve the case.

Trading platform BaFin Investigates Forbschain
In accordance with section 37 (4) of the German Banking Act (Kreditwesengesetz – KWG), BaFin would like to make clear that Forbschain, domiciled in Luxembourg, has not been granted authorisation under the KWG to conduct banking business or provide financial services. The company is not supervised by BaFin.

Investing and Trading

WallStreetBets Jokes of Pumping Reddit Stock After IPO Filing
Kai Schultz – Bloomberg
It took approximately zero seconds for Reddit users to dissect the social media platform’s short announcement on Wednesday that it had filed for a confidential initial public offering. On WallStreetBets, the subreddit responsible for igniting this year’s meme stock craze, the pile-ons were plentiful, the profanity more so. Many members worried that a stock market listing marked the beginning of the end of Reddit’s free-wheeling culture, while others saw the opportunity for more fun — and potentially profit.

Reddit Files for IPO After Igniting the Year’s Meme Stock Frenzy
Michael Hytha and Priya Anand – Bloomberg
Reddit Inc., the social media platform that helped fuel this year’s meme stock frenzy, said it has confidentially filed for an initial public offering. The San Francisco-based company said Wednesday in a statement that the number of shares and proposed price range for an IPO haven’t been determined. It said the listing is expected to occur after the U.S. Securities and Exchange Commission completes its review process, subject to market and other conditions.

Reddit prepares for stock market listing; Online forum that fuelled meme stock frenzy lodges confidential filing with SEC
Richard Waters – FT
Reddit, the controversial discussion forum that rose to prominence as a haven for free speech online, has begun the process for a stock market listing that could see it complete a transition to the corporate mainstream.

DV Group to Acquire Business of Allston Trading
Press release via PR Newswire
DV Group, LLC, parent to DV Trading and DV Securities, announced today that it has signed an agreement to acquire the business of Allston Holdings LLC, parent to Allston Trading and Allston Capital. Expected to close by year-end, the transaction combines two of the nation’s preeminent proprietary trading firms, both based in Chicago. Terms of the transaction were not disclosed.

Environmental, Social and Corporate Governance

Climate change: opportunities and risks for investors; Amid all the hype, savers need to examine technology, management skills and financial plans
Simon Mundy – FT
The day before I met Tim Holme at his headquarters in San Jose last December, he had just become Silicon Valley’s latest start-up billionaire. Shares in his next-generation battery company, QuantumScape, were surging in the wake of its recent public listing — one of many clean-tech stocks that had caught the imagination of investors across the US and beyond, amid a growing focus on the market implications of climate change.


Crypto-Themed Hedge Funds Outperform Bitcoin After Year-End Slide
Crystal Kim – Bloomberg
Eurekahedge index shows hedge funds beating Bitcoin last month; Bitcoin hit an all-time high of nearly $69,000 in November
Hedge funds offering a more diverse portfolio of cryptocurrencies got a leg up on Bitcoin last month after the world’s largest cryptocurrency started to fall from an all-time high, data show.

JPMorgan A-Rod Adviser Loses Ruling in Client-Poaching Fight
Malathi Nayak and Hannah Levitt – Bloomberg
Judge denies her request for a temporary restraining order; Gwen Campbell claims she was lured into a ‘shark tank’
A JPMorgan Chase & Co. financial adviser lost the first round in an unusual public spat with the firm over her allegations that private bankers in a different unit have been “ruthlessly” poaching her clients since she joined last year.

VanEck to move $6.6bn in muni ETFs to new benchmarks; The ETFs will swap existing Bloomberg indices for ones provided by Intercontinental Exchange
David Isenberg – FT
VanEck will switch the benchmarks for five municipal bond ETFs with a combined $6.6bn in assets, filings show. The ETFs will swap their existing Bloomberg indices for benchmarks run by Intercontinental Exchange, effective March 2, the company has disclosed.


Banks and asset managers expect operating in China, Hong Kong to get harder
Alun John – Reuters
Financial institutions think business conditions in Hong Kong and mainland China will deteriorate in the coming years, although they plan to keep investing in both markets, a survey by an industry association found. The results suggest banks and asset managers are concerned about this year’s sweeping regulatory changes associated with President Xi Jinping’s “common prosperity” policy, though rules for financial institutions have largely remained unchanged.

India Has a People Problem; Even now the country isn’t producing enough workers. With its population set to peak sooner than expected, it could soon face an unfolding demographic disaster.
Mihir Sharma – Bloomberg
By the middle of this century, India will have 1.6 billion people. That’s when the country’s population will finally start to decline, ending up at perhaps a billion by 2100. While that is still around 250 million more people than China will have then, every time India’s population is projected, its peak seems to come earlier and crest lower. While India will be a young country for decades yet, it is aging faster than expected.

Investors Tell Australian Firms to Improve Indigenous Relations
Matthew Burgess – Bloomberg
The firm that represents managers of more than A$1 trillion ($700 million) of Australia’s pension funds has told the companies they invest in to improve their ties with Indigenous communities. The Australian Council of Superannuation Investors wants firms to build strong relationships with First Nations peoples and ensure they have free, prior and informed consent through the life of a project on their land, according to its updated engagement guidelines Thursday. The firm advises local and global investors including AustralianSuper, the nation’s largest pension fund.

UK’s top earners give less to charity despite jump in income; Study finds Scrooge-like behaviour among the richest and calls on government to encourage greater philanthropy
Bethan Staton – FT
Charitable donations by Britain’s top earners fell by more than 20 per cent during the past decade even as their income increased significantly, according to research that suggests the wealthiest are becoming more Scrooge-like. The decline in generosity has meant charities have missed out on £2.1bn in donations between 2011 and 2019, according to research commissioned by the Law Family Commission on Civil Society.


Former Wall Street Banker Goes Missing in China Amid Misconduct Probe: Caixin
Bloomberg News
A Chinese private equity investor with a pedigree from some of Wall Street’s top banks has gone missing after authorities started a probe into allegations of misconduct, Caixin reported, citing people familiar with the matter. Wang Chaoyong, the founder of ChinaEquity Investment Co., was sought by police on Nov. 30 in Beijing and hasn’t been seen in public since, according to the report. The 56-year-old was last seen in his office in the Chinese capital’s central business district on the afternoon of Nov. 29.

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