CFTC Approves New Futures Exchange Aimed at Individual Traders

Mar 11, 2020

First Read

Hits & Takes
By JLN Staff

The markets have passed the post Dodd-Frank rules stress test, but have not figured out how to turn the stress test off. It was suggested to me we should be thanking Mr. Dodd and Mr. Frank for the way the markets have handled all this recent stress. They continue to work.~JJL

Nils-Robert Persson is now the chairman of Vermiculus Financial Technology. Not sure what Vermiculus is, but it sounds like a spell from Harry Potter.~JJL

The FIA today released a study in partnership with Greenwich Associates assessing market sentiment around several trading and clearing trends in derivatives markets. These included: the impact of capital requirements, the adoption of central clearing, the transition away from Libor, and the implementation of margin requirements on uncleared derivatives. ~SR

NYSE Arca Equities will temporarily widen the price collars for its Core Open Auction to 10% for all securities.~JJL

The White House is supposedly suggesting payroll tax relief to help with the impact from the coronavirus. I am wondering how that is going to help those people laid off from all of this?~JJL

JLN interviewed Renato Mariotti yesterday for a video for our yet to be released Spoofing Special Report. The report is scheduled to be released on April 1.~JJL

Today we are shooting interviews with Quantitative Brokers and Chris Hehmeyer, which we had originally scheduled to do during the FIA Boca conference.~JJL

The OIC is running a webinar today at 3:30 PM CST called, “Options Premium and Pricing.” It’s a free educational webinar, so why not check it out if you have the time? You can register for it here.~MR

The OCC has agreed to become a sponsor of The Spread. We are very excited to have them as a sponsor and so is Mr. Bill.~JJL


R.J. O’Brien Selects Eventus Systems for Global Market Surveillance, Real-Time Risk Monitoring Solution; Cloud Deployment of Validus Platform to Begin April 1
R.J. O’Brien
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, and
Austin-based Eventus Systems, Inc., a multi-award winning global trade surveillance and market risk software platform provider, today announced that RJO has selected Eventus to provide its global market surveillance and real-time risk monitoring solution. RJO conducted an extensive international search before choosing Eventus and expects its cloud deployment of the Validus platform.

*****The link to this story in yesterday’s newsletter didn’t work for some people. This link should work. This was John’s mistake, but please don’t mention it to him.~SR


U.S. Treasury Likely to Push Back April 15 Tax Filing Deadline, Sources Say; Tax filing extension would be part of broader fiscal stimulus effort
Kate Davidson, Richard Rubin and Andrew Restuccia – WSJ
The Trump administration is likely to extend the April 15 tax deadline as part of an effort to mitigate the effects of the novel coronavirus on U.S. households and businesses, according to an administration official and another person familiar with the matter.

*****This is more spring forward.~JJL


Take this seriously. Coronavirus is about to change your life for a while
Zach Wolf – CNN
If you thought coronavirus was no big deal or if you thought it was going to go away, wake up. Your life is about to change. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, issued a disturbing warning during a White House briefing Tuesday: Americans everywhere need to change the way they live their lives. Right now.

***** I had a talk with each employee yesterday in Chicago about this and we are working on our contingency plans.~JJL


Coronavirus Conference Gets Canceled Because of Coronavirus
David Welch – Bloomberg
So much for keeping business rolling during the coronavirus pandemic.
The Council on Foreign Relations has canceled a roundtable called “Doing Business Under Coronavirus” scheduled for Friday in New York due to the spread of the infection itself. CFR has also canceled other in-person conferences that were scheduled from March 11 to April 3, including roundtables in New York and Washington and national events around the U.S.

*****Of course it was.~JJL


Trading Technologies and Nodal Exchange Launch Collaboration to Provide Market Access Through the TT Platform
Trading Technologies International, Inc.
Trading Technologies International, Inc. (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, and Nodal Exchange, a derivatives exchange providing price, credit and liquidity risk management solutions to participants in the North American commodities market, today announced they have entered into a commercial agreement whereby Nodal Exchange’s contracts will be available for trading through the TT platform.

******I would like to see TT connect to the Yodel Exchange. That would be something to shout about.~JJL


Barchart Releases Marketplace to Connect Grain Elevators with Farmers
Barchart, a leading provider of commodity data and agribusiness solutions, announces the release of Marketplace, a solution that connects grain buyers with their producers in ways that were not previously possible. Part of the cmdty by Barchart product line, elevator-branded Marketplace mobile apps create a private community between grain buyers and producers that is linked through an immersive chat experience and physical grain trading capabilities.

****** Barchart continues to be one of the most interesting fintech companies.~JJL


Collaborating to Proactively Regulate the Digital Asset Ecosystem
ErisX Insights
Since their debut more than a decade ago, bitcoin and other digital assets have enjoyed heightened interest among retail and institutional investors across geographies and achieved several adoption milestones over this period. This progress has occurred despite the very different approaches taken by regulators in different regions who are, in some cases, still refining their own rulemaking processes.

*****Don’t forget about digital assets amid all this virus stuff. No one is going to want to touch money anytime soon.~JJL


Tuesday’s Top Three
Our top story Tuesday was Yes, You Should Work From Home to Help Fight Coronavirus Spread, from Bloomberg News. According to the article, most Bloomberg readers can work from home, and should. Second was COVID-19: Preparedness & Market Navigation, from ICE Data Services. Third was The Financial Times’ How this market crash is different from 2008, and the same.


