Bitcoin Bulls See ‘Trillions’ of Inflows When Spot ETF Wins Approval

Nov 5, 2021

First Read

$54,106/$300,000 (18%)
Cliff Histed

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FIA Expo: Sustainability Markets Growing, But Participants Search for Clarity of Its Parameters
Suzanne Cosgrove – John Lothian News

Although the five speakers at a Thursday FIA Expo panel titled “Sustainability/ESG and Markets” agreed that the ESG sector is one of the biggest growth areas in the marketplace, they said it can be difficult to define exactly what ESG encompasses.

The “E” (for environmental) is self-evident, but the “social and governance components are much more challenging,” said Elizabeth Turner, Qontigo’s director of index product management.

“With the energy markets, ESG components are everything outside the core products,” said Trabue Bland, president, ICE Futures US, Intercontinental Exchange. There is no final list, but given the concerns about climate change, the current focus is on the “E” part and CO2, he added.

To read the rest of this story, go HERE.

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FIA Expo: Crypto – An Evolving Regulatory Landscape
Jeff Bergstrom – John Lothian News

Cryptocurrencies are often viewed as the Wild West with very little in the way of law or regulations. If there was one thing the Thursday FIA panel on crypto wanted everyone to know, that is far from the current reality. Significant regulatory obligations exist for those trading cryptocurrencies.

That said, the regulatory landscape today is an uncertain one. Kyle Glenn, director of government relations for the FIA, noted that SEC Chairman Gary Gensler has opined that most cryptocurrencies fall under the SEC’s jurisdiction. Whereas the CFTC Acting Chairman Rostin Behnam said just last week that 60% of the digital asset marketplace is under CFTC jurisdiction.

Kari Larsen, partner and co-lead of the blockchain, digital asset, and custody group, Perkins Coie LLP, said, “What is a cryptocurrency? Is it a commodity? Is it a security? Is it a currency? The answer is yes, it could be any one of those. It could be multiple. It’s all facts and circumstances based. It all depends on what the digital asset is used for, what its characteristics are, how it was marketed, how it was sold.” Larsen also noted that, currently, there are few actual regulations on the books. The SEC and CFTC are regulating more by enforcement, she said.

To read the rest of this story, go HERE.

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Hits & Takes
JLN Staff

Right before publication yesterday, the WSJ story on the CME-Google deal popped up and it was the second most popular story yesterday. HERE is the CME release about it. CME is going to move into the Google cloud over the next 10 years, starting with data and then trading platforms. Google is the No. 4 cloud provider and the deal included a $1 billion investment in CME non-voting convertible shares. Convertible shares are a combination of debt and equity. They get a regular dividend, so it is like a bond. But they can also shift into common stock in the CME if the economics make it attractive, like the CME dividend going up more than the preferred one. In some ways this is like lending a customer money so they can buy your product, but the preferred stock owner has upside beyond getting paid interest/dividends on the money lent.

But this deal also brings two giant companies closer together and once you start going steady, the relationship can progress to bigger and better things. There has always been speculation an exchange group could be an acquisition target for a big technology company. This only adds a data point to that type of speculation. I think it is a good deal for both firms as is and we shall see where it leads. Congratulations to Terry Duffy and the CME team.

Stable was the winner of the FIA Innovator of the Year competition at FIA EXPO 2021 and X-Margin was the runner-up. Databento won the People’s Choice Award, which was voted on by the attendees of EXPO. Stable was first featured here in JLN with an interview I did with James F. Sullivan, Jr., commercial director of Stable USA.

Stable offers agricultural producers a way to hedge products that do not have futures contracts listed on the products and instead use an insurance approach. As Sullivan is fond of saying, you can hedge the whole burrito with Stable. Congratulations to Stable on their win. I think it is a brilliant concept and could lead to new ways for liquidity providers to bridge into the insurance market and bring agricultural producers closer to the derivatives markets.

Cliff Histed, a partner with K&L Gates and a former CFTC and U.S. Attorney lawyer, is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Histed is a return giver. Thank you to Cliff and all who have given and all who have yet to give. Your support helps us produce our historical video series that are helping the next generation of professionals and market participants understand the markets before their time.

