China Vows to Investigate Bond-Market Misconduct; CFTC’s Tarbert: Global standards for crypto and CCPs are top industry priorities

Nov 23, 2020

First Read

$16,111/$300,000 (5.4%)
Elizabeth Gisch


Hits & Takes
JLN Staff

Stories over the weekend like this one from the Washington Post claimed Sen. Kelly Loeffler had a positive as well as a negative test for COVID-19. A source close to the Senator told me Sunday that her latest test was negative and she was feeling well. I hope it stays that way.

Sen. Loeffler was featured in a story in Newsweek about getting into a fight with Rep. Ilhan Omar about her support for Loeffler’s opponent in the Georgia Senate race, Rev. Raphael Warnock. The subject of the Twitter spat was a subject as old as Christianity: whether you can serve Christ and serve in the military. Religious arguments are not the best subject to get into during a political battle, even if your opponent is a minister. We have bigger issues at the moment.

Thank you to Elizabeth Gisch of the CME Group for her donation to the JLN MarketsWiki Education GoFundMe campaign. Elizabeth is a long-time CME technology executive serving as a managing director, global market solutions & services. Thank you Elizabeth and to all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to the GoFundMe campaign.

IEX has a podcast series called “Boxes + Lines” with an episode on “A market structure podcast with Ronan Ryan and John Ramsay.”

On LinkedIn, Milo Hamilton has posted a history of the rice market since 1981.

Rumi Morales is now a board member of the national organization of the Girl Scouts of the USA.

Please sign up to participate in FIA, Inc. ‘s fundraiser for Futures for Kids on 8th Dec. The ticket price helps offset the cost of hosting the event and all proceeds, plus the funds raised in the silent and live auctions, will go directly to FFK to support their fantastic charities.

JLN will not be published on Thursday or Friday of this week. We are taking the Thanksgiving holiday off and I am giving the JLN team an extra day off, as Thursday is expected to be a slow news day. They have earned it.

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


This morning the Intercontinental Exchange tweeted that it set a new record in 2020 for White Sugar tenders. This year saw 2.1M tonnes of sugar delivered, a 75% jump on last year, the tweet said.~SR

Today, November 23, is Fibonacci Day, honoring Leonardo Bonacci (aka Leonardo Fibonacci), one of the most influential mathematicians of the Middle Ages. The date corresponds to the first numbers of the Fibonacci sequence – 1 1 2 3.~SR


Andy Busch Post Election Regulatory Analysis

Andy Busch is the former chief market information officer of the U.S. Commodity Futures Trading Commission. Today he is a consultant, speaker and market analyst offering his unique perspectives and analysis to corporate clients. John Lothian News asked him for his response to the recent U.S. presidential and congressional election.

Watch the video »


The Spread: Cleared for Retirement

This week on The Spread, the CME announces the launch of new volatility indices, the OCC’s David Prosperi retires, and more.

Watch the video »


Request for Public Representative Nominations for NFA’s Board of Directors
The terms of five of NFA’s current Public Representatives—Douglas E. Harris, Charles P. Nastro, Ronald S. Oppenheimer, Todd E. Petzel, and Michael R. Schaefer—will expire at the Board of Directors’ (Board) regular Annual Meeting on February 18, 2021. NFA is seeking nominations to fill the five Public Representative vacancies. NFA’s Articles of Incorporation (Articles) permit Public Representatives to be nominated by either NFA Members or non-Members.

****** Let’s recommend some good candidates and make the committee have to work hard to choose.~JJL


Pat Quinn, co-founder of Ice Bucket Challenge, dead at 37 after losing ALS battle
Gabrielle Fonrouge – NY Post
The New York man who co-founded the viral “Ice Bucket Challenge” died Sunday after a long battle with Amyotrophic Lateral Sclerosis — the disease he tirelessly raised awareness for until he succumbed himself. Pat Quinn, a 37-year-old from Yonkers, was diagnosed with ALS in 2013 and soon after, created the social media challenge as a way to raise money to find a cure for the illness, also known as Lou Gehrig’s disease.

****** Sad news, but what an inspiration. The Ice Bucket Challenge was brilliant!~JJL


Women in Finance Must Ask for Promotion, Unlike Men: Survey
Andreea Papuc – Bloomberg
Australian survey shows men offered promotions much more often; On average men in fund management paid twice as much as women
Far fewer women than men are promoted in the finance industry unless they first ask for seniority, a sign of institutional gender bias, according to a new study in Australia. The survey of 2,000 finance industry professionals showed 76% of men were offered a promotion at least once without requesting it, compared with 57% of women. The study was compiled by lead researchers Ardea Investment Management and Australian National University in conjunction with industry experts.

******Like Alice and the Red Queen, women in finance must run twice as fast as men to get anywhere.~SR


How the Coronavirus Pandemic Is Changing Philanthropy; From mutual-aid networks to emergency-response funds, communities and nonprofits have sped up efforts to get help to where it’s needed most
Lisa Ward – WSJ
The Covid-19 pandemic is forcing donors, volunteers and nonprofit organizations to rethink how they give and receive charitable aid. In many communities, individuals are banding together to help neighbors directly. Elsewhere, institutional donors are creating Covid-19 emergency funds, making grants less restrictive and investing more in minority-led charities. Those who have long advocated for philanthropy reform say the changes—if they take root—could result in more flexible and equitable forms of charitable giving.

******What is it not changing?~JJL


Friday’s Top Three
Our top story on Friday was Goldman Partner With Taste for Speed Says Market Has Hit Limits, from Bloomberg. Second was Newsweek’s Trump Can Still Win In Armageddon Scenario for Markets, JP Morgan Warns, a repeat from Thursday’s top three. Third was NYSE sales head departs for role at HFT Jump Trading, from The Trade.


