Exchange Leaders Take Stock of COVID-19 Volatility
SEC’s New Market Data Rules Debated
Suzanne Cosgrove – JLN
Executives from the New York Stock Exchange, Nasdaq and Cboe Global Markets, in a Tuesday webinar titled, “Equity Markets and the COVID-19 Pandemic,” mostly breathed a collective sigh of relief at surviving the storm.
The online event was sponsored by BakerHostetler and the Equity Markets Association.
During an unprecedented period of uncertainty, “Markets were part of the solution,” said Tal Cohen, executive vice president and head of North American Markets at Nasdaq. “Unlike in 2008 and 2009, when they were part of the problem,” he added.
During the COVID-19 crisis, markets “were taken to the edge, but they performed well,” Cohen said.
“Having a clear idea of the limit-up and limit-down rules prevented the need for improvisation during the crisis,” said Michael Blaugrund, NYSE’s chief operating officer. In addition, he said work done for the Securities and Exchange Commission’s Reg SCI, adopted in 2014, helped institutionalize exchange preparedness and “likely could be extended even more broadly across the industry.”
To read the rest of this story, go here.
Hits & Takes
By JLN Staff
Ed Tilly and his team at Cboe Global Markets have done it again, buying one of the leading data firms in the markets, Henry Schwartz’s Trade Alert LLC, which happens to be a sponsor of JLN. They are starting to rival ICE’s Jeff Sprecher for having bought the most onetime JLN and MarketsWiki sponsors. To combat this purchasing of JLN and MarketsWiki sponsors, JLN is starting its own data firm in the hopes it will get purchased. Right now it just counts the number of former sponsors that have been bought, but we are working on it.
Trade Alert LLC, now a Cboe Global Markets Company, provides software and services focused on the synthesis and distribution of securities market intelligence to financial professionals. They are some very good data geeks. Cboe had previously bought Hanweck Associates, also a group of very good data geeks.
Richard Sandor’s AFX received a shot in the arm from Chairman of the Federal Reserve Jerome Powell, who when responding to a letter from Sen. Tom Cotton mentioned Ameribor as an alternative to LIBOR and SOFR. This is from a press release from AFX:
Chairman Powell went on to state for the record: “Ameribor is a reference rate created by the American Financial Exchange based on a cohesive and well-defined market that meets the International Organization of Securities Commission’s (IOSCO) principles for financial benchmarks. While [Ameribor] is a fully appropriate rate for the banks that fund themselves through the American Financial Exchange (AFX) or for other similar institutions for whom Ameribor may reflect their cost of funding, it may not be a natural fit for many market participants.”
Futures For Kids announced that by the close on 24th May, over 150 people joined in the virtual sporting event as competitors and donors across the UK, Europe, Singapore, Australia and several locations in the US – making this a truly global event. Through all the efforts of the ‘athletes’ and donors, FFK raised just over £37,000 to date.
Thank you to those who sent me notes about my comments yesterday about the U.S. Constitution and the events of Monday in Washington, DC near St. John’s Epispocal Church. Thank you also to those of you who don’t share my views for your restraint.
We had peaceful protests in my city (Elmhurst, IL) yesterday, though the downtown businesses prepared for violence and looting by boarding up their storefronts. It looked like a town ready for a hurricane. However, all the protests happened without incident.
I hope you all stay safe.~JJL
In the midst of the unrest surging across the world due to the murder of George Floyd, I – like many of you reading this – have been looking for a way to help this country change for the better. If you share my interest, I’d like to use this space to share links to a couple of organizations that do fantastic work, both of which are accepting donations. The Baltimore Action Legal Team was founded after the Baltimore Riots in 2015 to fight racial injustice by providing legal and educational services to its community. The NAACP Legal Defense and Educational Fund, Inc. does similar work, but at a national level. Also, late night talk show host Conan O’Brien recently interviewed CNN’s Van Jones, asking him to share his thoughts about George Floyd and racial injustice. O’Brien repeatedly stated that he did not think it was his place, as a white man, to dominate a discussion about violence against people of color. Regardless of how you feel about O’Brien or Jones, deliberately handing off the mic to a person of color to talk about their experiences is a powerfully positive gesture, one that I think all of us should consider emulating.~MR
World Economic Forum Still to Hold Davos Meeting in January
Simon Kennedy – Bloomberg
The World Economic Forum still plans to hold some form of gathering of business and financial titans in the Swiss town of Davos next January.
*****Word is they will let mere “millionaires” attend this year.~JJL
London Luxury House Prices Plunge Most Since Financial Crisis
Jack Sidders – Bloomberg
Prime properties in central city now down 5% over past year; Knight Frank says market feels similar to post-EU referendum
Home prices in London’s wealthiest districts fell the most since the global financial crisis in April as sellers agreed to wider discounts to secure deals.
