Billionaires Peterffy, Ricketts Take Beating as Schwab Cuts Fees

Oct 2, 2019

First Read

Hits & Takes
By JLN Staff

The FIA has a promo video for EXPO that lays out why you want to attend and why you want to exhibit.~JJL

Stephen M. Humenik, Clifford C. Histed and Edgar Mkrtchian of KL Gates have published an article, “Reconsidering CFTC Position Limits—Looking Back in Order to Look Forward to the Upcoming CFTC Position Limit Proposal.”~JJL

The OCC reported that last month was the highest September cleared volume month on record with just over 400 million contracts cleared. But volume for the year is still down from 2018, with total options off 1.9%.~JK

In its Moral Money column today, The Financial Times has a preview of what will take place at the Global Impact Investing Network annual conference in Amsterdam, which will discuss the $500bn market for “those who consider non-financial outcomes in their investment decisions.” ~SR

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43 Percent of White Students Harvard Admits Are Legacies, Jocks, or the Kids of Donors and Faculty
Jordan Weissmann – Slate
This month, a group of researchers have delivered a sobering look at how affirmative action works for affluent whites at America’s most prestigious university.
From 2009 until 2014, the paper “Legacy and Athlete Preferences at Harvard” finds, 43 percent of the Caucasian applicants accepted at Harvard University were either athletes, legacies, or the children of donors and faculty. Only about a quarter of those students would have been accepted to the school, the study concludes, without those admissions advantages.
/jlne.ws/2mZKoSQ

**** I have long contended that the advantage of attending Harvard is less the education (which is great) than the connections you make there. Being in the club has a lot of value. ~JB

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How Big Oil Of The Past Helped Launch The Solar Industry Of Today – Houston Public Media
www.houstonpublicmedia.org
Call it a sign of the times.
Renewable energy has gotten so cheap that even oil giant Exxon Mobil, which reported $20.8 billion in earnings in 2018, is getting in on the savings.
Over the next couple of years, Exxon Mobil will begin purchasing wind and solar power in West Texas, part of a 12-year agreement signed late last year with the Danish energy company Orsted. The plan is to use cheap, clean electricity to power Exxon Mobil’s expanding operations in the Permian Basin, one of the world’s most productive oil fields.
/jlne.ws/2ohIzkb

***An interesting history of solar power.~JK

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Man in his 40s is first diagnosed with ‘Brexit psychosis’
The Telegraph
A man in his forties has become the first to be diagnosed with Brexit-triggered psychosis, an article in the British Medical Journal (BMJ) says.
The male patient suffered hallucinations and delusions when his mental health “deteriorated rapidly” shortly after the results of the EU referendum in summer 2016.
/jlne.ws/2nQ3zP9

**** It is maddening. ~JB

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The Shaw Family Admission Plan One Wall Street billionaire and the ultimate college hedge.
Ava Kofman and Daniel Golden – NY Magazine
The unhappy heroine of The Mistakes Madeline Made, which premiered Off Broadway in 2006, hates working as one of 15 personal assistants to a ?nancier and his family. The patriarch, she observes, “runs his home the way he runs his hedge fund — using a model to protect his family against the possibility of loss or waste or even just the unexpected.” His “Household System” demands perfection: Even the hunt for a duplicate pair of New Balance sneakers is to be executed with the logistical ?nesse of a Navy SEAL strike.
/jlne.ws/2ommvVz

**** “Cameron’s house is like a museum. It’s very cold, and very beautiful, and you’re not allowed to touch anything.” ~Ferris Bueller’s Day Off

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Tuesday’s Top Three
Our top story on Monday was the tragic and violent story from the New York Post Barclays bank exec beat wife to death for insulting daughter. Second was Bloomberg’s Bonds Get a Taste of What Happens When Central Banks Step Back. Third was GlobalCapital Global Derivatives Awards 2019: the winners from Global Capital.

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Lead Stories

Billionaires Peterffy, Ricketts Take Beating as Schwab Cuts Fees
Sophie Alexander – Bloomberg
It’s been a tough day for the billionaire founders of the biggest online brokerages. Shares of Interactive Brokers Group Inc. and TD Ameritrade Holding Corp. tumbled Tuesday after Charles Schwab Corp. said it planned to eliminate commissions for U.S. stocks, exchange-traded funds and options.
/jlne.ws/2okNOzW

**SR: MarketWatch has the story here and the FT’s Schwab story, Schwab opens new front in trading war by slashing rates to zero is here

