Cboe Proposes Plan That Could Curb Advantages of Fast Traders

Jul 29, 2020

First Read

Hits & Takes
By John Lothian & JLN Staff

Yesterday I interviewed Chris Hehmeyer for the MarketsWiki Education Open Outcry Traders HIstory Project. He was in our offices with Mike Forrester behind the cameras and I was Zoomed in via an iPod on a stand. Chris has some great stories from the earliest days of the old financial room at the CBOT. He started just before the bonds started trading in 1977.

FT Partners Research has published a 110-page Q2 2020 FinTech Insights report, providing a comprehensive review of global FinTech deal activity with analysis across private company financings, IPOs, and M&A statistics.

NYSE President Stacey Cunningham was on CNBC’s “Squawk Box” yesterday discussing how more companies are going public through SPACs rather than traditional IPOs.

CME Group is looking for an individual with 5-7 years of financial PR, B2B or corporate communications experience to join their team working on some exciting products at CME Group, including equities, crypto, interest rates and treasury products. Contact Chris Grams if you are interested.

The New York Times has an article about the very important subject of how the pandemic is impacting sports betting

Did you know that John Lothian Productions produces animated video? Do you need something to explain your company or services better? Talk to us about how you can use John Lothian Productions to bring some life to your marketing and education efforts.

Are you interested in sponsoring the widely read JLN Weekend Update edition? Talk to me. Let’s make a deal!

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


Our friends at Vela have a new white paper out on “Direct Market Access in the modern financial era.” The paper is from Vela and The Realization Group, with additional research from Acuiti, and asks the question, “How can DMA – operating under a SaaS-based model – allow firms to focus on their core business of trading, rather than the headache of maintaining software and infrastructure?” You can find it on their web site, here. ~SR


Publicly Traded Cannabis Stocks See Volume, Volatility as Sector Matures

Saleem Daya, analyst with Nasdaq IR Intelligence in Toronto, breaks down early 2020 trends in cannabis-related stocks for John Lothian News, and talks about active investors in the space and why some certain stock names have had greater appeal, both in the U.S. and Canada.

Listen »


Ex-Fed Economist Says Her Profession Is Racist, Sexist, Elitist
Michelle Jamrisko – Bloomberg
A former senior Federal Reserve economist levied a broad critique of her profession Wednesday, saying that racism, sexism and elitism have led to toxic work environments and bad policy advice.

*****Well, you can only go up from there.~JJL


Where Is All That Gold Being Stored? A multitude of options, from burying in the backyard to posh steel-lined vaults.
Danielle Braff – NY Times
We’re in the midst of a modern-day gold rush. The precious metal has reached record high prices in recent days. A survey of 1,000 people by Magnify Money found that one out of six have invested in gold or other precious metals since May, and about half of Americans are seriously thinking about buying gold. (This after Gallup reported in April that Americans had cooled somewhat on stocks as a long-term investment.)

*****I have no room for socks in my drawer anymore.~JJL


Russia behind spread of coronavirus disinformation, say US officials; Moscow intelligence services accused of using websites to exploit the crisis ahead of election in America
Russian intelligence services are using a trio of English-language websites to spread disinformation about the coronavirus pandemic, seeking to exploit a crisis that America is struggling to contain ahead of the presidential election in November, US officials said on Tuesday.

*****What we need is more good journalism to sniff this BS out. ~JJL


Stop Trying To Live Like We Aren’t In A Pandemic; As COVID-19 cases surge, many Americans are ignoring health guidelines with beach days and vacations. Pretending the coronavirus crisis doesn’t exist will just stretch it out longer.
Brittany Wong – Huff Post
In the early days of the coronavirus pandemic, many of us had high hopes for the summer: “Maybe by the time the kids are off for summer break, the virus will be under control and we can still go on vacation.” “Maybe the warm weather will drastically slow the spread of COVID-19.”

*****Listen to the headline. And wear your mask.~JJL


Goldman Sachs’ CEO DJ’d a party in the Hamptons that is now under investigation
Matt Egan – CNN
Goldman Sachs CEO David Solomon opened for the Chainsmokers at a benefit concert in the Hamptons last weekend. Now that concert is under investigation after videos showed packed crowds disregarding health guidelines.
New York Governor Andrew Cuomo slammed the drive-in concert in Southampton for “egregious social distancing violations.”

*****Listen to the headline in the previous story.~JJL



Tuesday’s Top Three
Our top story Tuesday was You’d think a volatility index would be doing great now, right? Wrong. from Crain’s Chicago Business, about the Cboe’s second-quarter slump in the trading of its VIX-linked derivatives. Second was a Disruptive Practices Prohibited notice from the CME Group. Third was the Wall Street Journal’s Companies Start to Think Remote Work Isn’t So Great After All.