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

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The TRADE announces Leaders in Trading 2021 awards winners; Over 260 industry leaders gathered at The Savoy hotel in London to celebrate their achievements throughout the year.
Editors – The Trade
The TRADE is pleased to announce the winners of this year’s Leaders in Trading awards, with the recipients honoured at a ceremony held last night at The Savoy, London. Over 260 industry leaders joined The TRADE in a sold-out room to recognise the year’s leading individuals and firms within the industry, with 35 awards handed out across buy-side, editors’ choice, algorithmic trading and EMS categories.
/jlne.ws/3oirQcb

***** Here are pictures of the Leaders in Trading 2021 winners.~JJL

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The TRADE announces the Rising Stars of Trading and Execution 2021; Running for its seventh year, the Rising Stars initiative recognises the budding buy-side talents of the institutional trading space.
Editors – The Trade
The TRADE is delighted to announce the winners of the Rising Stars of Trading and Execution awards for 2021, our long-running initiative to recognise the budding buy-side talents of the institutional trading space, in partnership with Instinet. Running for its seventh year, the Rising Stars initiative has recognised numerous promising talents over the years, many of whom have gone on to expanded roles such as head of trading as the world’s largest asset managers and hedge funds.
/jlne.ws/31sUAa9

***** It sounded like a nice party for these awards.~JJL

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FIA provides three recommendations to improve trading processes; The recommendations, developed with JDX Consulting, are based on insights gained from 25 organisations and over 60 people representing the listed derivatives marketplace.
Wesley Bray – The Trade
The world’s leading exchange-traded derivatives organisation is looking to improve trading and clearing processes following severe backlogging of unallocated and misallocated trades in March 2020, largely due to the pandemic. The FIA has provided three recommendations to improve the industry’s efficiency and resilience and has called on futures and options participants to work together on what it has called a “major initiative”.
/jlne.ws/3GTeAmM

**** This FIA recommendation did not get the attention it deserves. This is important.~JJL

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New York’s next mayor wants to be paid in Bitcoin
BBC
The former police captain was elected this week to take over at the end of mayor Bill de Blasio’s term in January. Mr Adams said on social media that he wanted to signal his intention to make New York the “centre of the cryptocurrency industry”.
/jlne.ws/3BODikf

***** Interesting first decision from Mr. Adams. He is probably responding to the Miami mayor who is trying to attract NYC financial firms to the Sunshine State.

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SEC’s Gensler warns securities lawyers: Don’t ‘help paper over the cracks’ of client misconduct
Chris Matthews – MarketWatch
SEC’s Gensler warns securities lawyers: Don’t ‘help paper over the cracks’ of client misconduct
Securities and Exchange Commission Chairman Gary Gensler warned securities lawyers that the regulator will take a tough stance on issuers and market participants who try to skirt financial-market rules or impede SEC investigations, in a Thursday speech to the Securities Enforcement Forum.
/jlne.ws/3kbVgHo

****** I moved jobs once when getting a recommendation to bury about a $1 million trading fraud scheme I discovered by a customer of a business partner. It turned out to be one of the best decisions I ever made as I joined The Price Futures Group as head of electronic trading as a result. And as they say, the rest is history.~JJL

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Thursday’s Top Three
Our top story Thursday was from John Lothian News, FIA Expo: Reunited After Two Years, Exchange Leaders Trade Friendly Barbs. It seems there is pent-up interest in derivatives industry dialogue now that we are climbing out of the pandemic. The second most-read story was from the Wall Street Journal and also has an exchange connection, Google Invests $1 Billion in Exchange Giant CME, Strikes Cloud Deal. And third was from the FIA, a video from the Expo 2021 – Exchange Leaders Panel (VIDEO).

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MarketsWiki Stats
26,643 pages; 236,164 edits
MarketsWiki Statistics

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Lead Stories

Bitcoin Bulls See ‘Trillions’ of Inflows When Spot ETF Wins Approval
Vildana Hajric and Katie Greifeld – Bloomberg
The launch of Bitcoin-futures ETFs was a watershed moment. But for crypto diehards, the Holy Grail remains a physically-backed product. That was a major refrain among panelists at Thursday’s Bloomberg Financial Innovation Summit, where the topic came up again and again. Bitcoin is eating gold as fast as it can and will over the next two-to-three years replace all gold exchange-traded funds, said MicroStrategy Inc. Chief Executive Officer Michael Saylor. It will also emerge as the primary asset index for the Western world and will eventually replace SPDR S&P 500 ETF Trust, ticker SPY, which is a $425 billion fund that tracks the equity index, he noted.
/jlne.ws/3GVBCcE

The London Stock Exchange is developing a new market solution for the voluntary carbon markets
London Stock Exchange
A new market solution would accelerate the availability of financing for projects that will support a just transition to a low carbon economy; The goal is to address two major challenges: access to capital at scale for the development of new climate projects worldwide; and primary market access to a long-term supply of high-quality carbon credits for corporates and investors; This will enable companies and investors to augment credible net zero transition strategies, by financing additional projects to offset unavoidable carbon emissions during their path to net zero; Potential to benefit economies in the Global South, a significant source of high-quality carbon credits
As part of our efforts to drive action on climate change, the London Stock Exchange today announces that it is developing a capital markets solution to enhance investment in carbon mitigation projects worldwide.
/jlne.ws/3EQYyIi