Tech forecast to destroy more than 200,000 US bank jobs; Report says cuts greatest in back offices, branches and call centres
Laura Noonan – FT
US banks will cut more than 200,000 jobs in the next decade as robots and other technology bring about the “greatest transfer from labour to capital” the industry has seen, a report by analysts at Wells Fargo claims.
/jlne.ws/2npxyxu

How Traders Get Enormous Tax Deductions, And Investors Do Not
Robert Green – Forbes
Traders eligible for “trader tax status” (TTS) deduct business expenses, startup costs, and home office deductions. A TTS trader may elect Section 475 for exemption from wash sale loss adjustments (deferrals), the $3,000 capital loss limitation, and to be eligible for a 20% qualified business income (QBI) deduction. Trading income is not self-employment income, so TTS traders don’t owe SE taxes. Using an S-Corp, TTS traders create earned income to maximize health insurance and or retirement plan deductions.
/jlne.ws/2p704nV

Trading Volume for Bakkt’s Bitcoin Futures Hit Just $5 Million in First Week
Brad Keoun – Coindesk
The Intercontinental Exchange’s highly anticipated bitcoin futures contract mustered just $5 million of total trading – and its daily product traded fewer than five contracts across its first week. According to the exchange’s Bakkt division, set up last year by the Atlanta-based company as a new marketplace for digital assets, some 623 monthly bitcoin futures contracts changed hands last week. Both the monthly and daily contracts debuted on Sept. 23.
/jlne.ws/2mTiqIb

Singapore’s Controversial ‘Fake News’ Law Comes Into Effect
Philip Heijmans – Bloomberg
A controversial “fake news” law in Singapore that critics worry will be used by authorities to clamp down on free speech took effect on Wednesday, according to the country’s government gazette. The Protection from Online Falsehoods and Manipulation Act 2019 would allow government ministers to be able to order a correction to be carried alongside a false or misleading claim, and material not in the public interest to be taken down.
/jlne.ws/2pkRPVr

U.S. CFTC orders six financial institutions to pay fine for reporting failures
Reuters
The U.S. Commodity Futures Trading Commission said on Tuesday it had ordered six financial institutions, including HSBC Bank USA, Societe Generale SA and PNC Bank NA to pay $6 million for reporting failures.
/jlne.ws/2nPQg19

The Great Onion Crisis in India Is Back to Modi’s Dismay
Anuradha Raghu, Pratik Parija – Bloomberg
Onions in India are once more at the epicenter of a major controversy, pitting government officials who want lower prices against farmers that need extra income. Prices of the vegetable, as ubiquitous as spices in Indian cooking, surged more than 200% in September from previous months after flooding from heavy monsoon rains damaged crops and reduced supplies. That’s prompted the government to ban exports and crack down on hoarding to lower prices, angering farmers who took to the streets on Monday in protest.
/jlne.ws/2pdnJTB

Why Buffett is wrong to dismiss the benefits of gold
Paras Anand – FT
Legendary investor Warren Buffett’s much-quoted dismissal of the investment merits of gold is simple: the metal is “neither of much use nor procreative.” But the Oracle of Omaha has got this wrong. Gold is constantly offering useful insights, if you look closely enough. Gold as an investment yields nothing and generates no cash flow, so its price is largely determined by the secondary market. In other words, it is only worth what other people are prepared to pay for it. That price has risen by almost a fifth so far this year to about $1,470 per troy ounce.
/jlne.ws/2pkQz4G

Ex-Societe Generale Traders’ Hedge Fund to Shut Down
Bei Hu – Bloomberg
“Running a multistrategy fund with an adequate infrastructure, both in terms of human capital and technology support, requires a higher level of assets under management,” Kim said. Almost 400 hedge funds liquidated in the first half, Hedge Fund Research Inc. data show. Fund closures have outpaced new starts in each of the past four years amid investor disappointment with returns and pressure on managers to cut fees while operational costs rise.
/jlne.ws/2pmu2Vf

Credit Suisse’s Spying Scandal Started With a Fight at a New Year’s Party
Patrick Winters – Bloomberg
Tidjane Thiam had reason to celebrate. A grinding three-year turnaround at Credit Suisse Group AG was starting to pay off and the bank boss was hosting a new year’s drinks party. Among his 60 or so guests were many locals from the Zurich suburb of Herrliberg, along with a clutch of top Credit Suisse executives and his new neighbors — Iqbal Khan, the bank’s wealth-management chief, and his wife.
/jlne.ws/2pfJja4

