Clearinghouses Are Intended to Reduce Risk. They Can Amplify It; Bloomberg Face-Off Awaits London Stock Exchange Following Refinitiv Deal

Feb 3, 2021

First Read

$27,651/$300,000 (9.2%)

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Hits & Takes
John Lothian & JLN Staff

Congratulations to the CME Group’s Executive Chairman and CEO Terry Duffy and his team on the completion of the migration of BrokerTec to CME’s Globex trading platform. This has been a goal of the industry for a long time and now it is complete.

The LegalEagle Youtube channel has a great explanation of the entire GameStop stock story. It is worth checking out.

This weekend we will be migrating MarketsWiki to a new hosting company featuring a more cloud-like solution. Currently, MarketsWiki is running on a single platform hosted by Codero. We recently moved JohnLothianNews.com to this new hosting company and are very pleased with the results so far.

Two Kansas City Chief players tested positive for coronavirus after having received a haircut from a barber who had the virus. The Super Bowl is this Sunday.

Later this morning we will be publishing a column I wrote about all the ways I have traded futures.

Today we will publish a video for the Path to Electronic Trading series featuring Cboe Executive Chairman and CEO Ed Tilly. The interview was conducted by JLN’s Suzanne Cosgrove. Tomorrow we will be publishing an interview for the Path to Electronic Trading video series featuring John Van Der Bleek, formerly of the CME and CBOT, who led the first overnight desk for Project A at the CBOT and was involved in many of the CBOT’s efforts to improve the efficiency of the trading floor and deploy electronic trading platforms. You will enjoy both videos.

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

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

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CME Group Completes Migration of BrokerTec Trading Platform to CME Globex
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets, has migrated its U.S. Treasuries benchmark trading and U.S. Repo platform to CME Globex. This follows the integration of BrokerTec’s EU government bond and repo markets in January.
/jlne.ws/3jcStMk

*****A dream come true.~JJL

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D-Limit: One of These Things is Not Like the Others
Ronan Ryan – IEX
Initial data shows differentiated performance in D-Limit trading
With the non-stop headlines on the growth of off-exchange trading and the record percentage of overall volume on the TRF, displayed on-exchange markets are at an innovation crossroads.
/jlne.ws/2YD23Ph

*****I am a fan of D-Limit if you recall.~JJL

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Robinhood’s C.E.O. Is in the Hot Seat; Vlad Tenev has incited the fury of the trading app’s fans amid a stock market frenzy. His lack of preparedness on nuts-and-bolts issues was part of a pattern, former employees and analysts said.
Nathaniel Popper, Kellen Browning and Erin Griffith – NY Times
Vlad Tenev, the chief executive of the online brokerage Robinhood, has had practice doing damage control. Last March, he told customers that “we owe it to you to do better” after Robinhood’s app suffered lengthy outages, leaving many people unable to trade.
/jlne.ws/3pLtQZU

*****Sometimes founders need to be replaced.~JJL

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Big name corporations more likely to commit fraud
Sara Zaske – Washington State University News
Fortune 500 firms with strong growth profiles are more susceptible to “cooking the books” than smaller, struggling companies, according to a recent study published in Justice Quarterly. Researchers from Washington State University, Pennsylvania State University and Miami University examined the characteristics of more than 250 U.S. public corporations that were involved in financial securities fraud identified in Securities and Exchange Commission filings from 2005-2013. They were then compared to a control sample of firms that were not named in SEC fraud filings. Clear trends emerged in the risk of fraud including corporations that were listed in the Fortune 500, traded on the New York Stock Exchange and had strong growth expectations.
/jlne.ws/3pWYcsc

*****Smaller companies have fewer books to cook, making it harder to hide the fraudulent feast.~JJL

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Tuesday’s Top Three
Our most read story Tuesday was the Financial Times’ Nasdaq agrees to sell US Treasuries trading business to Tradeweb for $190m – which if you say it out loud is a bit of a tongue twister. Also a big loss for Nasdaq on its original eSpeed purchase. Second was Nasdaq’s press release on the same, Nasdaq Agrees to Sell U.S. Fixed Income Business to Tradeweb Markets. Third was Bloomberg’s There’s a Plan to Bring Sports Gambling to the Futures Market.