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Lead Stories

Cboe Proposes Plan That Could Curb Advantages of Fast Traders; Exchange operator aims to bring first periodic auctions to a U.S. stock exchange
Alexander Osipovich – WSJ
Cboe Global Markets Inc. is seeking to introduce a new mechanism on one of its U.S. stock exchanges that could limit the advantages of high-frequency traders over other market participants. The exchange operator is proposing to launch periodic auctions lasting one-tenth of a second, during which buyers and sellers could come together to trade stocks. Such auctions work by aggregating orders to buy and sell stocks into batches and executing them at discrete intervals, rather than allowing orders to be executed continuously throughout the trading day, the standard practice at U.S. exchanges.

Japan’s first integrated stock and commodity futures bourse opens in Osaka
Japan Times
Japan Exchange Group Inc. on Monday began futures trading in commodities including gold at its Osaka Exchange unit, offering the first one-stop trading platform in Japan for financial and commodities futures. Amid sluggish commodity futures trading in Japan, the Osaka Exchange enables combined trading using a single account to provide a more user-friendly service.

Robin Hood Is Pillaging the Sheriffs of BlackRock; Retail investors surprisingly bested institutions during the Covid crisis. They could yet be left holding the baby.
John Authers – Bloomberg
When the chips are down, is institutional money any more patient than the money the rest of us put into the stock market? Over the past few decades, the game has changed. It is no longer about rich individuals investing their own funds for their own benefit, but about big institutions, trading in such a way as to convince people to entrust them with more money. In theory, the institutionalization and professionalization of investing should make for steadier, less excitable markets.

Rosenblatt survey highlights buy-side disconnect with changes to MiFID II; ESMA has made several recommendations in its report on the MiFID II review, but a poll from Rosenblatt Securities suggests the buy-side is not quite on the same page as the regulator.
Hayley McDowell – The Trade
Buy-side market participants hold conflicting views on sweeping changes to MiFID II that were proposed by the EU markets regulator earlier this month, according to a recent snap poll from Rosenblatt Securities.

European regulators delay new rules on failed trades; Lobby groups say planned changes will be harmful to stability of bond and exchange traded fund markets
Philip Stafford – FT
European markets regulators are planning a year’s delay to a new rule imposing penalties on trades that fail to settle on time, after market participants said the coronavirus pandemic had made it impossible to hit next February’s deadline.

E.C.B. asks banks to extend ban on dividends and big bonuses.
Jack Ewing – NY Times
The European Central Bank on Tuesday asked eurozone banks to extend a moratorium on paying dividends and to continue limiting executive bonuses. Lenders need to keep the money on hand in case the economic effects of the pandemic prove to be worse than expected, the bank said.

Fed Extends Emergency Lending Programs by Three Months; Funding, credit market backstops had been set to expire at end of September
Nick Timiraos – WSJ
The Federal Reserve said Tuesday it extended by three months the operation of all of its emergency lending programs that had been set to run through September to support economic activity during the coronavirus pandemic.

US Treasuries: the lessons from March’s market meltdown; The authorities are looking at ways to buttress a market that is the bedrock of the global financial system
Colby Smith and Robin Wigglesworth – FT
Kevin Walter’s work-from-home experiment lasted mere hours. On March 12, the Barclays trader was so alarmed by the turbulence flaring up in the US government bond market that he jumped in a car and made a dash from his home in Connecticut to his office in the normally crowded Times Square.

Rage against central banks is misdirected; The real problem is a declining natural rate of interest through demographic shifts and lower productivity growth
Robin Harding – FT
Rocketing house prices, zombie companies, rising inequality, a runaway stock market, struggling savers and even the outright destruction of capitalism — perhaps the only thing that does not get blamed on easy monetary policy from central banks is the weather.

CFTC Chair: ‘A Large Part’ of Financial System Could End Up in Blockchain Format
Nikhilesh De – Coindesk
Perfection shouldn’t be the enemy of good when it comes to regulating the cryptocurrency space, said Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert.

Founder Hits Jackpot Thanks to China’s Love of Stock Trading
Berber Jin and Venus Feng – Bloomberg
Futu Chairman Leaf Hua Li’s fortune has surged to $1.5 billion; Brokerage is backed by Tencent, where Li was early employee
When the coronavirus put a halt on people’s lives in China in February, Justin Jin’s old university classmates thought about selling face masks to make money. The 21-year-old suggested they instead try their luck with two stocks: Tesla Inc. and Tencent Holdings Ltd.

