Citi to Cut Hundreds of Trading Jobs in Bad Wall Street Omen

Jul 30, 2019

First Read

Hits & Takes
JLN Staff

Trading Technologies’ Brian Mehta and his band, Flood Waters, will be playing at the upcoming ALTSO Rocktoberfest-Chicago event on October 10 at the City Winery in the West Loop. He and his Flood Waters band members are seeking sponsors to help meet their goal of raising $10,000 for the ALTSO mission.~JJL

You can also help through buying tickets to attend the Rocktoberfest-Chicago event. There currently is a discount code FWater19 that unlocks the early bird rate of $125 (after Aug 1) for the duration of the fundraising. It’s an awesome evening featuring six local bands! Click HERE to donate and help Flood Waters meet their ALTSO goal.~JJL

Oops! Yesterday’s notice about the AMERIBOR event today said it was being held at the CBOT. Wrong! It is being held at the Cboe. My mistake. Today’s event runs from 3:00 PM – 4:00 PM. Contact Laura LaBarbera at llabarbera@theafex.com? to register.~JJL

Alexandra Garza, a marketing intern at Trading Technologies, wrote this about our event two weeks ago: “7 Takeaways from John Lothian News’ “MarketsWiki Education World of Opportunity” Event for Chicago Capital Markets Interns“~JJL

Curve Global has a video about the “Finder Price Tick” for trading at smaller increments on their interest rate products.~JJL

Our friend Simon Rostron was quoted in the Wall Street Journal about British men wearing shorts to work in an article titled “London Britches Falling Down in Record Heat Wave.” Turns out Simon is a traditionalist. Who knew? BTW, I wore shorts to work yesterday.~JJL

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The Spread – A Big Deal

JohnLothianNews.com

If LSEG’s purchase of Refinitiv goes through, it would be quite the mega deal for capital markets. This episode of “The Spread” examines the tie-up’s potential.

Watch the video »

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FINRA Fines Citigroup Global Markets Inc. $1.25 Million for Failing to Appropriately Fingerprint or Screen Employees Over Seven-Year Period
FINRA
FINRA today announced it has fined Citigroup Global Markets Inc. $1.25 million for failing to conduct timely or adequate background checks on approximately 10,400 non-registered associated persons spanning a seven-year period.
bit.ly/2K0Vek7

****Talk about bad risk management…~SD

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OCC Adds Leaders from Morgan Stanley and Bank of America Merrill Lynch to Board of Directors
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that Susan O’Flynn, Managing Director and Global Head of CCP Strategy and Resource Optimization with Morgan Stanley, and Stuart Bourne, Managing Director, Head of Americas Asset Management Services with Bank of America Merrill Lynch, have joined OCC’s Board of Directors as Member Directors.
bit.ly/2YsxLMP

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Brexit has become the enemy of the UK union; Boris Johnson’s ‘do or die’ strategy is gambling with Britain’s future
The editorial board – FT
Boris Johnson declares himself a champion of the UK union, a prime minister who wants to strengthen “the ties that bind our United Kingdom”. Mr Johnson also promises to leave the EU — “do or die” — by the end of October. Just days in office, he has flatly dismissed the withdrawal deal agreed with Brussels by Theresa May, and ordered Whitehall to draw up plans for Britain to crash out of the EU without a deal.
/on.ft.com/2ZnqNKi

*****Disunion is more like it.~JJL

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Bulletproof backpacks readily available on First Coast in time for school year
Kamrel Eppinger – First Coast News (ABC News)
One may call it a sign of the times, as bulletproof backpacks are now on sale at stores on the First Coast.
Since the shooting massacre at Sandy Hook, the backpacks have become a demand for parents during back to school shopping.
The backpacks were found for sale for $119.00 at Office Max in Jacksonville.
/fcnews.tv/2Mu2KWf

****Capitalism at its finest. ~JB

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Dark web criminal bought ‘quadrillions of Zimbabwe bank notes’
BBC
A drug dealer who used dark web marketplaces to ply his trade apparently used part of the proceeds to buy vast quantities of Zimbabwean cash.
The FBI said Richard Castro, of Florida, had bought the equivalent of “approximately 100 quadrillion [1,000 trillion] Zimbabwe bank notes” in June 2018.
Use of the currency had ended years earlier, following hyperinflation.
/bbc.in/2MrJYPw

****Near as I can tell, at the height of Zimbabwe’s hyperinflation, a Z$100 trillion Zimbabwe banknote was worth about $0.40 US dollars so this netted out to about $4.00 US. ~JB

