What a Year: Pandemic Spurs ‘Beauty Contest In Growth Expectations’ Among Nations
Suzanne Cosgrove – John Lothian News
While the pandemic sent chills around the globe, a close look at equity performance in 2020 shows a striking dispersion of portfolio returns that makes a case for more selective investment in international markets going forward, said analysts in a FTSE Russell webinar held Tuesday.
In addition, the expected arrival of vaccines to fight the virus “changed the market narrative in November,” said Phillip Lawler, managing director of global investment research for FTSE Russell. Most equity markets posted double-digit percentage gains, fueled by a shift into what had been some of the year’s worst-performing cyclical sectors.
A major rotation in investments from leaders to laggards on a country level was also evident in November, Lawler said, with Taiwan a stand-out example of a country that rebounded toward the end of the year. Taiwan is expected to end 2020 with positive GDP growth despite the global pandemic, benefiting from ties to the U.S. and advances in its tech prowess, analysts said.
To read the rest of this report, go here.
Hits & Takes
John Lothian & JLN Staff
The New York restaurant “21” Club is closing indefinitely and may close for good in March, according to a report in the New York Post. The restaurant has been a New York City hot spot through the years with an unending list of celebrities who have graced its dining room. I was introduced to this fine venue by Guy Taylor, now head of media relations for BNP Paribas and have eaten there three times, including once courtesy of the World Gold Council at their annual dinner.
We added remembrances of George Gero from former CFTC official Andrea Corcoran, NFA’s Karen Wuertz, and former NYMEX member Anthony Grisanti, GRZ on JohnLothianNews.com.
The CME Group has added new hemp pricing data to CME DataMine, its self-service online data platform.
The SEC announced that Brett Redfearn, director of the SEC’s Division of Trading and Markets, will end his tenure as director by the end of the year after leading the division for over three years. Thank you to Mr. Redfearn for his service.
The SPIKES Volatility Index on MGEX is now available for trading. Yesterday was the first day of trading on the relaunched product.
(Borrowed from Kellie Mejdrich of Politico on Twitter) I was told the future held snow. It is just FLAKE news.
We had no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Help us preserve industry history by donating to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
CoinRoutes is one of the latest pages on CryptoMarketsWiki to be transferred over to MarketsWiki. Speaking of which, Cboe and CoinRoutes have entered into a partnership agreement allowing Cboe to make use of CoinRoutes’ proprietary RealPrice data feed to create digital asset index products, as well as other, similar products and services.~MR
According to Bank of America and BofA Securities’s monthly Global Fund Manager Survey, the most crowded trade by far between November and December 2020 has been “long tech.” The second and third-most crowded trades, according to the participants of the survey, were “short U.S. dollar” and “long bitcoin.”~MR
Eurex’s Randolf Roth Talks MSCI with JLN
John Lothian News interviewed Randolf Roth, Eurex’s head of equity & index derivatives and head of client services for trading & clearing, over Zoom about Eurex’s MSCI offering. The MSCI has been in the news recently as MSCI awarded HKEX a license for the complex in Asia instead of SGX, where it had been for decades. The move to HKEX opened new doors for Eurex to compete for Asian MSCI business.
Massachusetts Regulators to File Complaint Against Robinhood; The wildly popular trading platform exposed Massachusetts investors to ‘unnecessary trading risks,’ according to the complaint
Caitlin McCabe – WSJ
Massachusetts securities regulators are expected to file a complaint Wednesday against the wildly popular trading platform operated by Robinhood Financial LLC, alleging the company aggressively marketed to inexperienced investors and failed to implement controls to protect them. In a final draft of a more than 20-page administrative complaint reviewed by The Wall Street Journal, the enforcement arm of the Massachusetts Securities Division said Robinhood failed to protect its customers and their assets, violating state laws and regulations. Robinhood exposed Massachusetts investors to “unnecessary trading risks” by “falling far short of the fiduciary standard” adopted this year that requires broker-dealers to act in their clients’ best interest, the state said.
****My first question as a customer would be “What risk?”~JJL
Brett W. Redfearn to Conclude Transformative Tenure as SEC Trading and Markets Director
The Securities and Exchange Commission today announced that Brett Redfearn, Director of the SEC’s Division of Trading and Markets, will conclude his tenure as Director by the end of the year after leading the Division for over three years. Since joining the SEC in October 2017, Mr. Redfearn led the Division’s 255 professional staff, including 168 attorneys, on a wide range of initiatives critical to the efficient and fair functioning of our trading markets and the protection of Main Street investors. Notably, Director Redfearn played a leading and essential role in coordinating the public and private sector efforts to maintaining fair, orderly, and efficient markets in March and April of 2020 when our markets faced unprecedented volatility and liquidity stresses.
*****Keep an eye on Mr. Redfearn’s future.~JJL
Futures Now Trading on the SPIKES Volatility Index
Miami International Securities
Exchange, LLC (MIAX) and the Minneapolis Grain Exchange (MGEX) today announce that a successful first day of futures trading on the SPIKES® Volatility Index (SPIKES) took place yesterday on December 14. “SPIKES Futures are a significant step forward for the volatility marketplace, adding necessary competition, choice and innovation,” said Thomas P. Gallagher, Chairman and CEO of MIAX. “With SPIKES Futures, investors have access to an advanced, competitively priced volatility trading product that further rounds out the SPIKES Volatility Products portfolio. We are excited that SPIKES Futures liquidity providers successfully began actively quoting yesterday, providing a tight market for SPIKES Futures right out of the gate.”