Google’s Extended Home Stay Isn’t for Everyone; Google is welcoming necessity with open arms, but that doesn’t mean every company should jump at the chance
Laura Forman – WSJ
Something similar could be said of remote working to what Winston Churchill said of democracy: that it is the worst possible option, except for all the others. Google parent company Alphabet GOOG -1.95% Inc. turned heads on Monday when The Wall Street Journal reported it would let employees work from home through at least next July—the first major corporation to finalize such a prolonged out-of-office timetable. The decision has been touted as a progressive example for large companies in and out of tech to follow. But it also is likely a case of choosing the least bad option.

SEC Announces Creation of the Event and Emerging Risk Examination Team in the Office of Compliance Inspections and Examinations and the Appointment of Adam D. Storch as Associate Director
The Securities and Exchange Commission today announced the creation of the Event and Emerging Risks Examination Team (EERT) in the Office of Compliance Inspections and Examinations (OCIE). The EERT will proactively engage with financial firms about emerging threats and current market events and quickly mobilize to provide expertise and resources to the SEC’s regional offices when critical matters arise.

Fund Scandal Was ‘Wake-Up Call’ for Noah’s Shadow-Bank Shift
Bloomberg News
Noah has transformed its business model since credit scandal; Independent asset managers step back from risky products
Only a year ago Noah Holdings Ltd. was a poster child for the dangers lurking in China’s $8 trillion shadow banking system. Now it’s at the fore of a historic shift in Chinese asset management, one that policy makers say is reducing financial risks in the world’s second-largest economy.

ISDA Launches Risk-free Rate Adoption Indicator
The International Swaps and Derivatives Association, Inc. (ISDA) has launched a new indicator to monitor the adoption of alternative risk-free rates (RFRs) in derivatives trading.

It’s Official, We’re Certified as a Great Place to Work!
We’re excited to share Robinhood has been certified as a Great Place to Work in the U.S.! The award recognizes the best workplaces and company cultures based on employee responses to the Trust Index Survey, in which 93% of our employees named Robinhood a great place to work.


Europe’s Banks Reveal Fuller Picture of Coronavirus Impact; Deutsche Bank, Barclays and Santander take loan-loss hit from the pandemic, but investment banking offers some support
Patricia Kowsmann and Simon Clark – WSJ
Some of Europe’s biggest lenders are revealing the extent of the coronavirus pandemic’s impact on their businesses. Germany’s Deutsche Bank AG DB -1.05% , the U.K.’s Barclays BCS 1.23% PLC and Spain’s Banco Santander SA SAN 0.83% all reported a big jump in loan-loss charges in the second quarter, as the companies they bank for struggle to repay debts, and unemployment rises across the regions in which they operate.

Market narratives fail to factor in Covid-19 endgame; Investors have bought into the rose-tinted tale of economic recovery without considering new era of upheavals
Pascal Blanqué – FT
The pandemic offers investors a rare opportunity to observe how a deadly virus can wreak untold havoc in major economies only to give rise to a narrative that relies far too heavily on past events.

Heathrow Steps Up Calls for Covid-19 Testing on U.K. Arrivals to Limit Quarantine
Charlotte Ryan – Bloomberg
London Heathrow airport will aim to introduce Covid-19 testing for arriving passengers by September if it can secure official U.K. approval for the move. There has been more engagement from the government over testing in the last few days, Heathrow Chief Executive Officer John Holland-Kaye said in an interview. The possibility that Britain could repeat its reimposition of quarantine on people arriving from Spain for other countries has helped to energize the discussion, he said.

Fauci says he has ‘not been misleading the American public’ despite Trump’s claims
Chandelis Duster, CNN
Washington (CNN)Dr. Anthony Fauci defended himself on Tuesday, saying he is “not misleading the American public under any circumstances” after President Donald Trump retweeted messages criticizing the nation’s top disease expert.

When will the pandemic end? Not before 2022, ex-U.S. surgeon general warns
Maria Aspan – Fortune
Even if the race for a COVID-19 vaccine has a winner soon, don’t expect the pandemic to end before 2022, a former U.S. surgeon general warned Tuesday. “If the goal is to return life to some semblance of what it was like pre-pandemic, I don’t see that happening in 2021,” Vivek Murthy, a surgeon general under President Obama, said during a virtual event organized by cruise operator Carnival Corp. and the World Travel & Tourism Council.

