Hits & Takes
John Lothian & JLN Staff
The NFA and the NIBA announced a joint webinar: Navigating Regulatory Requirements in a Hybrid Environment, to be held on Thursday, September 23, at 3:30 p.m. CT/4:30 p.m. ET. The webinar discusses recent regulatory developments in relation to current hybrid and remote work environments. During the webinar, representatives from NFA and the NIBA will discuss, among other things: preparing for a virtual NFA examination; supervising employees in a hybrid or remote work environment; and changes to the definition of a branch office. Representatives will also respond to questions submitted by attendees. There is no charge to attend the webinar; however, registration is required. Register HERE.
Sarah Hoitsma was promoted to director of HR and recruiting at XR Trading. She replaces Kimberly Kolb, who earlier this week announced she joined Sphera as chief human resources officer.
In honor of the people using Ivermectin, a horse medicine, to fight COVID-19, I thought I would offer these three bad horse medicine jokes:
Did you hear about the man who was hospitalized with six plastic horses inside him? The doctor described his condition as stable.
Q: What did the horse say when it fell? A: “I’ve fallen and I can’t giddyup!”
A horse sits down in a movie theater and the woman next to him asks, “Excuse me… are you a horse?” “Why yes, I am,” replies the horse. She asks, “What are you doing at this movie?” The horse says, “I really liked the book.”
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday.
Have a great day and weekend and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
With a focus on the “S” in ESG (environmental, social and governance): The Morningstar Women’s Empowerment Index has outperformed the broad U.S. equity market in 2021, at least so far. The index, which provides exposure to leading U.S. companies that have strong gender diversity policies, rose 21.5% in 2021 as of August 27, compared with a 20.2% return for the Morningstar U.S. Market Index. A link to a Morningstar report on the index is here. ~SC
The Cboe Options Institute is hosting a seven-part “Back To School” series this fall, led by adjunct OI faculty members Shelly Natenberg and David Silber. The sessions explore option pricing models, volatility and volatility strategies. The first one is September 14. You can register here. ~SC
Biden White House Favors Emory’s Kristin Johnson for CFTC Seat
Ben Bain and Josh Wingrove – WSJ
The Biden administration plans to select Kristin Johnson, a law professor who previously worked on Wall Street, for a Democratic seat on the Commodity Futures Trading Commission, according to a person familiar with the matter.
****From LinkedIn: “Kristin Johnson is a law professor, scholar, and author. She is an internationally recognized expert for her scholarship and policy proposals on fintech, financial market risk management, corporate law, capital, commodities and credit market oversight. Her recent scholarship and policy advocacy examines the implications of emerging innovative technologies including digital asset class ecosystems (distributed digital ledger technologies commonly described as blockchain-based, e.g. cryptocurrencies) and artificial intelligence technologies that facilitate commercial and consumer financial transactions, transfers, and assessments, such as digital payment platforms and banking services. (MORE)
Japan’s PM Yoshihide Suga to resign after failing to control Covid outbreak; Tokyo stocks hit 30-year high as investors bet next leader will increase economic stimulus
Kana Inagaki, Robin Harding and Leo Lewis – FT
Yoshihide Suga will step down as Japanese prime minister after just a year in office, risking a return to the shortlived premierships that once characterised the country’s politics. Suga, whose popularity plummeted after he failed to rein in the Covid-19 outbreak, announced on Friday he would not seek re-election in this month’s leadership race for the ruling Liberal Democratic party. The winner of that contest will lead the party in a general election that must be held by November 30.
***** Leadership has its consequences.~JJL
Naming Your New Company: Here’s What to Know; Research suggests there are certain rules to follow. Among them: Don’t be too cute.
Bruce Horovitz – WSJ
There is so much to do before you start your own company. You have to develop a business plan. You have to find financing. Oh, and you have to give it a name. Consider that roughly 627,000 businesses open every year in the U.S., according to a Small Business Administration estimate. That is a lot of new names. How to make your company name stand out or, at least, be remembered among so much competition?
*****The story says, “It’s OK to name your company after yourself. Naming a company after yourself might seem like an indication of an inflated ego. But it can be a sign of confidence.” “We do know that the kind of person who names a company after themselves tends to be a good founder,” says Aaron “Ronnie” Chatterji, a Duke University business professor, adding, “The sort of person who is willing to tie their name and their personal reputation to a business is more likely to succeed.” In a study of 1.8 million European small businesses between 2002 and 2012, Dr. Chatterji found that eponymous companies had a return on assets about 3 percentage points higher than other firms.~JJL
Thursday’s Top Three
Our top story Thursday was Fast Company’s 6 qualities that will make you a more innovative employee. It turns out the No. 1 quality that will make you a more innovative employee is “innovativeness.” Who’d have thunk? Second was If U.S. had fought COVID like Denmark did, hundreds of thousands of Americans would be alive, an opinion piece from the Miami Herald. (In Denmark, 72% of the people have been fully vaccinated, as opposed to 51% in the United States, the article says.) And third was What Gary Gensler Really Meant With His Order Flow Remarks, an opinion piece from Bloomberg. (It turns out Robinhood may NOT be in trouble.)
26,605 pages; 235,734 edits
China’s new stock exchange plans fuel fears of a bourse war
China’s plans to launch a new exchange in Beijing, announced by President Xi Jinping on Thursday, boosted shares in Chinese brokerages but knocked down Shenzhen start-up board ChiNext and shares of Hong Kong’s bourse amid fears of rising competition.