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Lead Stories

China Vows to Investigate Bond-Market Misconduct; Warning issued after a series of defaults by state-backed groups unsettled investors
Chong Koh Ping – WSJ
China warned it would show zero tolerance for misconduct in the debt markets, after a series of defaults by state-backed groups unsettled investors. The warning came from the Financial Stability and Development Committee, a body that groups together China’s central bank and other top financial regulators and that is chaired by Vice Premier Liu He, President Xi Jinping’s point person on economic and financial issues.

CFTC’s Tarbert: Global standards for crypto and CCPs are top industry priorities
Top US derivatives regulator discusses digital assets, relations with Europe, and his agency reorganization
MarketVoice staff – FIA
In July 2019, Heath Tarbert took over as chairman of the US Commodity Futures Trading Commission with an ambitious policy agenda in mind. In the first few months, he held more than two dozen meetings with almost all of the agency’s 700-plus employees and marshalled them behind a new mission statement. His vision for the agency, he said, was to promote the “integrity, resilience, and vibrancy of the derivative markets” and for the CFTC to set the “global standard for sound regulation.”

Sadiq Khan: ‘There is potentially an existential threat to central London’; London’s mayor on his experience of racism growing up, increasing diversity in the Met and the effect of lockdown on his mental health
Andrew Anthony – The Guardian
There have only been three London mayors and the current one, Sadiq Khan, is not like either of his predecessors. He doesn’t possess Boris Johnson’s entitled flamboyance, nor Ken Livingstone’s maverick independence. And neither has he inherited their gift for generating headlines. But, having met all three men, I’d say he is easily the most genuine and likable. A much less obviously ego-driven character than the other two, he is, at 5ft 6ins, both literally and figuratively more down to earth. Where Livingstone and Johnson won as personality candidates, Khan was framed in the 2016 mayoral election, not least by his opponent, Zac Goldsmith, as the identity candidate.

Tesla’s Addition to S&P 500 Shows Why Indexes Are So Weird; Vast amounts of money are being shifted around based on strange and conflicting rules
James Mackintosh – WSJ
Aficionados of Tesla Inc. TSLA -1.93% were celebrating last week as the electric-car maker was accepted into the S&P 500, propelling its shares up 22% in two days. Step back from the extraordinary gains, and the fact that America’s seventh-biggest company by market value is only now to be admitted to the index of the country’s 500 most-valuable stocks is weird. But it is only the most obvious of many strange but stock-price-moving ways that indexes rumble markets. Indexes play two important but often conflicting roles: They measure broad market performance, and they are investment tools.

UK exchange Aquis woos brokers in bid to revive trading; Stakeholder scheme aims to reboot specialist market aimed at smaller companies
Philip Stafford – FT
Aquis Exchange is aiming to kickstart the market for smaller companies in London by handing stakes in the specialist trading venue to the brokers that use it most. The plan is designed to reboot the AQSE market aimed at companies wanting to go public but which are too small for a listing on the far bigger and higher-profile Aim market.

Why China’s Debt Defaults Are More Alarming This Time
Bloomberg News
Chinese companies are facing a reality check after years of ramping up debt. A crackdown on unregulated lending — so-called shadow banking — and tighter rules on asset management made it harder for some to borrow fresh funds to repay existing debt, leading to a record number of bond defaults in 2018 and 2019. When the pandemic put business activity on hold in early 2020, policy makers initially rushed to prevent another wave of missed payments. As the year wound down, private-sector defaults seemed to be coming down but the list of state-tied firms in distress had grown, despite signs of an economic recovery. That new source of risk has roiled China’s credit markets, prompting a renewed emphasis on financial discipline and a “zero tolerance” approach to misbehavior.

China May Have to Delay National Carbon Market Debut to 2021
Bloomberg News
More than 2,000 power firms will be obligated to take part; Market will be more than twice the size of EU trading system
China may delay the launch of its national carbon market for power companies to the first half of 2021, according to a researcher who helped the government design the emissions trading system.

‘Big War’ in Bonds Escalates as Treasury Rift Puts Fed in Play
Liz McCormick – Bloomberg
Vaccine hopes fail to jolt yields as next Fed meeting looms; Expectation for Fed action ‘is keeping bonds from selling off’
The tide in the $20 trillion Treasury market appears to be turning in favor of the bulls for now, with expectations growing that the Federal Reserve will boost purchases of longer-maturity debt as soon as next month.

Biden’s SEC chair likely to take ‘hard look’ at ESG; Democratic member Caroline Crenshaw predicts climate risk will likely be on the agenda at the agency
Mark Schoeff Jr. – Investmentnews
President-elect Joe Biden’s choice to chair the Securities and Exchange Commission likely will make oversight of socially responsible investing an agency priority, current members predicted Friday.

Goldman, Citi, Others Get Nod for $24 Million Forex Rigging Deal
Bloomberg Law
Bank of America Corp., Citigroup Inc., Goldman Sachs & Co., JPMorgan Chase & Co., a dozen other top financial institutions, and the currency buyers that alleged an industry-wide scheme to rig foreign exchange rates won final approval from a federal judge in Manhattan for settlements worth nearly $24 million.


Bill Gates, the Virus and the Quest to Vaccinate the World; The billionaire is working with the W.H.O., drugmakers and nonprofits to defeat the coronavirus everywhere, including in the world’s poorest nations. Can they do it?
Megan Twohey and Nicholas Kulish – NY Times
The head of one of the world’s largest vaccine manufacturers had a problem. Adar Poonawalla, chief executive of the Serum Institute of India, needed $850 million for everything from glass vials to stainless steel vats so he could begin producing doses of promising coronavirus vaccines for the world’s poor.