Exchanges, OTC and Clearing

CME Group Inc. Reports Second-Quarter 2020 Financial Results
CME Group
CME Group Inc. (NASDAQ: CME) today reported financial results for the second quarter of 2020. The company reported revenue of $1.2 billion and operating income of $638 million for the second quarter of 2020. Net income was $503 million and diluted earnings per share were $1.40. On an adjusted basis, net income was $583 million and diluted earnings per share were $1.63. Financial results presented on an adjusted basis for the second quarter of 2020 and 2019 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1

Japan Exchange Group, Inc. and Consolidated Subsidiaries Consolidated financial results for the three months ended June 30, 2020 (Based on IFRS), unaudited

Overview of Earnings for Q1 FY2020J
Japan Exchange Group, Inc.

ICE Aims To Expand ETF Hub Internationally
Peter Borstelmann, head of ICE ETF Hub, said the platform is aiming to expand coverage to international equity exchange-traded funds listed in the US and ETFs listed in Europe, Middle East and Africa.

Dividend Derivatives: Amendment of the „Product Specific Supplement” for EURO STOXX 50® Index Dividend Options
The Management Board of Eurex Deutschland and the Executive Board of Eurex Frankfurt AG took the following decision with effect from 1 September 2020:

Leading Dealers and Buy-Side Firms Join DTCC Margin Transit Utility Community
DTCC press release
New York/London/Hong Kong/Singapore/Sydney, July 21, 2020 ? The Depository Trust & Clearing Corporation (DTCC), the premier post-trade infrastructure for the global financial services industry, today announced that its Margin Transit Utility (MTU) community has grown to 50 firms representing thousands of Credit Support Annexes (CSAs), with users including leading dealer and buy-side organizations around the world.

*****We missed this one on July 21, so here it is now. ~SR

Swiss Stock Exchange: Managing Reference Data As Volatility Grips
As equity and bond markets tumbled amid the Covid-19 volatility, structured products were actively used and intensively traded to manage the portfolios during this challenging time.

DGCX Appoints Abdullah Harmoozi As Head Of Outreach & Engagement – Harmoozi Brings Deep Expertise In Markets And Islamic Finance To Lead DGCX’s Outreach Programme http://
The Dubai Gold and Commodities Exchange (DGCX) has appointed, Abdullah Harmoozi, as Head of Outreach & Engagement. In his new role, Harmoozi will be responsible for overseeing media outreach, engagement and sales, and will work closely with senior management to effectively communicate the value of DGCX products to current and prospect members.

NZX: Issue Of Performance Rights
NZX advises that it has issued performance rights to members of its NZX Wealth Technologies executive and management teams pursuant to NZX’s Long Term Incentive Plan.


DASH Named Best Algorithmic Trading Provider in Waters Rankings; Win in WatersTechnology’s signature award series is the fifth of the year for DASH
Dash Financial Technologies
DASH Financial Technologies, the industry’s leading capital markets technology and execution provider, today announced it has been named “Best Algorithmic Trading Provider” in WatersTechnology’s annual Waters Rankings awards. In recent months, DASH’s executed listed options market share has neared 20 percent, with the majority of that flow being handled by SENSOR™, the firm’s highly customizable, multi-asset algorithmic execution and routing suite.

State Street moves to launch post-trade TCA for equities via BestX; BestX will provide equities TCA via its platform as State Street looks to provide multi-asset analytics to clients.
Hayley McDowell – The Trade
Boston-based State Street has confirmed the launch of post-trade transaction cost analysis (TCA) for equities through its analytics software vendor BestX.

JPMorgan partners with Marqeta to launch ‘virtual’ credit cards
Kate Rooney – CNBC
JPMorgan Chase is ditching plastic for some of its credit cards.
The Wall Street giant’s commercial cards team is partnering with Bay Area start-up Marqeta to launch digital-only credit cards. The new function will allow JPMorgan corporate cards to work in mobile wallets such as Apple Pay or Samsung Pay immediately — without having to wait for a physical version in the mail.

Fintech firm TransferWise valued at $5 billion in secondary share sale
Ryan Browne – CNBC
Fintech start-up TransferWise is now valued at $5 billion following a secondary share sale, the company announced Wednesday, highlighting increased investor appetite for online payments amid the coronavirus pandemic.

Refinitiv Acquires Advisor Software Inc. Further Expanding its Digital Capabilities for the Wealth Management Industry; Acquisition of Advisor Software Inc. further enhances Refinitiv’s digital assets with digital portfolio analysis and advisory capabilities.
Refinitiv today announced the acquisition of strategic assets from Advisor Software Inc. (ASI), adding key digital functionalities to Refinitiv’s Wealth Management offering including enhanced digital advice capabilities and digital portfolio analysis. ASI’s technology is interoperable and cloud enabled and will be integrated into the recently launched Refinitiv Digital Investor.