Europe’s markets regulators are worried. About everything; Excess of risk-taking in markets is not obviously healthy behaviour
Katie Martin – FT
Before the summertime tans had even faded on the continent, the cheerful souls of the European Securities and Markets Authority dropped a 110-page report, dedicated in part to outlining risks to investors based on observations from the opening half of this year. Most bears have already thrown in the towel, chucked away their prognoses of doom and learnt to love, or at least accept, a rally in risky assets that seems impervious to grim news, patchy data and elevated valuations. Esma seems less willing to gloss over the cracks.
Bitcoin Uses More Electricity Than Many Countries. How Is That Possible? In 2009, you could mine one Bitcoin using a setup like this in your living room.
Jon Huang, Claire O’Neill and Hiroko Tabuchi – WSJ
Cryptocurrencies have emerged as one of the most captivating, yet head-scratching, investments in the world. They soar in value. They crash. They’ll change the world, their fans claim, by displacing traditional currencies like the dollar, rupee or ruble. They’re named after dog memes.
Jim Simons, RenTech Insiders to Pay Billions in Back Taxes
Zachary R. Mider – Bloomberg
Jim Simons, one of the world’s most successful investors, has just been handed a rare defeat. The founder of quantitative hedge-fund manager Renaissance Technologies and his colleagues will pay billions of dollars in back taxes, interest and penalties to resolve one of the biggest tax disputes in U.S. history, under the terms of a deal reached by the firm and the Internal Revenue Service. Renaissance Chief Executive Officer Peter Brown disclosed the agreement Thursday in a letter to investors seen by Bloomberg. While it doesn’t say how much money will be paid, U.S. Senate investigators in 2014 pegged potential unpaid taxes in the case at $6.8 billion, before interest and penalties.
Tokyo Exchange Plans 30 Minute Longer Trading Day, NHK Says
Gearoid Reidy and Shoko Oda – Bloomberg
Change would take place three years from now, report says; Tokyo stock trading hours are much shorter than rivals
The Tokyo Stock Exchange is making preparations to extend the trading day by 30 minutes in about three years time, public broadcaster NHK reported, citing unidentified people.
New Beijing bourse faces tough road ahead despite Xi’s blessing; Analysts say there is little need for third stock exchange alongside Shanghai and Shenzhen
Hudson Lockett – FT
China’s plans for a new stock market in Beijing could relieve a lack of funding for small and medium-sized businesses, but analysts say another bourse could cannibalise listings destined for Shanghai and Shenzhen. An announcement on Thursday that the new exchange would become a significant platform for “innovation-orientated SMEs” caught global financial circles by surprise, coming after high-profile support from President Xi Jinping for Shanghai’s technology-focused Star Market.
SEC’s Gensler to Join Biden Panel Aimed at Curbing Consolidation
Josh Wingrove – Bloomberg
The chairman of the Securities and Exchange Commission will join the debut meeting of President Joe Biden’s competition council, a group intended to curb corporate consolidation that Biden says raises prices for consumers. The council, announced in July, will hold its first meeting on Sept. 10 at the White House. The panel includes eight cabinet secretaries and chairs of six independent agencies, according to officials familiar with the plan.
DAX Index to Get Growth Boost in Biggest Ever Makeover
Jan-Patrick Barnert and Michael Msika – Bloomberg
Zalando, Airbus among companies likely to join benchmark; Overhaul has been a year in the making, since Wirecard’s fall
Germany’s benchmark stock index is about to get a lot bigger and more focused on growth. The DAX Index is expanding to 40 stocks from 30, and JPMorgan Chase & Co. predicts the additions will include faster-growing, highly valued companies such as online retailer Zalando SE and food delivery stock Hello Fresh SE as well as industrial heavyweights Airbus SE and Siemens Healthineers AG.
China’s Weibo Bans Stock-Tip Accounts With Millions of Followers
Move is part of campaign to cleanse ‘harmful’ online content; Pundits have touted advice on indexes, stocks, macro policies
One of China’s largest social media companies closed stock-tipping accounts with millions of followers as it heeds Beijing’s call to cleanse content deemed harmful to the country’s economy. Weibo Corp., which operates the country’s Twitter-like website with about half a billion active users, shut down at least 52 user accounts due to violations of new rules on economic and finance-related information, according to a statement late Wednesday. The largest account — called GuSheQu or “Community of Stocks” — had 3.25 million followers.
Finance cartels face digital currency shake-up; Fear of competition means central bank projects are already hitting legacy payment companies
Gillian Tett – FT
This week the central banks of Australia, Malaysia, Singapore and South Africa have started a new experiment: building a cross-border central bank digital currency system called “Project Dunbar”, under the auspices of the Bank for International Settlements.
Bridgepoint’s carried interest disclosure shows flaw in UK rules; Investors don’t get the full picture if these payments to executives aren’t made clear
Helen Thomas – FT
Don’t worry London. Public companies may be abandoning the UK market in droves, amid fears that onerous governance requirements are driving businesses into private ownership. But Bridgepoint is here to show everyone how it’s done. The private equity group gave the market a fillip with its successful initial public offering in July: the shares are up 45 per cent from the listing price valuing Bridgepoint at almost £4.2bn.