******Panicking Russians? ~JJL
Tensions mar Paris protest as Floyd outrage goes global
Sylvie Corget, Nicolas Garriga – AP
Tear gas choked Paris streets as riot police faced off with protesters setting fires Tuesday amid growing global outrage over George Floyd’s death in the United States, racial injustice and heavy-handed police tactics around the world.
*****There are protests all over the world. Pay attention.~JJL
Tuesday’s Top Three
Our top story Tuesday was George F. Will’s commentary in the Washington Post, Trump must be removed. So must his congressional enablers. Second was the NFA enforcement actions against York Business Associates, Infinity Futures et al. Third was JLN’s article, Burton-Taylor Finds U.S. Futures Dominate, about what went into making the Intercontinental Exchange and CME Group the two largest exchange operators in the world.
178,515,784 pages viewed; 24,143 pages; 224,363 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
1,392 pages; 12,332 edits
Cboe adds real-time trade alerts and data with latest acquisition; Exchange group Cboe has acquired New York-based Trade Alert to expand information services division in latest takeover.
Hayley McDowell – The Trade
Cboe Global Markets has acquired a real-time alerts and order analysis services provider, which will be integrated across its suite of products within the information solutions division. New York-based Trade Alert was founded in 2005 and provides clients with real-time notifications of market activity and order flow dynamics by combining its software and system architecture with market metrics and computing power.
The women shaking up wealth management; Three female leaders take strikingly different approaches to managing money
Madison Darbyshire – FT
When Charlotte Ransom retired from her career in wealth management at Goldman Sachs, she had a problem. After years working with institutional and private clients, including 10 years as a partner at Goldman, she knew too much about the wealth management industry and its high fees to hand over control of her own hard-earned assets.
In Russia, World-Beating Trading Day Is About to Get Longer
Anna Baraulina – Bloomberg
Moscow Exchange is extending trading to just before midnight; The stock market hopes to cash in on a retail investor boom
The Moscow Exchange, which already boasts one of the longest trading days in the world, will soon let clients trade stocks until just before midnight as it seeks to cash in on a boom in retail investors. The Russian bourse is extending its equities session by nearly five hours in the evening, bucking a European trend toward shorter days. Professional bodies in Europe have proposed reducing market hours, an idea widely backed by traders.
China Is Getting Its Hooks Deeper Into Middle East Oil Supplies
Anthony Di Paola, Julian Lee, and Brian Wingfield – Bloomberg
Saudi Arabia and Iraq send greater proportion of oil to China; Producer cuts have reduced exports to other nations sharply
China is an ever-more important customer for Middle Eastern oil producers as they scramble to find buyers in the wake of the coronavirus.
The Buy-Side Trader Is Getting Outsourced in Coronavirus Crisis
Justina Lee – Bloomberg
Outsourcing firms report jump in revenue as volumes surge; New clients signing up for back-up plan in case of disruptions
A once-in-century disruption to securities trading is intensifying a revolution in how some investment firms conduct business.
Finance giants need 13 million square feet of extra office space for staff’s safe return to work
Emily Horton – Financial news
For financial executives who thought the post-coronavirus world would involve smaller, cheaper offices: think again.
Groups condemn detainment of journalists in Atlanta protests
Journalism organizations are condemning authorities’ detainment of two journalists who were covering protests in Atlanta. The Georgia chapter of the Society of Professional Journalists said in a news release that one journalist was detained Sunday and another on Monday covering protests and unrest that has followed the death of George Floyd in Minneapolis. Both were quickly released without charges.
Religious Leaders Say They Were Tear-Gassed For Trump’s Church Photo-Op
Carol Kuruvilla – Huffington Post
President Donald Trump on Monday reportedly used federal police to tear-gas Christian faith leaders, along with hundreds of peaceful protesters gathered to demand an end to police brutality against Black Americans.
Japan Warns Its Banks About Risky U.S. Debt; Country holds nearly 20% of $750 billion market in packaged corporate loans, exposing it to pandemic-related losses
Megumi Fujikawa – WSJ
Japanese regulators have warned the nation’s banks for the first time about the risk of investing in overseas securitized corporate loans, which have run into trouble from a wave of U.S. bankruptcies.
BNP Paribas gains execution services head from Deutsche Bank deal; Brian Fagen had previously spent nine years with Deutsche Bank, and recently joined BNP Paribas following the substantial prime brokerage deal between both banks.
Hayley McDowell – The Trade
BNP Paribas has appointed a new head of execution services who joins the French investment bank following its major deal with Deutsche Bank.
Fed Promised to Buy Bonds but Is Finding Few Takers; Companies are afraid of the stigma of borrowing from a backstop program
Matt Wirz – WSJ
The Federal Reserve thawed credit markets in March by promising a whatever-it-takes program to buy corporate bonds. Ten weeks later, the Fed has yet to buy a single bond.