Philippines Central Bank Considers Issuing Its Own Digital Currency
Siegfrid Alegado – Bloomberg
The Philippine central bank has created a committee to look at the feasibility and policy implications of issuing its own digital currency, Governor Benjamin Diokno said on Wednesday. “We have to first look at the findings of the group before making a decision,” Diokno said in a virtual briefing. The initial results of study is expected next month. Some of the world’s major central banks, including the Bank of England and Bank of Japan, have teamed up to assess the potential of developing their own digital currencies as new technologies and companies issuing their own digital tokens pose a challenge to monetary authorities.

605 Days Later: How ArCoins Got the SEC Go-Ahead as an Ethereum-Traded Treasuries Fund
Danny Nelson – Coindesk
Convincing the U.S. Securities and Exchange Commission (SEC) that the Ethereum blockchain is an acceptable medium to store regulated investment funds was no easy task for Mason Borda of Tokensoft.

Why DeFi on Ethereum Is Like Algorithmic Trading in the ’90s
Nathan DiCamillo – Coindesk
Mona El Isa would never go back to traditional finance. The former Goldman Sachs vice president developed the Melon protocol, a vehicle for creating Ethereum-based hedge funds without having to spend the tens of thousands of dollars it would take to launch a fund in traditional markets. “Managers who are used to a fund custodian and fund administrator are starting to experiment with automating technology,” El Isa said.

DeFi protocol Synthetix is now being governed by a trio of DAOs
Michael McSweeney – The Block
The team behind the synthetic asset issuance protocol Synthetix said Tuesday that the project is now officially being governed by three decentralized autonomous organizations, or DAOs. In a July 28 blog post, the team behind Synthetix detailed the wind-down of a foundation dedicated to the oversight of the protocol. Synthetix outlined its push toward decentralized control in December.

Hardware wallet firm Ledger suffered data breach in June, says customer contact and order information compromised
Aislinn Keely – The Block
On Wednesday, crypto hardware wallet firm Ledger detailed a data breach that occurred in late June. The breach centered on its marketing and e-commerce database, resulting in the exposure of customer information including approximately 1 million email addresses. Ledger said it patched the vulnerability, which was discovered by a researcher who participated in its bug bounty program.The vulnerability was reported on July 14.

Open the Floodgates: US Customers to See More Crypto Accessibility
Rachel Wolfson – Cointelgraph
The cryptocurrency market has come a long way in a seemingly short amount of time. Digital payment platforms have particularly taken note of the crypto market’s impressive growth, which is evident, as many have adopted new features and support for more cryptocurrencies. United States-based customers in particular seem to be reaping the benefits of recent implementations being made by digital payment providers.

Bitcoin’s rally above $11,000 is exactly what crypto bulls are looking for, Oppenheimer’s technical analysis head says
Ben Winck – Business Insider
Bitcoin’s latest upswing suggests the cryptocurrency on the verge of a new uptrend, Ari Wald, head of technical analysis at Oppenheimer, said Monday. The digital token rallied to its highest level in nearly a year in late Monday trading and held the $11,000 level into Tuesday morning. While gold is likely the most popular hedge bet for those expecting inflation to rise, bitcoin “isn’t as extended,” Wald said on CNBC. The coin is slowly reversing a years-long downtrend and is displaying “the type of action” a crypto bull would like to see, the analyst added. Watch bitcoin trade live here.

Crypto investment app Abra now offers interest-bearing accounts
Yogita Khatri – The Block
Crypto investment app provider Abra is now offering interest-bearing accounts, letting users earn a yield on their crypto deposits. Abra said users would receive up to 9% interest rate per annum, compounded daily. The currently supported coins for the interest offering are bitcoin (BTC) and ether (ETH), as well as stablecoins Tether (USDT), USD Coin (USDC), Paxos Standard (PAX) and True USD (TUSD).

Digital Yen Now ‘Top Priority’ for Japan Central Bank, Says Senior Official
Paddy Baker – Coindesk
As pressure mounts to catch up with rival China, a Bank of Japan (BoJ) official has said digital currencies are a “top priority.” Speaking to Japanese news outlet The Asahi Shimbun, departmental director-general Takeshi Kimura described the digital yen as a chief concern for the central bank. The BoJ has been experimenting with a central bank digital currency (CBDC) but has so far said there are no plans to launch one. The government said this month that the launch of a digital yen would be considered as part of this year’s legislative agenda.

Injective Protocol Raises $2.6m For Decentralized Derivatives Exchange Protocol – Prominent Institutional Investors Back Decentralized Cryptocurrency Derivatives Exchange
Injective Protocol, a fully decentralized derivatives exchange protocol, has raised $2.6 million dollars in a seed funding round led by Pantera Capital with participation from world renowned institutional investors including QCP’s investment arm QCP Soteria, Axia8 Ventures, and OK’s strategic investment partner K42.