The regulatory merger we all need
Virginie O’Shea, founder, Firebrand Research – The Trade
The last eight months have borne witness to a lot of regulatory to-ing and fro-ing about the jurisdictional parameters of cryptoasset regulation. What has become clear to the industry and hopefully to some of the US politicians in particular over this time, is that there are far too many unnecessarily grey areas overall in the US system and that it’s finally time for a merger between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
AstraZeneca Covid Vaccine Technology Shows Promise for Cancer Shot
Suzi Ring – Bloomberg
Preclinical studies in mice found vaccine improved survival; Human trials for the cancer shot are set to start this year
Scientists behind the University of Oxford and AstraZeneca Plc Covid-19 shot are using the same technology to try to develop a therapeutic cancer vaccine, with promising results seen in animal studies.
Singapore Pauses on Further Reopening, Moves to Vaccine Boosters
Philip Heijmans – Bloomberg
Infections have risen recently, though serious cases stable; Country says reverting to tigher rules must be ‘last resort’
Singapore will pause on plans to further loosen virus curbs after a recent rise in cases, and plans to start vaccine booster shots soon for vulnerable groups as highly-contagious variants remain a concern.
EU ends dispute with AstraZeneca over vaccine deliveries; Pharma group agrees to provide remaining doses by next March
Hannah Kuchler – FT
The European Commission has ended an acrimonious court dispute with AstraZeneca over delayed Covid-19 vaccines, dropping an attempt to levy billions of euros in penalties on the UK drugmaker.
The Great Divide over living with the virus; ‘Zero Covid’ strategies in Asia-Pacific are becoming ever harder to sustain
Editorial Board of FT
As Europe and the US stride on with coronavirus vaccinations, global divides are opening. One, as dozens of signatories highlighted in a letter to the Financial Times this week, is with lower-income countries where a dangerous shortage of vaccines persists. Another is within the more developed world: between western countries that are reopening and living with coronavirus, and many Asia-Pacific nations that are still focused on suppressing it. Their strategies, and the strict travel and border controls they necessitate, are becoming ever harder to sustain.
Tests can help get workers back to the office; A fresh push on fast and reliable Covid diagnostics is needed to supplement the vaccine effect
Tom Braithwaite – FT
The Covid vaccine makers are rightly getting the acclaim, the financial rewards, the Barbie dolls made in their image and soon the Nobel Prizes. But however many lives vaccines save, they are not a magic wand to return us to pre-pandemic norms.
Exchanges, OTC and Clearing
China to create new stock exchange for SMEs in Beijing; Xi’s move part of effort to develop smaller businesses and country’s capital markets
Edward White, Eleanor Olcott and Hudson Lockett – FT
China will create a new stock exchange in Beijing as part of an attempt to support the growth of small and medium-sized businesses and its capital markets. Xi Jinping, China’s president, told an international trade fair on Thursday that the new exchange in the capital would be the primary platform for serving “innovation-orientated SMEs”.
Intercontinental Exchange Reports August 2021 Statistics; August ADV up 12% y/y; OI up 11% y/y
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today reported August 2021 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at https://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Singapore exchange to allow Spac listings; SGX is the first major bourse in Asia to allow blank cheque companies to list
Mercedes Ruehl – FT
Singapore Exchange has become the first major bourse in Asia to allow blank cheque companies to list, even as the market attracts more intense scrutiny from global regulators.
EQDerivatives: MSCI, Eurex Grow Solutions in APAC, Global Demand for EM; This article was written by deputy editor Georgia Reynolds and published in EQDerivatives on 27 August 2021.
Eurex has grown its market share in the MSCI Asia underlying contracts this year to around 80% from 54% last year. Mezhgan Qabool, head of market development and equity and index sales in the APAC for Eurex, highlighted MSCI EM Asia as the biggest contract being traded with the highest interest from global investors. Other popular contracts include MSCI Japan, Australia, India, China Free and Taiwan.
Eurex Exchange Readiness Newsflash | Updates September 2021
With this Newsflash, we would like to draw your attention to the upcoming publications, events and necessary actions for the ongoing initiatives:
Clearstream is realigning its business portfolio after careful review of its strategic holdings
Deutsche Börse Group
Clearstream is selling its 50 percent stake in the European trade repository REGIS-TR to its joint venture partner Iberclear, part of SIX, which takes full control of the company. The decision to sell was made as part of the ongoing strategic review of Clearstream’s business portfolio. In line with the Compass 2023 strategy, future strategic efforts will focus on expanding the custody business and further strengthening the company’s leadership position in fund services.
HKEX to Collaborate with HKSTP on Biotech, Fintech Initiatives
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Thursday) it has signed a Memorandum of Understanding (MOU) with Hong Kong Science and Technology Parks Corporation (HKSTP), to explore new biotech and fintech initiatives. HKSTP is home to the city’s largest research and development base and a world-class innovation ecosystem, which will underpin the long-term growth of Hong Kong and the region as a global centre of excellence for biotech and new economy enterprises.
Nasdaq August 2021 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for August 2021 on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics.
SGX amends default management process
Singapore Exchange (SGX) is amending the default management process for clearing members of The Central Depository Pte Ltd (CDP). This follows a November 2020 public consultation on the proposed changes which received strong market support.