Oxford-AstraZeneca vaccine results raise hopes for Covid fight; Jab achieves efficacy of up to 90% and will be submitted for approval ‘immediately’
Donato Paolo Mancini and Clive Cookson – FT
The coronavirus vaccine developed by Oxford university and AstraZeneca has proved effective in late-stage trials, giving another boost to hopes that the pandemic can be defeated.

India Faces Cold Chain Logistics Challenge for Virus Vaccination
Archana Chaudhary and Ragini Saxena – Bloomberg
Government official says vaccine by March ‘if all goes well’; The country has no adult vaccination infrastructure in place
India hopes to start rolling out a Covid-19 vaccine by March 2021, but it faces a steep challenge: cold chain and distribution infrastructure. The nation with the world’s second-highest infections plans to use the existing cold chain network in place for its Universal Immunization Program, said Rajesh Bhushan, secretary to India’s federal health ministry, in an email interview. But that infrastructure is geared to only immunize children and pregnant women — vaccinating India’s 1.3 billion people will require its capacities to be significantly scaled up, experts say.

U.K. Sees Astra, Pfizer Vaccine Rollout Starting Next Month
Thomas Penny and Alex Morales – Bloomberg
Country may begin to return to ‘normal’ after Easter: Hancock; Boris Johnson to lay out winter plan for dealing with virus
Health Secretary Matt Hancock said the U.K. plans to start rolling out two coronavirus vaccines next month before the program gathers pace in the new year, with a return to “normal” possible in the spring.

Ad Council’s Challenge: Persuade Skeptics to Believe in Covid Vaccines; The nonprofit marketing group led a polio vaccine campaign in the 1950s. Now it is working on a $50 million ad blitz to counter concerns about coming treatments.
Tiffany Hsu – NY Times
With coronavirus cases on the rise and communities returning to lockdown across the country, a marketing push is underway to persuade skeptical Americans to immunize themselves once vaccines are ready.

US coronavirus cases near 200,000 a day as catastrophic crisis hits new heights; Friday saw 195,500 cases, a record infection rate for a single day, as parts of US imposed restrictions
Lauren Aratani and agencies – The Guardian
America’s catastrophic coronavirus crisis hit new heights as the most recent daily total of numbers of new cases neared the grim landmark of 200,000 a day and the overall total of infections burst through 12m.

Coronavirus cases in Japan hit record amid holiday travel
Associated Press
The daily tally of confirmed coronavirus cases in Japan hit a record for the fourth straight day at 2,508, the Health Ministry said on Sunday.

No, a Negative Coronavirus Test Does Not Mean You Can Safely Socialize; A negative test is helpful, scientists and doctors say. But it doesn’t mean you should skip other measures, like quarantining, masking and distancing.
Claire Cain Miller, Katherine J. Wu and Margot Sanger-Katz – NY Times
In the lead-up to Thanksgiving, Americans are no stranger to planning. But this year, as they prepare to let turkeys brine and pie crusts thaw, people across the country are waiting for something extra: a coronavirus test they hope can clear them to mingle with loved ones.

Group of 20 leaders call for global coronavirus vaccine access as U.S. labs near approval
Miriam Berger – Washington Post
BEIRUT — Leaders from the Group of 20 nations urged greater global cooperation Saturday to ensure coronavirus vaccines reach beyond the wealthiest regions as promising U.S. vaccines appear closer to approval.

Covid Deaths in Europe Are Overwhelmingly Among Those Over 60; Survival rates improve modestly, but disease still takes the elderly, and more men
Jason Douglas – WSJ
Europe’s older citizens are bearing the brunt of the coronavirus pandemic’s second wave in the region. People over 60 make up more than nine in 10 fatalities linked to Covid-19 since the start of August, figures show, with more men than women succumbing to it. The virus has now claimed more than 1.3 million lives world-wide.

Exchanges, OTC and Clearing

IIEX to transform the way clients consume and leverage insurance data
DTCC press release
The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today announced a client pilot program for its new Insurance Information Exchange (IIEX) service, a transformative new platform that will help clients turn massive quantities of insurance data and information across 15.6 million policy records into actionable insights. The pilot program is backed by a consortium of industry-leading insurance carriers and distribution partners who are collaborating with DTCC on the development of the service.

Nasdaq Named to Dow Jones Sustainability Index for the Fifth Consecutive Year
Nasdaq (Nasdaq: NDAQ) today announced it has been selected as a North American index component of the Dow Jones Sustainability Index (DJSI), one of the most prestigious environmental, social, and governance (ESG) ranking efforts, for the fifth consecutive year. Nasdaq maintains its industry leadership as the only stock exchange operator selected for inclusion in the North America index, and was among eight diversified financial services companies selected from the region this year.

ASX Trade Outage – ASIC Investigation
ASIC has confirmed to ASX that it is conducting an investigation into the ASX Trade outage on Monday 16 November 2020.

Xetra Trade-at-Close enables trading at the official closing price
Deutsche Börse
With Xetra Trade-at-Close, Deutsche Börse offers trading participants an additional opportunity to trade on the leading market for German stocks and ETFs in Europe at the official closing price. The service will be available from November 24 for all securities in Xetra trading.

Notice of Disciplinary Action
A. Each clearing member shall prepare, maintain and keep current those books and records required by the rules of the Exchange, the Commodity Exchange Act and the Regulations thereunder. Such books and records shall be open to inspection and promptly provided to the Exchange upon request.
PENALTY: In accordance with the settlement offer, the Committee imposed a $50,000 fine.