******Ready for trading.~JJL
Bitcoin tops $20,000, breakthrough price milestone for the largest digital asset
Daniel Roberts – Yahoo Finance
The price of bitcoin passed the $20,000 mark on Wednesday morning, a new all-time-high and the latest milestone in a huge 2020 surge that accelerated during the COVID-19 pandemic.
*****Bitcoin exceeds $20K the day after the Cboe gets back into the game. Will Tilly take his bonus in Bitcoin is a relevant question again.~JJL
LME Moves Ahead With Sustainability Strategy And LMEpassport Roll-Out
London Metal Exchange
The London Metal Exchange (LME) today announces plans to move forward with its sustainability strategy following supportive feedback from its discussion paper process.
*****Was the sustainability paper edible? ~JJL
Tuesday’s Top Three
Our top story Tuesday was The Wall Street Journal’s High-Frequency Traders Push Closer to Light Speed With Cutting-Edge Cables. Cutting edge indeed: “Made of glass, such cables carry data encoded as beams of light.” Second was JLN’s George Gero Remembrances from a number of industry execs and traders, which includes JLN’s video interview of Gero. Third was How Kelly Loeffler’s Firm Facilitated an Enron-Like Scandal, from Mother Jones, a repeat from yesterday’s top three.
195,139,231 pages viewed; 24,742 pages; 227,386 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
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Cboe to launch crypto indices following major data deal with CoinRoutes; The partnership with CoinRoutes will see Cboe roll out indices for digital assets using the RealPrice market data feed.
Annabel Smith – The Trade
Exchange operator Cboe Global Markets has confirmed plans to create crypto indices early next year after signing a major licensing agreement with trading software provider CoinRoutes. Through the licensing agreement Cboe said it will use the RealPrice data feed from CoinRoutes to establish digital asset indices and offer custom index creation and calculations to clients.
A Crowdsourced Quant Fund Fizzles in Era of Democratized Trading; Quantopian opened algorithmic investing to do-it-yourselfers, but great ideas proved hard to find
Justina Lee – Bloomberg
In an Italian town about 120 miles northeast of Rome, Emiliano Fraticelli spends half his day teaching computer science at a local high school and the other half pursuing a dream he once considered lost to him forever: quantitative trading. He creates computer algorithms that scour market data and make trades based on those patterns.
Top SEC Markets Regulator to Leave After Battling Exchanges; Brett Redfearn will leave his job as director of the SEC’s trading and markets division at the end of December
By Alexander Osipovich – WSJ
The Securities and Exchange Commission’s top official for the oversight of exchanges, brokers and high-speed trading firms is stepping down at the end of December, concluding a three-year tenure marked by clashes with the stock exchanges he regulated.
US declares Switzerland to be currency manipulator; Treasury department also brands Vietnam in final days of Trump administration
James Politi – FT
The US Treasury has labelled Switzerland and Vietnam currency manipulators, escalating tensions with the two countries in the waning days of the Trump administration.
EU cannot be ‘captured’ by City of London, warns financial services chief; Mairead McGuinness insists bloc must not be overly reliant on third countries in significant sectors
Sam Fleming and Jim Brunsden – FT
The EU cannot permit itself to be “captured” by the City of London given the UK’s plans for regulatory divergence, a top European official has warned, as she urged the financial services sector to prepare for change after Brexit.
Future of the City: London’s markets rivalry with EU intensifies; Cross-border business faces disruption, but commercial logic may yet trump political considerations
Philip Stafford – FT
Appearing in front of the Irish parliament last week, Mairead McGuinness, the EU’s financial services chief, laid out the bloc’s uncompromising stance towards the UK’s largest services export
EDF Energy pays £6m for breach of energy market rules; Ofgem found that UK utility inflated the minimum amount of power one of its plants was able to supply
Nathalie Thomas – FT
UK utility EDF Energy has agreed to pay £6m after the regulator found it “frequently inflated” the minimum amount of power one of its plants was able to supply to the National Grid, resulting in more energy being purchased than was needed.
EU Unveils Plans to Help Banks Clean Up Soured Covid-19 Loans; Way to help Europe’s creaky banks navigate the downturn and be strong enough to lend during the recovery
Patricia Kowsmann – WSJ
The European Union unveiled plans to assist countries in setting up a network of national “bad banks” to help cope with a possible avalanche of defaulted loans triggered by the pandemic. Bad banks—private or government funded repositories that soak up soured loans—are seen as a way to help Europe’s creaky banks navigate the Covid-19 downturn and be strong enough to lend during the recovery. The European Central Bank, which supervises the largest banks in the eurozone, has warned banks could be facing $1.7 trillion in bad loans under an extreme, yet possible, economic scenario.
MSCI Drops Chinese Stocks on U.S. Blacklist; The move, affecting stocks in seven Chinese companies, will take effect by the close of business on Jan. 5
Chong Koh Ping – WSJ
MSCI Inc. MSCI 0.02% will strip its indexes of stocks in seven Chinese companies that the U.S. government says help China’s military, including the country’s largest chip maker and a major producer of surveillance equipment.
Redfearn tenure as SEC trading and markets director to end this year; Brett Redfearn has been director of the trading and markets division at the SEC since October 2017.
Hayley McDowell – The Trade
The head of the trading and markets division for the US financial watchdog, Brett Redfearn, is preparing to step down by the end of the year after more than three years in the role.
The TRADE Magazine, Winter 2020; The latest edition of The TRADE magazine is now available to read online.