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Lead Stories

CFTC Approves New Futures Exchange Aimed at Individual Traders
Alexander Osipovich – The Wall Street Journal
Regulators have given the green light to a startup exchange that wants to attract individual traders to the risky world of futures.
The Small Exchange, a venture led by a former executive of TD Ameritrade Holding Corp., AMTD 11.81% won approval from the Commodity Futures Trading Commission on Tuesday to become the newest U.S. futures exchange.

SEC becomes first federal agency to ask DC employees to work from home over potential coronavirus case
Rob McLean and Caroline Kelly, CNN
The Securities and Exchange Commission is asking all personnel based at its headquarters to work from home due to an employee who may have coronavirus, according to an SEC spokesperson, becoming the first federal agency to ask its Washington employees to stay home.

How to Stop Coronavirus Shutdowns Becoming a Crisis of Solvency; Countries with most coronavirus cases, outside China
Mike Bird – WSJ
As the impact of the coronavirus and the measures to prevent it keep spreading, governments around the world are grasping for ways to address the sudden seizure in economic activity. Major proposals in recent days have come from the U.S. and Italy. In the former, a payroll-tax cut is on the table. In the latter, it is a moratorium on the repayment of debts, including household mortgages and, for businesses, small loans and revolving credit lines.

Financial markets ‘not broken’, says Goldman Sachs finance chief; Energy companies not in ‘immediate stress’, Stephen Scherr tells fintech conference
Laura Noonan – FT
Energy companies are not in “immediate stress” and financial markets are “not broken”, Goldman Sachs finance chief Stephen Scherr said, in the first public comments from a senior US bank executive on the many threats that have hammered bank shares for the last week.

Wall Street Comes Up With a Wish List to Stem Coronavirus Pain
Annie Massa – Bloomberg
Help for small business, furloughed workers among suggestions; ‘We need to see follow-through’ from government: Ryan of UBS
Wall Street investors, still reeling from market turmoil created by the coronavirus, are proposing an array of measures to help ease the economic pain brought on by the outbreak.

You Can’t Fight the Virus Without Harming the Economy; Quarantines, travel restrictions, business closings, and citizens’ voluntary self-protection measures are helpful, but they’ve frozen business while wreaking havoc on people’s routines.
Peter Coy – Bloomberg
When Covid-19 strikes, the worst of the damage is done by the body’s effort to fight off the disease. The immune system can overreact in what doctors call a cytokine storm. Immune cells attack not just the viral invader but healthy tissue as well. Victims gasp for breath as their lungs fill with fluid. The novel coronavirus, which scientists have christened SARS-CoV-2, tricks us into fighting it so hard that, in the most extreme cases, we kill ourselves.

ECB’s Lagarde Warns of 2008-Style Crisis Unless Europe Acts
Fergal O’Brien – Bloomberg
Lagarde tells EU leaders ECB looking at all tools, will act; Central bank president issues dire warning of virus fallout
Christine Lagarde said Europe risks a major economic shock similar to the financial crisis unless leaders act urgently on the coronavirus, and indicated the European Central Bank will take steps as soon as this week.

Aboard Air Force One, Trump Was Shaken Into Action on Virus
Justin Sink, Saleha Mohsin, Jennifer Jacobs and Shawn Donnan – Blomberg
As Air Force One sped toward Washington on Monday, the historic impact of the coronavirus outbreak became inescapable for President Donald Trump. Televisions on his plane were tuned to Fox News, which broadcast dire graphics illustrating the single worst day for stock markets since the 2008 financial crisis. Matt Gaetz, a Florida GOP congressman who had accompanied Trump to a series of fundraising events in Orlando, had isolated himself in an empty cabin on the jet after learning he’d had contact with someone infected by the virus at a political conference.

New York sends in National Guard to contain coronavirus; Troops to help check spread of virus in hard-hit suburban community of New Rochelle
Joshua Chaffin – FT
New York state is sending National Guard troops to suburban New Rochelle to help establish a “containment zone” in an attempt to check the spread of coronavirus in one of the hardest-hit communities in the US.

New York officials traced more than 50 coronavirus cases back to one attorney
Sheena Jones and Christina Maxouris, CNN
In one small suburb on the outskirts of New York City, coronavirus cases jumped from one to more than 100 in less than 10 days. Now the state’s governor is trying to catch up to the virus by setting up a containment area around New Rochelle and deploying the National Guard to assist with food deliveries and clean public spaces.

JPMorgan, Citigroup Feast on Equity Derivatives in Virus Panic
Donal Griffin – Bloomberg
Banks said to see $500 million surge in revenue amid panic; Investors using securities to speculate, hedge during turmoil
The historic panic in global stock markets has spawned a fortune for some of the world’s biggest investment banks. JPMorgan Chase & Co. and Citigroup Inc. have added about $500 million in revenue from equity derivatives trading year-to-date compared with the same period in 2019, people familiar with the matter said. Trading surged as investors rushed to bet on stock moves and protect their holdings.

Putin Isn’t as Immune to the Oil Crash as He’s Letting On
Anna Andrianova and Natasha Doff – Bloomberg
Kremlin pain will grow if crude war lasts more than 1 year; Prolonged low prices put higher living standards at risk
After embarking on an oil price war that shook global markets, Russia has been boasting that it can cope with oil as low as $25 a barrel for the next decade. Economists aren’t so sure.