China Revives London Stock-Listing Program; Beijing approves a plan by China Pacific Insurance, already listed in Shanghai and Hong Kong, to sell securities in London
Joanne Chiu – WSJ
Beijing has approved a Chinese insurer’s plans to sell securities in London, signaling that a tie-up between the U.K. and Shanghai stock markets is no longer on hold.
London Traders Vote to Reduce World’s Longest Trading Hours
Ksenia Galouchko – Bloomberg
Most survey participants favor a 9 a.m. to 4 p.m. trading day; LSE will wait for other European bourses’ consultation results
Most U.K. stock market participants want a reduction in the world’s longest trading hours, which they say can improve liquidity and industry diversity, according to the results of a London Stock Exchange survey.
Talk Series with BIS’s Jaime Cortina
Julie Ros – P&L
Jaime Cortina, Deputy Chief Representative and Regional Head of Treasury and Asset Management at the Bank for International Settlements (BIS) in Mexico City, talked with Julie Ros from the floor of the new BIS Americas dealing room about the BIS’s Innovation 2025 strategy.
Investors Channel Over $150 Billion Into Coronavirus Bonds; Pfizer and Bank of America are among the companies that have tapped investors since February
Anna Hirtenstein – WSJ
The coronavirus pandemic has led to the genesis of a new class of bonds, paving the way for fund managers to springboard from socially responsible investing to putting money toward the health crisis.
How Many U.S. Workers Have Lost Jobs During Coronavirus Pandemic? There Are Several Ways to Count; No matter the measure, Covid-19 and shutdowns led to historically high unemployment and are likely to leave lasting mark on U.S. economy
Eric Morath – WSJ
Friday’s U.S. jobs report from the Labor Department is expected to show U.S. employers shed nearly 30 million positions from payrolls this spring as a result of the coronavirus pandemic and related shutdowns—but that is just one of several varying estimates of job destruction.
The ‘Japan model’ that tackled coronavirus; Cluster control strategy helped but good timing mattered most of all, say experts
Robin Harding – FT
When Shinzo Abe ended a nationwide state of emergency last week with just 16,724 infections and 894 deaths from Covid-19, he could not resist bragging about the “Japan model” for handling coronavirus.
Swedish expert admits country should have had tighter coronavirus controls; Shift comes as Stockholm promises a commission to investigate approach to pandemic
Richard Milne – FT
The architect of Sweden’s controversial lighter lockdown policy for dealing with coronavirus has for the first time conceded the Scandinavian country should have imposed more restrictions to avoid having such a high death toll.
Brazil Reports Record Covid-19 Deaths as Surge Continues
Shannon Sims – Bloomberg
Brazil total cases surpass 555,000; death toll at 31,199; Some states, cities have begun to reopen from lockdowns
Brazil had a record day of Covid-19 deaths as the virus shows no signs of easing in Latin America’s largest economy. The country reported 1,262 new deaths on Tuesday, bringing the number of fatalities to 31,199. There were also 28,936 new reported cases, pushing the country’s total to 555,383, behind only the U.S.
Harvard’s New Era Likely Means Smaller Classes, Deeper Cleaning
Janet Lorin – Bloomberg
Some sports are likely to be canceled, president tells BTV; Changes are coming as school copes with the Covid-19 era
Harvard University is weighing an array of options — from disinfecting classrooms after each session to reducing the number of students sitting in lecture halls — to cope with the coronavirus pandemic when it reopens, said President Lawrence Bacow.
Exchanges, OTC and Clearing
Cboe Global Markets Acquires Trade Alert, Adding Real-time Alerts and Analytics to Information Solutions Offering
Acquisition of Trade Alert expected to provide real – time notifications and client touchpoints, reaching end users with highly curated information, alerts and messaging through Cboe’s own communications pipeline; Service complements earlier Hanweck and FT Options acquisitions, further bolsters Cboe’s diverse suite of information solutions offerings; Deal closed on June 1, 2020
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today announced it has acquired the business of Trade Alert, LLC, a real-time alerts and order flow analysis service provider based in New York.
Intercontinental Exchange Reports May Statistics; Total Open Interest +4% y/y, Energy Open Interest +19%y/y
Intercontinental Exchange, Inc
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported May 2020 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Pilot Test of DLT Information Sharing Platform in the Field of Securities Post-Trade – Selection of Use Cases for Verification
Japan Exchange Group, Inc. (hereinafter “JPX”) and Japan Securities Depository Center, Inc. (hereinafter “JASDEC”) announced today that they have selected three use cases for verification using a DLT test environment developed by JPX-led consortium(*2) in their pilot test project of a DLT information sharing platform in the field of securities post-trade(*1) launched in April 2020.