Editors – The Trade
The Winter 2020 issue of The TRADE magazine is now available to read online. As the industry continues to adapt to a new operating environment, delve into the very best content from the latest issue:
DOL may be too late with final fiduciary rule
Mark Schoeff Jr. – Investmentnews.com
The Department of Labor released a final regulation Tuesday to reform investment advice rules for retirement accounts, but the measure may be short-lived because it’s coming out within weeks of the Biden administration taking power.
SIFMA Statement on Final DOL Investment Advice Rule
SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, regarding the final rule from Department of Labor (DOL) on prohibited transaction exemptions and investment advice:
Goldman Sachs CEO says he’s concerned about stock-market euphoria stemming from retail investors
Emily Graffe – Business Insider
David Solomon told CNBC on Tuesday he’s concerned about euphoric activity in the stock market that is being driven by retail investors buying IPOs.
Vaccinating Billions Means Finding Ways Around a Patent Impasse; India’s proposed WTO waiver faces stiff opposition from the U.S. and EU. But pressure is growing on vaccine producers to make concessions to ensure billions get inoculated.
Hugo Miller and Susan Decker – Bloomberg
Covid-19 vaccines look set to protect millions of citizens of the world’s richest countries in the coming months. But inoculating the rest of the planet’s population may mean finding a way around an impasse over intellectual property.
To Make a Building Healthier, Stop Sanitizing Everything; Improve the ventilation, even spread some good germs. If you want people to be healthy and productive, tend the microbiome.
Caroline Winter – Bloomberg
Four years ago a doctoral student in architecture asked Luke Leung to help him come up with a thesis topic. Leung, an engineer whose projects include the world’s tallest building, the Burj Khalifa in Dubai, proposed the question: What is heaven?
Boris Johnson to issue warning about Christmas socialising in UK; PM unlikely to scrap 5-day relaxation of Covid rules over festive period, say ministers
Jasmine Cameron-Chileshe – FT
UK prime minister Boris Johnson is expected to issue clear warnings urging people to think carefully about socialising over Christmas but will not scrap the five-day relaxation of the coronavirus rules during the festive period, ministers have said.
Beware the criminal threat to the fight against Covid; There has been a global alert warning of organised networks targeting vaccines and medical supplies
Vanda Felbab-Brown – FT
Two months ago, in a worrying portent of the fresh challenges medics may face combating Covid-19 globally, criminals hijacked a truck outside Mexico City and stole its cargo of 10,000 flu jabs. Mexico, which is among the countries worst hit by the pandemic, also has the world’s sixth largest black market in medicines. Yet it is not alone in facing the potential threat of criminals subverting the fight against Covid-19. Interpol recently issued a global alert, warning its 194 members of organised crime networks targeting vaccines and antibody tests.
FDA approves first over-the-counter Covid-19 test; Self-testing kit developed by Australia’s Ellume provides results in 20 minutes
Jamie Smyth and George Russell – FT
The US Food and Drug Administration has authorised emergency use of the first over-the-counter, self-testing Covid-19 antigen kit, which can produce results within 20 minutes.
Coronavirus: California’s daily infections top 30,000 for fifth straight day — as it happened
George Russell, Harriet Clarfelt, Oliver Ralph, Harry Dempsey, Mamta Badkar, Matthew Rocco – FT
New York City faces the prospect of another “full shutdown” due to an increasing level of coronavirus infections, mayor Bill de Blasio warned. “We need to recognise that that may be coming and we need to get ready for that now,” he told CNN on Monday, saying employees should avoid offices and work from home as much as possible.
Covid-19 Vaccine Trial Volunteers Note Occasional Harsh Side Effects; Most report mild side effects, but those experiencing worse still recommend the shots
Rolfe Winkler – WSJ
Jocelyn Edwards wasn’t sure she got Moderna Inc.’s MRNA -5.06% experimental Covid-19 vaccine or a placebo when she received her first of two doses in August. Hours after the second shot, she said she was sure it was the genuine article.
In Sweden, Infections and Calls for a Lockdown Are Rising; The country has been keeping restaurants and bars open, trying not to let the pandemic disrupt life. But the second wave is forcing the authorities to reconsider their approach.
Thomas Erdbrink and Christina Anderson – NY Times
Sweden has been an outlier in the pandemic: It eschewed lockdowns and kept restaurants, bars, schools, movie theaters and gyms mostly open. And while death rates were high compared to its Nordic neighbors, they were comparable to those of larger European countries.
Misleading claims about the coronavirus vaccines are surging — often spread by the same people.
Davey Alba and Sheera Frenkel – NY Times
Sidney Powell, a lawyer who was part of President Trump’s legal team, spread a conspiracy theory last month about election fraud. For days, she claimed that she would “release the Kraken” by showing voluminous evidence that Mr. Trump had won the election by a landslide.
Five forces that will define our post-Covid future; Sustaining a dynamic world economy and managing the global commons were always going to be hard, even before the era of populism and great-power conflict
Martin Wolf – FT
Covid-19 has accelerated the world into the future. Here are five powerful forces that were at work before Covid-19, that intensified during the pandemic and will still affect the world in 2025, and far beyond.
Paris streets empty as COVID-19 curfew takes effect
Boutiques in the centre of the French capital shut early and shoppers hurried home to meet a new 8:00 p.m. curfew that took effect on Tuesday to try to prevent a new spike in COVID-19 infections.
Exchanges, OTC and Clearing
Cboe Global Markets and CoinRoutes Enter Exclusive Licensing Agreement for CoinRoutes RealPrice™ Cryptocurrency Market Data
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced it has signed an exclusive licensing agreement with CoinRoutes to disseminate its market data and create potential derived data and analytics products using its RealPrice data.