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Monday’s Top Three
Our top story of the day is the biggest deal of the day, in Bloomberg’s piece LSE Soars on Bet $27 Billion Refinitiv Bid Will Boost Bourse. Second was the MarketsWiki Education video The Power of the People, the presentation from Chart IQ’s Julie Armstrong. Third was the FT’s Deutsche Bank probes access of fired workers to lender’s systems

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Lead Stories

Citi to Cut Hundreds of Trading Jobs in Bad Wall Street Omen
Sridhar Natarajan, Donal Griffin, and Jennifer Surane – Bloomberg
Growing list of firms are firing as trading revenue falls anew; ‘The rest of Wall Street is thinking the same way,’ Harte says
Citigroup Inc. is preparing to cut hundreds of jobs in its trading division — stark new evidence that an industrywide slump in revenue this year may be more permanent than the tweets and policy moves rattling clients.
/bloom.bg/2Zl3DUK

More Exchanges Add ‘Speed Bumps,’ Defying High-Frequency Traders
Wall Street Journal
High-frequency trading firms are hitting a growing number of “speed bumps” around the world—the latest blow to a business that has struggled in recent years
/on.wsj.com/2MpGGvS

London Stock Exchange deal is signpost for City; Plan to buy Refinitiv is logical and instructive for the Square Mile
The editorial board – FT
The London Stock Exchange may be days away from doubling in size via the acquisition of Refinitiv, the data spin-off from Thomson Reuters. Over the weekend the LSE confirmed a Financial Times report that the two groups are in advanced talks.
/on.ft.com/2ZjacHf

Capital One Reports Data Breach Affecting 100 Million Customers, Applicants; Alleged hacker, a former employee of Amazon Web Services, arrested by federal agents in Seattle
Nicole Hong, Liz Hoffman and AnnaMaria Andriotis – WSJ
Capital One Financial Corp. , the fifth-largest U.S. credit-card issuer, said Monday that a hacker accessed the personal information of approximately 106 million card customers and applicants, one of the largest-ever data breaches of a large bank.
/on.wsj.com/2GBz3il

Citigroup Plans to Cut Hundred of Trading Jobs
Sridhar Natarajan and Donal Griffin – Bloomberg
Bank pulls back after traders posted first-half drop; Firm joins rivals in Europe that are laying off hundreds
Citigroup Inc. is preparing hundreds of job cuts at its slumping trading division as more of the world’s largest firms respond to dormant clients with layoffs. The firm plans to slash jobs across its fixed-income and stock-trading business over the course of 2019, according to people familiar with the matter. That includes at least 100 jobs in the equities unit, which would amount to almost 10% of that division, said the people, who asked not to be identified because details aren’t public.
/bloom.bg/2K00NPE

My False Hope for the FBI, DOJ Assistance in the OptionSellers, INT
Mike McLeod
One of my earlier blogs stated that we would have to depend on the FBI, Department of Justice, to do the job of the CFTC. My apologies to the CFTC.
bit.ly/2GAcr1K

How to tame China’s rogue state capitalism; The west must focus on the scale and scope of Beijing’s industrial subsidies
Sherman Katz – FT
Hopes that the resumption of trade talks between the US and China will lift the shadow of uncertainty hanging over the world economy miss something fundamental. Restoring global value chains, rebalancing US-China trade and increasing protection for intellectual property are, of course, desirable objectives. But there is a more significant issue at stake: loopholes in global trade rules on subsidies and the absence of any agreed restraints on state-owned enterprises.
/on.ft.com/2GBqCDG

Q&A: Dave Hoag, Chief Information Officer for OCC, on the Importance of Peer Relationships and His Advice for Aspiring CIOs
H. Michael Burgett – The National CIO Review
Dave Hoag, Chief Information Officer for OCC (Options Clearing Corporation), found a passion for technology in his childhood that has stayed with him his entire life. Programming was a hobby for him from an early age. That hobby developed into a college major, and that college major launched a career that’s led him to be the technology leader for the world’s largest equity derivatives clearing organization.
bit.ly/2GCh1wj

Chinese Hackers and the CAT?
Themis Trading Blog
While the industry gears up for the beginning of testing for the Consolidated Audit Trail (CAT) this December, there are still some that want to derail the project. After the SRO’s finally booted Thesys Technologies from the project, completion of the CAT seemed to be gaining momentum. FINRA has taken over production of the CAT and the CAT NMS Plan has produced what looks to be a reasonable timeline However, there are those that continue to balk at the idea of having personally identifiable information (PII) reside in the CAT database. The latest objector is Senator John Kennedy (R-LA) who just sent a letter to the SEC outlining his case against having PII in the CAT.
bit.ly/2JZCSQp