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Lead Stories

Clearinghouses Are Intended to Reduce Risk. They Can Amplify It; In the GameStop fiasco, one clearinghouse made a sudden grab for collateral that could have shaken the system
Peter Coy – Bloomberg
The Depository Trust & Clearing Corp. is unpopular with the trading bros on r/WallStreetBets for its role in short-circuiting the short squeeze in GameStop Corp. shares. But you don’t have to care about the raucous GameStop gamers and their “diamond hands” to be concerned about the DTCC’s intervention in the episode.
/jlne.ws/3tqi09B

Bloomberg Face-Off Awaits London Stock Exchange Following Refinitiv Deal; LSE’s big bet on data comes as Refinitiv has steadily lost market share against its main rival
Ben Dummett – WSJ
Now that the London Stock Exchange LSEG -0.19% Group PLC has completed its $15 billion acquisition of financial data company Refinitiv Holdings Ltd., the next big test is proving it can reclaim at least some of the ground it has lost to industry heavyweight Bloomberg LP. Refinitiv competes against Bloomberg selling an array of financial-data to the finance industry. Yet, Refinitiv’s share of the market against its rival has been declining for years. That underscores the LSE’s challenge, particularly given that some users say Bloomberg’s ubiquitous data terminal that is found on institutional trading desks around the world is more expensive than the equivalent from Refinitiv.
/jlne.ws/39KvmWu

The AstraZeneca vaccine is shown to drastically cut transmission of the virus.
Marc Santora and Rebecca Robbins – NY Times
The vaccine developed by the University of Oxford and AstraZeneca not only protects people from serious illness and death but also substantially slows the transmission of the virus, according to a new study — a finding that underscores the importance of mass vaccination as a path out of the pandemic.
/jlne.ws/3oKBGlc

Why Crypto Markets Aren’t ‘All-to-All’ Either (and How They Can Be); GameStop-Robinhood revealed inequalities in the retail equity trading system. Can crypto markets do better? They must.
Matthew Trudeau – Coindesk
Like just about everyone last week, we were watching the news about GameStop (GME) and the role Robinhood traders played in the market. In light of Robinhood’s disabling of buying in a number of stocks, there is a lot of fury about potential conflicts of interest that are not new but now suddenly in the spotlight.
/jlne.ws/39H9H1y

High-speed traders reap windfall from retail investor boom; Value of the extra trading is expected to be widely shared by market makers
Eric Platt, Aziza Kasumov and Colby Smith – FT
The deluge of trading activity in US equities and derivatives markets is expected to produce a windfall for the high-speed market makers that execute orders for brokers such as Robinhood and Charles Schwab. Market makers including Virtu Financial, Citadel Securities, Susquehanna and Two Sigma look set to be among the enduring winners from the burst of activity driven by retail investors, even as the run-up in shares such as GameStop appears to be reversing.
/jlne.ws/3avRB1r

GameStop Mania Hits a Wall of Tighter Trading Terms; The CME’s stricter margin requirements on silver futures hit a market that has been among the hottest in recent memory
Joe Wallace, Amrith Ramkumar and Gunjan Banerji – WSJ
A weekslong mania centering on GameStop Corp. and AMC Entertainment Holdings Inc. suffered its sharpest reversal yet on Tuesday, following an exchange operator’s decision to rein in the use of borrowed money in another hot market, silver.
/jlne.ws/39ISvso

Plunging GameStop Stock Tests the Will of Investors to Stick With the Ride; After a crazy run-up, the price dropped 72 percent over two days, putting it just 18 percent higher than it was at the start of last week.
Matt Phillips, Gillian Friedman and Taylor Lorenz – NY Times
GameStop, amateur investors like to say, is going to the moon. In a language all their own — with rocket ship emojis and unbreakable “diamond hands” — these online investors insist the struggling video-game retailer’s stock is about to soar even higher than last week’s spike, and urge one another to hold on tight.
/jlne.ws/2MRC5EY

Anyone Can Manipulate the Market. Here’s How to Fix That; Six ideas for making the markets more fair and trustworthy.
Andrew Ross Sorkin – NY Times
There will be academic case studies on the mania around GameStop’s stock. There will be philosophical debates about whether this was a genuine protest against hedge funds and inequality or a pump-and-dump scheme masquerading as a moral crusade. Eventually, we will learn whether this was a transformational moment powered by social media that will shift the investing landscape forever, or a short-term blip that soon fades away.
/jlne.ws/2YK36wJ

CFOs Prepare for Long-term Shifts in Customer Demand as Pandemic Drags On; In a recent survey, 86% of finance chiefs said that helping their businesses adapt is their top priority over the next five years
Kristin Broughton and Brooke Henderson – WSJ
Finance chiefs are assessing whether the economic downturn caused by the pandemic could force their companies to make long-term changes to their business models as the coronavirus upends customers’ spending patterns.
/jlne.ws/3jeTcwK