B3 publishes third preview for Ibovespa and other indices
São Paulo, September 2, 2021 – B3 hereby publishes the third preview for its Ibovespa index, which will be effective from September 6, 2021, to December 30, 2021, based on the close of the trading session of September 1st, 2021. This preview registers the debut of Alpargatas PN (ALPA4), Banco Inter PN (BIDI4), Banco Pan PN (BPAN4), Meliuz ON (CASH3), Rede D’Or ON (RDOR3), Dexco ON (DXCO3)and Petz ON (PETZ3) and totals 91 equities in 84 companies.
Ontime registers a new 50 million euro Commercial Paper Programme with MARF
BME’s Fixed Income Market, MARF, today admitted the first Commercial Paper (CP) Programme for trading from Ontime Corporate Union. This programme will allow the new issuer on the market to access qualified investors to diversify its sources of financing and place over the next 12 months CP issues with maturities of up to two years for a maximum outstanding volume of 50 million euros.
SIX to acquire 50% stake in REGIS-TR from Joint Venture Partner Clearstream
Iberclear, part of SIX, to become sole shareholder of Regis-TR and to continue to grow the existing business
The transaction is expected to close in the first half of 2022. The acquisition allows for a full consolidation and integration of the REGIS-TR business within the SIX Group. Financial terms of the acquisition are not disclosed
Change to the JPX-Nikkei Index 400
Japan Exchange Group, Inc., Tokyo Stock Exchange, Inc. and Nikkei Inc. will make the following change to the JPX-Nikkei Index 400 constituent in accordance with the constituent selection rule.
Status of study on the extension of trading hours in Tokyo Stock Exchange
In the Working Group for Strengthening the Functions of the Cash Equity Market(hereinafter the WG) established in May 2021, in order to strengthen the functioning of the cash market over the medium term, the trading rules including trading hours have been discussed 4 times in the working group so far. Regarding the trading hours, related parties of the WG are vigorously discussing the possibility of extending the trading hours by 30 minutes or several hours, based on the assumption that the extension would be done, but no decision has been made yet. As a matter of course, since the impact will be far-reaching, we will continue to discuss the issue in the WG and will carefully proceed discussions with the related parties outside the WG.
Letter from the IFRS Council of Japan to the Chair of the Board of Trustees of the IFRS Foundation
The IFRS Council of Japan, in which Japan Exchange Group, Inc. and Tokyo Stock Exchange, Inc. participate as members, has sent a letter to the Chair of the Board of Trustees of the IFRS Foundation on 31 August 2021 related to the International Sustainability Standards Board (ISSB), which the IFRS Foundation is considering establishing.
— Administrative Amendments to Twenty-One (21) Energy Futures and Options Contracts — CME
— Product Modification Summary: Amendment to CME Cryptocurrency Rulebook Language – CME
— Notice of Disciplinary Action – Paul Meech, CME RULE VIOLATIONS:Rule 533. Simultaneous Buy and Sell Orders for Different Beneficial Owners (in part) — CME
— Product Modification Summary: Amendment to Strike Listing Procedures for Options on Bitcoin Futures – Effective September 27, 2021 — CME
— Product Modification Summary: Launch new BTIC on Bitcoin Futures, BTIC on Micro Bitcoin Futures, and BTIC on Ether Futures – Effective September 27, 2021 — CME
— Notice of Disciplinary Action, CME
— Notice of Disciplinary Action, NON-MEMBER: Lloyd Rayner, CME RULE VIOLATIONS: Rule 533. Simultaneous Buy and Sell Orders for Different Beneficial Owners (in part) — CME
— Notice of Disciplinary Action, NON-MEMBER: Daniel Higgins, CME RULE VIOLATIONS: Rule 533. Simultaneous Buy and Sell Orders for Different Beneficial Owners (in part) — CME
— Notice of Disciplinary Action, MEMBER: BGC Financial L.P., CME RULE VIOLATION: Rule 432. General Offenses — CME
— Notice of Disciplinary Action, NON-MEMBER: Sanguk Yoo, CBOT RULE VIOLATION: Rule 534 Wash Trades Prohibited — CME
— Notice of Disciplinary Action, NON-MEMBER: Yu-gyeong Choi, CBOT RULE VIOLATION: Rule 534 Wash Trades Prohibited — CME
— Notice of Disciplinary Action, MEMBER: Robert Anthony Ross, CBOT RULE VIOLATIONS: Rule 575. Disruptive Practices -Prohibited (in part) — CME
— Notice of Disciplinary Action, NON-MEMBER: Puneet Chaudhary, CME RULE VIOLATION: Rule 575 Disruptive Practices Prohibited (in part) — CME
— Notice of Disciplinary Action, NON-MEMBER: Banca Patrimoni Sella & C. SpA, CME RULE VIOLATIONS: Rule 534 Wash Trades Prohibited — CME
— Storage and Handling Rate Changes for Kodiak Warehouse, LLCStorage and Handling Rate Changes for Henry Bath B.V.Storage and Handling Rate Changes for Utah Commodity Storage, Inc.m — CME
— Storage and Handling Rate Changes for Arizona Commodity Storage, Inc. — CME
Cathie Wood’s Fintech ETF Sells HDFC Bank First Time Since May
Abhishek Vishnoi – Bloomberg
Cathie Wood’s fintech fund has sold a stake in HDFC Bank Ltd, India’s largest by market value, for the first time in nearly four months. The move comes at a time when the lender’s main stock listing is less than 3% away from a record high.