COVID-19 continues to impact farmer sentiment; majority indicate economic assistance bill necessary
Farmer sentiment improved slightly in May after falling sharply in both March and April, according to the Purdue University/CME Group Ag Economy Barometer. The index was up 7 points from April to a reading of 103, but it remained nearly 40 percent below its all-time high of 168 set in February 2020. The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers and this month’s survey was conducted between May 18-22.
Eurex Exchange Readiness Newsflash | Updates June 2020
With this Newsflash, we would like to draw your attention to to the upcoming publications, events and necessary actions for the ongoing initiatives:
Nodal And IncubEx Expand Environmental Markets With Five New Contracts And Twelve REC Vintage Extensions
Nodal Exchange today launched new North American environmental futures and options contracts on the Oregon Clean Fuels Program and renewable energy certificates (RECs). New extended vintages on twelve previously listed REC contracts were also implemented.
Refinitiv automates access to FX swaps venue with API tool; Forwards Matching API service will increase trading efficiencies with automated access to the Refinitiv Forward Matching MTF.
Kiays Khalil – The Trade
Refinitiv has launched an application programming interface (API) tool to automate access to its FX swaps trading venue for clients, as the market continues to move towards electronification.
Barchart Releases Initial U.S. Yield Forecasts for Corn and Soybeans; cmdty Yield Forecast Indexes predict end of season yield at 172.4 bu/ac for corn and 48.8 bu/ac for soybeans in the U.S
Barchart, a leading provider of data and technology services to the financial, media, and commodity industries, announces their initial cmdty Yield Forecast for end of season yield at 172.4 bu/ac for corn and 48.8 bu/ac for soybeans in the U.S. Released for free to the public on the first Tuesday of each month during the growing season, and available to clients through daily updates, the cmdty Yield Forecast Index series allows users to get insights to guide their business decisions ahead of the USDA’s WASDE report.
Australia seeks to stimulate fintech growth
Michael Tattersall – Business Insider
The initiatives, announced in the last week, should help stimulate the development of Australia’s fintech ecosystem. First, new federal laws that will create a regulatory sandbox have been broadened to include fintechs that distribute insurance services and will come into effect on September 1, per Insurance News.
Latest Satoshi Nakamoto Candidate Buying Bitcoin No Matter What
Olga Kharif – Bloomberg
Adam Back’s name has surfaced again in the crypto community’s favorite guessing game: Who is the anonymous creator of Bitcoin who went by the pseudonym Satoshi Nakamoto. In mid-May, YouTube channel Barely Sociable, with nearly 400,000 subscribers, released a 40-minute video claiming that 49-year-old Back is Satoshi. The video has since raked up nearly 300,000 views.
JPMorgan Chase agrees to $2.5 million settlement in legal fight over crypto purchase transaction fees
Aislinn Keely – The Block
After a two-year-long dispute over allegedly charging crypto purchases as “Cash Advance” transactions without giving cutomers legally-required notice, JPMorgan Chase has agreed to settle with plaintiffs for $2.5 million. The parties filed a request that the court approve the proposed settlement agreement on May 26.
Uptrend in Mainstream Crypto Interest Started Last Fall, MIT Startups Says
Benjamin Pirus – Cointelegraph
Cryptocurrency has seen a rise in mainstream attention starting last fall — before COVID-19 measures took off, according Floating Point Group, or FPG, an algorithmic trading technology startup conceived at MIT. “An increasing portion of our inbound prospects are established industry participants coming from FX, equities and derivatives markets,” FPG co-founder Kevin March told Cointelegraph on May 28 after confirming the presence of increased mainstream crypto trading interest.
Blockchain Media Startup Civil Shuts, Staff to Join ConsenSys
Arnab Shome – Finance Magnates
Civil, a startup decentralizing journalism funding and vetting, has publicly announced the shut down of its operations. The homepage of Civil’s website now features a message from Matthew Iles, CEO of the startup, which was posted on Tuesday. “We built innovative technology, supported award-winning journalists, and inspired many people all over the world with our vision for a more participatory media landscape. But ultimately, we failed to sustain ourselves independently,” Iles wrote.
U.S. customs officials add Venezuela’s cryptocurrency superintendent to Most Wanted list
Michael McSweeney – The Block
The U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations office in New York announced Monday that it had added Venezuela’s cryptocurrency superintendent to its Most Wanted List. Joselit de la Trinidad Ramirez Camacho is accused of “having deep political, social and economic ties to multiple alleged narcotics kingpins.” Ramirez Camacho was one of a group of Venezuelan officials indicted in March alongside the country’s president, Nicolas Maduro.
Hard Fork Sets Stage for Ethereum Classic’s Second Major Departure From Ethereum
William Foxley – Coindesk
Trail partners Ethereum and Ethereum Classic are soon to split ways, highlighted by the latter’s successful “Phoenix” hard fork Sunday night. Executed at block 10,500,839 on May 31, the backwards-incompatible network upgrade makes Ethereum Classic fully compatible with Ethereum. That is, until the larger blockchain swaps its consensus algorithm in a network overhaul known as Eth 2.0 – tentatively scheduled for Q3 2020.