The Climate Billionaires: Elon Musk on Top, the Rest Are Made in China; Batteries, solar panels, and electric cars are spawning more giant fortunes
Venus Feng, Pei Yi Mak, and Devon Pendleton – NY Times
John D. Rockefeller became the richest person in history revolutionizing the oil industry. A century and a half later, Elon Musk is in the running for that same title by eliminating demand for Rockefeller’s chief product.
/jlne.ws/3pKN3ec

Traders Who Launched GameStop Frenzy Are Turning Against New Members; Longtime WallStreetBets followers ask moderators to ban new users or limit where they appear
Shane Shifflett – WSJ
Longtime members of the Reddit forum that was the launchpad for the GameStop GME -60.00% frenzy are lashing out at the group’s millions of new users, asking whether they can be trusted and accusing them of working for hedge funds.
/jlne.ws/2LfLJRz

Coronavirus

England Virus Tracing Undercut by 20,000 a Day Not Isolating
Emily Ashton – Bloomberg
Test-and-trace chief Harding says 20% not complying with rules; Hunt warns those levels are ‘enough to restart the pandemic’
At least 20,000 people a day in England are failing to self-isolate after contact with a coronavirus case despite being told to do so, according to the head of the country’s test-and-trace program. Dido Harding told members of Parliament about 20% of some 100,000 contacts traced by authorities each day last week were not fully complying with regulations, due to a range of reasons including financial difficulties.
/jlne.ws/36FrpAr

Stopping the Next Pandemic Starts Now; The next global health crisis is coming, and the world needs to prepare.
Tedros Adhanom Ghebreyesus and Michael R. Bloomberg – Bloomberg
As the First World War wore on, a new scourge erupted: an influenza pandemic that left even more bodies in its wake than the conflict itself. But the 1918 pandemic was overshadowed by the war, and its lessons went unheeded. One hundred years later, the world faces a similar test. When the Covid-19 pandemic eventually recedes, will we learn the lessons it is teaching us? Or once the emergency subsides and life returns to “normal,” will we carry on the same as before?
/jlne.ws/3tnS9zm

Why Europe Is Panicking About Vaccines; The EU’s reputation for technocratic competence is being questioned.
Ferdinando Giugliano – Bloomberg
The European Commission’s fiasco over the vaccine rollout is above all else a terrible concern because of the potential cost in human lives. It also risks damaging Brussels’ reputation for technocratic competence with regard to its own citizens, giving fresh impetus to euroskeptic forces. It may diminish the European Union’s brand in the world, especially in those countries that might struggle to get access to life-saving jabs because of any EU export restrictions. And it could do long-lasting harm to Europe’s economy, which is struggling to recover after a miserable year of uncertainty and lockdowns.
/jlne.ws/36D9ZVa

Iran Buys AstraZeneca-Oxford Vaccine Despite Leader’s Ban on Western Shots
Arsalan Shahla – Bloomberg
Iran has bought 4.2 million doses of the AstraZeneca-Oxford University coronavirus vaccine, despite a ban on British and U.S.-made shots. Health Minister Saeed Namaki told state TV the shipment is expected later this month and was secured through the global vaccine procurement system backed by the World Health Organization.
/jlne.ws/3atKwyC

More Than 20% of Londoners Have Covid-19 Antibodies, ONS Study Shows
David Goodman – Bloomberg
More than one in five people in London would have tested positive for Covid-19 antibodies in January, according to a new study that highlights how widespread the disease has become in the U.K. capital. The capital city, which was particularly hard hit during the winter wave of the virus, has the highest rate of positive tests in the whole of England. Nationwide, one in seven likely have the anitbodies, which suggest a person had the infection in the past, the Office for National Statistics said Wednesday.
/jlne.ws/2MtNKdr

Secretive Russia Deal Allows Erdogan Ally to Produce Sputnik V
Firat Kozok and Stepan Kravchenko – Bloomberg
A close ally of Turkish President Recep Tayyip Erdogan is preparing to produce Russia’s Sputnik V coronavirus vaccine under a months-old deal shrouded in secrecy. Ozturk Oran, the chairman of Islamic bank Vakif Katilim and owner of the VisCoran Ilac Sanayii pharmaceutical company, signed an agreement with the Russian Direct Investment Fund to manufacture the vaccine in Turkey. Kirill Dmitriev, the head of the Russian fund, confirmed a joint production agreement with a Turkish company but declined to identify it.
/jlne.ws/36Db9Qw