Wood’s Ark Fintech Innovation ETF (ARKF) sold 127,637 American depository receipts of the lender on Thursday for the first time since May 6, according to Ark Investment Management’s daily trading data compiled by Bloomberg. It now holds ADRs worth $19 million, Ark’s website shows.
‘Buy now, pay later’ retail loan services test patience of investors; Affirm’s deal with Amazon is a ‘massive customer expansion opportunity’ but profits may be years away
Imani Moise and Miles Kruppa – FT
Old-fashioned store credit has an app interface and a Gen-Z-friendly name. ‘Buy now, pay later’ services allow consumers to pay for purchases over time while driving new traffic for merchants.
Fintech startup Jeeves raises $57M, goes from YC to $500M valuation in one year
Mary Ann Azevedo – TechCrunch
Last summer, Jeeves was participating in Y Combinator’s summer batch as a fledgling fintech.
This June, the startup emerged from stealth with $31 million in equity and $100 million in debt financing.
Today, the company, which is building an “all-in-one expense management platform” for global startups, is announcing that it has raised a $57 million Series B at a $500 million valuation. That’s up from a valuation of just north of $100 million at the time of Jeeves’ Series A, which closed in May and was announced in early June.
South Korea’s fintech stretches valuation limits
South Korea’s financial technology mania has reached new heights. The payments-to-wealth management arm of super-app owner Kakao cut the price range of its initial public offering by roughly 6% after regulators ordered it read more to revise its filings. Kakao Pay’s enterprise will now be worth as much as about $10 billion, or 27 times 2021 annualised sales. Brazilian fintech services PagSeguro (PAGS.N) and StoneCo (STNE.O) and American e-lender Upstart (UPST.O) trade at an average 16 times.
OneZero launches analytics to help traders review ‘last look’ impact; New analytics will calculate the impact of trades rejected in last look practices to help traders better understand spreads and the type of flow sent to liquidity providers.
Annabel Smith – The Trade
Broker-dealer trading technology provider, oneZero, has launched a new analytics offering that will allow traders to analyse the impact of the controversial ‘last look’ execution method.
A relentless battle for app-based freedom and cybersecurity
Martin Ricker – Texas News Today
An app-based life encourages a combination of criminal activity and games.
Whatever the motive, vulnerabilities in digital systems undermine public confidence in the security of the information they provide. Tell football fans who struggled to compete in the “once-in-a-lifetime” Euro 2020 final in Wembley due to a software failure that access to the app is safer than a paper ticket. .. Due to the nature of IT, there are always technical issues caused by internet connectivity, the need for resets, or unstoppable automatic updates.
Ravie Lakshmanan – The Hacker News
Juniper Breach Mystery Starts to Clear With New Details on Hackers and U.S. Role
Jordan Robertson – Bloomberg
Days before Christmas in 2015, Juniper Networks Inc. alerted users that it had been breached. In a brief statement, the company said it had discovered “unauthorized code” in one of its network security products, allowing hackers to decipher encrypted communications and gain high-level access to customers’ computer systems.
CISA, FBI Post Ransomware Alert Ahead of Holiday Weekend
Nathan Eddy – Security Boulevard
The FBI and CISA do not currently have any specific threat reporting indicating a cyberattack will occur over the upcoming U.S. Labor Day holiday. However, the two agencies took the opportunity before the holiday weekend to release a statement aimed at sharing information and providing awareness about the need for extra diligence in network defense practices.
State Street to add 400 jobs in Ireland in tech and cybersecurity drive; New global cybersecurity and technology unit to be set up by State Street in Ireland over the next two years.
Jon Watkins – The Trade
State Street will establish a specialist 400-strong team in Ireland over the next two years to provide technology infrastructure and cybersecurity services. The investment bank has been in Ireland for 25 years and currently employs approximately 2,000 staff in Ireland across Dublin, Drogheda, Naas and Kilkenny.
‘Crypto Dad’ Giancarlo to Quit BlockFi’s Board After 4 Months; The departure comes as BlockFi faces mounting legal pressure over its flagship interest-bearing crypto accounts.
Danny Nelson – Coindesk
Former chief U.S. commodities regulator Christopher Giancarlo has resigned from BlockFi’s board of directors after only four months, CoinDesk has learned. It was not immediately clear why Giancarlo is leaving the cryptocurrency lender’s board. He did not respond to multiple requests for comment.
Slavi Set to Offer DeFi Users a Decentralized Application With 30+ Supported Blockchains
Navid Ladani – Benzinga
Over the last 2 years, a certain sub-sector of the blockchain industry has gained immense popularity, with billions of dollars in capital inflow, and is being pegged as the next big thing not just in blockchain but in finance as a whole. This, of course, is decentralized finance or DeFi as it is popularly called. The reason why DeFi has become so popular is that it offers essentially all the benefits of the traditional financial industry but with the middlemen removed and significant cost reduced.
Singapore Tells Binance to Halt Service in Latest Crypto Hit
Chanyaporn Chanjaroen – Bloomberg
Binance Holdings Ltd. must stop offering services regulated in Singapore after a potential breach of local payment rules, adding to a mounting list of jurisdictions scrutinizing the world’s largest cryptocurrency exchange. Binance may be in breach of the Payments Services Act for providing payment services to, and soliciting business from Singapore residents without an appropriate license, the Monetary Authority of Singapore said Thursday, in response to questions from Bloomberg.