Amendments to the Termination of Trading Rule of Four (4) European Natural Gas Option Contracts
CME Group
Effective Tuesday, December 8, 2020, for trade date Wednesday, December 9, 2020, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “the Exchange”) will amend the Termination of Trading rule of four (4) European natural gas option contracts (the “Contracts”) in the table below to align the Contracts’ last trade date (“LTD”) with current over the counter market practices.

Notice of Disciplinary Action
Any positions in excess of those permitted under the rules of the Exchange shall be deemed position limit violations.
PENALTY: In accordance with the settlement offer, the Panel ordered Logista to pay a fine to the Exchange in the amount of $12,500 and to disgorge profits in the amount of $13,260.

Notice of Disciplinary Action
NON-MEMBER: Libra Fearnley Energy
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
PENALTY: In accordance with the settlement offer, the Panel ordered Fearnley to pay a fine to the Exchange in the amount of $40,000.

Notice of Disciplinary Action
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
PENALTY: In accordance with the settlement offer, the Panel ordered Starfuels to pay a fine to the Exchange in the amount of $40,000.

Notice of Disciplinary Action
CME Group
The Exchange shall designate the products in which block trades shall be permitted and determine the minimum quantity thresholds for such transactions. The following shall govern block trades:
PENALTY: In accordance with the settlement offer, the Panel ordered BGC to pay a fine to the Exchange in the amount of $60,000.

CME Direct Software Enhancement Postponed
The CME Direct software upgrade previously scheduled for Sunday, November 22 has been postponed. A new software upgrade release date will be announced in future CME Direct notices.

Deutsche Börse to back ISS in lawsuit against SEC; Proxy adviser says its new owner understands need for legal action against US financial regulator
Attracta Mooney – FT
Institutional Shareholder Services, the world’s largest proxy adviser, says its new owner Deutsche Börse will back it in a legal fight against the top US financial regulator that will help shape the market for shareholder advice.

Shenzhen Stock Exchange Establishes The 1st Accounting Advisory Committee To Build Market Synergy And Improve Quality Of Financial Information Disclosure In Capital Market Mondovisione
To fully implement the guiding principles of the Fifth Plenary Session of the 19th CPC Central Committee and the requirements specified by the State Council in the Suggestions on Further Improving the Quality of Listed Companies, SZSE recently set up the Accounting Advisory Committee. It’s a measure taken by SZSE to further pool market wisdom and leverage the synergy of market participants to jointly improve the financial information disclosure quality in the capital market, support the reform of the registration-based IPO system with “information disclosure at its core”, and ensure steady advancement of the key tasks of deepening the reform of the capital market in all respects and the comprehensive authorization reform of the pilot demonstration zone of socialism with Chinese characteristics.

Dubai Financial Market Closed For Commemoration Day And UAE’s 49th National Day, From Tuesday 1st To Thursday 3rd, Reopening On Sunday 6th December
On the occasion of Commemoration Day and UAE’s 49th National Day, DFM will be closed starting from Tuesday 1 December 2020 till Thursday 3 December 2020 and work shall resume on Sunday 6 December 2020.

Aquis Stock Exchange Launches Market Maker Incentive Scheme
Aquis Stock Exchange Limited (AQSE), a division of exchange services company Aquis Exchange PLC, has launched an incentive scheme for market makers designed to boost liquidity and improve the functioning of the AQSE market for growth stocks.

CCP12 Special General Meeting
CCP12 – The Global Association of Central Counterparties – held its Virtual 2020 Special General Meeting (SGM). In the second virtual Meeting of the General Assembly in 2020, CCP12 Members acknowledged the progress report and the updated work plan for the upcoming year. The four Working Committees of CCP12 presented its recent publications, including the CCP12 Primer on Credit Stress Testing, the enhanced CCP12 Public Quantitative Disclosure documents, and discussed upcoming releases and future projects. In the second half of the meeting, CCP12 welcomed policy experts from the official sector for a discussion on market developments.

The London Metal Exchange: Options discussion paper https
The London Metal Exchange (LME) issued a market-wide discussion paper on plans to simplify and standardise some areas of its options market structure in order to support the development of its electronic options market.

DGCX Celebrates 15th Year Anniversary Today
Established in 2005, the DGCX today stands as the largest and most diversified derivatives exchange in the Middle East, providing guaranteed settlement and reduced counterparty risk through the Dubai Commodities Clearing Corporation (DCCC), a 100% owned subsidiary by DGCX.


Surveillance firm Eventus adds GH Financials
Wendy Lisney – FOW
Eventus Systems has signed exchange-traded derivatives clearing firm G.H. Financials as the US surveillance firm pursues aggressive plans to expand in Europe and globally.
GHF plans to deploy the cloud-based version of the Eventus Validus platform beginning in early 2021, replacing two existing outsourced solutions.
“We’ve made great progress on our staffing and expansion plans outlined earlier this year,” Eric Einfalt, chief strategy officer at Eventus told Global Investor. “Since the beginning of the year, we’ve already more than tripled our staff globally.”

Symphony keeps arms open for the right partners
Dan Barnes – The Desk
Symphony, the capital markets communications platform, and Genesis the low-code application platform (LCAP) have partnered to support the development of interoperable technology and applications, with Symphony indicating collaboration could be on the cards with select other firms.