U.K. Health Minister Tests Positive for Coronavirus Days After No. 10 Visit
Robert Hutton – Bloomberg
Times reports she attended reception with Johnson last week; News may increase pressure to take more action against disease
A U.K. minister of health, Nadine Dorries, has become the first British member of parliament to test positive for coronavirus. She’s reported to have attended a reception with Prime Minister Boris Johnson the day before she fell ill, and had met hundreds of people in Parliament that week. The Times reported she had fallen ill on Friday and her diagnosis was confirmed Monday evening.

It was a marriage of convenience based on oil. When it came apart, it sent the markets reeling.
Andrew Higgins and Andrew E. Kramer – NY Times
It was always a marriage of convenience, whatever the pledges of devotion, but when Russia and Saudi Arabia parted ways late last week after a dispute over oil production, it was like a lot of breakups: instantly acrimonious.

Mexico says hedge covers oil income, government should accelerate spending
Abraham Gonzalez, Frank Jack Daniel – Reuters
Mexico’s finance minister said on Tuesday a $1.4 billion hedge program completely covered 2020 national oil income following a steep drop in crude prices, adding the government needed to accelerate spending to help stimulate a flagging economy.

TP Icap boss: You might have to stop calling us a broker; Storied City broker has been diversifying its global businesses under Nicolas Breteau
Samuel Agini – Financial News
The chief executive of TP Icap, one of London’s biggest brokers to investment banks, has said there may come a day when the storied City firm no longer calls itself a broker. Nicolas Breteau, who has been CEO of TP Icap since July 2018, is diversifying the group’s revenues by reaching for clients outside banking and growing its data business and oil and energy brokerage.

Coronavirus Cancels Vote at Federal Regulator; Move by Securities and Exchange Commission comes after employee is referred for testing
Paul Kiernan – WSJ
A federal regulator canceled a planned public vote this week in which officials were expected to give some companies relief from audit requirements after an employee was referred for novel coronavirus testing.

Treasury Holds Call With Fed and SEC on Virus-Fueled Volatility
Benjamin Bain – WSJ
President’s Working Group spoke Tuesday on market impacts; FSOC will convene later this month to discuss similar issues
Treasury Secretary Steven Mnuchin held a call Tuesday with the leaders of the Federal Reserve, Securities and Exchange Commission and other financial agencies to discuss how markets are faring amid intense volatility spurred by the spread of coronavirus.

Robinhood Maxed Out a Credit Line Last Month as Markets Fell
Jennifer Surane, Annie Massa, and John Gittelsohn – Bloomberg
The online brokerage has already returned the capital to banks; Repeat outages spurred investor frustration with upstart firm
In the throes of frantic market uncertainty, traders using Robinhood Markets Inc. faced the ultimate frustration: Their accounts kept malfunctioning. Behind the scenes, the online brokerage was already bracing for financial strains.

Exchanges, OTC and Clearing

Trading in VIX options froze after open -CBOE
Aaron Saldanha- Reuters
Trading in options on Wall Street’s fear gauge was impossible in the first minutes of Monday’s session due to an absence of prices from the market makers on whom trading depends, a representative of index operator CBOE Global Markets Inc said.

More cleaning, few visitors on Chicago, London trading pits amid coronavirus
Tom Polansek – Reuters
Exchange operators in Chicago and London are making contingency plans and stepping up cleaning for the world’s last remaining open-outcry futures and options trading floors as the global spread of coronavirus spooks markets. The exchanges are seeking to avoid disruptions linked to the virus, which has roiled equities and commodities prices worldwide.

First Islamic bonds have been listed on AIX
Astana International Exchange (“AIX”, “Exchange”) is pleased to announce the first cross listing at AIX of Sukuk issued by Qatar International Islamic Bank (QIIB) with primary listing on the London Stock Exchange (LSE). This QIIB debt is a Shari’ah-compliant, fixed-income capital markets instrument.

CME Group Inc. Announces First-Quarter 2020 Earnings Release, Conference Call
CME Group
CME Group Inc. will announce earnings for the first quarter of 2020 before the markets open on Wednesday, April 29, 2020. Written highlights for the quarter will be posted on the company’s website at 6:00 a.m. Central Time, the same time it provides its earnings press release. The company will hold an investor conference call that day at 7:30 a.m. Central Time, at which time company executives will take analysts’ questions.

TP ICAP hits record trading volumes from market volatility; UK interdealer broker forecasts low single-digit revenue growth for the year
Philip Stafford – FT
TP ICAP, the interdealer broker, has experienced a record volume of trading in the last week as rapidly shifting sentiment on global interest rates and the oil price crash roiled prices on its main markets.


Robinhood Maxed Out a Credit Line Last Month as Markets Fell
Jennifer Surane, Annie Massa, and John Gittelsohn – Bloomberg
In the throes of frantic market uncertainty, traders using Robinhood Markets Inc. faced the ultimate frustration: Their accounts kept malfunctioning. Behind the scenes, the online brokerage was already bracing for financial strains. Robinhood drew its entire $200 million credit facility from Barclays Plc, Citigroup Inc. and JPMorgan Chase & Co., according to people familiar with the matter. It made the move just as fears of the coronavirus set off more than two weeks of violent market swings and heavy volume, during which Robinhood’s trading platform suffered three significant outages.

Google recommends all North America employees to work from home
Alphabet Inc’s (GOOGL.O) Google is recommending all of its North American employees to work from home if their roles permit, the search giant said on Tuesday, aiming to minimize the risk of spreading the coronavirus.

COVID-19 – Home Working Probably Won’t Break UK Broadband
Over the past few days a number of newspapers and websites have run with stories claiming “experts” are predicting that the United Kingdom’s broadband ISP networks “will be unable to cope” if millions of people start working from home during the COVID-19 Coronavirus outbreak, but such reports can be misleading.