First Crypto Fund in Japan Targets Long-Term Retail Investors
Takashi Nakamichi and Takako Taniguchi – Bloomberg
SBI’s Asakura says fund can help diversify a broad portfolio; Fund includes Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin
Japanese financial conglomerate SBI Holdings Inc. is aiming to launch the country’s first cryptocurrency fund by the end of November that can give individual investors a way to diversify their broader portfolio.
Bitcoin ‘Hash Crash’ Rebound Points to Miners Plugging Back In
Call it the “hash crash” — the steep drop in computing power for the Bitcoin network as Chinese operations pulled the plug amid the government crackdown. But whatever term one might use, it’s basically over now. The hash rate, a measure of computing power used in mining and processing, has jumped as much as 55% from early July, when it hit an almost two-year low. Prices for the token also recouped more than half of its losses since its April peak and traded at around $50,000 on Thursday.
Japan’s Suga Quits as Premier, Throwing Open Succession Race
Isabel Reynolds – Bloomberg
Japanese Prime Minister Yoshihide Suga announced plans to resign after failing to control the country’s coronavirus surge, with two former foreign ministers seen as leading the pack to take over, weeks before a general election.
Japan Investors Are Glad to See the Back of an Unpopular Leader
Gearoid Reidy – Bloomberg
Stock markets soared in Tokyo after the shock resignation of Prime Minister Yoshihide Suga, as investors expressed hope that a new leader would lift the cloud of uncertainty that has depressed sentiment in equities for months.
Suga’s Misjudgement of Economy-Covid Balance Dooms Premiership
Yoshiaki Nohara – Bloomberg
Delta, public fatigue, Olympics helped fuel record virus cases; Suga leaves green goal, cheaper phones, inflation below zero
Japanese Prime Minister Yoshihide Suga’s decision to step down as leader largely reflects his failure to balance the goals of containing Covid-19 and protecting the economy. His strategy of trying light restrictions for longer to limit the impact on companies helped the economy avoid another recession, but stretched the patience of bar and restaurant owners singled out for stricter rules. Consumers also grew weary of an on-again-off-again state of emergency that has been losing its effectiveness to contain activity.
Suga’s abrupt exit threatens return of volatility to Japan politics; Ruling Liberal Democratic party needs candidate with popular appeal and policy vision
Robin Harding – FT
Yoshihide Suga won the race to succeed Shinzo Abe as leader of the Liberal Democratic party and prime minister of Japan in a landslide last year. He was the continuity candidate, vowing to carry on Abe’s policies; the competence candidate, known for his powerplays behind scenes; and the consensus candidate, unaligned with any of the party’s large organised factions.
China says US tensions threaten fight against climate change; Washington blamed for worsening ties as Kerry visits Tianjin to push emissions cuts
Edward White – FT
China has warned the US that a “strategic miscalculation” in its relations with Beijing had stoked bilateral tensions that risked derailing high-level talks aimed at combating the global threat of climate change.
Hedge Fund Manager Gets Four Years for $20 Million Fraud Scheme
Chris Dolmetsch – Bloomberg
The co-founder of a Connecticut hedge fund was ordered to spend four years in prison for scamming more than two dozen investors out of nearly $20 million in a Ponzi-like scheme. Jason Rhodes was sentenced on Wednesday by U.S. District Judge Sidney Stein in Manhattan. Rhodes pleaded guilty in January 2020 to charges that he used more than $19 million he raised for his fund, Sentinel Growth Fund Management LLC, to repay early investors and for personal expenses like a vacation in Dubai and a luxury timeshare.
CFTC Files Action to Suspend Registration of Mississippi Man Based on Criminal Charges
The Commodity Futures Trading Commission announced today that it commenced a registration action against Ted Brent Alexander of Jackson, Mississippi. The CFTC action is based on a federal criminal indictment charging Alexander with six felony counts of securities and commodities fraud, conspiracy, and wire fraud.
China’s Regulators Are Moving Fast and Breaking Things. Tech Investors Should Watch Out.
Craig Mellow – Barron’s
Imagine a large industrial economy with no taxes on property, capital gains, or estates, and no national minimum wage. Such a conservative paradise, by Western standards, does exist: China. Against that backdrop, the Communist Party’s campaign for “Common Prosperity,” which has roiled markets afresh lately, smacks more of Woodrow Wilson than Chairman Mao, says Jason Hsu, chief investment officer at Rayliant Global Advisors. “I mostly see China trying to be more like the West,” he says. “Creating a social safety net and financing it with more taxes.”
Cryptocurrency Promoter Pleads Guilty in $2 Billion Fraud
A Los Angeles man pleaded guilty Wednesday to participating in what prosecutors called a “textbook Ponzi scheme” that defrauded cryptocurrency investors worldwide of more than $2 billion. Prosecutors said Glenn Arcaro, 44, sat atop the North American branch of the pyramid investment scheme BitConnect, the San Diego Union-Tribune reported.