U.S. More Than Doubles Borrowing Estimate on Debt-Limit Lifting
Alex Harris – Bloomberg
The U.S. Treasury Department said it plans to borrow more than twice as much as previously anticipated in the third quarter, assuming lawmakers free up spending by lifting the debt ceiling.
/bloom.bg/2JZPLtL

Private-Equity Firm Abraaj Is Fined a Record $315 Million in Dubai; Regulator imposes its largest-ever penalty, saying Abraaj misused investors’ funds and provided misleading information
Simon Clark – WSJ
Dubai’s financial regulator fined collapsed private-equity firm Abraaj Group $314.6 million for deceiving investors and carrying out unauthorized activities, a record penalty in the Persian Gulf emirate.
/on.wsj.com/2GzzJF2

Ohio Farmers Face Lean Year, Hard Decisions After Spring Floods; Wet weather compounds challenges posed by low prices, tariffs
Jacob Bunge – WSJ
American farmers are reeling after unrelenting rain delayed planting across the Midwest while trade battles continue to drag down exports and crop prices. Now, the prospect of another lean year is spreading farmers’ pain to the agricultural suppliers, traders and food makers that depend on them.
/on.wsj.com/2GyIa3e

Profoundly low interest rates are here to stay; Investors and policymakers must recalibrate their assumptions on capital and investment
Robin Harding – FT
This will be a discomforting, defining week for the global economy. That is not because the US Federal Reserve is set to cut interest rates. Rather it is because of the strikingly low level of rates from which the Fed will start: a range of just 2.25 to 2.5 per cent.
/on.ft.com/2GEMrCq

Blockchain launches cryptocurrency exchange with trades at high speed
Gertrude Chavez-Dreyfuss – Reuters
Blockchain, one of the world’s largest digital currency wallet companies, announced on Tuesday the launch of a cryptocurrency exchange called The PIT that aims to execute trades in microseconds for retail and institutional investors.
/reut.rs/2GzDiuU

Dirty Money Spotlights Role of Family Offices as Enablers; Jahangir Hajiyev was convicted of looting millions of dollars from a bank in Azerbaijan. Lawyers, investment advisers and a family office in London helped him spend his money.
Edward Robinson, Gavin Finch – Bloomberg
The signs were there. Jahangir Hajiyev, chairman of the biggest bank in Azerbaijan, and his wife, Zamira, appeared to be living on dirty money.
/bloom.bg/2GC1lZT

Crypto Exchange Blocked From Tether Reserves During Lawsuit
By Chris Dolmetsch – Bloomberg
N.Y. attorney general sued Bitfinex and cryptocurrency Tether; Exchange contends New York has no jurisdiction in the matter
Digital-asset exchange Bitfinex remains blocked from taking money from the cash reserves of the cryptocurrency Tether as a judge decides whether to dismiss a regulator’s lawsuit claiming the companies hid losses of more than $850 million.
/bloom.bg/2ZhgOpO

Negative Yields Could Be the Death of Bond Markets; How long can investors go on pretending that sub-zero interest rates are normal?
By Brian Chappatta – Bloomberg
Negative yields have never truly made sense.And yet, if you work in finance or even just read about markets in general, it’s starting to feel as if the once-absurd (or, at least, strictly academic) is starting to be considered, well, normal. Bloomberg Businessweek’s latest cover in Europe and Asia reads: “No Escape From Low Rates: A Decade of Cheap Money Is Warping the World.” It follows the European Central Bank’s decision last week to keep its key interest rate below zero, and it hinted at cutting the rate even further in the near future.
/bloom.bg/2Mi8oe6

Exchanges, OTC and Clearing

LSE/Refinitiv/Blackstone: leaping to a conclusion
Opinion – Financial Times
Effusive praise is nicer than curt criticism. But it sets expectations taxingly high. Monday’s 15 per cent jump in the shares of the London Stock Exchange illustrated the point. Investors think LSE’s all-share takeover of Refinitiv will be fantastic. However, a standing ovation for the ensemble as it shuffles on stage makes a bravura performance harder to deliver.
/on.ft.com/2K0Qr27

Citadel Securities Ireland to trade on SIX Swiss Exchange
Citadel Securities’ Irish subsidiary is the fourth firm to commence trading on SIX Swiss Exchange so far this year.
Hayley McDowell – The Trade
The Irish subsidiary of Citadel Securities has joined SIX Swiss Exchange as a trading member, becoming the fourth new member to trade with the exchange so far this year.
bit.ly/2yjQCir