Short sellers gain from bets against US brokerages
Richard Henderson and Jennifer Ablan – FT
The intensifying price war over commissions among the US’s top stock-trading platforms has delivered a $191m boost to investors betting against the sector. Short sellers, who profit when a stock drops in price, enjoyed the gains from bets against Charles Schwab, TD Ameritrade, Interactive Brokers and ETrade, according to data from S3 Partners. The sharp share price sell-off on Tuesday was triggered by Schwab’s announcement that it would scrap its $4.95 fee to trade stocks, exchange traded funds and options listed on US and Canadian exchanges, starting on Monday next week.
/jlne.ws/2mU41vl

Exchanges, OTC and Clearing

CME Group Doesn’t Plan to Launch Physically-Delivered Bitcoin Futures
Alex Dovbnya – news.u.today
During a recent interview with Markets Media, CME’s Tim McCourt says that institutions are becoming more interested in Bitcoin, but physically-delivered futures are not currently on the table for the Chicago-based exchange.
/jlne.ws/2oqzy8G

Moscow Exchange welcomes its 3 millionth retail investor
MOEX
In September 2019, the number of retail investors on Moscow Exchange reached three million. Individual Investment Accounts (IIA) constitute a substantial portion of retail accounts registered with Moscow Exchange, now reaching 1.17 million. IIAs were introduced to stimulate investments in Russian securities by offering tax incentives to individuals.
/jlne.ws/2nA99VU

Nasdaq to Acquire the Center for Board Excellence
Nasdaq, Inc.
Nasdaq, Inc. announced today its acquisition of the Center for Board Excellence (CBE), a privately-held provider of corporate governance and compliance solutions for boards of directors, CEOs, corporate secretaries, and general counsels. Nasdaq plans to combine CBE with its Nasdaq Governance Solutions business, which operates award-winning board portal and collaboration technology solutions.
/jlne.ws/2p7pQsd

Eurex expands pioneering role in sustainable investing
Press Release
Launch of first exchange-traded ESG options / new STOXX ESG Select derivatives
The derivatives exchange Eurex extends its pioneering role in ESG derivatives by adding the first exchange-traded ESG options on a European benchmark to its product range. Launch of the new options, which are based on the leading STOXX Europe 600 ESG-X Index, is scheduled for October 21.
/jlne.ws/2mP6FCy

SIX Trading Key Figures: September 2019
Mondovisione
In September, trading turnover on the Swiss stock exchange was up 6% on the previous month and reached CHF 139.1 billion. There was decrease in the number of transactions by -7.3% to 6,181,625. In comparison with the corresponding period last year, trading turnover was up by 8.1% at CHF 1,101.8 billion, while the number of trades rose by 4.1% to 46,321,527. Since the beginning of the year, the SMI® rose by 19.6% and reached 10,078.3 points at the end of September.
/jlne.ws/2mHyaxT

OCC September Cleared Volume Up 11.3 Percent – Highest September on Record
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in September reached 406,444,790 contracts, an 11.3 percent increase compared to last September, and the highest total volume for September on record. OCC’s year-to-date average daily cleared contract volume is 19,741,303 down 2.3 percent compared to 2018’s record-breaking pace.
/jlne.ws/2mHhyGw

Fintech

Pico Announces New Managed Hosting Services at Borsa Italiana; Delivering low-latency hosting services with direct connectivity in the exchange colocation facility
Pico
Pico, a leading provider of technology services for the financial markets community globally, today announced the latest extension to its European network of exchange colocation facilities with the addition of hosting services at the Borsa Italiana exchange colocation facility in Milan.
/jlne.ws/2p7Vshp

QuantConnect Launches Designer Algorithm Development Competition; The first competition of its kind, Alpha Five revolutionizes the model for connecting hedge funds with quants’ alpha
Business Wire
QuantConnect today announced the launch of an innovative competition in which hedge funds can solicit “designer” alphas from the crowd. QuantConnect, an open-source algorithmic trading platform, provides its community of over 85,000 quants access to financial data, cloud computing, and a coding environment where they can design, build, and live trade algorithmic trading strategies. For the first time, institutions can tap into the power of the crowd to solicit specifically designed trading strategies.
/jlne.ws/2nDlWH9

Wall Streeters say AI is going to disrupt their business more than any other tech. Many big investors are getting left behind.
Dan DeFrancesco – Business Insider
A recent survey conducted by the research firm Greenwich Associates found that only 23% of hedge funds and asset managers are using artificial intelligence on their trading desks. That’s compared to 63% of banks and 60% of trading venues using the cutting-edge tech. As hedge funds and asset managers face shrinking fees, the cost required to internally build AI tools is viewed as too high.
/jlne.ws/2nDmg8Y