Australian Crypto Exchanges Partner With Koinly to Simplify Tax Reporting for Users
Sebastian Sinclair – Coindesk
Three of Australia’s digital asset exchanges have teamed up with crypto tax software provider Koinly following the Australian Tax Office’s (ATO) crackdown on local investors. Announced Wednesday, Cointree, CoinJar and Swyftx have begun offering their users the ability to link their accounts and public wallet addresses to Koinly’s service, providing investors with a capital gains tax report.

What Crypto Lender Celsius Isn’t Telling Its Depositors
Nathan DiCamillo – Coindesk
Standing in a spacious, white living room and sporting a black T-shirt, Alex Mashinsky, CEO and co-founder of cryptocurrency lender Celsius Network, urged his customers to ignore the naysayers. “Don’t listen to the FUD-ers, look at the facts,” Mashinsky said on the YouTube livestream on July 17, using crypto slang for “fear, uncertainty and doubt.” A few minutes later, he reassured the audience of “Celsians,” as the platform’s users are nicknamed, that the company is prudently deploying their crypto deposits.

The new Augur promises to be faster and simpler — and denominated in dollars
Momina Khan – The Block
Decentralized prediction market platform Augur has launched its “Augur v2” platform upgrade. The new version consists of a range of features designed to improve its user interface and make trading faster and cheaper. Perhaps the most important change is that in Augur v2, bets will be “effectively in dollars,” according to a blog post announcing the launch. In the original version, Augur’s markets were denominated in ETH, leaving users exposed to its volatility relative to the U.S. dollar. The new version lets users trade in DAI stablecoin.


Trump undermines his pandemic response with more misinformation and self-obsession
Stephen Collinson – CNN
President Donald Trump’s return as the face of the Covid-19 response has deteriorated into a misinformation masterclass that explains why America is in such a mess. In an extraordinary performance Tuesday, as the daily death toll again soared toward 1,000 and the number of Americans dead approached a tragic milestone of 150,000, Trump again foreswore the most basic requirements of national leadership in a crisis.

Trump retweeted a video with false covid-19 claims. One doctor in it has said demons cause illnesses.
Travis M. Andrews and Danielle Paquette – Washington Post
After social media companies removed a viral video showing doctors spreading unsubstantiated information about the novel coronavirus, a phrase inspired by one doctor’s past claims began trending on Twitter: demon sperm. It turns out Stella Immanuel has a history of making particularly outlandish statements — including that the uterine disorder endometriosis is caused by sex with demons that takes place in dreams.

Oil and Gas Groups See ‘Some Common Ground’ in Biden Energy Plan; Some energy executives are pleased that the former vice president is not calling for a fracking ban and said they could work with him.
Clifford Krauss and Ivan Penn – NY Times
Joseph R. Biden Jr. won over environmentalists and liberals when he announced a $2 trillion plan to promote electric vehicles, energy efficiency and other policies intended to address climate change.

Biden Urges Bigger Role for Fed in Addressing Racial Wealth Gap; The former vice president also called for greater funding for low-income housing and other policies meant to reduce inequality
Jacob M. Schlesinger and Sabrina Siddiqui – WSJ
??Joe Biden called on the Federal Reserve to play a bigger role in addressing racial economic inequality, demanding the central bank look beyond its current mandate of containing inflation and maximizing employment.


AIG Unit to Pay $20 Million to Settle SEC Probe of Teacher-Retirement Business; Valic Financial Advisors also resolved separate fund-fees investigation
Dave Michaels and Anne Tergesen – WSJ
A unit of American International Group Inc. AIG 0.32% agreed to pay $20 million to settle claims that it failed to disclose payments intended to draw more business to the firm, the first case to emerge from a crackdown on practices in the market for teachers’ retirement plans.

That celebrity-endorsed bitcoin ad is probably a scam
Kochie, Celeste Barber and Waleed Aly among many celebrities whose endorsements are being used fraudulently. Bitcoin scammers are fraudulently using prominent news sites and government agencies in an attempt to legitimise scams. Avoid crypto trading scams such as Bitcoin Evolution, Bitcoin Revolution and Bitcoin Trader.

Parliamentary Joint Committee on Corporations and Financial Services Inquiry into litigation funding and the regulation of the class action industry
Opening statement by ASIC Deputy Chair, Daniel Crennan QC at the Parliamentary Joint Committee on Corporations and Financial Services Inquiry into litigation funding and the regulation of the class action industry, Wednesday, 29 July 2020, Parliament House, Canberrra

ASIC consults on remaking class order on notification requirements for unlicensed carried over instrument lenders and clarification of credit disclosure obligations
ASIC today released a consultation paper (CP 331) proposing to remake two class orders that are due to expire (‘sunset’) on 1 October 2020 and 1 April 2021.