CME Group Adds New Hemp Pricing Data to CME DataMine
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that customers can now access hemp pricing data in DataMine, its self-service online data platform. This new alternative dataset from Hemp Benchmarks®, a division of New Leaf Data Services, LLC, allows CME Group market data customers to access benchmark wholesale hemp pricing data alongside nearly a petabyte of historical data for futures and options across every investible asset class.
CME Group to Launch Ether Futures on February 8, 2021
Ether futures to expand CME Group’s robust crypto derivatives offering for institutional traders alongside CME Bitcoin futures
CME Group press release
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it intends to launch Ether futures starting February 8, 2021, pending regulatory review.
The new contract will be cash-settled, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of Ether. Ether futures will be listed on and subject to the rules of CME.
MSCI drops seven Chinese companies from indices; Action follows Trump ban on US investors buying shares in groups with China military ties
Eric Platt and Demetri Sevastopulo – FT
Index provider MSCI said it would drop seven companies that the US government has labelled as having ties to the Chinese military from its indices, after Donald Trump barred US investors from holding stakes in such businesses.
Elektroimportøren lists on Euronext Growth Oslo
Elektroimportøren has today been admitted to trading on Euronext Growth (ticker code: ELIMP). Elektroimportøren is a leading Norwegian provider of electrical equipment and installations. This week Elektroimportøren raised NOK 650 million through sale of existing shares. The IPO offering attracted strong interest from institutional and other high-quality long-term investors, and was substantially oversubscribed, announced the company.
Anticipating Brexit, the French public investment bank, Bpifrance relocates clearing business into the EU;Bpifrance successfully switches swap book to Eurex Clearing.
As the legal and regulatory framework for transactions processed or managed from UK territory will be impacted by Brexit, the French public investment bank Bpifrance has transferred its entire portfolio of derivatives, composed mainly of interest rate swaps, from London Clearing House LCH to EU27-based Eurex Clearing.
Nagarro SE new in the Prime Standard of the Frankfurt Stock Exchange
Deutsche Börse Group
Nagarro SE (ISIN: DE000A3H2200 ) has been listed in the Prime Standard segment of the Frankfurt Stock Exchange since today . At the start of trading, the shares were listed at EUR 69.00.
ICE Benchmark Administration launches GBP SONIA ICE Swap Rate as a benchmark for use by licensees
Intercontinental Exchange, Inc
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announces that ICE Benchmark Administration Limited (IBA) has launched its GBP SONIA ICE Swap Rate as a benchmark for use by licensees.
CME Group Announces 2021 Annual Meeting Date
CME Group Inc.
CME Group Inc. (NASDAQ: CME), the world’s leading and most diverse derivatives marketplace, today announced it will conduct its 2021 annual meeting of shareholders at 10:00 a.m. Central Time on Wednesday, May 5, 2021. Additional information will be provided in the company’s proxy statement.
Parameter Update Pertaining to the Concentration Margin Program – Effective December 16, 2020
Effective December 16, 2020, CME Clearing will enact a parameter change to its concentration margin program for futures and options. No changes will be made to the concentration margin program methodology.
Initial Listing of Three (3) CBL California Carbon Allowance Vintage-Specific Futures Contracts (2021, 2022, 2023)
Effective Sunday, January 10, 2021, for trade date Monday, January 11, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list three (3) CBL California Carbon Allowance Vintage-Specific Futures (2021, 2022, 2023) (the “Contracts”) for trading on the CME Globex electronic platform and for submission for clearing via CME ClearPort as noted in the table below.
Updated: December 2020 Final Foreign Currency Settlement Prices
Please find attached updated December 2020 Final Foreign Currency Settlement Prices.
SGX welcomes China International Capital Corporation as Securities Trading Member
Singapore Exchange (SGX) today welcomed China International Capital Corporation (Singapore) Pte. Limited (CICC Singapore) to its securities market as a trading member. Incorporated in July 2008, CICC Singapore is the hub for CICC’s Southeast Asia and South Asia businesses and operations, primarily focusing on sales and trading, and investment banking activities.
Singapore Exchange named Regulation Asia’s Exchange of the Year for 3rd year running
Singapore Exchange (SGX) has again been recognised as the “Exchange of the Year” in the 3rd Regulation Asia Awards for Excellence 2020. This is the third time SGX has received the accolade. The 2020 award recognised SGX’s achievements in sustainability and innovation. Cited in the award were SGX’s initiatives to boost awareness of ESG and sustainability issues. Among others, SGX reviewed companies’ sustainability disclosures to identify areas for improvement, held discussions and focus groups to understand financial institutions’ needs regarding ESG, and increased investor awareness and understanding of sustainability disclosures.
DGCX Wins ‘Exchange Of The Year- Middle East And Africa’ At FOW International Awards For The Third Year
The Dubai Gold & Commodities Exchange (DGCX) – the largest and most diversified derivatives exchange in the Middle East – has been named as ‘Exchange of the Year’ at the prestigious FOW Global Investor MENA 2020 for a third year in a row.
B3 Selects Genesis Low-Code Application Platform For Brazil’s Financial Markets http://
Ant Conducting ‘Self-Review’ After $35 Billion IPO Collapses
Bloomberg News – Bloomberg
Chairman Eric Jing says firm trying to meet regulatory demands; Fintech giant is ‘finding out our shortcomings,’ Jing says
Ant Group Co. Chairman Eric Jing has emerged contrite and apologetic from the collapse of the fintech giant’s $35 billion initial public offering. The company is “looking into the mirror, finding out our shortcomings, and conducting a body check-up,” Jing said in a speech at the 4th China Internet Finance Forum on Tuesday. Ant is striving to “properly manage” issues related to the suspension of the IPO, he said.