Short Sellers Target Ping An Fintech Unit After Ant IPO Halt
Bloomberg News
The headwinds that toppled Ant Group Co.’s initial public offering now threaten a $22 billion dream of China’s Ping An Insurance (Group) Co. — to pivot from a finance group to a tech giant and be valued like one. While Ping An’s Lufax Holding Ltd., which offers wealth management and retail lending services, was able to complete its U.S. IPO days before new Chinese rules torpedoed Ant’s $35 billion sale, the stock has given up early gains and is now a target for short sellers. Renewed threats by U.S. regulators to delist Chinese stocks also threaten Ping An’s plans to take more of its in-house startups public.

China Construction Bank pulls US$3 billion blockchain debt programme amid scrutiny on fintech, financial risks
Georgina Lee – South China Morning Post
China Construction Bank (CCB) has decided to pull a US$3 billion digital bond programme on a blockchain platform, getting cold feet on the eve of a market breakthrough, amid a clampdown on technology companies and their financial innovations. The bank, the world’s second-largest lender, “decided not to proceed” with the programme without offering an explanation, Fusang Exchange, a virtual stock exchange for digital initial offerings, said in a statement on Monday.

The Future Of Fintech In A Post-pandemic World
Lauren Mae – Fintech News
COVID-19 has been extremely damaging for many businesses, especially small businesses and their employees. Yet, tragedy is excellent at uncovering opportunity, and in this case, the opportunity lies in the fintech industry. The response to the pandemic in the business world was to redo structure. Businesses that hadn’t previously been online have been forced to do so to maintain livelihoods. Therefore, whether business owners and consumers knew it or not, they began engaging with the fintech industry.


Bitcoin Trades Again Near Record, Driven by New Group of Buyers; Cryptocurrency attracts billionaires Paul Tudor Jones and Stanley Druckenmiller plus momentum investors
Paul Vigna and Anna Hirtenstein – WSJ
Bitcoin climbed back above $18,000 last week to flirt with record levels, a spectacular rally driven by a new group of buyers seeking the opportunity for big profits. The digital currency traded as high as $18,965 on Friday, according to CoinDesk, about 4% below its all-time high of $19,783 set in December 2017. It has surged more than 50% in the past month alone.

Why Tomorrow’s Money Will Come in New Crypto Flavors
Olga Kharif – Bloomberg
Five years ago, Bitcoin and its cousins in cryptocurrency seemed so unimportant that central banks could hardly be bothered to sneer at them. Now central banks in small countries like the Bahamas and big ones like China are rolling out digital currencies of their own, with the European Central Bank and the U.S. Federal Reserve watching closely. And these days, Bitcoin seems almost traditional compared with a raft of other new developments that might be pointing to a new path forward for money — or toward more of the ups and downs, scams and sudden fortunes that have marked much of the crypto era. Here’s a guide to some of the ideas that could transform the world of finance.

XRP Rises More Than 30% as Altcoins Piggyback on Bitcoin’s Wave
Omkar Godbole – Coindesk
XRP has surged to 16-month highs, leading a pack of cryptocurrencies all benefiting from bitcoin’s rally toward historic levels.

Bitcoin Faces Volatility Rise as Futures Market Shows Signs of Overheating
Omkar Godbole – Coindesk
A metric from bitcoin’s perpetual futures market suggests some traders may have become overleveraged during the recent rally to above $18,000. The average level of the “funding rate” across major exchanges has risen sharply from 0.023% to a five-month high of 0.087% in the past 48 hours, according to data source Glassnode.

China’s Xi calls for G20 to adopt ‘open and accommodating attitude’ on CBDCs
Michael McSweeney – The Block
Xi Jinping, the president of China, remarked during a G20 meeting this week that the group should adopt an “open and accommodating attitude” on central bank digital currencies, or CBDCs. His remarks on November 21 are notable, given that China is on the cusp of launching its own digital currency system, dubbed DC/EP. Testing is underway in Chinese jurisdictions and thousands of citizens have taken part in such trials to date. Xi referred to CBDCs in the context of “the sound development of the digital economy,” according to a transcript published by the Ministry of Foreign Affairs.

Hacked Crypto Exchange KuCoin Resumes Deposit, Withdrawal Services for All Tokens
Kevin Reynolds and Daniel Kuhn – Coindesk
KuCoin, the Singapore-headquartered digital asset exchange that was hacked to the tune of $281 million in September, said it’s restored the deposit and withdrawal services of all tokens as of Sunday. Due to ongoing judicial proceedings for some tokens, daily withdrawal limits will be put in place for a few tokens, the exchange said. Those limits will be removed after the judicial process has been completed, KuCoin said. In the meantime, those tokens with daily limits will have zero trading fees, the exchange said.

Law Enforcement Agencies Are Missing Forked Cryptos in Criminal Seizures: Research
Daniel Palmer – Coindesk
Authorities are “ignoring” sizable stashes of “forked” cryptocurrencies when they make bitcoin seizures from criminals, according to research from blockchain analytics and RegTech company Coinfirm. In a blog post Friday, Coinfirm said that it has found “substantial funds” left in wallets by government agencies that may still be accessible by criminals. The post cites as an example the recent seizure by the U.S. Justice Department of over $1 billion in bitcoin (BTC, +1.74%) said to have been hacked from defunct dark market Silk Road.

US bank regulator unveils push to compel banks to provide fairer access to banking services
Saniya More – The Block
A proposed rule from the US Office of the Comptroller of the Currency seeks to provide a particular kind of equitable relief to affected businesses: fairer access to banking services. Published on November 20, the OCC’s stated position is that “banks should provide access to services, capital, and credit based on the risk assessment of individual customers, rather than broad-based decisions affecting whole categories or classes of customers,” according to the US banking regulator’s statement on Friday.