Euromoney TRADEDATA releases Symphony App
Euromoney TRADEDATA is pleased to announce the release of its first reference data application that can be deployed into the Symphony secure team collaboration environment, in the second deliverable from its strategic partnership with ipushpull, the powerful data sharing and workflow platform.

JPMorgan slashed how long it takes to test out fintechs from 9 months to 3 weeks with a new process that could save it millions as it looks to buy, invest in, or work with more young companies
Dan DeFrancesco – Business Insider
For a bank the size of JPMorgan, putting a fintech through its paces used to be a long and costly ordeal.

As Investor Demographics Continue to Shift, TradeStation Group Announces Sponsorship with TradeOff, a company focused on Gamifying Trading
PR Newswire PR Newswire•March 6, 2020
TradeOff brings gaming to Wall Street to engage with a new generation
TradeStation Group, Inc.
TradeStation Group, Inc. (“TradeStation”), a Monex Group company, today announced a sponsorship with TradeOff Technologies, LLC (“TradeOff”), a fantasy stock trading platform. As the financial industry continues to identify new ways to reach millennials, TradeOff is leveraging the soaring popularity of online gaming to help bring financial literacy and education to new investors and traders in an interesting, simulated trading environment.

TransFICC and SoftSolutions to Provide Connectivity for Interest Rate Swaps
TransFICC, the specialist provider of low-latency connectivity and workflow services for Fixed Income and Derivatives Markets, and SoftSolutions, the developer of high-performance mission-critical platforms, have announced a partnership to provide clients with connectivity and workflow solutions for Interest Rate Swaps.


Coronavirus: Best and Worst-Case Scenarios for Bitcoin & Beyond
Rachel McIntosh – Finance Magnates
Finally, after the coronavirus (COVID-19) brought forth days of some of the worst price movements that financial markets have seen in years – or even decades – investors may be breathing a small sigh of relief. At press time, the S&P500 was showing upward motion, with a 24-hour increase of just under 5 percent. The Brent Crude international oil standard, which dove 30 percent when trading opened on Monday, has stabilized around $37 a barrel, and is even showing some small progress toward recovery.

The Cryptocurrency Act of 2020 Is ‘Dead on Arrival,’ Washington Tells Sponsors
Daniel Kuhn – Coindesk
An omnibus bill aimed at comprehensive reform of U.S. cryptocurrency regulation was introduced Monday by Representative Paul Gosar (R-Ariz). It is thought to have little chance of passage at present but, according to lawyers and backers in the industry, it does provide insight into what a top-to-bottom new law governing crypto could look like one day. Marshall Hayner of Metal Pay and Erik Finman, who became a millionaire from bitcoin (BTC) before the age of 18 and now runs an investment fund, contributed to the discussion draft.

Circle announces launch of APIs for businesses to adopt USDC stablecoin
Frank Chaparro – The Block
Circle is opening up the doors of its new stablecoin platform to businesses. The company announced Tuesday that business clients can now sign up for the Circle Business Account, a toolbox of APIs that allow developers to build on top of USDC – the stablecoin it founded alongside Coinbase in 2018 via the CENTRE consortium. The move is the latest development in Circle’s shift from a business primarily built around trading and investing to one focused on the adoption and use of stablecoins.

Productive Congressional Blockchain Hearing Looks Like
Nikhilesh De – Coinbdesk
For once, U.S. lawmakers had an informative conversation about blockchain technology without posturing. The House Committee on Small Business hearing last week lasted only an hour, and only four members asked questions. But in some respects it was far more productive than an eight-hour hearing of the larger Financial Services Committee might have been. It was a sharp contrast from past Capitol Hill proceedings, when lawmakers took their entire allotted time to compare Libra to terrorist attacks or ask pointed questions about how Silicon Valley is biased toward one partisan slant or another.

Bitcoin Option Volumes Hit Fresh Records, Bakkt Saw Zero Turnover
Aziz Abdel-Qader – Finance Magnates
Bitcoin options contracts are nearing the $200 million benchmark, volume-wise, as crypto-data analytics firm Skew says the cryptocurrency derivative has touched a new all-time high yesterday. With $198 million worth of contracts sold in a single day, BTC options turnover on Monday has taken out the previous record high of $171.3 million set last month. Skew data also shows that Panama-based crypto platform Deribit continues to maintain its dominance with its metrics having dwarfed volumes on competing exchanges, including institutional marketplaces like CME and Bakkt. Specifically, Deribit has handled $170 million of total option volumes, commanding more than 85 percent of the market share worldwide.

New Celo Alliance Has Same Aims as Libra – And Some of the Same Partners
Leigh Cuen – Coindesk
The Silicon Valley crypto startup cLabs, focused on mobile payments and the Celo blockchain project, is following another precedent from Facebook’s Libra playbook by launching an industry association through a separate Celo Foundation. Dozens of blockchain companies and investors – including Libra Association members Coinbase, Andreessen Horowitz, Bison Trails and Anchorage – are committing to promote Celo tokens in some fashion by joining this “Alliance for Prosperity.”

A16z, Coinbase Ventures join an alliance to build financial apps on top of Celo blockchain
Yogita Khatri – The Block
Venture firms Andreessen Horowitz (a16z), Coinbase Ventures, Polychain Capital, and several other crypto firms have joined the “Alliance for Prosperity” to build financial apps on top of the Celo blockchain. The Celo Foundation announced the news on Wednesday, saying that 50 initial members of the alliance will work toward financial inclusion and explore several use cases such as remittances, humanitarian aid, and microlending.