Development and Revision of Rules and Regulations Associated with Product Transfer from Tokyo Commodity Exchange to Osaka Exchange, etc.
JPX
In line with the business integration between Japan Exchange Group, Inc. (JPX) and Tokyo Commodity Exchange, Inc. (TOCOM) scheduled for October 2019, some of the products listed on TOCOM will be
transferred to Osaka Exchange, Inc. (OSE), a JPX subsidiary, in order to create a comprehensive exchange that allows for one-stop trading of a wide range of financial and commodity products.
bit.ly/2ZnV0sw

Selection of Development Vendors for Next Generation Derivatives Trading System
JPX
Osaka Exchange, Inc. (OSE) has been engaged in the selection of development vendors for the replacement of the next generation derivatives trading system since April 2019, with the primary concept being “Launch Timely” to realize timely addition of products and functionalities and to contribute to business growth. OSE hereby announces that Nasdaq Technology AB and NTT DATA Corporation have been selected to be the development vendors.
bit.ly/2ZlBgWi

Overview of Earnings for Q1 FY2019
Japan Exchange Group, Inc.
bit.ly/2ZkXub3

LSE admits one million IG Group shares to trading
Finance Feeds
The admission follows an application submitted by the brokerage last week for a block listing of 1,000,000 ordinary shares of 0.005p each in IG to be admitted to LSE trading.
bit.ly/2ZkYjAF

Fintech

JPMorgan Chase Taps AI to Make Marketing Messages More Powerful; Company seeks big gains from tweaking the word choice in its pitches
Nat Ives – WSJ
JPMorgan Chase & Co. is adopting artificial intelligence that’s meant to improve what the financial-services firm says in its marketing messages, such as email pitches to prospective borrowers.
/on.wsj.com/2GD6oJP

Tipster’s Email Led to Arrest in Massive Capital One Data Breach
Christian Berthelsen, William Turton, and Jennifer Surane – Bloomberg
Former Amazon employee stole data, boasted online, U.S. says; ‘I gotta find somewhere to store it,’ hacker allegedly wrote
Capital One Financial Corp. set up an email address for tipsters — including “white hat” hackers — to alert the company to potential vulnerabilities in its computer systems. On July 17, the company got a hit.
/bloom.bg/2ZkugJx

AI Strengthens Its Hold on the Trading Desk
Markets Media
Artificial intelligence has moved beyond to having a toe-hold on the trading desk, according to an online poll conducted during a webinar hosted by industry analysis firm Greenwich Associates regarding AI’s use on the trading desk.
bit.ly/2GBvrwM

How new technology can help you check your stock portfolio while driving
McKenzie Stratigopoulos – Yahoo Finance
Investors could soon be trading stocks while behind the wheel. TD Ameritrade (AMTD) is rolling out voice-activated technology that allows users to check their portfolios and listen to real-time quotes during their commute.
/yhoo.it/2GAa3Ik

London Stock Exchange is looking to challenge the Bloomberg data empire
John Detrixhe – Quartz
Can anyone out-Bloomberg the Bloomberg? That will be one of the key questions for London Stock Exchange Group, which is in talks to acquire a Refinitiv, a terminal network for traders and other financial professionals that competes with Bloomberg’s financial data empire. Refinitiv is owned by a consortium of private equity companies led by Blackstone, and it generated $6.3 billion of revenue last year. (This reporter was previously a journalist at Bloomberg News. Uzabase, Quartz’s parent company, runs Speeda, a financial data platform.)
bit.ly/2ZmO6Ui

Broadway Technology Accelerates Growth in 2019 Following Period of Record Results and Product Innovation
Financial IT
Broadway Technology, a leading provider of high-performance fixed income and foreign exchange front-office solutions, today announced record results for 2018 and continued momentum in 2019. The company recorded an impressive 42% year-over-year revenue increase in 2018, led by ongoing expansion into global fixed income and foreign exchange markets and the addition of cryptocurrency as a supported asset class. Following its 2019 acquisition of Barracuda FX, Broadway continues to expand its global footprint and now counts 50% of the top global 50 banks in its client base.
bit.ly/2Ziqpg5

Cryptocurrencies

Bitcoin: Blockchain launches crypto exchange to take on Coinbase
Ryan Browne – CNBC
Blockchain, one of the world’s largest cryptocurrency wallet platforms, says it’s launched a digital currency exchange aimed at delivering “lightning-fast” trades.
The company’s exchange, called The PIT, is the result of a behind-the-scenes effort led by a team of former executives from the New York Stock Exchange, TD Ameritrade, Google and Goldman Sachs.
/cnb.cx/2MprbUH

Crypto Exchange Blocked From Tether Reserves for Now in Lawsuit
Chris Dolmetsch – Bloomberg
Digital-asset exchange Bitfinex remains blocked from taking money from the cash reserves of the cryptocurrency Tether as a judge decides whether to dismiss a regulator’s lawsuit claiming the companies hid losses of more than $850 million.
/bloom.bg/2K2aI7h