Torstone Technology plans 30% headcount increase as volatility drives cloud adoption; Headcount will increase next year at Torstone Technology after it found industry demand for cloud services has increased throughout 2020.
Annabel Smith – The Trade
Post-trade and derivatives provider Torstone Technology has outlined plans to increase its company headcount by 30% in the next year after seeing increased demand for cloud services due to the market volatility.
Party’s Over: A Maturing FinTech Industry Faces Its Reckoning
Vyshakh Kodoth – Forbes
For years, investors and operators in the FinTech industry were branded by a singular rallying cry: a reckoning in financial services was coming, and the need to stake equity in user-centric apps, lowered transaction fees, and hashtag-friendly startup names was critical.
IBM Acquires Canadian FinTech Expertus
IBM has acquired Montreal-based FinTech Expertus Technologies, according to a press release, in a bid to boost its hybrid cloud and artificial intelligence (AI) tech as well as its digital payment strategies. Expertus works in cloud services for the financial industry with over 1,000 banks, credit unions, regulatory agencies and corporates, which process around $50 billion daily from around the world on its platform, the release stated. It’s also one of the largest Society for Worldwide Interbank Financial Transactions (SWIFT) North American services bureaus, which work to help manage money transfers and treasury transactions.
Cboe’s latest data deal lays the foundation for a wide range of new crypto market products
Frank Chaparro – The Block
Derivatives exchange operator Cboe Global Markets is preparing to launch crypto indexes after inking a partnership with trading software firm CoinRoutes. The partnership provides Cboe with exclusive rights over the CoinRoutes RealPrice Best-Bid-Offer (BBO), which offers real-time crypto price data aggregated across several trading venues. Cboe plans to use the data to launch indexes tied to the digital asset market at the beginning of 2021, according to Catherine Clay, its senior vice president and head of information solutions.
Japan’s SBI to launch digital asset dealing desk after B2C2 acquisition; SBI Financial Services agreed to take a minority stake in B2C2 in July and has now acquired the firm fully amid plans to launch a crypto dealing desk.
Annabel Smith – The Trade
Japanese financial group SBI has said it will be the first globally to launch a principal digital asset dealing desk after acquiring UK crypto market maker B2C2. The deal follows news in July that SBI Financial Services, the subsidiary of SBI Holdings, had agreed to take a minority stake in B2C2 for $30 million.
Draft rehabilitation plan filed for defunct bitcoin exchange Mt Gox but details are scant
Michael McSweeney – The Block
A long-delayed rehabilitation plan for the bankrupt bitcoin exchange Mt Gox has been filed in a Tokyo court. A short notice issued on December 15 — two months after the previous deadline — indicated only that “the Rehabilitation Trustee filed a draft rehabilitation plan. The Tokyo District Court and an examiner will review the draft rehabilitation plan and determine whether to proceed with the rehabilitation proceedings relevant to the draft rehabilitation plan.”
Crypto Firm Co-Founder Gets Year in Prison Over Debit Card Scam
Christian Berthelsen – Bloomberg
A co-founder of a cryptocurrency firm was sentenced to a year in prison after pleading guilty to tricking investors out of more than $25 million in an investment scam promoted with the help of celebrities including Floyd Mayweather and musician DJ Khaled. Robert Farkas, 34, who created the firm Centra Tech with two other former co-workers at a luxury car rental company, was sentenced on Tuesday by U.S. District Judge Lorna G. Schofield in Manhattan. Farkas’ two co-founders have also pleaded guilty to their role in the scheme.
Fund Managers See Bitcoin Trade Crowded as Institutions Jump In
Vildana Hajric – Bloomberg
BofA manager survey shows Bitcoin is third-most crowded trade; The largest cryptocurrency has gained about 170% this year
Bitcoin’s dizzying rally in 2020 has captivated the professional investing class. About 15% of fund managers, with $534 billion under management, surveyed by Bank of America Corp. said Bitcoin is the third-most crowded trade behind being long technology shares and shorting the U.S. dollar. The poll was taken between Dec. 4 and Dec. 10.
Silk Road’s Ulbricht Being Considered for Pardon by Trump: Report
Sebastian Sinclair – Coindesk
U.S. President Donald Trump is reportedly weighing whether he should give the jailed founder of the defunct dark web marketplace Silk Road, Ross Ulbricht, a pardon. According to a report by the Daily Beast on Tuesday, the White House counsel’s office is reviewing Ulbricht’s case documents. The Daily Beast cites three sources familiar with the matter claiming the president has been reviewing cases ahead of his next round of pardons and commutations before the Jan. 20, 2021, inauguration of President-elect Joe Biden.
How A Biden Administration Is Likely To Approach Bitcoin
Roger Huang – Forbes
One opening question for the new Biden Administration is how they might deal with cryptocurrencies. It’s not going to be an issue that is central to the administration directly, yet with the emergence of the digital yuan from geopolitical competitor China, and inflationary monetary policy meant to gear a recovery in employment rates, the questions on the economy, great power competition and digital rights around the world, central themes of bitcoin, will be immediate priorities.
Open interest in Bitcoin derivatives hit new highs this week
MK Manoylov – The Block
This week saw open interest in bitcoin options and futures surge to new highs, according to data collected by The Block Research. On Sunday, open interest for bitcoin options reached $4.81 billion. Open interest refers to the total amount of contracts that have yet to be settled at a given time. Eighty-one percent of bitcoin options open interest was on market leader Deribit, followed by Bit.com (6%) and CME (5.4%).