Rising Covid infections in Europe spark fears of new wave; WHO says pace of transmission across continent and Central Asia is a ‘grave concern’
Guy Chazan, Leila Abboud and Clive Cookson – FT
Europe is experiencing a surge in coronavirus infections to levels not seen in months, alarming health officials and sparking fears that the continent could be engulfed by a new wave of the pandemic this winter. Hans Kluge, regional head of the World Health Organization, said the pace of transmission across Europe, as well as Central Asia, was a “grave concern”, adding that the region was moving back to the “epicentre” of the health crisis.
/jlne.ws/3ELgBPV

China Bond Market Meltdown Brings World of Hidden Bills to Light
Sofia Horta e Costa – Bloomberg
Developers have issued wealth products, private bonds; Refinancing difficulties make it harder for firms to pay debt
China’s property developers are struggling to pay bills that many of their bond investors didn’t know were there in the first place. Missed payments on off-balance sheet IOUs such as high-yield consumer products, secretive loans and private bond guarantees have rocked China’s credit market in recent weeks. Dollar bondholders are struggling to know their place in the repayment queue in the event of a default, forcing a dramatic repricing of risk that’s all but frozen the primary market for developers.
/jlne.ws/3CToHp6

Should Central Banks Be Responsible for Saving the World? In a time of crisis, three top economists discuss the institutions’ role when it comes to climate, income inequality and everything else.
Michael Sasso and Stephanie Flanders – Bloomberg
As if controlling spiraling inflation wasn’t enough to worry about, the world’s central bankers are under increasing pressure to help solve climate change, income inequality and myriad other societal ills. What’s more, elected officials in some nations are trying to exert more power over bankers for political ends.
/jlne.ws/2YonKGs

Futures standards body seen as first step to utility; FIA project could usher in new hub to connect trading parties and guard against derivatives logjams, experts say
Luke Clancy – Risk.net
An industry utility to ease futures trading and clearing bottlenecks inched closer this week with an initiative from a trade body to set standards for processing listed derivatives, say senior figures in derivatives clearing. The Futures Industry Association issued on November 2 a blueprint for overhauling the way that firms trade futures and options. As part of its proposals, the FIA recommends creating an independent standards body that would develop and oversee a universal set of procedures
/jlne.ws/3q6qbJb

The World’s Addiction to Palm Oil Is Only Getting Worse
Pablo Robles, Anuradha Raghu, Adam Majendie and Jin Wu – Bloomberg
Seventeen climate summits ago, one of the world’s first sustainability efforts in global food production was set up to stop palm oil plantations from destroying the rainforest. Yet more than 80% of the market remains untouched by the effort because no one wants to pay for it.
/jlne.ws/3wiCB1u

Crypto Billionaire-Backed SPAC Listing Plan Sends Monex Limit Up
Go Onomitsu – Bloomberg
Japan online financial firm’s shares jump 20%, most since 2018; To list U.S. unit TradeStation in deal with Novogratz’s Galaxy
Monex Group Inc. surged by its daily limit after the Japanese financial firm announced plans to list its U.S. online trading subsidiary through a deal with Michael Novogratz’s Galaxy Digital Holdings Ltd. In a statement after the market close Thursday, Monex said its wholly-owned unit TradeStation Group Inc. plans to list on the New York Stock Exchange in the first half of 2022 following a merger with Quantum FinTech Acquisition Corp. The deal puts TradeStation at an implied pro forma enterprise value of $1.43 billion at closing.
/jlne.ws/3bG6UG2

How Barclays And Jes Staley Are Navigating Delayed Impact Of The Jeffrey Epstein Scandal
Edward Segal – Forbes
The resignation earlier this week of Jes Staley as CEO of Barclays Bank—apparently because of issues related to his ties with the late convicted sex offender Jeffrey Epstein—made international headlines. For business leaders, Staley’s sudden departure and the still unfolding story behind it could prompt concerns and questions about issues in their own pasts that, though assumed are dead and buried, could unexpectedly come back to life.
/jlne.ws/3GUjfEP

Coronavirus

Pfizer Develops Covid Pill That Cuts Hospitalizations and Deaths by 89%
Robert Langreth – Bloomberg
Drug reduced Covid hospitalizations by 89% in clinical trial; Pfizer shares surge 11%; Merck pill awaiting U.S. approval
Pfizer Inc. said its Covid-19 pill reduced hospitalizations and deaths in high-risk patients by 89%, a result that has the potential to upend how the disease caused by the coronavirus is treated and alter the course of the pandemic. The shares surged 11%.
/jlne.ws/3mKrStF