Facebook’s Libra Could Aid Law Enforcement; Company says proposed cryptocurrency could be valuable tool partly because of information generated by users
Paul Vigna – WSJ
Lawmakers were up in arms this month about whether Libra, Facebook Inc. FB -1.91% ‘s proposed new cryptocurrency, would be a haven for money launderers and other criminal activities.
/on.wsj.com/2GARlQT

Libra crypto may never launch due to regulatory scrutiny, warns Facebook
The Block Crypto
Social media giant Facebook has now itself warned that Libra cryptocurrency may never launch due to “significant” regulatory scrutiny.
bit.ly/2GP01TV

Facebook Libra Might Never Launch, Company Concedes in SEC Disclosure
Daniel Palmer – Coindesk
Facebook has acknowledged what many have been saying – that regulatory issues may be an insurmountable barrier to the launch of its Libra global cryptocurrency project.
bit.ly/2GDZALR

Facebook And Libra Are Looming Large Over Tomorrow’s Crypto Hearing In Congress
Steven Ehrlich – Forbes
A key moment from Facebook’s blockchain lead David Marcus’ testimony in front of Congress was an exchange he had with House Financial Services Committee Chair Maxine Waters. In response to her question asking whether he committed to refraining from moving forward with Libra until policymakers put appropriate regulations in place, he responded, “I committed to waiting for us to have all the appropriate regulatory approvals and have addressed all concerns before moving forward.”
bit.ly/2MpxqIj

Blockchain.com Enters Crypto Trading With New London-Based Exchange
Matthew Leising – Bloomberg
London-based supplier of digital wallets is accepting deposits; Crypto exchanges a market sore spot with hacks and thefts
Blockchain.com, which has created more than 40 million digital-asset wallets, is moving into the trading side of cryptocurrencies with a new exchange.
/bloom.bg/2ZtJPid

Bitcoin’s Largest Wallet Blockchain Just Launched Its First Crypto Exchange
Leigh Cuen – Coindesk
Bitcoin wallet and blockchain explorer provider Blockchain just launched its first exchange platform.
Blockchain’s head of retail products, TD Ameritrade alum Nicole Sherrod, told CoinDesk the custodial exchange, called the PIT, can connect to non-custodial Blockchain wallets for nearly instant transfers. Registration opens today, with the ability to trade up to 26 assets rolling out over the next two weeks.
bit.ly/2MpUp60

Millions in Crypto Is Crossing the Russia-China Border Daily. There, Tether Is King
Anna Baydakova – Coindesk
The cash-counting machines were softly buzzing in an office with floor-to-ceiling windows overlooking Moscow’s landmarks.
bit.ly/2GwEpeL

Crypto Exchange Bitstamp Is Adding UK Pound to Funding Options
Daniel Kuhn – Coindesk
The longest standing cryptocurrency exchange BitStamp will soon offer funding denominated in British pounds.
bit.ly/2GzJl2g

US Firm Launches Hedge Fund With Holdings in Coinbase, Bakkt
Daniel Kuhn – Coindesk
The investment firm US Capital Global announced it will add a tokenized venture fund with holdings in Coinbase, Bakkt, Nomics, and Tagomi in its portfolio.
bit.ly/2GyMSOs

Politics

Cruz Pushes Mnuchin for Quick Action on Capital Gains Tax Break
Laura Davison – Bloomberg
Senator Ted Cruz is pressuring Treasury Secretary Steven Mnuchin to quickly deliver a tax cut to investors by indexing capital gains to inflation, a move that he said would encourage savings, investment and innovation.
Cruz, along with 20 other Senate Republicans, are sending a letter to Mnuchin on Monday urging him to index the tax on gains made from real estate, stocks or bonds so investors would pay less when selling an asset than they would under existing law.
/bloom.bg/2Mpxjw9

Leon Cooperman: a wealth tax will not solve US inequality; Hedge fund magnate argues that eliminating waste and income tax loopholes are better options
Leon Cooperman – FT
There has been much written lately about imposing an explicit wealth tax, as well as higher income taxes, on the richest Americans.
/on.ft.com/2GzU0tU

French minister calls Trump’s wine tax threat ‘utterly pathetic’; US president has vowed retaliation over France’s decision to hit big tech groups with a new tax
Victor Mallet – FT
Didier Guillaume, France’s agriculture minister, has described as “utterly pathetic” President Donald Trump’s threat against French wine imports in retaliation for a new tax to be imposed by Paris on big tech companies such as Facebook and Google.
/on.ft.com/2GwExuL