UK regulator announces ‘temporary registration regime,’ extends operating deadline to July 9 for existing crypto businesses
Yogita Khatri – The Block
The U.K.’s Financial Conduct Authority (FCA) has just announced a “temporary registration regime” for existing crypto businesses. The new regime allows crypto firms that have applied for registration to continue operating until July 9, 2021. The previous deadline was January 10, 2021.
Japanese financial giant SBI acquires crypto trading firm B2C2; Japanese financial services firm SBI has acquired a 90% stake in trading firm B2C2, hopes to attract institutional investors into crypto.
Japanese financial giant SBI has completed another cryptocurrency-related acquisition in a move to bring more adoption to the industry. SBI Financial Services, a subsidiary of SBI Holdings, has acquired United Kingdom-based crypto trading firm B2C2. According to an official Dec. 16 announcement, SBI has purchased a 90% stake in B2C2, making it a subsidiary. The acquisition was completed on Dec. 15, the announcement notes.
Kraken Exchange Will Integrate Bitcoin’s Lightning Network in 2021
Colin Harper – Coindesk
One of Bitcoin’s most promising new technologies is coming to one of its oldest exchanges.
Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says
Craig Stirling – Bloomberg
Paper looks at fiscal policies in 18 countries over 50 years; Governments shouldn’t worry about taxes on rich, author says
Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic. The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.
China’s power is rising in an unstable world; Japan and Europe must step up to stabilise the global order
Ryosuke Harada – FT
The scourge of the coronavirus has exposed glaring weaknesses in capitalism and democracy all over the world. With wages for some stagnating and a growing digital divide, divisions in societies, and the gap between the haves and have-nots, have never been starker. While western countries flounder in the face of the pandemic and face challenges to their democracies, China has pulled ahead by containing the disease through technology and authoritarian rule.
Facebook Lifting Political Ad Ban For Georgia Runoff Elections
Alison Durkee – Forbes
Facebook is partially lifting its post-election ban on political ads, but only in Georgia ahead of the state’s runoff elections, the company announced Tuesday, as the social network continues to grapple with curbing misinformation after the election. Facebook has banned political ads since the week before Election Day, extending a policy meant to curb misinformation and “prevent confusion or abuse” as President Donald Trump draws out the election by refusing to concede.
How Capitalism Is Coping in an Era of Populism; A group of experts gathered to debate the role of government and business, and what each can do to address rising anger over inequality.
Michael J. de la Merced – NY Times
Recent years have seen a marked rise of populism, as leaders like President Trump tapped into fury over growing chasms in society to assume power and reshape American institutions. Even President-elect Joseph R. Biden Jr., an embodiment of the Washington establishment for decades, has embraced populist elements in his platform. (Core to his “Build Back Better” plan is “Buy American,” after all.)
Trump is pocketing Georgia Senate runoff donations for his PAC, while the GOP candidates themselves don’t get a dollar, a new report says
Jake Lahut – Business Insider
With only a few weeks left in office, President Donald Trump is taking his business instincts to a new fundraising venture for the highly consequential Georgia Senate runoffs, which will decide which party controls the upper chamber.
ECB issues tough conditions for resumption of bank dividends
Regulator recommends limits of 15% of past two years of profits and 0.2% of common equity tier one capital ratio
Martin Arnold – FT
Bank in the Eurozone will be able to pay modest dividends to shareholders again from the start of next year under strict limits outlined by Europe’s top financial regulator on Tuesday.
U.K. Watchdog Fines Barclays Units $34.7 Million Over Treatment of Customers in Arrears; Barclays said it has since implemented changes to its systems, processes and training and sought to redress customers
Sabela Ojea – WSJ
A top U.K. regulator has levied a £26 million ($34.7 million) fine on Barclays PLC-related units over the treatment of customers that fell into arrears or went through a difficult financial situation.
ESMA supports IFRS Foundation’s efforts on international standardisation in sustainability reporting
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its response to the IFRS Foundation’s consultation on sustainability reporting. ESMA recommends establishing high-quality international standards while also catering for the needs of jurisdictions that are at different stages in their sustainability efforts.
ESMA updates guidelines on stress tests for money market funds
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, is publishing the 2020 update of guidelines on MMF stress tests under the Money Market Funds Regulation (MMFR). The updates take account of MMFs recent experience during March 2020, particularly in relation to redemption scenarios.
ESMA reminds users of scheduled IT operations at the end of the Brexit transition period
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a reminder of the operations planned on its databases and systems at the end of the Brexit transition period on 31 December 2020.
FINRA Appoints Scott W. Anderson as Head of Market Regulation and Transparency Services
FINRA announced today that it has appointed Scott W. Anderson as Executive Vice President and Head of Market Regulation and Transparency Services. Anderson began his career at NASD, FINRA’s predecessor organization, and has 25 years of experience working on complex legal and compliance matters relating to the regulation of securities markets. He will join FINRA on Jan. 25, report to President and CEO Robert W. Cook and serve on FINRA’s Management Committee.
FINRA Announces Regional Committee, SFAC and NAC Election Results and Appointments
FINRA recently held annual elections to fill vacancies on its Regional Committees, Small Firm Advisory Committee (SFAC), and the National Adjudicatory Council (NAC). Additionally, at its December meeting, the FINRA Board of Governors (FINRA Board) also selected individuals to fill several appointed seats on the SFAC and NAC. This Notice lists the individuals recently elected and appointed to the Regional Committees, SFAC and NAC.