Tradeweb Integrates Margin Optimisation Analytics for Interest Rate Derivatives Trading
Press Release via Businesswire
Tradeweb Markets Inc. (Nasdaq: TW), a leading global operator of electronic marketplaces for rates, credit, equities and money markets, announced its collaboration with two leading margin optimisation providers, Cassini Systems and OpenGamma, to offer clients a choice of best-of-breed vendor access to life-cycle cost analytics, including initial margin, collateral, clearing fees, brokerage and trading costs.
/jlne.ws/2osOEKP

Will bots replace humans in active equity investment?
Robert Pozen – FT
Although machine learning has huge potential to increase the ability of investors to find outperforming stocks, humans will be needed to develop the right algorithms and exercise investment judgment — just humans with different skills.
/jlne.ws/2osTZ4Y

Cryptocurrencies

US Department of Homeland Security Awards $143K Grant to Blockchain Firm
Joeri Cant – Cointelegraph
On Sept. 26, the United States DHS Science and Technology Directorate (S&T) announced in a press release that Danube Tech was awarded a contract to assist the department in its ongoing fight against forgery and the counterfeiting of certificates and licenses.
/jlne.ws/2oqxXzI

Are Trading Vehicles Dragging Crypto Into Maturity?
Nikolai Kuznetsov – Cointelegraph
Just a decade ago, speculating on cryptocurrency prices meant figuring out a way to buy Bitcoin (BTC) and add it to your blockchain wallet. This was a feat that was worthy of bragging rights: In 2010, there were few exchanges, low liquidity and barely any infrastructure, meaning that crypto was less a financial instrument and more a digital novelty.
/jlne.ws/2mB6GKe

Switzerland’s FINMA boss fears crypto’s ‘dark corners,’ not Libra
Angelika Gruber – Reuters
Switzerland is more worried about cryptocurrency projects developing outside official scrutiny than about the Facebook-conceived Libra project, which is being handled with openness, the head of Swiss financial supervisor FINMA said on Tuesday.
/jlne.ws/2oWCES1

OKEx Made up Over One-Third of Crypto Derivatives Trading Volumes in August, Report Finds
Francisco Memoria – Cryptoglobe
Leading cryptocurrency exchanges OKEx has managed to propel itself to the forefront of the cryptocurrency derivatives industry, as it managed to capture around 37% of the market in August.
/jlne.ws/2oyBZG7

Facebook Libra Payments Partners Waver on Cryptocurrency
Lydia Beyoud, Joe Light – Bloomberg
Four payments companies that have joined Facebook Inc. as founding members of the Libra Association are wavering over whether to officially sign on to the cryptocurrency project, according to people familiar with the matter. Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Stripe Inc. are undecided about formally signing onto Libra’s organizing charter because they’re concerned about maintaining positive relationships with regulators who have reservations about the project, the people said.
/jlne.ws/2nPttCF

Mt Gox Trustee Asked DOJ to Share Info on Jailed BTC-e Owner Alexander Vinnik
Anna Baydakova – Coindesk
The trustee recovering funds on behalf of Mt Gox’s creditors has contacted the U.S. Department of Justice seeking information about Alexander Vinnik, who prosecutors allege played a role in laundering stolen funds from the bankrupt exchange. Nobuaki Kobayashi, the trustee, requested details of the DOJ’s investigation into BTC-e, a defunct crypto exchange with the Russian roots, his office announced Tuesday. Vinnik, allegedly BTC-e’s operator, was arrested in the summer 2017 at the request of U.S. law enforcement and is now imprisoned in Greece.
/jlne.ws/2mZMmTe

Financial Services Giant Morningstar to Offer Ratings for Crypto Assets
David Pan – Coindesk
Morningstar Credit Ratings is planning an evaluation system for debt securities issued as tokens on a blockchain to make the emerging asset class more credible for investors. The new rating services could enable a migration of the $117 trillion debt securities industry, which is administered and governed by custodians and trustees, to a decentralized financial network, Michael Brawer, chief operating officer at Morningstar Credit Ratings, said in a Forbes interview on Tuesday.
/jlne.ws/2oprlBD

Institutional Libra Backers Are Getting Cold Feet
Danny Nelson – Coindesk
Major Libra backers Visa and Mastercard are second-guessing their participation in the Facebook-led digital payments project, the Wall Street Journal reported Tuesday. Against a global regulatory blasting of the proposed cryptocurrency, the financial services pair and unnamed other companies are balking at Facebook’s call for a unified front. The Journal says that few want to boost the project publicly – leaving Facebook to defend Libra by itself.
/jlne.ws/2oyj0vj