Covid Antibodies Remain Six Months After Infection, Study Shows
Corinne Gretler – Bloomberg
The vast majority of people who contract Covid-19 still have antibodies at least six months after infection, a new study involving more than 20,000 people showed. Some 88% of participants who tested positive for a previous infection retained antibodies for six months, according to the report by UK Biobank, a major biomedical database. The number was 99% at three months.
/jlne.ws/2LhWPWc

WHO investigators probe Wuhan virology lab; Some China critics claim leak from institute may have led to coronavirus pandemic
Yuan Yang in Wuhan and Christian Shepherd – FT
The World Health Organization team investigating the origins of coronavirus has visited a Wuhan laboratory that has become the focus of theories suggesting a leak was responsible for the pandemic.
/jlne.ws/3rgJEnz

GSK and CureVac to develop vaccines to tackle Covid variants; EUR150m deal aims to have a vaccine ready for use in 2022
Donato Paolo Mancini, Joe Miller – FT
The UK’s GlaxoSmithKline and Germany’s CureVac will work together on a new generation of Covid-19 vaccines to tackle emerging variants of the virus that have shown some resistance to existing ones.
/jlne.ws/2MsFEla

U.K.’s Rapid Covid-19 Vaccination Campaign Shows Early Signs of Success; Indications raise hopes over how soon the U.K. will be able to reopen its ravaged economy
Max Colchester and Joanna Sugden – WSJ
The U.K.’s fast-paced vaccination drive is showing early signs of curbing Covid-19 infections, government scientific advisers say, a promising litmus test of how a mass inoculation campaign in a developed nation can slowly turn the tide on the virus.
/jlne.ws/3oEmaqU

AstraZeneca Vaccine Shown to Curb Covid-19 Transmission, Preliminary Data Suggest; Researchers at Oxford say spacing apart doses as much as three months worked, but others say the trial had limits
Jenny Strasburg – WSJ
Researchers from the University of Oxford said Tuesday its Covid-19 vaccine could have a substantial effect on curbing virus transmission after one dose, and said that spacing doses apart by as long as three months improved effectiveness, according to data adding to previously published findings.
/jlne.ws/3tmG2Cy

U.K. Coronavirus Variant Acquires Mutation That Could Weaken Vaccine Defense; So far 11 cases of potentially supercharged version of virus now dominant in the U.K. have been identified
Joanna Sugden and Gabriele Steinhauser – WSJ
British authorities say they have discovered a potentially supercharged version of the country’s more-contagious coronavirus variant with a new mutation—one also detected in strains in South Africa and Brazil—that appears to make some vaccines less effective.
/jlne.ws/3cAWmcK

New York City Barely Tests for Virus Variants. Can That Change? The rate in January was far below the 10 percent recommended by some experts. Now, officials are aiming to put a more robust program in place.
Joseph Goldstein – NY Times
In New York City, despite its many major hospitals and research institutions, only about 55 coronavirus cases a day on average last month were sequenced and screened for more contagious variants.
/jlne.ws/36DxpK2

Biden and Drug Makers Look to Speed Coronavirus Vaccine Deliveries; Moderna will ask federal regulators to increase the amount of coronavirus vaccine it can put in each vial by as much as 50 percent, potentially bolstering availability quickly.
Sharon LaFraniere, Noah Weiland and Rebecca Robbins – NY Times
As President Biden winds up his second week in office, a flurry of developments in vaccine production and distribution could mean a bigger boost to coronavirus vaccine supplies than was expected even just days ago.
/jlne.ws/2LfLq9n

Exchanges, OTC and Clearing

Exchanges compete to improve ETF investor experience; Fee cuts and other measures have been made to attract and retain listings
Jackie Noblett – FT
The competition among exchanges for ETF business is driving innovations that help make buying and selling shares easier and more attractive to investors, executives say.
/jlne.ws/3tqz5k2

CME completes BrokerTec platform migration to Globex; The BrokerTec EU government bond and repo platform was migrated to the Globex system at CME Group earlier this month.
Annabel Smith – The Trade
US derivatives exchange CME Group has completed its integration of BrokerTec onto CME Globex with the migration of its US treasury benchmark trading and repo platform. The US treasury benchmark trading and repo platform was the final part of the migration to take place, after BrokerTec’s EU government bond and repo markets platform was transferred to Globex earlier this month.
/jlne.ws/3rnumh7