US Government Enlists USDC for ‘Global Foreign Policy Objective’ in Venezuela: Circle CEO
Nikhilesh De – Coindesk
Payments startup Circle is getting political. The stablecoin issuer is working with the U.S. government to bypass Nicolás Maduro and support the Bolivarian Republic of Venezuela led by Juan Guaidó. Circle is using USDC, the dollar-pegged stablecoin it issues with Coinbase, to distribute relief funds to medical workers and other Venezuelan locals, it announced Friday.

Coinbase Has Raked in $14B in New Institutional Assets Since April
Nathan DiCamillo – Coindesk
Coinbase has seen a $14 billion increase in institutional assets under custody since April, its head of institutional coverage at Coinbase said in a YouTube interview published on Friday. Brett Tejpaul told interviewer Eliisabetta Bartolini, partner at Heidrick & Struggles, that institutional assets under custody were $6 billion when he joined the firm in April and have grown to $20 billion today. Tejpaul came to Coinbase after 25 years in sales and trading in the traditional financial markets with stints at Barclays and J.P. Morgan.


Business Leaders, Citing Damage to Country, Urge Trump to Begin Transition; At the urging of New York’s attorney general, business leaders in New York push for the Trump administration to begin a transfer of power.
Kate Kelly and Danny Hakim – NY Times
Concerned that President Trump’s refusal to accept the election results is hurting the country, more than 100 chief executives plan to ask the administration on Monday to immediately acknowledge Joseph R. Biden Jr. as the winner and begin the transition to a new administration.

Joe Biden needs to break the market’s codependency with White House; Trump’s approach widened the disconnect between traders and the real economy
Mohamed El-Erian – FT
As US president-elect Joe Biden contemplates his first 100 days in office, he should consider what can be done over time to reduce the extreme codependency that developed between his predecessor and the US stock market.

Trump running out of chances to overturn election defeat; States to certify Biden victory after crushing weekend courtroom setback for outgoing president
Kadhim Shubber – FT
Donald Trump’s legal options to challenge his election loss are about to significantly narrow, with three battleground states carried by Joe Biden due to certify their results in the wake of a crushing weekend courtroom defeat for the president and a departure from his legal team.

Biden Team, Pushing Quick Stimulus Deal, Prepares for Renewed Recession; Economists warn that lawmakers must pass aid now, as a renewed coronavirus surge chills consumer spending and business activity.
Jim Tankersley and Emily Cochrane – NY Times
Advisers to President-elect Joseph R. Biden Jr. are planning for the increasing likelihood that the United States economy is headed for a “double-dip” recession early next year. They are pushing for Democratic leaders in Congress to reach a quick stimulus deal with Senate Republicans, even if it falls short of the larger package Democrats have been seeking, according to people familiar with the discussions.


FCA fines TFS-ICAP £3.44 million for market misconduct
The Financial Conduct Authority (FCA) has fined TFS-ICAP Ltd, an FX options broker, £3.44m for communicating misleading information to clients.

ASIC takes Federal Court action to enforce compliance with enforceable undertaking
ASIC has commenced civil proceedings in the Federal Court against Gold Coast-based accountant, Jenan Oslem Thorne (also known as Cenan Thorne or Cenan Dikmen) of Saber Superannuation Pty Ltd.

Investing and Trading

FTI axed by clients in fallout over oil industry work; MSCI, First Sentier and CDP sever links with public relations consultancy while others review position
Billy Nauman, Attracta Mooney and Chris Flood – FT
FTI Consulting has been dumped by at least three of its clients while several global asset managers are reviewing their relationship with the business advisory and public relations consultancy, as the fallout from a media report about controversial work for the oil industry intensifies.

The World’s Famed Shopping Streets Are Preparing for the Worst; Covid-19, protests and falling sales have crushed luxury-shopping districts. Can they bounce back and have a happy holiday?
Kim Bhasin, Angelina Rascouet, Jinshan Hong, and Lisa Du – Bloomberg
World-famous shopping districts are preparing — and bracing — for a holiday season unlike any they’ve ever seen. Many consumers are still wary of visiting stores, with the coronavirus pandemic reignited in much of the world. Travel restrictions will also slash the number of wealthy tourists normally relied upon to spend oodles of cash this time of year.

Advice From a Financial Pro: A Career Coach Wants to Invest in Property; Before taking on a big expense, consider shoring up emergency funds
Lisa Ward – WSJ
Tracy Timm’s career-coaching business has withstood the pandemic and she just published her first book, a step-by-step guide to discovering the ideal career. Now, Ms. Timm, age 33, is looking to buy property, either as a home or investment.

A wall of money is ready for the post-pandemic economy
Julia Horowitz, CNN Business
London (CNN Business)There’s at least one thing the pandemic hasn’t changed: Private equity firms entered the Covid-19 crisis flush with cash, and they’re due to leave it with full pockets, too.

A Stock Market Bubble? It’s More Like a Fire; Wild market speculation can feel like an out-of-control blaze: The more it expands and the hotter it gets, the more havoc it can wreak
Jason Zweig – WSJ
The stock market isn’t a bubble, but parts of it are on fire. So far in 2020, the NYSE FANG+ index of giant technology stocks is up 78%. The Renaissance IPO ETF, IPO 1.44% an exchange-traded fund that holds recent public offerings, is up 84%. The SPDR S&P Kensho Clean Power ETF, CNRG 1.68% which invests in renewable-energy companies, has gained 88%.

Environmental, Social and Corporate Governance

CFA forges ahead with ESG standard despite criticism; Asset managers warn that body’s move is premature given different attitudes among global policymakers
Siobhan Riding – FT
The CFA Institute has been forced to defend its efforts to create a global standard for environmental, social and governance investing after many asset managers poured cold water on the initiative.