Regulators Investigate Crypto-Exchange Developer Uniswap Labs; SEC probe comes amid heightened scrutiny of fast-growing decentralized markets
Dave Michaels and Alexander Osipovich – WSJ
The Securities and Exchange Commission is investigating the startup behind one of the biggest cryptocurrency exchanges, as regulators probe further into parts of the digital-asset market that have resisted oversight, according to people familiar with the matter. Regulators are examining Uniswap Labs, the main developer of the world’s largest decentralized exchange, called Uniswap, the people said. Enforcement attorneys are seeking information about how investors use Uniswap and how it is marketed, the people said.
Perth man charged with failing to assist ASIC investigation
Hazeem Lamar Hajinoor of Beckenham, WA, has been charged with failing to attend and comply with ASIC examination requirements. In the course of ASIC conducting an investigation, Mr Hajinoor was served with an information gathering notice that required him to appear at an examination on 20 November 2020 and provide reasonable assistance. Mr Hajinoor failed to appear at the examination.
Investing and Trading
Reddit-inspired day traders bought stocks at a record pace this summer – and their recent push into altcoins has crypto markets looking frothy, JPMorgan says
Matthew Fox – Business Insider
Retail investors bought stocks at a record pact over the summer, helping push markets to records, according to data from JPMorgan. Retail investors have been buying stocks at a record pace over the summer, helping push markets to record highs, according to a Wednesday note from JPMorgan. The bank estimates that retail investor net flow into US stocks hit a record high of almost $16 billion in July, and stood at about $13 billion in August. The previous record was $10 billion last June, JPMorgan highlighted.
Evergrande bond trading halted on growing fears of cash crunch; Suspensions come as country’s most indebted property developer faces liquidity crisis
Thomas Hale – FT
Trading in some debt issued by China Evergrande was temporarily halted on Friday, as the under-pressure property developer’s bonds tumbled to new lows on fears of a deepening liquidity crisis.
Australia strikes deal to ‘swap’ 4m vaccine doses with UK; Canberra hopes agreement will accelerate rollout that has been one of slowest in developed world
William Langley and Oliver Barnes – FT
The UK will send 4m Covid-19 vaccine doses to Australia in a swap deal aimed at accelerating Canberra’s stuttering rollout and bolstering British supplies later in the year when ministers are pushing for a booster campaign.
Banks and investors gear up for US corporate debt binge; Companies rush to lock in low rates after summer lull
Joe Rennison – FT
Bankers and investors are bracing for a bumper month of debt issuance in the US, with pent-up supply from a quiet end to August set to be unleashed following the Labour day holiday this weekend.
The downside of the economics of self-reliance; If a coming investment push is inward-looking, it might substitute global trade rather than complement it
David Lubin – FT
One often hears that China accounts these days for about a third of global GDP growth. That’s true enough, but a more interesting statistic is this: in the 10 years running up to the pandemic, China accounted on average for almost half — actually, 47 per cent — of global investment growth.
The Latest IRS Headache for Taxpayers: 11 Million ‘Math Error’ Notices; Tax changes like the ones brought by last year’s stimulus payments often trigger a surge in such problems
Laura Saunders – WSJ
Millions of Americans have gotten a scary, confusing letter from the Internal Revenue Service in 2021 saying they owe more taxes. Making matters worse, many of the letters are about stimulus payments meant to lessen the blow of the pandemic.
Sugar Prices Soar After Brazil Cold Snap; Prices are likely to stay elevated for several months, analysts say
Joe Wallace – WSJ
Sugar prices shot to four-year highs after a frost in Brazil cut the size of the cane crop in the world’s biggest producer, and hedge funds are adding to the market’s momentum. Prices for raw sugar futures have jumped 10% over the past month to trade at about 20 cents a pound in New York. Sugar prices haven’t been that high since early 2017 and have climbed more than 60% over the past year.
Reddit is hiring bankers and lawyers ahead of planned $15 billion IPO: report
Theo Wayt – NY Post
Reddit is looking to hire investment bankers and lawyers as part of its plans to go public early next year at a value of more than $15 billion, Reuters reported Thursday. Reddit most recently raised money in a private fundraising round in August at a valuation of $10 billion — meaning that an IPO at a valuation of $15 billion would represent a dramatic 50 percent increase in the company’s valuation in just a matter of months.
Environmental, Social and Corporate Governance
All the Biggest Environmental Risks Facing the World’s Biggest Cities; From landslides and extreme heat to insect infestations and airborne diseases, these are the most worrying hazards in urban areas with more than 1 million people.
Dorothy Gambrell – Bloomberg Green
Last year 48 global cities with a population of more than 1 million reported the climate hazards they faced to the nonprofit CDP, which helps them track their environmental actions and risks and compare themselves with peers.
Companies Are Tallying Their Carbon Emissions, but the Data Can Be Tricky; Microsoft, other companies use difficult-to-measure information about suppliers and customers to reach emissions totals
Jean Eaglesham – WSJ
Microsoft Corp. MSFT -0.23% has halved its greenhouse-gas emissions—with a wave of a calculator. In 2017, the software company said it was responsible for 22 million metric tons of carbon. Since then, the 2017 number was reduced to 11 million metric tons. The annual total remained at 11 million for the 12 months ended in June 2020.
HSBC’s CEO Has His Eye on China Wealth Beyond Xi’s Crackdown
Francine Lacqua and Denise Wee – Bloomberg
Europe’s largest lender plans more bolt-on acquisitions; Quinn sees crypto as ’emerging market’ with too much risk
HSBC Holdings Plc Chief Executive Officer Noel Quinn is betting on China’s middle classes. It’s an opportunity too big to miss, he believes, even as President Xi Jinping cracks down on the country’s wealthiest.