UK equities exchanges re-list Swiss securities as FINMA recognises UK trading venues; The move by Aquis, Cboe, and LSEG follows an announcement from the Swiss authorities that gave UK trading venues permission to re-admit Swiss securities.
Annabel Smith – The Trade
Several major UK based European equities exchanges will re-list Swiss securities from 4 February following the Swiss financial market supervisory authority’s (FINMA) recognition of UK based trading venues. FINMA has added Aquis Exchange, Cboe Global Markets, and the London Stock Exchange Group’s (LSEG) venue Turquoise to its list of recognised foreign trading venues, marking the removal of the final obstacle between UK venues and the trading of Swiss securities.
/jlne.ws/3asGciZ

Proximar Seafood lists on Euronext Growth Oslo
Euronext
The land-based salmon farming company Proximar Seafood has today been admitted to trading on Euronext Growth (ticker code: PROXI). “Listing on Euronext Growth is an important milestone for Proximar,” says Joachim Nielsen, CEO of Proximar.
/jlne.ws/3pK5UWT

Introduction of the T7 Release 9.0 FIX LF interface
Eurex
As originally announced as part of the T7 Release 9.0 introduction, Eurex will now begin to introduce the new FIX LF interface and associated FIX LF sessions. The new FIX LF interface will make use of the FIX 4.4 protocol only and be integrated closer into the T7 architecture by providing similar underlying infrastructure and functional/technical characteristics as the existing ETI interface, e.g. backward compatibility. The new FIX LF interface will initially be offered in parallel to the existing FIX Gateway interface and will, after individual transition periods, ultimately replace the existing FIX Gateway interface.
/jlne.ws/3ape28E

CDS and Euroclear Aim to Develop Collateral Management Service for Canada
TMX
CDS Clearing and Depository Services Inc. (CDS), Canada’s equities and fixed income clearing house, and the Canadian Derivatives Clearing Corporation (CDCC), each wholly-owned subsidiaries of TMX Group Limited, today announced a joint initiative with Euroclear to develop a new collateral management service for Canada’s capital markets.
/jlne.ws/3teZd1b

Nasdaq January 2021 Volumes
Nasdaq
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for January 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.
/jlne.ws/3cDRwvs

Ag Barometer drifts lower, farmers remain concerned about the future despite strong economic conditions
CME Group
The Purdue University/CME Group Ag Economy Barometer dropped 7 points in January to a reading of 167. While the Index of Current Conditions remained relatively flat, down 3 points to a reading of 199; the Index of Future Expectations fell 10 points to a reading of 151. Since its peak in October of 2020, the Ag Economy Barometer has fallen 9 percent, all attributable to weaker expectations for the future. The Index of Future Expectations has fallen 19 percent since October, while the Index of Current Conditions rose 12 percent over the same time period. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from January 18-22, 2021.
/jlne.ws/2MLartx

Position Limit, Accountability Levels, and Large Trader Reporting Requirements in Connection with the Initial Listing of the Ether Futures Contract
CME Group
In connection with the listing of the Chicago Mercantile Exchange Inc. (“CME”) Ether Futures contract (the “contract”) on trade date Monday, February 8, 2021 (see SER-8699 published January 14, 2021), please note below and in Appendix B of CME Submission No. 21-005 the corresponding spot-month position limit (Rule 559), accountability levels (Rule 560), aggregation allocations (Rule 559.D) and reportable level (Rule 561) for the contract.
/jlne.ws/3cK9OLo

Procedures for 2021 Annual Meeting of Members of Commodity Exchange, Inc.
CME Group
The Annual Meeting of Members of Commodity Exchange, Inc. (“COMEX”) is scheduled to be held on Tuesday, March 9, 2021.
/jlne.ws/2NYhCip

Treasury Spot Month Position Limit Notice for March 2021
CME Group
The applicable position limits for CBOT Treasury futures are set forth in the Position Limit, Position Accountability and Reportable Level Table in the Interpretations & Special Notices Section of Chapter 5.
/jlne.ws/3cD52zC

Application for Increase in Approved Livestock Yard for Live Cattle Regularity
CME Group
Notice is hereby given that Winter Livestock has applied to the Exchange for an increase in their livestock yard regularity. The approved location’s current maximum daily delivery limit, requested maximum daily delivery limit, and location are as follows:
/jlne.ws/3rg5szQ