Majority of Trump’s Trade Aid Went to Biggest Farms, Study Finds
Mike Dorning – Bloomberg
54% of the aid payments went to just a 1/10 of recipients; President approved new $16 billion round of trade aid for 2019
More than half of the Trump administration’s trade war aid for farmers went to just a 1/10 of the recipients in the program, according to analysis of payments by an environmental organization.
/bloom.bg/2GBwm0c

Regulation

Robert A. Cohen, Cyber Unit Chief, To Leave SEC After 15 Years Of Service
Mondovisione
The Securities and Exchange Commission today announced that Robert A. Cohen, Chief of the Division of Enforcement’s Cyber Unit, will be leaving the agency in August after 15 years of service.
bit.ly/2K3h8TT

UK regulator plans ban on ‘contingent charging’ by pensions advisers; Controversial fee model suspected to be fuelling a pension mis-selling crisis
Josephine Cumbo – FT
A controversial advice fee model suspected to be fuelling a pension mis-selling crisis is to be banned under proposals unveiled by the regulator.
/on.ft.com/2GDKXrQ

CFTC Orders Principal Of Binary Options Trading Firm To Pay $200,000 For Illegal Off-Exchange Trading And Registration Violations
CFTC
The U.S. Commodity Futures Trading Commission today issued an order filing and settling charges against Curtis Dalton of Middleton, Massachusetts, requiring him to pay $200,000 for offering illegal off-exchange retail commodity transactions to U.S. and overseas customers while failing to be registered by the CFTC as required.
bit.ly/2ykOTsW

The World Federation Of Exchanges Responds To IOSCO’s Consultation On Crypto-Asset Trading Platforms
Mondovisione
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to the International Organisation of Securities Commissions’ (IOSCO) Consultation Report on Issues, Risks and Regulatory Considerations Relating to Crypto-Asset Trading Platforms.
bit.ly/2Zjav4R

Former Leighton Holdings executive receives decision on sentence
ASIC
The New South Wales District Court today indicated that Mr Peter Allan Gregg, a former director and chief financial officer of Leighton Holdings Ltd (LHL) would be sentenced to a total effective sentence of 2 years imprisonment, to be served by way of Intensive Correction Order (ICO).
bit.ly/2Zl46pN

ASIC implements pause on admission of managed funds with internal market makers
ASIC
ASIC has requested that exchange market operators do not admit any managed funds that do not disclose their portfolio holdings daily and have internal market makers while it undertakes a review during the remainder of this calendar year.
bit.ly/2ZlOsur

Citigroup Hired Three Criminals Due to Poor Background Checks
Matt Robinson – Bloomberg
Finra fines Citi unit $1.25 million over employee screening; Bank brokerage unit settles case without admitting wrongdoing
A Citigroup Inc. brokerage unit’s failure to run adequate background checks on thousands of employees led to three individuals who’d been convicted of crimes working for the firm, an industry regulator said.
/bloom.bg/2ZjoBn5

Why the CFTC is the most important regulator you’ve never heard of
Dr. Heath P. Tarbert – FOXBusiness
Last week, I had the honor of becoming the new Chairman of the Commodity Futures Trading Commission Opens a New Window. . The CFTC regulates U.S. derivatives markets Opens a New Window. — including futures, the vast majority of swaps, and certain types of options. These markets see over $4 trillion in notional activity Opens a New Window. in the U.S. each day. Many Americans have probably never heard of the CFTC, but the sheer size and utility of these markets make it among our most important regulators.
/fxn.ws/2GD899T

ICYMI: Chairman Tarbert Lays Out Priorities in Fox Business Op-Ed; Excerpts from FoxBusiness.com
CFTC
“… Instead of taking the ‘ready, fire, aim’ approach all too common in Washington, I am building the CFTC’s agenda with an open mind. In addition to combating fraud, abuse, and manipulation, I am thinking carefully about two sets of issues: resolving unfinished business and preparing for the unwritten future …
bit.ly/2Zj1ysk

FCA acts to protect consumers transferring out of defined benefit pension schemes
UK FCA
The Financial Conduct Authority has today published a package of pension related proposals designed to improve the quality of pension transfer advice, and to help consumers get better value from their pension.
bit.ly/2GzCW7y

Investing and Trading

Federal Borrowing Soars as Deficit Fear Fades; The Treasury expects to sell over $1 trillion in debt this year; issue has little traction in 2020 race
Kate Davidson – WSJ
Borrowing by the federal government is set to top $1 trillion for the second year in a row as higher spending outpaces revenue growth and concern about budget deficits wanes in Washington and on Wall Street.
/on.wsj.com/2GARqUH