Politics

Trump Is Too Dangerous for Twitter; The president flagrantly violates the social platform’s rules. It’s time to bar him.
Kara Swisher – NY Times
It’s almost as if Donald Trump is trying to get impeached. By Twitter, I mean. That’s where the twitchy fingers of the president of the United States have been working overtime to try to get him tossed off the digital communications service by posting all kinds of rule-breaking things and often in all caps with lots of exclamation marks — just so we don’t miss them.
/jlne.ws/2mGSXla

Trump Officials Agree on Plan to Boost Ethanol, Biodiesel
Jennifer A Dlouhy, Mario Parker, and Jennifer Jacobs – Bloomberg
Administration trying to balance farm, oil refinery interests; Targets to reflect a three-year rolling average of exemptions
The Trump administration has agreed to a new plan for boosting renewable fuels and offsetting waivers exempting oil refineries from mandates to use them, according to three people familiar with the matter who asked for anonymity before a formal announcement.
/jlne.ws/2ofIlKy

Trump’s tariffs may have forced an American steel company into bankruptcy.
Jordan Weissmann – Slate
Donald Trump likes to brag that his tariffs have saved the U.S. steel industry from collapse. “Steel was dead,” he told a crowd of Pennsylvania workers in August. “Your business was dead. Okay? I don’t want to be overly crude. Your business was dead. And I put a little thing called ‘a 25 percent tariff’ on all of the dumped steel all over the country. And now your business is thriving.”
/jlne.ws/2mSWjBG

Ex-GOP Representative Pleads Guilty in Insider-Trading Case
Chris Dolmetsch – Bloomberg
Guilty plea comes as New York’s Chris Collins quits Congress; Collins admits tipping his son to negative test results
Chris Collins pleaded guilty to insider-trading charges just hours after his resignation from Congress took effect, completing a stunning downfall for the first U.S. Representative to endorse Donald Trump for president.
/jlne.ws/2okPcTa

Donald Trump claims ‘coup’ under way as Ukraine pressure mounts
Demetri Sevastopulo and Aime Williams – FT
Donald Trump said he was the victim of a “coup” as a government watchdog requested an urgent meeting with lawmakers in connection with an impeachment investigation into the president. The US president made the claim on Tuesday as Mike Pompeo, his secretary of state, tried to stall the impeachment inquiry, in which Mr Trump is accused of pressuring a foreign leader to investigate Joe Biden, the former vice-president and his potential rival in the 2020 presidential race.
/jlne.ws/2nC1pCV

The chances of Republicans deserting Trump are underrated
Janan Ganesh – FT
Upon dismissing his chief of staff in 1973, Richard Nixon said that he loved him “like my brother”. The line seems too easy until you remember that the US president had seen two of his own die young. Nixon’s bond with H R Haldeman and other colleagues fortified him well into the Watergate crisis that brought him down. Excluding his in-laws and blood relations, is there anyone in Washington of whom Donald Trump would make the same comment?
/jlne.ws/2osZ8di

Regulation

CFTC Orders Energy Broker and Its Owner to Pay Over $1.5 Million for Misappropriating Confidential Customer Information and Other Violations
CFTC
The U.S. Commodity Futures Trading Commission announced today that it issued an order filing and settling charges against introducing broker Classic Energy LLC and its owner Mathew D. Webb of Houston, Texas for misusing material, nonpublic order information in connection with block trades in natural gas futures on ICE Futures US, as well as related supervision and recordkeeping violations. The order was entered on Monday, September 30, 2019.
/jlne.ws/2oYYRyP

SEC’s Message for 2019 World Investor Week: Start Early; How to Choose an Investment Professional, Importance of Diversification also Highlighted
SEC
The Securities and Exchange Commission today announced that during World Investor Week staff will participate in more than 50 events around the country encouraging individuals to start early to save and invest for their futures. SEC staff will also provide information on how to choose an investment professional and the importance of diversification.
/jlne.ws/2oZ1IYz

CFTC Orders CHS, Inc. to Pay $500,000 Penalty for Reporting Violations
CFTC
The U.S. Commodity Futures Trading Commission announced today that an order filing and simultaneously settling charges against CHS, Inc. a cooperative corporation headquartered in Minnesota, for failing to submit accurate monthly CFTC Form 204 Reports regarding the composition of CHS’s fixed price cash corn and soybean purchases and sales. The order was entered on Monday, September 30, 2019. The order also charges CHS for violating the cease and desist provision of a 2016 CFTC order [See Release No. 7337-16], which involved a 13-year failure to file correct Form 204 reports with the Commission.
/jlne.ws/2ohy28V