Pfizer’s Covid antiviral pill slashes hospitalisation risk, trial shows; Pharmaceutical group says results of study on Paxlovid ‘a real game-changer’ in fight against pandemic
Hannah Kuchler – FT
Pfizer’s Covid-19 oral antiviral drug cut the risk of hospitalisation or death by 89 per cent in a late-stage trial, creating a potential new tool in treating patients and combating the pandemic.
/jlne.ws/31olekq

Pfizer Says Covid-19 Pill Is 89% Effective in Preliminary Assessment; Drug company plans to seek FDA authorization of treatment for patients with a mild to moderate form of the illness
Jared S. Hopkins – WSJ
Pfizer Inc. PFE -1.31% said a preliminary look at study results indicated that its experimental pill was highly effective at preventing people at high risk of severe Covid-19 from needing hospitalization or dying, the latest encouraging performance for an early virus treatment.
/jlne.ws/3000Kyc

German Cases Hit Fresh Record as Fourth Wave Spreads in Europe
Iain Rogers – Bloomberg
Infections threaten to overwhelm hospitals in some hotspots; Health ministers to agree on widening access to booster shots
Germany reported record Covid-19 infections for a second straight day, as a fourth wave of the pandemic hits Europe and threatens to overwhelm hospitals in some hot spots. Cases increased by 37,120 on Thursday, while the seven-day incidence rate climbed to 169.9, exceeding the peak reached during the third wave in the spring, according to the latest data from the RKI public-health institute.
/jlne.ws/3BIipr7

Covid Drugs Will Change the Way We Live With the Virus; Good news about at-home Covid treatments from Merck and Pfizer offer some hope as infections surge again.
Therese Raphael – Bloomberg
The U.K. was the first country to approve a Covid-19 vaccine; it has now become the first to approve an at-home treatment for Covid. On Thursday, the medicines regulator, MHRA, green-lit the antiviral drug molnupiravir, produced by Ridgeback Biotherapeutics and Merck & Co. and shown in trials to halve the risk of hospitalization or death in those with mild to moderate disease.
/jlne.ws/3mO2XFw

Oxford Scientists Find Gene That Doubles Risk of Dying From Covid-19
Suzi Ring – Bloomberg
Gene prevents the lungs from responding to the virus properly; About 60% of people with South Asian ancestry have gene
Scientists identified a specific gene that doubles the risk of respiratory failure from Covid-19 and may go some way to explaining why some ethnic groups are more susceptible to severe disease than others.
/jlne.ws/3BSu5Y5

Japan Eases Many Covid-Era Border Restrictions as Cases Slump
Lisa Du – Bloomberg
Japan announced a broad easing of Covid-era border control measures that will relax restrictions for visitors such as students and those traveling for business, seeking to reopen the economy after a dramatic drop in virus cases and a vaccination campaign that’s inoculated more than 70% of the population.
/jlne.ws/301hB3F

Breaking Down the Biden Vaccine Mandate; New details have clarified the forthcoming requirements — and prompted questions and concerns.
Andrew Ross Sorkin, Jason Karaian, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
It’s official.
The Biden administration yesterday set Jan. 4 as the deadline for large companies to mandate coronavirus vaccinations or start weekly testing for their workers. The rule is expected to cover 84 million workers, roughly 31 million of whom are unvaccinated.
/jlne.ws/3mLeaqi

Exchanges, OTC and Clearing

Google strikes $1bn ‘cloud’ deal with exchange operator CME Group; CME plans to accelerate shift of trading systems into Google data centres under 10-year pact
Nicholas Megaw – FT
Google has invested $1bn in CME Group as part of a pact that will see one of the world’s biggest exchange operators shift more of its trading operations into the Silicon Valley tech behemoth’s “cloud” data centres.
/jlne.ws/3k8UIlK

Google invests $1 billion into CME Group as the two strike 10-year cloud deal; The two organisations will look to deliver expanded access, new products, and more efficiencies for all market participants.
Jon Watkins – The Trade
CME Group and Google Cloud have signed a 10-year strategic partnership to accelerate the exchange operator’s move to the cloud, in a bid to transform how global derivatives markets operate with technology. Alongside the agreement, Google has also made a $1 billion equity investment in a new series of non-voting convertible preferred stock of CME Group.
/jlne.ws/3EOzLo1

CME Group Signs 10-Year Partnership with Google Cloud to Transform Global Derivatives Markets Through Cloud Adoption; Companies to co-innovate to deliver expanded access, new products, and more efficiencies for all market participants; Google also makes $1B equity investment in CME Group
CME Group
CME Group and Google Cloud today announced a 10-year strategic partnership to accelerate CME Group’s move to the cloud and transform how global derivatives markets operate with technology.
/jlne.ws/301nZrF