Bank That Pioneered Green Bonds Sets Ultimatum for Clients
Frances Schwartzkopff and Hanna Hoikkala – Bloomberg
The Swedish bank that brought the first green bond to the world over a decade ago is now forcing corporate clients to prove they’re clean enough to stay on its books.

The Biden Era Could Be a Boon to Sustainable Investing
Leslie P. Norton – Barron’s
As President-elect Joe Biden prepares to take office on Jan. 20, practitioners of sustainable investing are coming up with wish lists for a new era. The thinking goes that sustainable investing will dovetail neatly with the new administration’s ambitions, including its plans to tackle climate change with large investments in clean energy.

CFA forges ahead with ESG standard despite criticism
Siobhan Riding – FT
Siobhan Riding YESTERDAY 8 Print this page The CFA Institute has been forced to defend its efforts to create a global standard for environmental, social and governance investing after many asset managers poured cold water on the initiative. Investors are demanding more information about ESG risks in their portfolios given the explosion of interest in sustainable investing. Yet a lack of standards means that managers’ disclosures vary wildly, fuelling greenwashing concerns. The CFA, the global organisation that hands out the coveted designation of “Chartered Financial Analyst”, recently became the latest body to try to inject order into the space by starting work on a standardised framework for ESG disclosures.


Bank Stocks Already Had a Wild 2020. Then November Got Even Crazier; The day after the election was one of the worst ever for bank stocks; three trading sessions later, they had one of their best days
David Benoit – WSJ
On the first Friday night in November, bank investor Ben Mackovak sat outside his Cleveland home smoking a cigar, contemplating the ruin in his portfolio. It had been a brutal year and he’d just taken another beating. The day after the U.S. election, the Nasdaq Bank Index he uses as a benchmark suffered its worst underperformance against the S&P 500 since 1987. Mr. Mackovak no longer saw a path to the higher interest rates that banks need to make more money in the coming years. “It was a gut punch,” he said.

Bain Capital Raises $800 Million for Second Impact Investing Fund; The Boston firm raised a substantially larger impact fund despite headwinds that have slowed capital inflows to such strategies
Laura Kreutzer – WSJ
Bain Capital has raised $800 million in fresh capital to back businesses that the firm bets will benefit not only fund investors but also society at large. Bain Capital Double Impact, the Boston firm’s impact investment unit, has raised its second fund as investment vehicles focused on generating environmental, social and governance benefits have faced their share of marketing headwinds.

Deutsche Bank on the lookout to expand its payments business; German lender’s fledgling ‘Merchant Solutions’ unit is weighting options for potential targets
Olaf Storbeck – FT
Germany’s largest lender Deutsche Bank is on the lookout for takeovers and joint ventures to help towards its goal of becoming a major force in Europe’s rapidly consolidating payments processing industry. “Digital payments are one area with the highest strategic priority for us,” Stefan Hoops, head of Deutsche’s corporate bank, told the Financial Times adding that “non-organic growth is clearly an option . . . If an opportunity comes along we would clearly consider [it]”.

Mutual fund conversions to ETFs set to gather momentum, experts say; Latest attempt by Dimensional could be start of ‘significant trend’ if move proves to be successful
Steve Johnson – FT
Moves by two US asset managers to convert some of their mutual funds into exchange traded funds could trigger a wave of copycat manoeuvres by rival houses, industry figures believe.

The ethical mission of private equity; Cerberus’s interest in Co-op Bank is not the contradiction it might look
Patrick Jenkins – FT
This should be the Co-operative Bank’s moment. Green finance initiatives are springing up everywhere and the UK government is pushing the agenda hard ahead of next year’s COP26 climate change conference.

Battered Active Managers See Salvation in Churning Stock Market
Katherine Greifeld and Lu Wang – Bloomberg
Top-heavy S&P 500 is easier to outperform if big tech stumbles; Just 30.6% of S&P 500 stocks beat index in August: Leuthold
After going half-insane watching a tiny cabal of technology megacaps rule stock indexes all year and make their benchmarks almost impossible to catch, active fund managers may be on the verge of liberation.

JPMorgan Sees Possible $300 Billion Rebalancing Flow From Stocks
Joanna Ossinger – Bloomberg
Rebalancing flows may lead to an exodus of around $300 billion from global stocks by the end of the year, according to JPMorgan Chase & Co. Large multi-asset investors may need to rotate money into bonds from stocks after strong equity performance so far this month, strategists led by Nikolaos Panigirtzoglou wrote in a note Friday. They include balanced mutual funds, like 60/40 portfolios, U.S. defined-benefit pension plans and some big investors like Norges Bank, which manages Norway’s sovereign wealth fund, and the Japanese government pension plan GPIF, the strategists said.

BNP Paribas Asset Management Announces Four Hires Within Private Debt & Real Assets Investment Division
BNP Paribas Asset Management (‘BNPP AM’) announces the further strengthening of its Private Debt & Real Assets (‘PDRA’) investment division, headed by David Bouchoucha, with four appointments. All four are based in Paris.


European Insurers Gear Up to Do Deals; A tough period during the pandemic is prompting restructuring and sales
Julie Steinberg – WSJ
European insurers have weathered the crucible of the coronavirus pandemic and are ready to do some deals. Last week a Canadian and Danish insurance consortium agreed to buy the U.K.’s RSA Insurance Group RSNAY 0.48% PLC for £7.2 billion, equivalent to $9.6 billion. And on Friday, Zurich Insurance Group AG said it is in talks to acquire MetLife Inc.’s U.S. property and casualty insurance business.