In greenbacks we trust: global crises propel demand for $100 bills; Widely viewed as a safe asset, nearly 80% of the US notes are now held overseas
Federica Cocco – FT
“A curious thing has happened,” the IMF observed in a blog post last week, noting that the $100 bill had overtaken the $1 bill in circulation for the first time.
/on.ft.com/2GCbvtx

Investors must rethink portfolios in era of low debt yields; Threat of ‘Japanification’ stalks markets and fund managers need to respond
Sophie Huynh – FT
Muted economic growth and low inflation now appear to be unbeatable forces in some countries despite the unconventional monetary policies deployed by central banks to shrug off the post-crisis bug.
/on.ft.com/2GENtOO

What Anglo American’s ‘one-off’ buyback reveals about commodities; Miner exercises caution as standout performing metals look unlikely to push higher
Neil Hume – FT
When Anglo American reported its best half-year results since 2011 last week, the London-listed miner had a surprise for investors: a $1bn share buyback.
/on.ft.com/2GC27GB

Cooling hedging costs take sting out of US-dollar debt investment; Foreign investors face easier ride as price for dollar hedges starts to back down
Colby Smith – FT
Buying US government bonds could soon become a more enticing prospect for overseas investors as the sky-high cost of protection against dollar gyrations starts to recede.
/on.ft.com/2GARa8b

Swiss Central Bank Fires Warning Shot on Currency; Bank officials appear to be pushing the franc weaker as investors pull in the other direction
Paul J. Davies – WSJ
The Swiss central bank appears to have taken its most significant steps to weaken the Swiss franc in two years, after looming rate cuts from U.S. and European central banks put upward pressure on the currency.
/on.wsj.com/2MpEXXq

Institutions

Goldman Tries to Exorcise Ghost of Real Estate Past With New Fund; Firm’s real estate group raising $2.5 billion in fund structured similarly to former Whitehall funds
Peter Grant – WSJ
Goldman Sachs Group Inc. ‘s newly reorganized real-estate investment unit is reviving a fund business that the firm shut down after it suffered steep losses during the financial crisis.
/on.wsj.com/2GBzSrr

Woodford under more fire after £1m trust share sale; Investors in £3.5bn flagship income fund locked in until December
Peter Smith and Owen Walker – FT
Neil Woodford’s relationship with the London Stock Exchange-listed investment trust that bears his name has blown apart after he dumped a £1m shareholding but failed to notify the company of the share sale for three weeks.
/on.ft.com/2Zk19Ww

UK’s big banks told to publish ‘living wills’ from 2021; Rules are final part of plan to avoid taxpayer bailouts in the future
Caroline Binham – FT
Big UK banks, including Lloyds Banking Group and Royal Bank of Scotland, will have to publish their “living wills” from June 2021, alongside an assessment from the Bank of England as to whether they pass muster.
/on.ft.com/2GBymWh

GAM appoints BlackRock’s Peter Sanderson as chief executive; Swiss asset manager has declared an end to its legal stand-off with former star fund manager
Sam Jones – FT
Beleaguered Swiss asset manager GAM has announced the appointment of BlackRock’s Peter Sanderson as chief executive, unveiling further declines in assets under management and a hit to profits in its half-year results.
/on.ft.com/2GBpEY4

Deutsche Bank sets deadline for equity derivatives sale; Co-head of German lender’s bad bank expects bids in September as it seeks to dispose of assets
Laura Noonan, Stephen Morris and Olaf Storbeck – FT
Deutsche Bank has set a September deadline for bids on the vast portfolio of equity derivatives it is selling, as the struggling lender looks to expedite a key part of its ambitious restructuring.
/on.ft.com/2GCai5t

Hedge fund Element Capital to raise performance fees to 40%; Jeffrey Talpins’ $18bn vehicle to shrink in size to avoid return-sapping bloat
Robin Wigglesworth and Lindsay Fortado – FT
Element Capital, one of the best-performing major hedge funds since the financial crisis, is sharply increasing its performance fee and shrinking the size of the fund to avoid falling prey to the return-sapping bloat that has affected many of its rivals.
/on.ft.com/2GzyWny

Swiss asset manager taps BlackRock managing director as new chief executive; Peter Sanderson to take helm of GAM as group chief executive officer as of 1 September.
John Brazier – The Trade
Swiss asset manager GAM has announced the appointment of former BlackRock managing director, Peter Sanderson, as its new Group chief executive officer.
bit.ly/2ZjquzP