Eurex to partner with various banks to strengthen its USD clearing services; The new service targets EU-based clients who are increasingly demanding additional currencies.
Wesley Bray – The Trade
Eurex is partnering with various banks to strengthen its USD clearing services, an important step into the USD swap market. Deutsche Bank, JP Morgan and LBBW are amongst the first banks to provide electronic Eurex USD prices on Tradeweb’s interest rate swaps platform, with more banks expected to start streaming in the near future.
/jlne.ws/3ELK7Vz

Cboe expands into fixed income US treasuries with interdealer trading platform; The new dealer-to-dealer electronic trading platform for on-the-run Treasuries expected to launch in the second quarter next year will be Cboe’s first cash US fixed income product.
Annabel Smith – The Trade
Cboe Global Markets has set out plans to move into the fixed income markets with the launch of a new US Treasuries trading platform. Due to launch next year, the dealer-to-dealer electronic trading platform for on-the-run US treasuries will be Cboe’s first ever US cash fixed income product and is designed to enable dealers to more efficiently source liquidity and trade in size while minimising market impact.
/jlne.ws/3kbckNY

MotorK lists on Euronext Amsterdam
Euronext
Successful private placement of EUR75 million, implying a market capitalisation of EUR261 million;172nd company listed on Euronext markets and 20th listing on Euronext Amsterdam in 2021
Amsterdam – 5 November 2021 – Euronext today congratulates MotorK Plc (together with its subsidiaries and affiliates, “MotorK”), a leading software-as-a-service (“SaaS”) provider for the automotive retail industry in the EMEA region, on its listing on Euronext Amsterdam (ticker code: MTRK). It is the 172nd listing on the Euronext markets in 2021, and the 20th for Euronext Amsterdam this year.
/jlne.ws/3qf8Lu1

Euronext publishes Q3 2021 results; Strong revenue growth, driven by double digit organic growth in listing, trading and clearing activities, and significant contribution of the Borsa Italiana Group.
Euronext
Euronext, the leading pan-European market infrastructure, today publishes its results for the third quarter of 2021. Revenue and income at EUR350.6 million (+EUR145.8 million, +71.2%, +10.2% like-for-like[1]): Borsa Italiana Group contributed EUR121.1 million to revenue for full quarter of consolidation.
/jlne.ws/3bH5ESV

Euro Fixed Income Futures: Definition of reporting and position limits for December 2021
Eurex
Position limits apply only to long positions in the front month contracts of the products concerned. Reporting limits will be valid from 30 November 2021 after close of trading until 3 December 2021 after close of trading. Position limits will be valid from 6 December 2021, start of trading, until expiration of the December contract on 8 December 2021. Long positions in December 2021 contracts must therefore be within the prescribed limits at start of trading on 6 December 2021.
/jlne.ws/3o18fNl

Eurex takes important step into USD swap market; Three banks streaming Eurex USD swap prices on Tradeweb; The service targets EU based clients
Eurex
Eurex is partnering with several banks to strengthen its USD clearing services. Deutsche Bank, J.P. Morgan, and LBBW are now the first movers providing electronic Eurex USD prices on Tradeweb’s interest rate swaps platform, with further banks preparing to start streaming soon. This is in addition to the already established request for quote and voice market for Eurex USD swap prices.
/jlne.ws/2ZWCKMo

HKEX Supports Growth of Asian Startups; Asian startups are warmly invited to Strike the Gong ! to close HKEX’s markets in celebration of their successes; HKEX is committed to building an inclusive ecosystem for the companies of the future
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Friday) pleased to announce that it will welcome applications from Asian innovative companies and successful start-ups to come and Strike The Gong ! Companies based in Asia-Pacific can apply to take part in a bespoke Market Closing Ceremony to celebrate their achievements, following completion of significant fundraising or fundraising rounds. Applications can be made via the general HKEX enquiries line or directly, through HKEX’s Global Issuer Services team.
/jlne.ws/3ELlkkD

ICE to Launch its First Nature-Based Solutions Carbon Credit Futures Contract
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that it plans to launch its first Nature-Based Solutions (NBS) carbon credit futures contract. Subject to regulatory approvals, the new futures contract is expected to launch in the first quarter of 2022. It will be traded and cleared by ICE in London and will physically deliver credits certified under Verra’s Verified Carbon Standard (VCS) and Climate, Community and Biodiversity (CCB) Standards Programs. Each futures contract will be equal to 1,000 eligible VCS credits with each credit equivalent to one metric ton of greenhouse gas emissions.
/jlne.ws/2ZTUnwx

NYSE Pillar Options Migration: Additional Pillar Enhancements
NYEX
As part of NYSE Arca Options’ migration to NYSE Pillar, we will be including additional features for the launch beginning on February 7th, pending regulatory approval.
/jlne.ws/2ZYYtTO