Executives at hedge fund Renaissance to pay $7bn in back taxes; Founder Jim Simons will pay additional $670m in largest tax settlement in US history
James Fontanella-Khan – FT
Top executives of Renaissance Technologies and their spouses have agreed to pay about $7bn in back taxes and penalties to federal authorities in connection with trades made by the quantitative hedge fund in the largest tax settlement in US history, according to people briefed on the matter.
James Simons, Robert Mercer, Others at Renaissance to Pay Up to $7 Billion to Settle Tax Probe; Tax settlement, which current and former executives will personally pay, may be the largest in history
Gregory Zuckerman and Richard Rubin – WSJ
Current and former executives of hedge fund Renaissance Technologies LLC will personally pay as much as $7 billion in back taxes, interest and penalties to settle a long-running dispute with the Internal Revenue Service, the firm said, a tax settlement that may be the largest in history.
Citi appoints new global clearing boss following departure of co-heads; Head of clearing and FXPB in the US at Citi will replace former co-heads Chris Perkins and Sabrina Wilson as sole head of the division.
Annabel Smith – The Trade
Citi has appointed a new global head of clearing following the departure of former co-head Sabrina Wilson, who has left the bank just weeks after fellow co-head Chris Perkins, The TRADE understands. Mariam Rafi, who is currently head of clearing and FX prime brokerage for North America and has been with Citi 2011, will take sole control of the division, according to a source familiar with the matter. A spokesperson at Citi declined to comment.
China Is Hoarding Crude Again, And That’s Great News For Oil Prices
After recording the worst monthly loss this year in August, the oil markets have kicked off trading in September on a much brighter note on a trifecta of positive developments. Crude oil prices have been inching up after OPEC+ agreed to keep its current production agreement in place, in effect maintaining the 400K bbl/day hike scheduled for October, thus signaling that the markets are healthier than earlier feared. Reuters has also reported that OPEC+ will raise its 2022 oil demand growth forecast to 4.2M bbl/day from its previous outlook of 3.28M bbl/day.
Russia Has a Gas Problem Nearly the Size of Exports to Europe
Elena Mazneva – Bloomberg
Gazprom has just 2 months to build record inventory in Russia; That means storing supply equal to 80% of Western Europe flows
Gazprom PJSC needs to store nearly as much natural gas at home to keep Russians warm this winter as it currently ships to its top customer Western Europe every day, Bloomberg calculations show.
The Last Thing San Francisco Needs Is More Home Offices; As more workers split time between home and office, demand for more space and shorter commutes will grow, exacerbating shortages of urban housing in major business centers.
Noah Smith – Bloomberg
For a decade, Americans have endured rising rents in the cities where the best jobs are. Some hoped that the post-pandemic era would reverse this trend, as people moved out to the suburbs and worked from home. But in fact, remote work is likely to exacerbate the rent problem rather than relieve it, because of demand for larger houses.
India’s State Oil Company Excluded by Norway’s Wealth Fund
Lars Erik Taraldsen – Bloomberg
India’s state-owned Oil & Natural Gas Corp has been excluded from the world’s biggest sovereign wealth fund, due to the “unacceptable risk that the company is contributing to serious violations of the rights of individuals” in its joint ventures with South Sudan’s national oil company Nile Petroleum Corporation.
Norway to Mull Splitting $1.4 Trillion Fund From Norges Bank
Ott Ummelas and Stephen Treloar – Bloomberg
A Norwegian government-appointed committee will re-assess whether to separate its $1.4 trillion sovereign wealth fund, the world’s largest, from the central bank.
China Big Tech’s Charitable Donations Are Hurting Their Stocks
Abhishek Vishnoi and Venus Feng – Bloomberg
Stocks of key firms have fallen after pledging money; ‘It’s actual dollar going out of the door,’ Bocom says
Chinese tech giants’ increasing charitable pledges may be contributing toward Xi Jinping’s “common prosperity” vision, but they have also been costing investors. Stocks of all seven listed companies giving details of donations and pledges for various causes this year were sold off in the trading session following those moves, according to Bloomberg compiled data, which don’t include pledging announcements that were clubbed with earnings releases.
Indonesia Cuts Bond Income Tax for Local Investors to Record Low
Grace Sihombing – Bloomberg
Rate for foreign investors has been cut to 10% as of Aug. 1; Indonesia has tapped central bank to help finance deficit
Indonesia is cutting the income tax rate on bond interest to a record-low 10% for domestic investors, putting it on par with the rate for foreign funds. The change is set to reduce distortions in bond prices between local and global investors, the government said in a revised regulation that took effect on Aug. 30. The new rate, lowered from 15%, applies to Shariah-compliant and conventional bonds sold by the government and companies.
A long wait for Scottish gold ‘but it will be worth it’; A traceable supply chain from the Cononish mine may command a premium, but the native metal is in high demand
Rachael Taylor – FT
The promise of Scottish gold was a heady lure. Mining precious metals in the Trossachs national park would offer jewellers locally sourced materials with full transparency — and offer consumers jewellery imbued with the romance of the Highlands. The dream, however, has stalled.