Application for Increase in Approved Livestock Yard for Live Cattle Regularity
CME Group
Notice is hereby given that Tulia Livestock Auction has applied to the Exchange for an increase in their livestock yard regularity. The approved location’s current maximum daily delivery limit, requested maximum daily delivery limit, and location are as follows:
/jlne.ws/3rfOeTe

Application for Increase in Approved Livestock Yard for Live Cattle Regularity
CME Group
Notice is hereby given that Ogallala Livestock Auction Market, Inc. has applied to the Exchange for an increase in their livestock yard regularity. The approved location’s current maximum daily delivery limit, requested maximum daily delivery limit, and location are as follows:
/jlne.ws/2MlDLqF

Initial Listing of the Physically-Delivered CBL Global Emissions Offset Futures Contract
CME Group
Effective Sunday, February 28, 2021, for trade date Monday, March 1, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list the physically-delivered CBL Global Emissions Offset Futures (the “Contract”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort as noted in the table below.
/jlne.ws/2MlDUKJ

Intercontinental Exchange Reports January 2021 Statistics
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today reported January 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.
/bit.ly/3pMVIN7

Borsa Italiana Monthly Update, January 2021
Mondovisione
/jlne.ws/39JsGbO

NZX Shareholder Metrics – January 2021
MondoVisione
Please see attached NZX Limited shareholder metrics for January 2021.
/jlne.ws/3oHm0it

Fintech

MackeyRMS and InsiderScore Announce Strategic Merger; Merger creates best-of-breed data, analytics, and software platform for institutional investment teams conducting fundamental research for actively managed portfolios
MackeyRMS
MackeyRMS, a provider of SaaS-based research management software, and InsiderScore, a provider of actionable data and analytics on publicly traded U.S. companies, today announced a strategic merger to create a best-of-breed investment and research management data, analytics, and software platform.
/jlne.ws/3cvlf9X

AI Is Becoming a New Weapon in the Battle Against Crop Pests
Andrew Marc Noel and Agnieszka de Sousa – Bloomberg
Syngenta teams up with Insilico Medicine to use AI tools; Pressure mounts to find alternatives to traditional pesticides
Artificial intelligence already is making strides in the development of new drugs, and now the pesticide industry wants in on the action. Switzerland’s Syngenta AG has teamed up with Insilico Medicine to use its deep-learning tools to produce sustainable weedkillers. As well as taking on some of the early-stage work traditionally conducted in a lab, AI could design molecules used in crop-protection tools that are more sustainable and environmentally friendly, the companies said Wednesday.
/jlne.ws/3pOb6J2

Early UK fintech Cashplus becomes fully fledged bank; Move by company will cut funding costs as it seeks to compete with rivals such as Monzo
Nicholas Megaw – FT
Cashplus, one of the UK’s oldest fintech companies, has become a full bank as it looks to speed up growth and position itself as a more sustainable and profitable competitor to rivals such as Tide and Monzo.
/jlne.ws/2LfTKpF

Are Private Messaging Apps the Next Misinformation Hot Spot? Telegram and Signal, the encrypted services that keep conversations confidential, are increasingly popular. Our tech columnists discuss whether this could get ugly.e
Brian X. Chen and Kevin Roose – NY Times
Encrypted messaging apps, which protect the privacy of online conversations, were once special tools used primarily by people working in professions where confidentiality was prized, like law, journalism and politics.
/jlne.ws/2O4Asob

Quantitative Brokers to expand with 20 hires in data and product engineering; Algo trading specialist Quantitative Brokers will focus on expanding its data analytics and product engineering teams in 2021 with 20 new hires.
Hayley McDowell – The Trade
Quantitative Brokers has outlined plans to expand its team with new hires shortly after German exchange group Deutsche Börse took a majority stake in the company. The algorithmic trading specialist will hire 20 full-time employees globally during this year, with a focus on data analytics and product engineering to boost its execution performance and analysis for futures and fixed income markets.
/jlne.ws/3tmHYuO

Cryptocurrencies

Kraken Exchange Brings Its Spot Price Data to DeFi Via New Chainlink Node
Tanzeel Akhtar – Coindesk
Kraken, the fourth-largest cryptocurrency exchange by trading volume, is making its spot price data available for use by decentralized finance (DeFi) applications and developers.
/jlne.ws/3atNBP5