Europe’s New AML Rules Made Crypto More Attractive to Institutions, Says Boerse Stuttgart Exec
Paddy Baker – Coindesk
The fifth anti-money laundering directive (AMLD5) has unexpectedly increased institutional interest in cryptocurrencies, according to an executive at the crypto trading subsidiary of Boerse Stuttgart. Speaking at the CryptoCompare London conference Tuesday, Boerse Stuttgart’s chief digital officer, Dr. Ulli Spankowski, admitted he had been “surprised” by the positive effect 5AMLD had on attracting traditional financial institutions into cryptocurrencies. “I actually didn’t think anything would happen because banks and other financial institutions could already do crypto custody [and] could do crypto trading,” Spankowski said. But since the law came into force earlier this year, “we now see a lot of interest from the traditional players as well.”

UK Trade Negotiators Eye Blockchain Provisions in Coming US Trade Talks
Danny Nelson – Coindesk
The United Kingdom’s trade negotiators want to influence global blockchain regulation in its upcoming free trade talks with the United States, according to the negotiating objectives released by the U.K.’s Department for International Trade (DIT). The plan is straightforward and the “opportunity,” as DIT called it, is clear. In its 184-page action plan released March 2, U.K.’s post-Brexit trade broker said it will “seek to deliver” favorable digital trade terms for small to midsize businesses, including those in blockchain.

Human Rights Foundation now accepts bitcoin donations via BTCPay Server
Yogita Khatri – The Block
The Human Rights Foundation (HRF), a New York-based non-profit charity, is now accepting bitcoin donations via open-source payment processor BTCPay Server. The non-profit has been accepting bitcoin donations since 2014, but this is the first time it is using a payment processor, Alex Gladstein, chief strategy officer of the HRF, told The Block. “BTCPay Server helps protect the privacy of donors; has no centralized entity that would collect or exploit user information; and is nicely customizable,” said Gladstein.

Polychain, Dragonfly-backed DeFi project Paradigm Labs is shutting down
Celia Wan – The Block
Paradigm Labs, a decentralized finance (DeFi) project backed by Polychain Capital, Dragonfly Capital, and Chapter One Ventures, is shutting down. Announcing the news on Tuesday, CEO Liam Kovatch said the decision was made due to a failure to identify product-market fit and a lack of funding. “After almost two years of active research and development, our team has come to the decision that without significant product-market fit and limited resources to pursue emergent opportunities, the kind of success we envisioned for Paradigm Labs is unlikely,” Kovatch wrote in the post. “Out of respect to all of our stakeholders, we assessed this situation as quickly as we believed we could responsibly do and converged on the decision to sunset the company.”

IOTA is back online nearly a month after $2 million attack on wallet software users
Yilun Cheng – The Block
The IOTA network went back online Tuesday after an extended shutdown following an attack on users of the Trinity wallet software. When the attack happened on Feb 12, the IOTA Foundation – a non-profit group that oversees the development of the network and runs the so-called Coordinator node – took down the Coordinator to stop value transactions and protect Trinity users from further thefts of their tokens. Around $2.2 million in IOTA tokens were stolen from users as a result of vulnerability.


Trump summons top bankers for emergency coronavirus meeting; Global lenders race to respond to outbreak and risks it poses to business and the economy
Stephen Morris, Laura Noonan and David Crow – FT
Donald Trump has summoned some of America’s most senior bankers to an emergency coronavirus meeting on Wednesday as global lenders scramble to respond to the threat the outbreak poses to business and the economy.

Oil Lobbyists Call on Trump to Buy the Dip for Strategic Reserve
Ari Natter, Jennifer A Dlouhy, and Stephen Cunningham – Bloomberg
Pitch follows collapse in oil prices due to Saudi price war; Trump officials weighing royalty relief for oil production
America’s emergency oil reserves have been used in the past to provide relief from price spikes caused by wars or hurricanes. Now, they could be deployed to help oil drillers reeling from the worst market rout in nearly 30 years.

No plans to shut UK parliament despite positive coronavirus test
Britain’s parliament has no plans to shut over coronavirus, a spokeswoman said on Wednesday, after a minister tested positive for the virus and another lawmaker was advised to stay at home as a precaution.

Trudeau to Announce Financial Measures in Canada Virus Response
Erik Hertzberg and Kait Bolongaro – Bloomberg
Prime minister to unveil new steps at 9 a.m. on Wednesday; May include faster access to funds for those in isolation
Canadian Prime Minister Justin Trudeau is set to announce financial measures on Wednesday to help mitigate the effects of the widening coronavirus outbreak.

Don’t Sweat A Financial Transaction Tax
Paul Jacobs, CFP, EA – Palisade Hudson Financial Group LLC
Current and former candidates for the Democratic presidential nomination have expressed support for a “financial transaction tax.” As election year tax policy promises go, it is not one worth losing sleep over – regardless of the naysayers’ doomsday predictions.

There Are No Libertarians in an Epidemic; Donald Trump is running for reelection on an anti-socialist message. But the COVID-19 outbreak demonstrates the emptiness of ideological labels.
Peter Nicholas – The Atlantic
“America vs. Socialism” was the theme of the Conservative Political Action Conference last month, though as fights go this one was pretty one-sided. An anti-socialist message thrummed through the halls while the crowds celebrated free-market capitalism over $4 cups of coffee and $20 chicken-salad sandwiches wrapped in cellophane.