China regulations spur investors to reassess tech sector; Proposals to curb dominance of mainland groups prompt fund managers to rethink holdings
Primrose Riordan and Mercedes Ruehl – FT
Print this page
Investors are reviewing their record holdings of mainland internet companies after Beijing proposed sweeping new antitrust rules for China’s technology industry.

Abu Dhabi boosts oil reserves with 22bn-barrel find; Gulf producer pledges $122bn in capex for state oil group over next 5 years
Simeon Kerr – FT
Abu Dhabi has unveiled the discovery of 22bn barrels of unconventional reserves including shale oil as the Gulf producer pledged $122bn in capital expenditure for its national oil company over the next five years.

Beijing warns of crackdown on misconduct after bond defaults; China’s debt market roiled after high-profile state-owned groups miss payments
Sun Yu in Yongcheng – FT
Beijing has warned it will show “zero tolerance” for financial misconduct after several high-profile bond defaults by state-owned companies roiled the Chinese debt market.

Beijing warns of crackdown on misconduct after bond defaults; China’s debt market roiled after high-profile state-owned groups miss payments
Sun Yu in Yongcheng – FT
Beijing has warned it will show “zero tolerance” for financial misconduct after several high-profile bond defaults by state-owned companies roiled the Chinese debt market.

China’s Surveillance State Sucks Up Data. U.S. Tech Is Key to Sorting It; Intel and Nvidia chips power a supercomputing center that tracks people in a place where government suppresses minorities, raising questions about the tech industry’s responsibility.
Paul Mozur and Don Clark – NY Times
At the end of a desolate road rimmed by prisons, deep within a complex bristling with cameras, American technology is powering one of the most invasive parts of China’s surveillance state.

Majority of regional banks in Japan see profit drop and red ink
The Japan Times
Some 60% of 102 regional banks in Japan posted profit falls or net losses in April-September, according to their latest business results.


Brexit: UK and Canada agree deal to keep trading under EU terms
BBC News
The UK and Canada have agreed a deal to continue trading under the same terms as the current EU agreement after the Brexit transition period ends. The government said it paved the way for negotiations to begin next year on a new comprehensive deal with Canada. The PM and Canadian PM Justin Trudeau made the “agreement in principle” in a video call, the Department for International Trade said. The agreement does not give any new benefits to businesses. But it rolls over the Comprehensive Economic and Trade Agreement reached by the EU and Canada after seven years of negotiations.

Trade deal edges closer as Brexit negotiations go virtual after positive COVID-19 test
Callum Keown – MarketWatch
A trade deal between the U.K. and the European Union is edging closer, despite negotiations moving online following a positive COVID-19 test. European Commission President Ursula von der Leyen said “better progress” had been made in the last few days after “difficult weeks with very, very slow progress.” She added there was still “a lot of work to do” and said the “time pressure is high,” in a press conference on Friday. The crunch talks in Brussels were suspended on Thursday after a member of the EU’s negotiation team tested positive for COVID-19.

EU Warns U.K. Hasn’t Compromised Enough for Brexit Deal
Ian Wishart and Nikos Chrysoloras – Bloomberg
The European Union warned that the U.K. hasn’t moved sufficiently to overcome the main obstacles to a post-Brexit trade deal as three of the bloc’s leaders called for contingency plans to be stepped up in case there is no agreement. At a meeting in Brussels on Friday, Secretary General of the Commission Ilze Juhansone told envoys from the EU’s 27 member states that negotiations could now slip into December as progress has been slow, according to people in the meeting who asked not to be identified because they weren’t authorized to speak publicly. The pound trimmed its earlier gains.

Get a grip on Brexit talks, UK opposition urges PM Johnson
British Prime Minister Boris Johnson needs to intervene personally in trade talks with the European Union to ensure a deal is reached as the clock ticks down, the opposition Labour Party said in a letter on Friday. Britain and the EU urgently need to find a deal to avoid disruption to more than $1 trillion of trade between the two when a transition period expires in December. Despite months of intensive talks, gaps still remain on key issues. Labour said ongoing uncertainty over whether a deal could be reached was holding back the economy and highlighted the damage that failing to reach an agreement would do to businesses and the ties between the four nations of the United Kingdom.

British ski workers ‘set to lose seasonal jobs’ after Brexit
Jamie Doward – The Guardian
Adieu to the British seasonaire. Barring an 11th-hour reprieve, Europe’s ski resorts will soon be largely devoid of British seasonal workers. From 1 January, post-Brexit, British employees seeking seasonal work as chalet hosts, instructors, drivers and nannies in European ski resorts will find it more difficult to obtain work. “It’s game over unless the government makes an agreement with the EU that will mean there is a way for British staff to work across Europe in the tourism industry on seasonal jobs,” said Charles Owen, director of Seasonal Businesses in Travel (SBiT), which represents many holiday firms.

Brexit crunch time? Traders say maybe later
Eva Szalay – FT
For foreign exchange markets, the supposed crunch time in Brexit talks next week is looking decidedly soggy. Key figures in the talks between the UK and the EU have suggested that the two sides could find common ground on the last outstanding issues next week, raising hopes that a trade deal could be agreed before the end of the year. But after the many tunnels, landing zones and numerous hard deadlines that were postponed over the years, traders and investors in currency markets are finding it hard to get as excited about the next showdown moment as they used to.


9 Ways to Support Small Businesses; Wondering how you can help as a consumer? Here are some ideas.
Ellen Rosen – NY Times
In the early weeks of the coronavirus pandemic, consumers buoyed small businesses with gift card purchases and online fund-raising campaigns. But as the pandemic persisted and restrictions constrained operating hours, many independent businesses continued to struggle.

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CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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