ASIC bans Hobart adviser for five years
ASIC has banned Hobart-based financial adviser David Horton from providing financial services for five years for failing to comply with financial services laws.

SEC Charges VALIC Financial Advisors with Failing to Disclose Payments to Promote Services to Florida Educators; SEC Also Charges VALIC Financial Advisors in Separate Action for Mutual Fund Selection Violations
The Securities and Exchange Commission today charged Houston-based VALIC Financial Advisors Inc. (VFA) in a pair of actions for failing to disclose to teachers and other investors practices that generated millions of dollars in fees and other financial benefits for VFA.

New guidance to help firms do more for vulnerable consumers
The FCA has set out new best practice guidance for firms to do more to protect vulnerable consumers.

Investing and Trading

Tracking our grey costs per trade: Hidden risks and overlooked opportunities
The Trade
Surely after years of practice and refinement we all have a crystal-clear view of our costs per trade – Don’t we? Haven’t MIFID, the global financial crisis and the shift to passive all forced us to learn up over the last 12 years and become experts in tracking our unit costs?

Riskiest Bonds Are On the Rise in Europe; High-yield bond issuance to finance acquisitions has picked up in recent weeks in Europe, ending a nearly five-month lull
Anna Hirtenstein – WSJ
Investors are channeling more money into the riskiest companies’ bonds in Europe and spurring an uptick in deal making in the region. Debt financing for acquisitions and leveraged buyouts by high-yield companies jumped to over EUR6.4 billion ($7.5 billion) in the past four weeks, ending a nearly five-month lull in the market, according to data from Dealogic. Companies that sold these bonds included the U.K.’s Stonegate Pub Co. and an elevator business sold by Germany’s Thyssenkrupp AG TKAMY 0.62% in a leveraged buyout.

Gold’s Record Rally Fuelled by Unlikely Buyers
Ranjeetha Pakiam, Jack Farchy, and Anchalee Worrachate – Bloomberg
Hunt for portfolio diversification spurs wave of gold buying; Investor inflows have helped drive prices towards $2,000
Gold’s surge to an all-time high is winning over a wider fan base of pension funds, insurance companies and private wealth specialists. Managers who run long-term portfolios worth trillions of dollars are taking interest in gold as they search for returns in a yield-starved investing landscape. The broader array of buyers is one of the key dynamics behind the rally to $2,000 an ounce, even as gold’s traditional customers in India and China remain on the sidelines.

Environmental, Social and Corporate Governance

ESG investors wake up to biodiversity risk; Damage to ecosystems including forests and coral reefs forecast to have devastating effect on global economy
Billy Nauman – FT
As environmental, social and governance investing has swept across the financial world, the “E” in ESG has become nearly synonymous with attempts to mitigate climate change. But while the climate crisis is one of the planet’s gravest problems, it is not the only environmental threat that needs tackling.

State Street Offers ESG Version of Powerhouse SPY Fund
Claire Ballentine – Bloomberg
ETF excludes companies involved with tobacco products, weapons; Assets in ESG funds have taken in almost $15 billion this year
Fans of value-based and sustainable strategies have a new exchange-traded fund option to track large American companies.


Barclays’ loan-loss reserves rise to £3.7bn as Covid-19 hits economy; Jump in investment bank’s trading income helps offset profit drop from pandemic provisions
Stephen Morris – FT
Barclays added a further £1.6bn to its reserves for bad loans in the second quarter as the scale of the damage coronavirus could wreak on Britain’s banks becomes clearer.

ETFs are the canary in the bond coal mine; Exchange traded funds deserve more scrutiny in light of March’s market turmoil
Gillian Tett – FT
Ever since the 2008 financial crisis, policymakers and pundits have wondered what would happen to the cogs of finance in the next big global market shock.

Veteran agricultural brokerage team led by Craig Matthews includes 12 specialists
Press Release
Marex Spectron, the global commodities specialist, today announced that veteran agricultural brokerage team, the Matthews Group, has joined the firm to bolster its capabilities in North America. The Matthews Group brings to Marex North America a team of 12 industry specialists in grains and oilseeds, soft commodities and energies, led by Craig Matthews.