FINRA Launches New Data on Treasury Securities Trading Volume; Treasury Aggregate Statistics to Provide More Transparency in Marketplace
FINRA today for the first time posted weekly, aggregate data on the trading volume of Treasury securities reported to TRACE, FINRA’s Trade Reporting and Compliance Engine.

Accounting Support Fee to Fund the Governmental Accounting Standards Board
In February 2012, pursuant to an SEC order, FINRA established an accounting support fee (GASB Accounting Support Fee) to adequately fund the annual budget of the Governmental Accounting Standards Board (GASB). The GASB Accounting Support Fee is collected on a quarterly basis from member firms that report trades to the Municipal Securities Rulemaking Board (MSRB). Each member firm’s assessment is based on its portion of the total par value of municipal securities transactions reported by all FINRA member firms to the MSRB during the previous quarter. FINRA will assess and collect a total of $10,022,000 to adequately fund GASB’s annual budget by collecting $2,505,500 from its member firms each calendar quarter beginning in April 2020.

CFTC Designates Small Exchange, Inc. as a Contract Market
The Commodity Futures Trading Commission today announced that it has issued an Order of Designation to Small Exchange, Inc., located in Chicago, Ill., granting it status as a designated contract market (DCM), effective today. Small Exchange is incorporated under Delaware state law.

SEC Halts Fraudulent Offering By Florida Investment Adviser
On March 6, 2020, the Securities and Exchange Commission obtained an asset freeze and other emergency relief against Florida-based investment adviser Kinetic Investment Group LLC and its managing member, Michael Scott Williams, in connection with an alleged fraudulent, unregistered securities offering that raised approximately $39 million from at least 30 investors located mostly in Florida and Puerto Rico.

DOJ to Propose Changes to Legal Shield for Tech Companies
Victoria Graham and David McLaughlin – Bloomberg
No. 2 official says tech firms going beyond intent of law; Changes to Section 230 would threaten business models
The Justice Department plans to propose changes to a legal shield enjoyed by companies such as Alphabet Inc.’s Google and Facebook Inc. amid criticism that the tech platforms carry material that promotes illicit conduct and suppresses conservative opinions.

SEC Lacks Enough Resources To Make Specific Climate Disclosure Requirements Says Obama-Era Chair
Ted Knutson – Forbes
The Securities and Exchange Commission lacks enough resources to make specific climate risk disclosure requirements, Elisse Walter, who was chairman of the SEC during the Obama Administration, said Monday.

Investing and Trading

Saudi-Russia price war puts $110bn of US energy bonds on the brink; Debt issued by US producers plummets in price, mirroring crude
Joe Rennison – FT
Nearly $110bn of bonds sold by energy companies in the US have fallen into distressed territory, after a plunge in the oil price left investors doubting that the money will be paid back.

Don’t Get Comfortable. Stocks Also Bounced in 1929; And 1987, and 2008. A bottom won’t be reached until investors lose all hope.
John Authers – Bloomberg
Are We There Yet?
Markets like bouncing, and they certainly bounced Tuesday. The 10-year Treasury yield, at the time of writing, has rebounded to 0.803%, having hit a low early Monday of 0.314%. This is by far the greatest volatility the bond market has experienced since the crisis of 2008-09. U.S. stocks had their best day since 2018, after European stocks staged a 4.3% rally only to give it all up and close lower.

They Manage $310 Billion, and They Want New Carbon Pricing Rules
Love Liman – Bloomberg
Three of the biggest asset managers in Sweden have started a campaign to force listed companies to back up their carbon-emissions claims with a lot more data.

Top ESG Manager Is a Philosophy Graduate With Outsized Returns; Storebrand fund ranks as the best performer of Europe’s highest-graded climate funds
Jonas Cho Walsgard – Bloomberg
One of the highest-ranked money managers in the world of ethical investing never expected to work in finance. Philip Ripman, a 39-year-old Scottish Norwegian who studied Chinese and political philosophy, says he’s grateful to his employer — Storebrand Asset Management — for giving an outsider a chance.

Special Report: Sleeping Beauty – How suspect gold reached top brands
Brenna Hughes Neghaiwi, Mitra Taj, Peter Hobson – reuters
From the Andes mountains, thousands of artisanal gold-diggers for years sent fragments of metal to a Swiss valley. There, a refinery purified the gold to sell to banks, watchmakers, fine jewelers and electronics companies. It circulated as ingots, phones and trinkets – some branded with names including Apple and Tiffany & Co.

From Exxon to Royal Caribbean Cruises, U.S. companies rush to hoard cash
Joshua Franklin – Reuters
Corporate America is gearing up for leaner times.
From Exxon Mobil Corp (XOM.N) to Royal Caribbean Cruises Ltd (RCL.N), companies rushed to borrow more money and boost their cash coffers on Tuesday, as the market turmoil fueled by a plunge in oil prices and the global coronavirus outbreak raised the prospect of an economic downturn.

Carmakers May Wean Off Dependence on Palladium With Breakthrough
Elena Mazneva and Justina Vasquez – Bloomberg
BASF has new technology for gasoline cars to replace palladium; Palladium price is almost triple the cost of platinum
The auto industry took a step nearer to curbing its dependence on palladium after BASF SE developed a new technology for gasoline cars that substitutes some of the metal with cheaper platinum.