Coinbase cuts rewards on USDC stablecoin holdings by nearly 90%
Yogita Khatri – The Block
Crypto exchange Coinbase has slashed rewards on USDC stablecoin holdings by around 90%. Until now, Coinbase users earned 1.25% annual percentage yield (APY) on their USDC funds. That reward now has been cut to just 0.15% APY, effective today. Coinbase did not specify the rationale behind the move, but the reduction is in line with other major banks and fintech firms.
Open Interest in Ether Options Hits Record High on Deribit
Omkar Godbole – Coindesk
Derivative contracts on ether are more popular than ever, as evidenced by record open positions in options listed on the Panama-based derivatives exchange Deribit. Open interest, or the number of contracts outstanding and not yet liquidated by an offsetting trade, rose to a record high of $136 million on Monday, marking a 460% increase from $24 million seen on March 24, according to data provided by crypto derivatives research firm Skew.
Crypto exchange Coincheck says it suffered a data breach, which may have exposed some users’ personal information
Yogita Khatri – The Block
Japanese cryptocurrency exchange Coincheck announced on Tuesday that it suffered a data breach, which may have leaked users’ emails and personal information. The information includes name, registered address, birth date, phone number, and selfie ID, said Coincheck. The breach affected around 200 customers who made email inquiries from May 31 to June 1, the exchange added.
Caitlin Long’s crypto bank raises $5M led by the University of Wyoming
Celia Wan – The Block
Avanti Financial Group, crypto advocate Caitlin Long’s latest initiative to bank digital asset companies, has closed a $5 million angel round. Announced on Tuesday, the funding round was led by the University of Wyoming Foundation with participation from Morgan Creek Digital, Blockchain Capital, Digital Currency Group, and others.
U.S. Steps Up Sanctions Against Venezuela’s Maritime Oil Trade
Stephen Cunningham – Bloomberg
The Trump administration escalated sanctions against Venezuela’s oil industry, targeting four maritime companies for supporting the “illegitimate” government of President Nicolas Maduro.
The Treasury’s Office of Foreign Assets Control also identified four tankers it said had continued to lift oil cargoes from Venezuelan ports in recent months as blocked property, according to a statement on Tuesday.
Republicans join in backlash over Donald Trump’s tactics; Senators, military and religious leaders criticise use of force against White House demonstrators
Demetri Sevastopulo and Katrina Manson – FT
Donald Trump faced criticism from Republicans and a rare rebuke from a former top military officer after police on Monday used tear gas on peaceful protesters to clear the way for the US president to leave the White House and pose for a photo holding a Bible in front of a nearby church.
Pentagon Distances Its Leaders From Trump’s Threat to Use Military
Travis J Tritten – Bloomberg
Officials say Esper, Milley weren’t aware of church visit; About 2,800 National Guard will be in Washington on Tuesday
Pentagon officials distanced themselves from President Donald Trump’s warning that he could use active-duty military forces to clamp down on protests around the country, saying that it would be better to rely on National Guard for law enforcement where needed.
Trump’s Re-Election Chances Are Dwindling; The president needs to appeal to voters beyond his strongest supporters. He doesn’t seem to be trying very hard.
Jonathan Bernstein – Bloomberg
After a month of bad news, President Donald Trump’s approval ratings have taken another hit. He’s in serious trouble for re-election. Most of the damage is on the disapproval side. On May 1, Trump was at 43.3% approval and 50.7% disapproval, according to the estimate at FiveThirtyEight, which is based on an adjusted average of all the polls out there. Now? Although his approval is down just a bit, to 42.9%, his disapproval is up another three percentage points and sits at 53.6%. Two months ago, Trump was getting his best approval numbers since his brief honeymoon; now, he’s lost all of that and is back to where he’s been for most of the past two years.
The central feature of Trump’s presidency: False claims and disinformation; Will future presidents return to trying to tell the truth?
Glenn Kessler, Salvador Rizzo and
Meg Kelly – Washington Post
For weeks, as the coronavirus silently spread through the United States, President Trump belittled the threat and repeatedly praised China for “transparency” and the World Health Organization for its handling of the outbreak. But when the death toll mounted and the scope of the public health crisis became too difficult to ignore, Trump reversed course.
Boris Johnson Offers 3 Million Hong Kong Residents Haven in U.K.
Tim Ross – Bloomberg
China warns U.K. interference in former colony will ‘backfire’; British policy on China heading for re-set after coronavirus
Prime Minister Boris Johnson said he will give as many as three million Hong Kong residents the chance to seek refuge and a new life in the U.K. if China presses ahead with plans to impose a new security law on the former British colony.