CFTC Orders Two Trading Firms, Bank to Pay a Total of $3 Million for Spoofing
CFTC
The U.S. Commodity Futures Trading Commission today announced that civil enforcement actions were filed and simultaneously settled against two trading firms and one bank for violating the Commodity Exchange Act’s (CEA) prohibition on spoofing (bidding or offering with the intent to cancel the bid or offer before execution). These cases were brought in connection with the Division of Enforcement’s Spoofing Task Force.
/jlne.ws/2nB1JBL

U.S. SEC proposes exchanges seek public consultation on data fee changes
Katanga Johnson – Reuters
The U.S. securities regulator on Tuesday proposed a change to the way exchange operators alter their fees, in a move aimed at improving transparency but which could make it harder for operators to compete on price to propel revenue growth.
/jlne.ws/2mZCitq

SEC reaches settlement with the firm behind Sia Network
Steven Zheng – The Block Crypto
Nebulous Inc., the firm behind the Sia decentralized cloud storage network, has entered a settlement agreement with the U.S. Securities and Exchange Commission (SEC). According to an SEC filing, in 2014 and 2015, Nebulous “offered and sold securities that were required to be registered with the Commission.” The SEC claims that Nebulous violated the Securities Act “by offering and selling these securities without a registration statement filed or in effect with the Commission and without qualifying for exemption from registration.”
/jlne.ws/2oxSG4s

SEC Proposes to Require Proposed NMS Plan Fee Amendments to Follow Public Notice, Comment, and Approval Procedure
SEC.gov
The Securities and Exchange Commission today proposed to require an amendment to a national market system plan (NMS plan) that would establish or change a fee or other charge (Proposed Fee Change) to be subject to the standard procedure for NMS plan amendments.
/jlne.ws/2oqrZ1M

Chicago trading firm fined $2.5 million by CFTC
Lynne Marek – Crain’s Chicago Business
The Commodity Futures and Trading Commission charged the Chicago trading firm Hard Eight Futures and its founder Igor Chernomzav with manipulative trading, requiring them to pay a $2.5 million penalty. The agency, which oversees futures trading, said yesterday in a statement that it had simultaneously filed and settled the enforcement action, which focused on trading in CME Group’s E-mini S&P 500 futures contracts between March 2014 and March 2015.
/jlne.ws/2nQTNMT

CFTC Orders Trader to Pay $160,000 for Making Misrepresentations to Futures Commission Merchants
CFTC
The U.S. Commodity Futures Trading Commission announced today that it issued an order filing and simultaneously settling charges against Aron Seidenfeld, a New York-based futures trader, for causing material misrepresentations to be made in account opening documents submitted to multiple futures commission merchants (FCMs). The order was entered on Monday, September 30, 2019.
/jlne.ws/2mTF7Mq

CFTC Orders Six Financial Institutions to Pay Total of More Than $6 Million for Reporting Failures
CFTC
The U.S. Commodity Futures Trading Commission today announced that it issued orders yesterday against HSBC Bank USA, N.A., Société Générale International Limited, The Northern Trust Company, NatWest Markets Plc, The Bank of New York Mellon, and PNC Bank, National Association for reporting failures. Société Générale International Limited and The Northern Trust Company were also charged with failing to supervise in connection with the reporting failures. HSBC was also charged with violating swap-dealer risk management regulations, the first time the Commission has brought such an action.
/jlne.ws/2mUBlCB

CFTC Orders RBC Capital Markets, LLC to Pay $5 Million for Supervisory Failures Resulting in Illegal Trades and Other Violations
CFTC
The U.S. Commodity Futures Trading Commission today announced the agency issued an order on Monday, September 30, 2019, filing and setting charges against RBC Capital Markets, LLC (RBCCM), a registered futures commission merchant (FCM), for failing to meet its supervisory obligations, which resulted in hundreds of unlawful trades and other violations over the period of at least late 2011 through May 2017.
/jlne.ws/2pfYD6A

France Wants to Harvest Facebook Data to Catch Tax Fraudsters
Helene Fouquet – Bloomberg
French President Emmanuel Macron is planning to give tax authorities the power to harvest data from Facebook, Instagram and other social media to help detect fraud. The government wants parliament to include an article in the 2020 budget law granting the new powers to officials from the tax and customs administrations. The state will also screen online market places like EBay Inc., Vinted, or Le Bon Coin as part of a trial program that is slated to run for three years.
/jlne.ws/2pgdFcw