Junk Bond ETFs Are Again Defying Doubters and Liquidity Fear
Cecile Gutscher, Claire Ballentine, and Katherine Greifeld – Bloomberg
About 74 million HYG shares change hands with few stress signs; No sign of forced selling even as cash bond spreads widened
On a day when the whole world seemed to be jettisoning junk bonds, Geof Marshall had a plan to buy. The idea was that, as exchange-traded funds struggled to keep up with a wave of redemptions spurred by crashing oil and coronavirus fears, he was going to swoop in and buy bonds from the ETFs on the cheap.

The Fed Can’t Let Bond Yields Fall to Zero; Ultra-low rates on benchmark government debt would have negative consequences for the global financial system.
Danielle DiMartino Booth – Bloomberg
The Federal Reserve has a lot to worry about these days. And while it’s not often mentioned, at the top of the list should be preventing rates on longer term U.S. Treasuries, the world’s risk-free benchmark securities, from falling to zero.

United warns shock from virus could rival 9/11 financial fallout; “Hope is not a strategy,” says incoming CEO Scott Kirby, who predicts the travel downturn will be deep.
John Pletz – Crain’s Chicago Business
United Airlines is preparing for the worst when it comes to the coronavirus. As rivals today caught up with the double-digit capacity cuts United announced last week, President Scott Kirby told investors that he’s planning for a short but deep downturn.


Caxton chief calls for ‘overwhelming’ coronavirus response; Hedge fund head Andrew Law says policymakers must take stronger action to avoid panic
Laurence Fletcher – FT
The response from central banks and governments to the spread of coronavirus needs to be “large and overwhelming” to avoid further market turbulence, according to the head of one of Europe’s oldest and biggest macro hedge funds.

HSBC appoints new China head in latest executive reshuffle; Move comes as bank pushes through one of the biggest restructurings in its history
Don Weinland – FT
HSBC has appointed a new head of its China operations, marking the latest top personnel change in the country following a row with Beijing and the departure of its greater China head.

Market turmoil brings windfalls for handful of funds; Performance gains come after years of sluggish returns for much of the industry
Laurence Fletcher, Ortenca Aliaj and Robin Wigglesworth – FT
A handful of hedge funds betting on bonds or volatility have reaped profits from the turbulence in financial markets over the past fortnight.

Dan­ske Bank Tells Investors Not to Come to Meeting Due to Virus
Christian Wienberg – Bloomberg
Danske Bank A/S is advising its shareholders to stay away from next week’s annual general meeting and instead follow the event online, amid a spike in the number of Danish cases of the coronavirus.

H2O Funds Hammered by Record Losses of Up to 30% in Virus Rout
Lucca De Paoli and Nishant Kumar – Bloomberg
Strategies had already seen heavy declines over previous month; The firm’s Multiequities fund erased about six years of gains
H2O Asset Management suffered heavy losses of as much as 30% across its funds during Monday’s market rout, adding to severe declines that have pummeled its strategies over the past month.

Brevan Howard’s Main Hedge Fund Gains 6.8% as Panic Roils Market
Nishant Kumar – Bloomberg
The $3.2 billion fund has returned nearly 11% so far this year; Macro money pools are rebounding from years of poor returns
Brevan Howard Asset Management’s flagship hedge fund rose 6.8% last week as the escalating coronavirus outbreak rocked markets. The gain in the week through March 6 boosted the $3.2 billion macro fund’s returns this year to nearly 11%, according to a letter to investors seen by Bloomberg. A spokesman for the Jersey-based investment firm declined to comment.

Banks at risk of losing billions of dollars in fee-based revenues: study
Anna Irrera – Reuters
Major banks are at risk of losing billions of dollars of fee-based retail revenue as they face increased regulatory pressure and growing competition from new entrants offering no-fee services, Accenture Plc (ACN.N) said on Wednesday.

Hedge Fund That Rarely Loses Has Its Worst Start to Year Ever
Nishant Kumar and Katia Porzecanski – Bloomberg
The strategy is down about 3% this year amid virus sell-off; Decade-old fund has never lost money in a 12-month period
Even one of the world’s steadiest hedge funds can’t escape the coronavirus-fueled market carnage. The worldwide sell-off since last month has left London-based hedge fund LMR Partners down about 3% for 2020 through last week, according to people with knowledge of the matter, who asked not to be named because the details are private. It’s the worst start to a year in about a decade of trading for the $4.6 billion fund, which has never lost money over a 12-month period.

BlackRock Employee in New York Tests Positive for Coronavirus
Annie Massa and Davide Scigliuzzo – Bloomberg
Firm has done ‘deep cleaning’ of relevant area, it says; Office at 52nd street is safe to remain open: statement
BlackRock Inc., the world’s biggest asset manager, said that an employee in New York City tested positive for coronavirus.

Barclays Says NYC Employee Tested Positive for Coronavirus
Jennifer Surane – Bloomberg
Worker has been self-quarantined since March 3, bank says; Bank is working with CDC and ‘operating business as usual’
Barclays Plc said an employee in its New York trading operations tested positive for the coronavirus and has been self-quarantined since March 3.


Lebanon’s sovereign default leaves creditors facing big losses; London-based Ashmore bet heavily on the country’s short-term debt
Tommy Stubbington and Chloe Cornish – FT
Investors in Lebanon’s dollar debt are nursing big losses after the government failed to repay a $1.2bn bond due on Monday, triggering the country’s first ever sovereign default.

Taiwan Reports $99 Billion in Currency Swaps, in Rare Disclosure
Cindy Wang and Argin Chang – Bloomberg
Taiwan’s central bank disclosed its outstanding position in foreign-exchange swap trading, a rare move aimed at answering calls for improved transparency.