Miami International Holdings Reports October 2021 Trading Results; Miax Pearl Sets Market Share and Volume Records; Spikes Volume Reaches Record Levels
MIAX
/jlne.ws/3ymBkH1

Zener makes its market debut with a commercial paper programme in MARF
BME-X
BME’s Fixed Income Market, MARF, has admitted the first commercial paper (CP) programme to trading from Zener-Encitel. This programme will allow Zener flexibly to access qualified investors to diversify its financing sources and place CPs up to a maximum outstanding balance of 50 million euros. The securities issued will have a nominal value per unit of 100,000 euros with maturity terms ranging from three days to two years.
/jlne.ws/3nZyUKy

Revisions of Guidebooks for JPX-Nikkei Index 400 and JPX-Nikkei Mid and Small Cap Index
JPX
Tokyo Stock Exchange, Inc. and Nikkei Inc. have carefully considered revisions of guidebooks for JPX-Nikkei Index 400 and JPX-Nikkei Mid and Small Cap Index, taking into account feedback from market users gathered through the Index Consultation process. As a result, Tokyo Stock Exchange, Inc. and Nikkei Inc. have decided to implement the revision as following.
/jlne.ws/2ZZ3gEM

Fintech

Stable named FIA Innovator of the Year; X-Margin is the runner-up and Databento wins the People’s Choice Awards
FIA
FIA announced today the results of its annual pitch competition for fintech startups. Stable has been named the FIA Innovator of the Year, X-Margin was named the runner-up, and Databento won the People’s Choice Award.
These three companies were among the eight startups participating in the annual Innovators Pavilion at the FIA Expo, an award-winning showcase for fintech startups that is designed to support innovation in the derivatives industry. More than two dozen applications for places in the Pavilion were reviewed by a selection committee comprised of experts from banks, trading firms and venture capital firms.
/jlne.ws/2YiX4qq

Blockchain.com Hires Deutsche Bank Executive as First Compliance Chief; The appointment of CJ Rinaldi comes as the firm continues to expand and seeks to develop legal frameworks for its business
Mengqi Sun – WSJ
Blockchain.com Inc., which provides a variety of cryptocurrency services to individual investors and institutional clients, has hired its first chief compliance officer as it looks to keep up with rapid growth while developing legal frameworks for its business.
/jlne.ws/3GRgYKx

Cybersecurity

Soaring cost of cyber protection lifts commercial insurers; Beazley and Hiscox report further rises for cover to counter threat of ransomware attacks
Ian Smith – FT
The surging cost of cyber protection is buoying commercial insurers and powering a persistent upswing in broader insurance prices, as the industry continues to reprice the risk of ransomware attacks.
/jlne.ws/3EOx7Pi

Cybersecurity Companies Are Raking in Millions. Many Don’t Turn Profits.
David Uberti and James Rundle – WSJ
Mark McClain, chief executive of cybersecurity firm SailPoint Technologies Holdings Inc., has what he calls an old-school mind-set: Companies can’t lose money forever.
But even though his business is unprofitable, like many in the sector, that hasn’t put off investors. Share prices of most publicly traded cybersecurity companies have shot up during the coronavirus pandemic.
/jlne.ws/3nZqcfk

Industry pushes back on federal, congressional cybersecurity mandate efforts
Maggie Miller – The Hill
Officials representing key transportation sectors including rail and aviation on Thursday made clear that proposed cybersecurity reporting mandates and other federal cyber efforts aimed at beefing up security are not what is needed to defend against increasing attacks.
Their concerns were voiced as the Transportation Security Administration (TSA) is working to develop and roll out security directives for the rail and aviation sectors that would lay down timelines for required reporting of cyber incidents, among other security steps.
/jlne.ws/3ETl0Ax

Federal Cybersecurity Directive Spotlights Aging Computer Systems; Outdated equipment, talent shortages have complicated efforts to address vulnerabilities
Angus Loten and Isabelle Bousquette – WSJ
Many of the cybersecurity gaps outlined in a new White House directive that calls on federal agencies to patch hundreds of online vulnerabilities stem from the government’s aging computer systems, current and former federal tech chiefs, lawmakers and industry analysts say.
/jlne.ws/3k8VBL6

SEC to ‘dig deeper’ in cybersecurity enforcement
Jim Tyson – CFO Dive
Ablaev was an investigator in enforcement against Pearson, a London-based provider of educational publishing, which agreed to pay $1 million to settle charges that it misled investors about a 2018 cyber attack. Hackers stole millions of records, including birth dates and email addresses, the SEC said in August.
Ablaev was also involved in recent SEC enforcement against eight broker-dealers and/or investment advisors that will pay penalties for cybersecurity failures after hackers took over email accounts and gained access to the personal information of thousands of customers.
/jlne.ws/3BOKexG