FCA establishes Temporary Registration Regime for cryptoasset businesses
The Financial Conduct Authority (FCA) has established a Temporary Registration Regime to allow existing cryptoasset firms, who have applied to be registered with the FCA, to continue trading. The FCA is advising customers of cryptoasset firms which should have applied to the FCA, but have not done so, to withdraw their cryptoassets or money before 10 January 2021.
FCA warns crypto consumers as temporary registration regime established; Unregistered UK cryptoasset firms may cease trading
Pedro Gonçalves – InvestmentWeek
The Financial Conduct Authority (FCA) has urged customers of cryptoasset firms which have failed to apply to the financial watchdog for registration to withdraw their investments before 10 January 2021. The FCA took on supervisory responsibility for anti-money laundering in January last year and required existing crypto businesses to register with it by 15 December this year in order to enforce compliance.
Securities Commission Malaysia And Bursa Malaysia To Uplift Temporary Suspension Of Regulated Short Selling On 1 January 2021
The Securities Commission Malaysia (SC) and Bursa Malaysia Berhad (Bursa Malaysia) will uplift the temporary suspension of Regulated Short Selling (RSS) and have reviewed other market management measures that were introduced this year following heightened market volatility arising from the broader impact of COVID-19.
Investing and Trading
Lira Traders, Burnt Eight Times, Hope 2021 Will Be Different
Tugce Ozsoy and Inci Ozbek – Bloomberg
Erdogan’s economy-team revamp has spurred orthodox policy bets; But investors warn a U-turn could come if conditions improve
Lira traders chastened by the currency’s almost 25% collapse this year are daring to believe 2021 will be different after President Recep Tayyip Erdogan’s surprise flip to more orthodox policies.
UK heads for busy year of IPOs after 2020 bounceback; Autumn brought a rush of fundraising in equity markets after coronavirus lull
Camilla Hodgson – FT
Bankers are gearing up for a burst of London IPOs next year after a rebound in the UK’s equity capital markets led to nearly $7bn in funds raised over the past four months.
There is no stock market bubble; The bigger question is whether rock-bottom interest rates will revert to ‘normal’ and, if so, when
Martin Wolf – FT
Are stock markets, especially the US market, in a bubble that is sure to pop? The answer depends on prospects for corporate earnings and interest rates. Provided the former are strong and the latter ultra-low, stock prices look reasonable.
Fed Closes Out Wild Year as All Eyes Focus on Bond-Buying Program; The central bank’s meeting will wrap up Wednesday, as the Fed stares down a bifurcated economic outlook.
Jeanna Smialek – NY Times
WASHINGTON — The Federal Reserve is wrapping up what might be the most activist year in its history with a final scheduled policy meeting this week, one at which it is expected to leave interest rates at rock bottom and to signal continued willingness to help the economy through the challenging pandemic era.
Environmental, Social and Corporate Governance
Money Managers Pledge to Hit Net Zero. Now the Hard Part; Lots of promises have been made, but it could be years until we see any results.
Tim Quinson – Bloomberg
In the past week, Macquarie Asset Management, the New York State Common Retirement Fund and a group of 30 fund management companies have come out with statements saying they’re serious about getting the world to net-zero emissions.
Fed joins central bankers backing Paris climate goals; Banks grapple with question of whether to use vast bond-buying programmes to combat climate risks
Martin Arnold – FT
The US Federal Reserve has joined a consortium of central bankers supporting the Paris climate goals as it becomes more outspoken on the risk climate change poses to the global economy.
Investors Pile Into ETFs Devoted to Socially Responsible ESG; Funds focusing on environmental, social and corporate governance practices draw record amount
Michael Wursthorn – WSJ
Money is pouring into exchange-traded funds that bill themselves as socially conscious. This year investors have put a record $27.4 billion into ETFs traded in U.S. markets that say they focus on environmental, social and corporate governance, or ESG, practices, according to data from FactSet, doubling the size of the sector.
BlackRock steps up its push for LGBT+ equality and inclusion by joining LGBT Great; Joining diversity programme
BlackRock, the world’s largest asset manager, has joined LGBT Great to intensify its efforts to increase LGBT+ awareness and visibility across the firm. The group joins as a top tier member and will work with LGBT Great to spearhead and lead the agenda across the investment, wealth management and savings industry.
Deutsche Bank Wins Dismissal of Lawsuits by Postbank Investors
Karin Matussek and Steven Arons – Bloomberg
Bid was adequate since companies didn’t act in concert: court; Ruling is likely to influence the outcome of other lawsuits
Deutsche Bank AG won’t have to pay former Deutsche Postbank AG shareholders more money for the takeover of the retail lender a decade ago, according to a court ruling Wednesday.
Warren Buffett and Goldman Sachs boss call for small business relief
Thornton McEnery – NY Post
Warren Buffett is warning Congress that it needs to stop dithering on economic stimulus or risk the future of American small business.
Vanguard achieves world’s first trillion-dollar fund; The fund is the world’s first $1trn product
James Baxter-Derrington – InvestmentWeek
Vanguard has made history as one of its equity index funds becomes the first ever to hold more than $1trn in assets under management (AUM), according to reports. The Vanguard Total Stock Market Index fund surpassed the milestone, holding $1,035,112,935,440 in assets as of 30 November, a far cry from its year-end total of $512m in 1992, the year it was launched.