Investing and Trading

Fed Has No Choice But to Tackle Both Repo and Recession; A slump in U.S. manufacturing again raises the specter of a slowdown, making the central bank’s October decision even more complicated.
Brian Chappatta – Bloomberg
Heading into October, it was clear Federal Reserve officials would face a difficult decision at their meeting at the end of the month. Just one day into October, the challenges have already become even more intense.
/jlne.ws/2mHtY18

US manufacturing survey contracts to worst level in a decade
Yun Li – CNBC
A gauge of U.S. manufacturing showed the lowest reading in more than 10 years in September as exports dived amid the escalated trade war.
The U.S. manufacturing purchasing managers’ index from the Institute for Supply Management came in at 47.8% in September, the lowest since June 2009, marking the second consecutive month of contraction. Any figure below 50% signals a contraction.
/jlne.ws/2nP2wPt

Farmer sentiment regarding current conditions slips in September
CME Group and Purdue University
Farmers became much more pessimistic about current conditions on their own farms and in the U.S. agricultural economy in late summer, according to the September Purdue University/CME Group Ag Economy Barometer. While the overall Ag Economy Barometer reading dipped slightly to a reading of 121, down three points from August; the Index of Current Conditions, a sub-index of the barometer, dropped 22 points to a reading of 100. The barometer is based on a mid-month survey of 400 agricultural producers across the U.S.
/jlne.ws/2mO3Ams

Billionaires Peterffy, Ricketts Squeezed as Schwab Cuts Fees
Sophie Alexander – Bloomberg
It was a tough day for the billionaire founders of the biggest online brokerages. Shares of Interactive Brokers Group Inc. and TD Ameritrade Holding Corp. tumbled Tuesday after Charles Schwab Corp. said it planned to eliminate commissions for U.S. stocks, exchange-traded funds and options.
/jlne.ws/2okNOzW

SIX Trading Key Figures
Mondo Visione
In September, trading turnover on the Swiss stock exchange was up 6% on the previous month and reached CHF 139.1 billion. There was decrease in the number of transactions by -7.3% to 6,181,625. In comparison with the corresponding period last year, trading turnover was up by 8.1% at CHF 1,101.8 billion, while the number of trades rose by 4.1% to 46,321,527. Since the beginning of the year, the SMI® rose by 19.6% and reached 10,078.3 points at the end of September.
/jlne.ws/2mHyaxT

Fenics Market Data launches US Treasuries Data Services
Press Release
Fenics Market Data (“Fenics MD”), a division within BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners,” “BGC” or the “Company”), today announced the launch of its US dollar data service, FENICSMD 20/20, a premium service that combines the precision pricing of Fenics USTreasuries (“Fenics UST”) with real-time interest rate swaps data from BGC, as well as US Treasuries implied spreads to SOFR.
(via email)

Institutions

Charles Schwab to end commissions for stock trading, shares fall
C Nivedita, John McCrank – Reuters
Discount brokerage Charles Schwab Corp (SCHW.N) said on Tuesday it is eliminating commissions for online trading of stocks, ETFs and options listed on U.S. or Canadian exchanges.
/jlne.ws/2nyZoY0

Advisers warned they are still not customer focused
Rachel Mortimer – FT Adviser
Advisers “leave a lot to be desired” when addressing services and charges in initial disclosure documents, the regulator’s former technical specialist has warned.
/jlne.ws/2nDAiHx

Financial advisers and the ‘wealth tax’ toll; The industry takes a percentage of its clients’ invested assets year after year
Paul Lewis – FT
A wealth tax has always been anathema to UK governments. The closest was Labour’s capital transfer tax, which ran from 1974 to 1986. It was basically an inheritance tax that applied in life as well as after death. Vestiges of it remain in the IHT rules but it was not a wealth tax like those they have in Spain, Argentina, Norway, Switzerland and other countries. They charge a percentage of your total assets each year.
/jlne.ws/2mHcvWz

Credit Suisse says risk calculation, hedging change to reap $250 million
ZURICH (Reuters) – Credit Suisse (CSGN.S) on Wednesday said it expects an estimated $250 million boost in annual profit from higher net interest income it expects to reap by calculating risk-weighted assets in dollars rather than Swiss francs.
/jlne.ws/2osq0dr

Swedbank Ousts Executives in Estonian Unit Amid Internal Probe
Kristin Broughton – The Wall Street Journal
Swedbank AB removed three executives and appointed permanent leaders in its troubled Estonian division as part of its probe into allegations of weak anti-money-laundering compliance.
/jlne.ws/2mYOhr8