Citi combines equities, prime brokerage and securities services units; The new division is the latest in a string of restructuring moves in recent months as Citi looks to streamline its businesses.
Joe Parsons – The Trade
Citi is set to merge its equities, prime brokerage and securities services businesses into a new division, as it looks to combat increased industry and client pressures.
bit.ly/2ZkWR1b

Swiss group GAM declares truce with Haywood, appoints new CEO
Michael Shields, Simon Jessop – Reuters
Embattled Swiss asset manager GAM Holding (GAMH.S) called a truce with former star manager Tim Haywood after months of wrangling over his sacking, saying it was drawing a line under a saga that hammered its share price last year.
/reut.rs/2ZlcbLk

Deutsche Bank eyes cutting more floors at Time Warner Center
Steve Cuozzo- NY Post
On the heels of giving up two floors at Time Warner Center, embattled Deutsche Bank is likely to put more floors up for sublease before it even moves in by 2021, sources told Realty Check.
/nyp.st/2GwFW4v

Regions

Why Asia’s Banking Hubs Are Making Virtual a Reality
Alfred Liu – Bloomberg
Long gone are the days when banking meant having to stand in line at crowded branches to cash a check or apply for a loan. Automated teller machines, the internet and mobile apps mean many people hardly ever step foot inside their bank. So-called virtual banks question the need for brick-and-mortar branches altogether. With catchy names such as Ally and Simple in the U.S., Monzo in the U.K. and WeBank and MYbank in mainland China, these digital-only upstarts have been signing up lots of customers, especially among the young. Now Asia’s financial hubs, Hong Kong and Singapore, are getting ready to hop on the bandwagon, issuing licenses for new entrants.
/bloom.bg/2GC1jBf

Chinese Banks Riding on High of Shanghai’s Nasdaq-Style Tech Board
Julia Fioretti – Bloomberg
China’s new Star Market may be coming down from its feverish first day surge, but Chinese banks that worked on the deals are still enjoying the high.
/bloom.bg/2GELSZk

Is Sajid Javid’s appointment as UK chancellor good for the City?; Former investment banker’s promotion greeted with relief but no-deal Brexit focus causes concern
Cat Rutter Pooley, Patrick Jenkins and Judith Evans – FT
The appointment of Sajid Javid, a former investment banker, as Britain’s chancellor of the exchequer has been greeted with relief by City of London figures nervous over the choices of a prime minister who notoriously used the expression “fuck business”.
/on.ft.com/2ZtJ5cV

As trade war bites, China’s factories set for third month of shrinking activity: Reuters poll
Reuters
Factory activity in China is expected to have contracted for the third month in a row in July, a Reuters poll showed, underlining the intensifying strains on the world’s second-biggest economy from a protracted trade war with the United States.
/reut.rs/2GBD6v3

Brexit

EU ‘protected’ from no-deal Brexit, Brussels insists; Comment comes as Johnson’s adviser tells EU27 ‘not to underestimate’ British prime minister
Mehreen Khan and Daniel Thomas – FT
Brussels has hit back at claims the EU is unprepared to cope with the fallout of a no-deal Brexit, rejecting a report from Britain’s largest employer organisation that suggested the bloc was even less ready than the UK to withstand a chaotic departure.
/on.ft.com/2GAQVtN

Japan’s Taste for Brexit Lamb May Not Be Enough for U.K. Farmers
Stuart Biggs – Bloomberg
The U.K. government has a message for British sheep farmers worried about the impact of a no-deal Brexit: Look East.
/bloom.bg/2GDTjzN

U.K. Will Push EU to Negotiate a New Brexit Deal Within Weeks
Tim Ross – Bloomberg
No-deal fears hammered the pound Monday as U.K. hardened line; Johnson meets farmers in Wales to hear their hopes for Brexit
U.K. Prime Minister Boris Johnson will spend the next few weeks pressing the European Union to negotiate a better Brexit deal, his office said, while preparing the country to leave the bloc in case he fails.
/bloom.bg/2Zv63ju

Companies Dabble in Brexit Humor—at Their Own Risk; Ad campaigns wade into treacherous waters of a national debate
Michelangelo Fano – WSJ
For much of Britain, the protracted divorce from the European Union is no laughing matter.
/on.wsj.com/2GyMEqA

Miscellaneous

Fortnite Is Here to Stay. Just Ask Its Fans; Battle royale, a “fight for survival” genre popularized by Fortnite, has inspired imitators hoping to cash in. But there are signs that the market has reached a plateau.
Jason M. Bailey – NY Times
In battle royale games like Fortnite, players skirmish in a shrinking landscape with one goal: to be the last one standing. Ambition in the genre itself is more modest, with imitators piling on in hopes of sharing in the riches.
/nyti.ms/2Zjncgj

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