Futures Debut to Test Ether’s Bitcoin-Beating Rise to Record
Eric Lam – Bloomberg
CME Group to start Ether futures Feb. 8 pending final approval; Launch of Bitcoin futures in 2017 coincided with peak in boom
An eightfold rally in Ether over the past year to a record faces possible turbulence from the impending launch of CME Group Inc. futures for the largest cryptocurrency after Bitcoin. The contracts set to debut from Feb. 8 evoke memories of 2017, when the start of Bitcoin futures coincided with a peak in the leading digital asset ahead of a spectacular bust. A Federal Reserve Bank of San Francisco analysis posits the derivatives opened the door for bearish investors.
/jlne.ws/3cDDsCm

Crypto Pump And Dumps Aim Small Amid Speculative Trading Frenzy
Olivia Raimonde – Bloomberg
The retail trading frenzy that drove up shares of GameStop Corp. and AMC Entertainment Holdings, Inc. has again spilled over into digital assets as prices on little-known alt coins surge. “You have a whole new population of people coming in who are primed to participate in pump and dump who maybe wouldn’t have previously,” said Tyler Moore, a professor at the University of Tulsa who co-wrote a peer-reviewed paper ‘An Examination of the Cryptocurrency Pump and Dump Ecosystem’ that looked at more than 3,400 schemes hatched in 2018. He says all indicators are that it’s happening again in the cryptocurrency sphere after the run-up in Bitcoin earlier this year and the frenzy in retail stocks, with traders seeking to inflate prices so a small group of investors can profit off the surge.
jlne.ws/3oKG83o

ETH price hits new all-time high above $1,500 days after previous record
Aislinn Keely – The Block
The price of ETH, the native cryptocurrency of the Ethereum network, hit a new all-time high on Tuesday. ETH’s value shot past $1,500, according to data from TradingView. This development comes days after ETH’s previous record-setting high was hit on January 19. At time of writing, ETH is trading hands at roughly $1,515, having hit a high of $1,542.
jlne.ws/3axlhez

Ethereum Miners Earned Record $830M in January; Miner revenue jumped over 120% from the previous month.
William Foxley – Coindesk
Ethereum miners earned a record $830 million in January as network activity, fees and ether’s price all surged. Monthly revenue has not reached this level since the previous record from January 2018 near ether’s previous all-time high, according to data estimates by CoinDesk. Revenue estimates assume Ethereum miners sell their ether immediately. On-chain data reviewed by CoinDesk, however, shows network fees in January 2018 only represented 9% of monthly revenue. Last month, nearly 40% of revenue came from network fees, totalling more than $504 million in revenue.
jlne.ws/3oNoOuq

Crypto asset manager 21Shares is launching an exchange-traded product for Polkadot’s token
Yogita Khatri – The Block
Cryptocurrency asset manager 21Shares, formerly known as Amun, is launching a Polkadot exchange-traded product (ETP). The ETP is set to list on Switzerland’s SIX exchange on February 4, 21Shares announced Tuesday. Once listed, it will allow investors to effectively hold Polkadot’s native DOT token as stock. 21Shares said the product would be the “world’s first” Polkadot ETP. Last week, 21Shares added DOT to its crypto index ETP (HODL), making the token the second-largest constituent after bitcoin. DOT replaced bitcoin cash, said the firm.
jlne.ws/2YHcMbq

Bitwise begins process to list its bitcoin fund on OTC Markets
Yogita Khatri – The Block
Crypto asset manager Bitwise announced Tuesday that it has begun the regulatory process to list its bitcoin fund on OTC Markets. If approved, Bitwise Bitcoin Fund will trade like Grayscale Bitcoin Trust (GBTC) on OTC Markets’ OTCQX venue. Bitwise has not yet announced a ticker for the fund. Bitwise Bitcoin Fund was first launched in 2018 and has been available via private placements since then, with a minimum investment of $10,000. The listing on OTCQX would mean that any investor with a traditional brokerage account can trade the fund’s shares throughout the trading day.
jlne.ws/3oK6fYa

Two former Coinbase employees are building a DeFi lending protocol for emerging markets
Michael McSweeney – The Block
A pair of former Coinbase employees are launching a new protocol that aims to advance one of the DeFi space’s primary use cases — decentralized lending — in the world’s emerging markets. Goldfinch, which has raised $1 million from a group of industry stakeholders that includes Kindred Ventures, Coinbase Ventures, IDEO CoLab Ventures and Dragonfly Capital co-founder Alex Pack, is the brainchild of Mike Sall and Blake West. Sall previously worked as Coinbase’s head of product analytics and West was a senior backend engineer for the crypto exchange. The two departed Coinbase last summer to begin building out Goldfinch.
jlne.ws/3ayrcQP