Dalio Outlines Possible Trump Path to Limit Capital to China
Peggy Collins – Bloomberg
Ray Dalio, the billionaire founder of the world’s biggest hedge fund, said preliminary discussions on limiting U.S. investments in China make him wonder if the Trump administration is “inching toward bigger moves.” In a new essay posted on LinkedIn Tuesday, the Bridgewater Associates co-chairman points to the U.S. freezing Japanese assets and embargoing oil to Japan in the late 1930s to early 1940s as a potential example of how special emergency powers could be used by the president.
/jlne.ws/2otpg7T

Einhorn’s Greenlight Jumps 8% as Factor Reversal Proves Boon
Katia Porzecanski, Simone Foxman – Bloomberg
David Einhorn’s value-oriented Greenlight Capital hedge funds surged in September amid the market’s temporary shift away from long-favored momentum stocks and toward inexpensive equities. Greenlight gained 8.4% across its funds, bringing returns for the year to a weighted average of 24%, according to an update sent to clients Tuesday.
/jlne.ws/2opkyI9

BNP Paribas Asset Management Appoints David Vaillant as Global Head of Finance, Strategy & Participations
Mondovisione
BNP Paribas Asset Management (‘BNPP AM’) announces the appointment of David Vaillant as Global Head of Finance, Strategy & Participations. He succeeds Pascal Biville, Head of Strategy & Finance and Head of Affiliate Network, who has left the firm to pursue other opportunities.
/jlne.ws/2oyyq2H

Einhorn hedge fund Greenlight wins out of momentum shift
Ortenca Aliaj – FT
David Einhorn’s Greenlight Capital hedge fund has emerged as one of the big winners from the shift out of momentum stocks in September. The value-focused hedge fund posted an 8.4 per cent return in September across its funds, according to a person familiar with the firm, bringing its year-to-date performance to 24 per cent.
/jlne.ws/2nEPjsK

ECB launches new lending benchmark based on overnight deals
Philip Stafford – FT
Global authorities’ efforts to move capital markets on to a sounder base took a step forward on Wednesday after European authorities launched a new benchmark based on overnight deals. The new rate, called EURSTR, is intended to replace Eonia, a daily reference rate that reflects unsecured overnight lending between banks in the EU and which prices about EUR24tn of deals. The European Central Bank published the EURSTR rate for the first time on Wednesday, at a rate of minus 0.549 per cent based on Tuesday’s trading.
/jlne.ws/2mTwfq4

Regions

Nowhere to turn for funding as door slams shut on China Inc; US regulators, exchanges and politicians turn up heat on Chinese companies
Louise Lucas – FT
Where is a Chinese company to turn for funding these days? Whether at home, across the border in Hong Kong or further afield in the US, doors are shutting faster than a unicorn can gallop.
/jlne.ws/2nz0cvZ

Strong Franc Revives Disinflation Headache in Switzerland
Fergal O’Brien, Jan Dahinten – Bloomberg
Swiss inflation slowed to the weakest since 2016 and is now barely above zero, reflecting the franc’s rally against the euro. A day after South Korea reported the first annual drop in prices in more than a half-century of records, Switzerland said its rate fell to just 0.1% in September from 0.3%. That’s at the very lower end of the Swiss National Bank’s target range, which is rising prices at a rate below 2%.
/jlne.ws/2nEA8jg

Brexit

Boris Johnson Issues Ultimatum as EU Balks at His Brexit Plan
Robert Hutton, Kitty Donaldson – Bloomberg
Boris Johnson is poised to issue an ultimatum to the European Union on Wednesday: negotiate Brexit on his terms within the next nine days, or face a no-deal divorce. A key EU player has already rejected the prime minister’s plan. On Wednesday, Johnson will address his Conservative Party’s annual conference in Manchester, England, and his office said he would present a “fair and reasonable compromise” offer to the EU. He will say it is now vital to deliver on the decision of the British people to leave the EU in a referendum in 2016.
/jlne.ws/2pm1Kdv

Johnson Gambles on Nine-Day Brexit Deadline
Tim Ross – Bloomberg
The European Union has nine days to save Brexit talks or Britain will walk away without a deal. That’s the message Prime Minister Boris Johnson is sending to Brussels today. He’s setting an Oct. 11 deadline for an agreement and proposing the whole U.K. leaves the EU customs union in a few weeks. After a transition period, there would be temporary arrangements for goods crossing the Northern Irish border for about four years.
/jlne.ws/2nNBvMr

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