Regulatory Reminder Regarding Obligations Guaranteed by FCMs, FDMs and IBs
On May 27, 2020, the Joint Audit Committee issued a Regulatory Alert to FCMs addressing the net capital treatment of guaranteed obligations and liabilities of subsidiaries or affiliates. Certain CFTC Regulations require the reporting of guaranteed obligations and liabilities of subsidiaries or affiliates in the computation of adjusted net capital. NFA is issuing this Notice to remind Members that these requirements also apply to RFEDs (i.e., FDMs) and IBs.
CFTC Market Risk Advisory Committee’s Interest Rate Benchmark Reform Subcommittee Holds Table Top Discussion and Revises Membership
The Commodity Futures Trading Commission Market Risk Advisory Committee’s (MRAC) Interest Rate Benchmark Reform Subcommittee (Subcommittee) held a virtual table top discussion earlier today regarding CME Clearing (CME) and LCH Limited’s (LCH’s) single-step proposals for the transition of discounting and price alignment interest for certain products to the secured overnight financing rate (SOFR), scheduled for October 2020. CFTC Commissioner Rostin Behnam is the sponsor of MRAC.
CFTC Charges Kentucky Man in Multi-Million Dollar Fraud Scheme
The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the Eastern District of Kentucky against defendant William S. Evans III (d/b/a Turning Point Investments) of Harrodsburg, Kentucky, charging him with fraud in connection with soliciting clients to trade S&P commodity futures contracts and options in a commodity pool while failing to register with the CFTC. The Commission’s action also names Evans’ wife, Frances Evans, as a relief defendant in possession of funds from Evans’ alleged illegal activity. On May 29, 2020, U.S. District Court Judge Claria Horn Boom signed a statutory restraining order freezing the Evanses’ assets and prohibiting the destruction or concealment of their books and records.
CFTC Obtains $700,000 Judgment Against New York Man in Fraud and Misappropriation Scheme
The Commodity Futures Trading Commission today announced that the U.S. District Court for the Southern District of New York entered a consent order for permanent injunction against defendant Eyal Alper of Irvington, New York, in connection with a fraudulent scheme.
Proposed Rule Change to Extend the Implementation of FINRA Rule 4240 (Margin Requirements for Credit Default Swaps)
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend to September 1, 2021 the implementation of FINRA Rule 4240. FINRA Rule 4240 implements an interim pilot program with respect to margin requirements for certain transactions in credit default swaps that are security-based swaps.
Update – FINRA Forms
Update – FINRA Forms Issue (FINRA Order Form, FINRA New Issue Form, FINRA Participant Agreement Form)
FINRA Foundation Announces Annual Research Award Recipients; Studies Advance Understanding of Financial Capability in the United States
The FINRA Investor Education Foundation (FINRA Foundation) recently announced the recipients of its higher-education awards created to recognize outstanding analyses by researchers-in-training who seek to advance understanding of consumer financial wellness and the complex relationships among financial literacy, financial capability and financial well-being.
ESMA updates transparency and position limit opinions for 3rd country venues
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published updated opinions on post-trade transparency and position limits under MiFID II and MiFIR following its assessment of over 200 third-country trading venues (TCTV) against criteria published in opinions in 2017.
ESMA consults on cloud outsourcing guidelines
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a consultation paper on guidelines on outsourcing to cloud service providers.
Directors disqualified for engaging in illegal phoenix activity; Disqualification of Andrew Yiasemides
ASIC has disqualified Mr Andrew Yiasemides of West Gosford, New South Wales, from managing corporations for five years.
Members Equity Bank (ME Bank) redraw issue
Opening statement by Sean Hughes, ASIC Commissioner, at the House of Representatives Standing Committee on Economics (Australia’s four major banks and other financial institutions), 3 June 2020.
Europe May Relax Controversial Free Research Ban to Lift Economy
Silla Brush and Ksenia Galouchko – Bloomberg
MiFID II ‘unbundling’ rule may be loosened for smaller stocks; More coverage for emerging firms desired for post-Covid growth
European policy makers could soften restrictions on research into emerging companies as part of attempts to lift the economy after the coronavirus pandemic.
Autorité Des Marchés Financiers: Measures To Facilitate Career Entry During The COVID-19 Pandemic
The Autorité des marchés financiers (AMF) is implementing temporary exceptional measures to facilitate career entry in the sectors governed by the Act respecting the distribution of financial products and services. These measures will, subject to certain conditions, make it possible for candidates to complete their probationary period prior to passing their exams.
Investing and Trading
Portfolio trading continues to take hold in fixed income markets; As portfolio trading becomes more popular among buy-side traders, research has warned a large portfolio trade could increase risks around the CSDR buy-in regime if a single trade fails.
Hayley McDowell – The Trade
Fixed income traders are increasingly engaging with portfolio trading to manage portfolios, particularly during the recent volatility due to the COVID-19 crisis.