Nomura’s Bond-Trading Sugar Rush Won’t Last; Japan’s largest brokerage should get bolder about cutting costs before the boost from a bumper quarter fades.
Nisha Gopalan – Bloomberg
Like its bulge-bracket Wall Street rivals, Nomura Holdings Inc. found volatility was its friend last quarter. The surge in trading revenue that drove a return to profit is unlikely to be sustained, though. Japan’s largest brokerage needs more than tinkering at the margins to drive a post-Covid recovery.

Credit Suisse Boss Rewrites the Bank’s Master Plan; Thomas Gottstein had indicated that he may not change much as CEO. A reappraisal of the bank’s complexity and risk may have changed his mind.
Elisa Martinuzzi – Bloomberg
Thomas Gottstein indicated that he didn’t plan to change much when he was promoted to the top job at Credit Suisse Group AG earlier this year. It’s a company he knows well, having worked there for two decades. But a reappraisal of the Swiss lender’s complexity and its appetite for risk appears to have changed his mind. That’s no bad thing.

Goldman Sachs C.E.O. played an ill-fated DJ gig in the Hamptons.
Michael J. de la Merced – NY Times
Goldman Sachs’s chief executive, David M. Solomon, had a lot to celebrate when he took the stage on Saturday in the Hamptons, under his alter ego DJ D-Sol, as the opening act for the duo The Chainsmokers. He may come to regret the gig, as New York’s health authorities investigate the concert for “rampant” violations of social-distancing rules.

Barclays Profit Falls as Covid-19 Hits U.K. Unit; London-based bank set aside £1.62 billion in provisions for losses from loans during the quarter
Simon Clark – WSJ
Barclays BCS 1.23% PLC’s net profit fell 91% to £90 million ($116 million) in the second quarter after its U.K. unit swung to a loss because of the impact of the coronavirus pandemic.


Antique Chinese bonds are now in play; Speculators and politicians are eyeing ways to use pre-communist debt to put pressure on Beijing
Izabella Kaminska – FT
Former US national security adviser Zbigniew Brzezinski wrote that Americans seeking to preserve the country’s global primacy must, as in chess, think several moves ahead, anticipating possible countermoves.

Americans Aren’t Making Babies, and That’s Bad for the Economy; The U.S. could see 500,000 fewer births next year, which will have repercussions long after the pandemic is over.
Peter Coy – Bloomberg
Pandas and white rhinos aren’t the only creatures that are unsuccessful at mating in captivity. The folk wisdom that humans will copulate when left with nothing else to do—dubbed the blackout babies theory—surfaces regularly in the immediate aftermath of disasters, but the baby boom never materializes. The Covid-19 pandemic spawned predictions that stay-at-home orders would eventually deliver a baby bump. Yet far from having more children than usual, Americans are expecting fewer.

Zimbabwe Signs $3.5 Billion Compensation Deal With White Farmers
Godfrey Marawanyika and Ray Ndlovu – Bloomberg
Accord marks turning point in dispute over farm invasions; President says ‘historic’ deal shows respect for rule of law
Zimbabwe’s government signed a $3.5 billion deal to compensate white commercial farmers who were evicted from their land two decades ago. The agreement is a turning point in a dispute that tipped the southern African nation’s economy into freefall by slashing food production and export income, and incurred sanctions from the U.S. and European Union.

Turkey faces currency crisis as lira nears record lows.
Jack Ewing – NY Times
Turkey was headed toward a currency crisis Tuesday as the value of the lira fell and the country’s central bank appeared to be running out of ammunition to stop its decline toward record lows.


New French Europe minister – Brexit deal possible but not ‘at any price’
France will continue to take a tough line on defending the rights of French fishermen in Brexit talks but a deal with the United Kingdom is still possible, France’s new European affairs minister Clement Beaune said on Wednesday.

U.K., Japan Close to Post-Brexit Trade Accord Replacing EU Deal
Joe Mayes – Bloomberg
The U.K. and Japan are close to agreeing a post-Brexit trade accord, a deal that would replace the free-trade agreement Britain enjoys through its membership of the European Union and avoid the introduction of tariffs next year. An agreement in principle is expected in coming weeks, according to a person familiar with the U.K. side of the talks, who asked not to be identified because the negotiations are private. The discussions haven’t yet concluded, and some issues still need to be resolved, the person added.

Unfortunately for Boris Johnson, much of Europe has moved on from Brexit
Luke McGee – CNN
Europe is braced for its second wave of coronavirus, as infection rates rise in numerous countries, including Spain, France and Germany. Covid-19 has sucked up the political capacity of virtually every European nation, leaving every other area of policy playing second fiddle as the world tries to fight this invisible threat. This has created a uniquely difficult problem for Boris Johnson, the UK Prime Minister, who faces the harrowing prospect of two unprecedented crises taking hold simultaneously before the end of 2020.

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