JPMorgan Reaped $100 Million as China Squeezed Niche Nickel Market
Alfred Cang, Jack Farchy, and Mark Burton – Bloomberg
Bank made outsized profits as nickel price spiked last year; JPMorgan’s dominance in metals has grown as rivals retreated
JPMorgan Chase & Co. made about $100 million trading nickel last year, according to people familiar with the situation, as it benefited from a price spike on the back of a Chinese-led supply squeeze.

Irish Central Bank Faces Capital Buffer Dilemma as Virus Spreads
Peter Flanagan – Bloomberg
Reducing buffer could release 10.5 billion euros into economy; Bank of England moved its buffer to zero on Wednesday
Ireland’s central bank may face pressure to allow lenders release capital set aside to counter economic downturns, as the coronavirus crisis escalates.

Iran Urges U.S. to Lift Sanctions on Food and Medicine Imports
Arsalan Shahla – Bloomberg
Iran urged the U.S. to ease sanctions that have been preventing the Islamic Republic from importing medicines and foods needed in its efforts to fight a major outbreak of the coronavirus.

Saudi Arabia Pledges to Expand Oil Output Capacity
Verity Ratcliffe, Anthony Dipaola, and Matthew Martin – Bloomberg
Saudi producer to raise capacity to 13 million barrels a day; Aramco said it will flood market with 12.3 million in April
Saudi Arabia ordered state-run oil producer Aramco to boost the kingdom’s output capacity by 1 million barrels a day, the latest escalation in a battle for control of the global petroleum market.

Zimbabwe to switch to managed float exchange rate in latest move
Zimbabwe will adopt a “managed float” exchange rate regime, Finance Minister Mthuli Ncube said on Wednesday, abandoning strict control of foreign exchange by the central bank in the latest in a series of currency reforms that have so far failed.

Italy in coronavirus lockdown as deaths soar and economy fades
Angelo Amante, Crispian Balmer – Reuters
Shops and restaurants closed, hundreds of flights were canceled and streets emptied across Italy on Tuesday, the first day of an unprecedented, nationwide lockdown imposed to slow Europe’s worst outbreak of coronavirus.

Top India Hedge Fund Hoards Cash as Volatility Remains High
Nupur Acharya – Bloomberg
India’s largest equity hedge fund manager is hoarding cash as it’s too early to call the bottom to a free fall in the nation’s equity market triggered by global risk-off and local financing woes.


Brexit: EU aid a ‘bureaucratic nightmare’, MPs are told
BBC News
European funding has been a “bureaucratic nightmare” which has put organisations in Wales off accessing it, MPs have been told. Economic development expert Prof Steve Fothergill said EU aid to Wales was “a bit of a mess in terms of management.” “There are so many players with their hands on the till,” he told the Welsh Affairs Select Committee. The committee is considering the scheme intended to replace EU aid after Brexit – the Shared Prosperity Fund. UK ministers have promised to substitute the £375m that Wales gets annually from the European Union, but have not confirmed how.

Next Week’s U.K.-EU Brexit Trade Talks Still On, Officials Say
Ian Wishart – Bloomberg
Next week’s round of trade talks between the U.K. and European Union are still set to go ahead, officials said, amid growing speculation the coronavirus outbreak may force them to be delayed. The negotiations, set to be held in London between March 18 and 20, are being kept under review, according to officials involved in the preparations. A decision to delay them could yet be made in coming days, they said. After the first round of discussions on Britain’s future relationship last week, both sides played down the chances of a delay — but the EU has since canceled all but the most urgent meetings on other issues in a bid to slow the spread of the coronavirus. The talks involve more than 100 negotiators from both sides.

Brussels warns no quick decision on City market access
Sam Fleming and Jim Brunsden – FT
The EU is preparing to rebuff UK pressure for a quick decision on market access rights for the City of London, in a setback to Boris Johnson’s plans to cushion the effects of Brexit on the country’s powerful financial services sector. Rishi Sunak, the chancellor, used a letter to the EU last month to urge rapid progress, saying he could “see no reason” why both sides could not complete the necessary approvals in time for a June deadline. But EU officials said the process will drag on at least until later this year.


Don’t Ask Employees If They Have Covid-19, and Other HR Tips; When the CDC agreed to talk to HR professionals, 40,000 people got on the call
Jeff Green- Bloomberg
Can I ask an employee if he or she has Covid-19? Can I send a sick worker home and require a doctor’s note to return? Should I worry about staff getting the virus from the mail or a shipping container from China?

Why Rational People Are Panic Buying as Coronavirus Spreads
Ari Altstedter and Jinshan Hong – Bloomberg
Psychologists view this as a form of control amid uncertainty; Store shelves around the world bare of toilet paper, staples
The worldwide spread of the novel coronavirus is leading to some curious side effects: Store shelves are being stripped bare from Singapore to Seattle. Supermarkets in the U.K. have started rationing items. In Hong Kong a delivery man was reportedly robbed at knife-point of hundreds of toilet-paper rolls. Australia has seen brawls break out at supermarkets prompting police to taser one man. And France effectively nationalized all production of face masks after people began depleting the supply.

College Towns to Clear Out as Virus Upends Local Businesses
Janet Lorin – Bloomberg
Harvard, Stanford among schools to go virtual or cut visits; Economic damage could last long if U.S. campuses stay shut
Coronavirus is upending college campuses, as schools including Harvard and Amherst move to online classes and tell most students not to return to campus. School communities will get pinched economically.

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