Public equity markets are flagging when we need them the most; Governments should broaden opportunities for people to own stakes in the Covid recovery
Anne Richards – FT
Governments around the world are firing up time machines, pulling years of future growth and spending into the present to plug economic gaps left by the Covid-19 outbreak. France and Germany have proposed a EUR500bn aid package, for example, while in the UK the Office for Budget Responsibility expects the Treasury to need an extra £300bn to keep businesses on life support.
US yield curve steepens as 30-year Treasury falls from favour; Traders eye Fed policy shift, ballooning government spending and stabilising economy
Colby Smith – FT
Long-dated Treasury bonds have lost favour among investors, sending yields to their highest since March, following a jump in borrowing to fund a massive economic stimulus and signs of shifting policy by the Federal Reserve.
First U.S. Gold Coin May Fetch $15 Million in Private Sale
Josh Friedman – Bloomberg
Brasher Doubloon from pre-mint era is an icon of Americana; Washington’s neighbor minted it. Philip Marlowe hunted it.
One of the world’s most coveted coins is coming to the market. The Brasher Doubloon, the first gold coin struck in the U.S., is being offered privately at a $15 million asking price, according to numismatic adviser Jeff Sherid. His firm, Los Angeles-based PCAG Inc., is marketing the coin on behalf of a collector he would only identify as a former Wall Street executive.
The Most Hated Rally in History Just Won’t Stop; This 10-week-old upswing may have already taken the mantle from the post-2009 bull market.
John Authers – Bloomberg
The bull market in stocks that galloped on for a decade after 2009 was widely described as the most hated rally in history. It took many by surprise (myself included), and came even as money flowed into bonds. Stock markets outside the U.S. behaved roughly as they were supposed to do after a big crash, and traded sideways in a wide range for years. In the U.S., they just went upward. In hindsight, many of us badly underestimated the power and determination of the Federal Reserve.
The Other Fossils in the Boardroom; The sustainable revolution hasn’t reached the top levels of the biggest U.S. and European banks.
Saijel Kishan and Andre Tartar – Bloomberg
The world’s largest banks have issued billions in loans to sustainable businesses and taken some steps to restrict funding for some of world’s worst polluters. But the greening of global finance hasn’t reached the boardroom yet.
Green Bond Crisis Premium Theory Debunked by Covid, Manager Says
Alastair Marsh – Bloomberg
Green bonds fared no better than regular debt in the coronavirus-fueled credit rout, confounding a widely held theory that because holders of the debt are motivated by the environmental impact of the securities they may be less prone to losses in a market crash.
World’s Hottest Bond Market Fired by Defiance to Go Sub-Zero
Ruth Carson – Bloomberg
Australia bonds require less ‘leap of faith’ to buy, PGIM says; Aussie-U.S. spread flipped to a premium in March on Fed cuts
One central bank’s refusal to contemplate negative interest rates is helping set it apart from developed peers and stoke interest in its world-beating bond market. The Reserve Bank of Australia’s reluctance to contemplate life below zero is helping draw the likes of PGIM Inc. and JPMorgan Asset Management to the nation’s $482 billion sovereign bond market. Australia’s 10-year bond yield discount to Treasuries flipped to a premium in March as the Federal Reserve slashed borrowing costs, spurring bets U.S. rates would turn negative next year.
Factsheet: Understanding IBOR Benchmark Fallbacks
Benchmark fallbacks are replacement rates that would apply to derivatives trades referencing a particular benchmark. These would take effect if the relevant benchmark becomes unavailable while market participants continue to have exposure to that rate. Specific fallback rates are set out in the 2006 ISDA Definitions. ISDA is working on new robust fallbacks that would apply in the event of a permanent cessation of a key interbank offered rate (IBOR).
Bond Market’s Toughest Problems Go Unresolved; Regulators leave issues of credit-rating conflicts and trade transparency largely untouched.
Brian Chappatta – Bloomberg
The U.S. Securities and Exchange Commission’s Fixed Income Market Structure Advisory Committee met earlier this week by webcast. For those in the bond markets who might have missed it, it’s worthwhile to briefly note the takeaways from the group’s virtual get-together.
Goldman Sachs Names Ross N.Y. Region Head of Wealth Management
Devon Pendleton – Bloomberg
She succeeds Gary Giglio, who’s leaving the bank in July; Nicole Pullen Ross was previously head of Mid-Atlantic region
Goldman Sachs Group Inc. named Nicole Pullen Ross as regional head of the bank’s private wealth-management arm in New York. Ross, 48, joins the New York division from her current role as head of the Mid-Atlantic region, where she has overseen offices in Philadelphia and Washington since 2011. It will be a homecoming of sorts for Ross, who started with Goldman in 1998 and worked as a wealth adviser in the New York office for 13 years.