SEC cyber chief warns the agency is ‘very focused’ on policing crypto exchanges
Chris Matthews – MarketWatch
SEC cyber chief warns the agency is ‘very focused’ on policing crypto exchanges
The crypto industry may want to prepare for tough oversight of digital asset exchanges, including new enforcement actions against those that sell crypto tokens that are securities under federal law.
/jlne.ws/3GTxz0n

Cryptocurrencies

Cryptocurrencies should not be viewed as their own asset class and should be evaluated individually, an SEC director says
Isabelle Lee – Bloomberg
Cryptocurrencies should not be viewed as their own asset class and should be evaluated individually, according to Valerie Szczepanik, director of the US Securities and Exchange Commission’s Strategic Hub for Innovation and Financial Technology. “It may be a misnomer to say that digital assets are an asset class,” she said during a conference organized by Chainalysis in New York Thursday. “I think a digital asset is a representation of value, and you have to figure out what that value is.”
/jlne.ws/2ZXuWcL

ECB’s Panetta Says Digital Euro to Be Attractive, Not Redundant
Carolynn Look – Bloomberg
Bank examining broad range of policy, legal, design questions; Cautions that project’s success shouldn’t be taken for granted
The European Central Bank will ensure its digital euro is attractive enough for users so it won’t be swept aside by other private means of payment, Executive Board member Fabio Panetta said.
/jlne.ws/3CNqRGU

Specialist Asset Manager Modular Tackles ESG Strategy for Crypto
Joanna Ossinger – Bloomberg
Modular partners with Lightbulb Capital to develop framework; Firm seeks to integrate ESG metrics into crypto investing
Modular Asset Management is developing an environmental, social and governance framework for investing in cryptocurrencies, an asset class that often runs into trouble on all three counts.
/jlne.ws/3nXGKo0

Ethereum booms on NFT interest, crypto investors hunting ‘metaverse money’
David Hollerith – Yahoo Finance
Ethereum (ETH-USD) set a new record high for yet another consecutive day on Thursday, riding at least two macro themes entrenching themselves within the cryptocurrency sector. The second-largest cryptocurrency traded above $4600 before paring those gains, but has logged record highs over the past week — thanks in part to the rising popularity of non-fungible tokens (NFT) and Decentralized Finance (DeFi) projects. Over the last year, ether has outperformed bitcoin, gaining more than 1025%.
/jlne.ws/3GW6kT1

Novogratz’s Galaxy Assets Surge as Canadian Ether ETF Booms
Katie Greifeld – Bloomberg
Crypto billionaire Michael Novogratz’s Galaxy Digital Holdings Ltd. saw its biggest cash influx ever last month as Bitcoin and Ether marched to all-time highs.
/jlne.ws/3kbHIMh

Politics

New York Mayor-elect Adams says he will take his first three paychecks in bitcoin
Reuters
New York Mayor-elect Eric Adams said on Thursday he would take his first three paychecks in bitcoin and signaled his intention to make his city the “center of the cryptocurrency industry” after he takes office in January.
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Everything Keeps Coming Up Roses for the $200,000 to $500,000 Set; The HENRYs — high earners, not rich yet — were treated well by the 2017 tax bill, and SALT repeal could deliver them another big financial boost.
Justin Fox – Bloomberg
When the Tax Cuts and Jobs Act of 2017 took effect in 2018, with its $10,000 cap on state and local tax deductions, residents of Democrat Josh Gottheimer’s affluent, high-property-tax Northern New Jersey Congressional district feared big hikes in what they owed the government. Once 2018’s federal income taxes were all paid and tallied, though, members of every income group in the district ended up paying less on average than they had for 2017 (this was even true of those with incomes of less than $1, whom I left off the chart because their negative tax rates made it hard to read).
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Sweden’s Next Likely Leader Takes Dig at ‘Grinning’ Bankers
Niclas Rolander – Bloomberg
The woman most likely to become Sweden’s next prime minister began her tenure as leader of the ruling party by taking a dig at Wall Street bankers. In her first speech to the Social Democratic Party after her election, Magdalena Andersson recalled encounters with “grinning bankers” who said her country’s welfare model was doomed after Sweden’s financial crisis in the 1990s.
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Toomey vows fix to ‘badly flawed’ cryptocurrency broker plan in infrastructure bill
Jennifer Schonberger – Yahoo News
Senator Pat Toomey, ranking member of the Senate Banking Committee, says he’s prepared to fix the broad definition of a cryptocurrency broker that’s contained within the Biden administration’s infrastructure bill bogged down in Congress.
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Regulation