Australia Set for Budget Windfall After Iron Ore Prices Soar
James Thornhill – Bloomberg
Government assumes prices will fall to $55/ton by end 3Q; Spot prices top $150 on Chinese demand, constrained supply
Australia stuck with a conservative iron ore price forecast in its latest budget update, even as prices surge, setting the country up for a windfall that may bolster its recovery from a pandemic-driven hit to the economy.
SNB’s Frenzied Currency Battle May Give Way to Easier 2021
Catherine Bosley – Bloomberg
Central bank spent 90 billion francs on interventions in H1; Interest rates likely to stay at record-low -0.75% on Thursday
Swiss National Bank President Thomas Jordan has reason to expect a less intense 2021 after a multi-billion currency battle this year that put Switzerland in the crosshairs of U.S. authorities.
Japanese retail investors give shares in toaster maker 88% pop; Designer brand Balmuda enjoys stunning debut as Tokyo ends year with IPO frenzy
Leo Lewis – FT
Japanese retail investors have placed a $270m valuation on the company behind the nation’s most elite toaster — a contraption that has made breakfast into an art form, took 20 years to perfect and whose designer was once reduced to tears by a loaf of bread.
If self-interest is the measure, Boris Johnson will do a Brexit deal
The UK prime minister puts himself top of his creditors, but forgets his debt to voters
Robert Shrimsley – FT
Life, notes one of John le Carré’s protagonists, “is duty. It’s just a question of establishing which creditor is asking the loudest”. The late novelist, who also wrote that “the privately educated Englishman is the greatest dissembler on earth” was no fan of Brexit or Boris Johnson, but the UK prime minister often resembles one of his complex and compromised characters.
Treasury plans UK tax shake-up for asset holding companies; Move to bolster City of London’s appeal at end of post-Brexit transition
Emma Agyemang and Siobhan Riding – FT
The UK is pushing ahead with sweeping reforms of the way specialist vehicles used by private equity and infrastructure funds are taxed as the government seeks to bolster the country’s appeal as an asset management hub at the end of the post-Brexit transition period.
UK drops push for renationalising of fishing vessels in Brexit talks
Daniel Boffey and Peter Walker – The Guardian
Downing Street has watered down a key demand over post-Brexit fishing rights as part of a broader compromise, EU sources said as Germany’s ambassador in Brussels said there was a chance of a deal by the weekend. The UK dropped a push for fishing vessels operating under the UK flag to be majority British-owned in the future, it was claimed. It came as Jacob Rees-Mogg, the leader of the Commons who is responsible for its timetable, suggested it was “theoretically possible” that MPs could be asked to approve a trade deal retrospectively.
UK firms struggling to import as end of Brexit transition period looms
Richard Partington – The Guardian
Manufacturers are stockpiling goods as disruption at Britain’s ports before the end of the Brexit transition period piles pressure on UK companies, raising the likelihood of supply shortages. With little more than two weeks before the UK leaves the EU single market and customs union, the latest monthly survey from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) said British companies were struggling to import goods owing to congestion at the county’s main ports.
Brexit Border Chaos Prompts Warning Truckers Will Ditch U.K.
Alex Longley – Bloomberg
Europe’s largest truck owner warned it could turn away deliveries to the U.K. if Brexit triggers chaos at the border, a move that could threaten supermarkets’ supplies of fresh produce. With a little more than two weeks until the U.K. leaves the European Union’s single market, Kristian Kaas Mortensen, an executive at Girteka Logistics, said he expects queues at the border that could stretch as far as 50 kilometers (31 miles). Hold-ups could force his firm, which owns 7,500 trucks, as well as its rivals to limit bookings to the U.K., he said in an interview.
London Touts Financial Dominance With Brexit Talks In Balance
Silla Brush – Bloomberg
Brexit talks may be hanging in the balance but London remains a dominant financial center and a critical pillar of the U.K. economy. The U.K. is the world’s biggest net exporter of financial services, with its $77 billion trade surplus in 2019 outpacing the U.S., Switzerland, Singapore and countries across the European Union, according to a report Wednesday by TheCityUK, a lobbying group for the industry. That figure hits $102 billion when including related offerings like legal and accounting services.
EU chief says UK trade pact closer but success not certain
Francesco Guarascio, Gabriela Baczynska – Reuters
Britain and the European Union have moved closer to sealing a new trade deal but it was still unclear if they would succeed, the bloc’s chief executive said on Wednesday.
Britain and the EU are in the final stretch of talks to keep an estimated one trillion dollars of annual trade free of tariffs and quotas beyond Dec. 31, when the United Kingdom finally transitions out of the world’s largest trading bloc. With just over two weeks left, Prime Minister Boris Johnson said he hoped the EU would “see sense” and agree a deal that respected Britain’s sovereignty, while German Chancellor Angela Merkel said the bloc favoured agreement.
Washington Post signs up for new online advertising tool; ID system from The Trade Desk is a closely watched successor to tracking cookies
Richard Waters – FT
The Washington Post has become the first big publisher to sign up for a new way of targeting online advertisements at its readers, as the advertising world searches for a successor to the cookies that currently underpin digital ads. The identity system developed by US adtech company The Trade Desk relies on users signing up for a single ID, potentially tied to their email address or mobile phone number, that they can use to sign in across multiple sites.
MacKenzie Scott Announces $4.2 Billion More in Charitable Giving; “She’s disrupting the norms around billionaire philanthropy by moving quickly,” an expert on charities said.
Nicholas Kulish – NY Times
In her short career as one of the world’s leading philanthropists, MacKenzie Scott has made a mark through the enormous scale of her giving and also through its speed, donating nearly $6 billion of her fortune this year alone.