Billionaire Hintze’s Hedge Fund Rocked by Pandemic Losses
Nishant Kumar and Nabila Ahmed – Bloomberg
Growth ambitions at CQS give way to fight to stem reversals; Hedge fund legend missed market rebound after March plunge
The outsiders that Michael Hintze brought in to his secretive hedge fund firm didn’t last long. Nor did their growth plans. The billionaire’s firm, known as CQS, a bastion of money-making whose flagship fund has returned more than three times the average of hedge fund peers since it opened in 2005, is now headed in reverse.
Deutsche Bank’s Epstein Dealings Under Scrutiny in New York
Greg Farrell and Steven Arons – Bloomberg
State’s banking regulator looking into compliance and controls; New York Times, reporting probe, says action could come soon
New York state regulators are investigating Deutsche Bank AG’s relationship with the disgraced late financier Jeffrey Epstein, adding another compliance issue to a growing list for Chief Executive Officer Christian Sewing.
Japan’s all-male boards face gender reckoning; Hundreds of companies without a female director set for mass AGM-season shaming
Leo Lewis and Kana Inagaki- FT
The all-male boards of hundreds of Japanese companies face a mass shaming this month as investors prepare to vote against the leadership of companies that do not have any female directors.
HSBC’s Top Asia Executive Backs China’s Hong Kong Security Law
HSBC Holdings Plc’s top executive in Asia has come out in support of a controversial national security law drafted by China’s central government for Hong Kong.
Bank executive Peter Wong signed a petition in support of China’s proposed security legislation, according to comments posted on the bank’s official WeChat account.
Nomura reviews scale of operations in Hong Kong; Bank CEO’s comments come as US companies express concern over China’s security law
Leo Lewis – FT
Nomura is “seriously” examining its Greater China strategy and the scale of its operations in Hong Kong as relations between Beijing and the former British colony deteriorate, according to the chief executive of Japan’s largest investment bank.
Bond Traders in Japan Can’t Stop Fretting Over Long-End Supply
Chikafumi Hodo – Bloomberg
Spread between 10-, 30-year JGBs rises above 50 basis points; Steepening bias likely to continue amid supply concern: Kato
Moves in Japanese government bonds are signaling concern among traders about the market’s ability to absorb an increase in supply of longer-dated notes from July.
Turkey’s Hedge Funds Are Latest Casualties of Currency Clampdown
Constantine Courcoulas – Bloomberg
Turkey will no longer allow investors to set up hedge funds that invest primarily in foreign-exchange assets and will start taxing existing ones, the latest measures designed to clamp down on local demand for hard currency.
Brexit is back to rattle UK markets; Tough EU talks add to ‘wall of worries’ facing sterling assets, say analysts
Anna Gross – FT
Having navigated the economic storms inflicted by coronavirus, UK markets are heading for fresh stress over Brexit, warn analysts.
The harder reality gets for Johnson, the tighter he clings to Brexit fantasy
Rafael Behr – The Guardian
Words do not often fail Boris Johnson. They are the tools that built his career, wielded for persuasion and deception, often at the same time. But the gift has deserted him during the pandemic. His performances in parliament are halting and listless. It is a while since he seeded the national conversation with one of his trademark rococo phrases. No “doomsters and gloomsters”, “mutton-headed old mugwump” or “inverted pyramid of piffle”. He had a jaunty metaphor for flattening the peak of infection – “squash the sombrero” – but that was before he caught the disease. Covid-19 drained the colour from the prime minister’s speech as well as his cheeks.
The pandemic is being used as cover for a no-deal Brexit
Mujtaba Rahman – The Guardian
Most of us who have followed Brexit closely believed coronavirus would soften the government’s stance in trade talks with Europe. The economic shock triggered by the pandemic, and the fact Whitehall is so overwhelmed managing it, made it more likely the government would extend the transition period, due to expire at the end of this year, or strike a deal. It turns out that the opposite is true. Rather than encouraging a more flexible and pragmatic approach, Covid-19 has instead reinforced the case for no deal at the very top of government.
(Video) Risk of No-Deal Brexit Is at All-Time High, Says Aviva Investors
“People should be very concerned,” says Peter Fitzgerald, chief investment officer of multi-assets and macro at Aviva Investors. “The risks of a no-deal Brexit are probably higher now than they have been at any other point,” he says on “Bloomberg Markets: European Open.”
A Decade’s Worth of Progress for Working Women Evaporated Overnight; Men have not been spared, but preliminary research suggests women have been impacted disproportionately.
Shelly Banjo – Bloomberg
Ashley Reckdenwald loves her job. But the reality of the pandemic is that someone has to stay home with the kids. Reckdenwald, a physician assistant in Princeton Junction, N.J. is among the 23.5 million working moms with kids under 18 years old that make up almost a third of the female labor force in the U.S. After the pandemic shuttered schools and child-care facilities in March, she faced the painful decision of prioritizing her children over her career.