ASIC and ATO engage with directors as part of ASIC’s Phoenix Surveillance Campaign
ASiC
Between 1 July 2020 to 30 June 2021, ASIC and the ATO conducted 21 joint engagement consultations with directors of selected companies. These engagements form part of ASIC’s Phoenix Surveillance Campaign, which aims to proactively deter and prevent company directors from engaging in illegal phoenix activity. ASIC, in collaboration with the ATO, engage with company directors to remind them of their director duties, discuss their taxation obligations, and encourage them to seek professional and reputable business advice early if they are experiencing financial distress.
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SEC Updates Electronic Filing Requirements; Amendments Will Help Modernize Manner in Which Information Is Submitted to Commission
SEC
The Securities and Exchange Commission today published proposed amendments to update electronic filing requirements. The SEC currently permits and sometimes requires certain forms to be filed or submitted in paper format. The proposed rule and form amendments would require certain forms to be filed or submitted electronically. The proposed amendments also would make technical amendments to certain forms to require structured data reporting and remove outdated references. The amendments are intended to promote efficiency, transparency, and operational resiliency by modernizing the manner in which information is submitted to the Commission and disclosed. Furthermore, publicly filed electronic submissions would be more readily accessible to the public and would be available on our website in easily searchable formats, which benefits both investors and the broader public.
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SEC Obtains Emergency Relief in Case Charging Claims Aggregator and Principals with Multi-Million Dollar Fraud
SEC
The Securities and Exchange Commission today announced it charged a New Jersey “claims aggregator” – a firm that submits claims on behalf of its clients to administrators tasked with returning settlement funds to harmed investors – and its three principals with defrauding distribution funds established to return money to securities fraud victims in a multi-year scheme that yielded millions of dollars.
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ESMA highlights its contribution to a more sustainable financial system
ESMA
The European Securities and Markets Authority, the EU’s securities markets regulator, is committed to contributing to a more sustainable financial system, as part of the European Green Deal and global efforts to deliver on the United Nations’ COP26 objectives on combatting climate change.
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FCA confirms plans to protect new funeral plan customers from July 2022
UK FCA
Once pre-paid funeral plans come under our regulation next July, customers will be protected if their authorised plan provider fails.
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Investing and Trading

Mystery of China’s Huge Dollar Surplus Baffles Global Markets
Enda Curran – Bloomberg
Bumper exports and investor inflows pump dollars into China; Analysts say it’s unclear where those dollars are being parked
Unprecedented trade surpluses and record inflows into its bond market are giving China a stockpile of dollars unseen since the days when the ‘Asian savings glut’ was blamed for keeping U.S. interest rates excessively low and fueling the sub-prime mortgage crisis.
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The Power Grid Is Just Another Casino for Energy Traders; When GreenHat Energy collapsed after blowing millions speculating on power prices, it became plain: Energy traders are essentially gambling, and ratepayers back every bet.
David Kocieniewski, Naureen S Malik – Bloomberg
One morning in January, Andrew Kittell climbed into his gray Toyota pickup and drove to the top of the San Diego-Coronado Bay Bridge. He parked in the service lane and got out, leaving his driver’s license in the car. He walked toward the railing.
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The end of the bond market bull run; Central banks have begun the slow process of normalising monetary policy
The editorial board – FT
For more than 40 years betting on developed-country sovereign bonds has required following one simple rule: rates will go lower. US 10-year Treasury yields peaked at around 16 per cent in 1981 and have, with only brief interruptions, been steadily falling ever since, reaching close to 0.5 per cent during the most acute phase of the pandemic. Bond prices rise as yields fall, and so the decline in long-term interest rates delivered a substantial windfall to bondholders.
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Nitrogen fertilizer shortage threatens to cut global crop yields -CF Industries
Rod Nickel – Reuters
A shortage of nitrogen fertilizer due to soaring natural gas prices is threatening to reduce global crop yields next year, CF Industries, a major producer of the crop nutrient, said on Thursday.
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Environmental, Social and Corporate Governance

Tricky Talks on Carbon Markets; Thunberg Fed Up: COP26 Update
Bloomberg News
Energy Day at COP26 produced a couple of deals meant to phase out fossil fuels and bring in clean energy. But the agreements — crafted as part of the U.K.’s effort to “consign coal to history” — were soon looking a bit thin.
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BNY Mellon cuts ties with controversial Adani coal mine; Bank says business ‘is not aligned with ESG principles’
Owen Walker – FT
BNY Mellon has cut ties with one of the world’s most controversial coal mines, after Financial Times reporting revealed the bank’s Australian subsidiary was preparing to help with the financing of the Carmichael project in Queensland.
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Regions

Millions of UK retirement savers blocked from accessing pensions at 55; Treasury in surprise closure of window for savers to beat two-year rise in minimum age for eligibility
Josephine Cumbo – FT
Millions of UK retirement savers will be blocked from taking action to preserve access to their pensions at age 55 under a dramatic overnight move by the Treasury.
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