Coinbase, Binance are now in the top 1,000 most visited websites in the world
Yogita Khatri – The Block
Crypto exchanges Coinbase and Binance have become two of the top 1,000 most visited websites in the world, according to estimations by trackers SimilarWeb and Alexa. Coinbase is currently ranked 874 and Binance 839 worldwide on SimilarWeb. Meanwhile, on Amazon-owned Alexa, Coinbase is ranked 830 globally and Binance 415. Country-wise, Coinbase is ranked 386 in the U.S., according to SimilarWeb, and 187, according to Alexa. Binance, on the other hand, is most popular in Russia, according to SimilarWeb, and is ranked 563 in the country. Meanwhile, according to Alexa, Binance is ranked 676 in the U.S.
jlne.ws/3cBhZd2

Bitcoin Holders Have Now Stashed Away 15% of Circulating Supply; Continued accumulation of bitcoin by investors is causing market liquidity to drop and helping drive prices higher.
Omkar Godbole – Coindesk
Long-term investors continue to hoard bitcoin, sucking up market supply and helping the cryptocurrency maintain its broader upward trajectory. Data provided by Glassnode shows the total balance of bitcoin (BTC, +5.14%) held in “accumulation addresses” rose to a 3.5-year high of 2,851,608 BTC on Tuesday. That amounts to 15.32% of the total circulating supply of 18,618,081 BTC. The number stood slightly below 14% three months ago. Accumulation addresses are those that have at least two incoming non-dust transfers (tiny amounts of bitcoin) and have never spent funds. The metric excludes addresses active more than seven years ago to adjust for lost coins and those belonging to miners and exchanges.
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Politics

Will GameStop saga revive calls in Congress for a financial transaction tax?
Yahoo Finance
Will the GameStop frenzy revive calls in Congress for a financial transaction tax? Yahoo Finance’s Jessica Smith explains.
ZACK GUZMAN: Obviously, the attention has been swirling around what changes might come through on the regulation front, and it’s catching the eyes of politicians in DC, who are potentially returning to calls to tax individual trades here in the system. For more on that, I want to bring on Yahoo Finance’s Jessica Smith, who’s taking a look at that for us today. Jess?
/jlne.ws/3pJyYh9

‘Let them trade’: Washington struggles with Robinhood politics; Online brokerage faces grilling in Congress after imposing curbs on GameStop trading
James Politi – FT
Later this month, the co-founder of Robinhood is likely to find himself being grilled by angry lawmakers in Washington, who are demanding answers over his company’s role in the GameStop trading saga. Vlad Tenev’s appearance on February 18, which has not yet been formally announced, would come against the backdrop of a wave of populist outrage, after his online brokerage was attacked for imposing limits on trading in GameStop and other stocks that had soared amid wild enthusiasm from retail investors.
/jlne.ws/2YDdUNp

Regulation

Janet Yellen calls meeting with financial regulators over GameStop frenzy
Kenneth Garger – NY Post
Treasury Secretary Janet Yellen will meet with top financial regulators to discuss the recent stock market frenzy propelled by a mass movement of retail investors on Reddit targeting GameStop and other heavily shorted stocks.
/jlne.ws/3cBHg6V

ASIC successful against Westpac subsidiaries’ appeal to High Court
ASIC
The High Court has today confirmed that Westpac Bank subsidiaries, Westpac Securities Administration Limited (WSAL) and BT Funds Management Limited (BTFM), breached financial services laws, including the requirement to act in their clients’ best interests and the requirement to act honestly, efficiently and fairly.
/jlne.ws/3avYEHr

ESMA provides input to the Commission on improvements for ELTIF
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today sent a letter to the European Commission consultation on the review of the European Long Term Investment Funds (ELTIF) Regulation. ESMA highlights the key topics of the ELTIF review where we see the need to consider amendments to this framework.
/jlne.ws/3oIxkef

New Research: Global Pandemic Brings Surge of New and Experienced Retail Investors Into the Stock Market
FINRA
In a year when a pandemic gripped the world, beginning and experienced retail investors flocked to the stock market using taxable, non-retirement investment accounts, according to new research by the FINRA Investor Education Foundation (FINRA Foundation) and NORC at the University of Chicago.
/jlne.ws/3jff9vF

FINRA Modifies TRACE Dissemination Protocols for Specified Pool Transactions
FINRA
FINRA has modified its Trade Reporting and Compliance Engine (TRACE) dissemination protocols applicable to agency pass-through mortgage-backed securities and Small Business Administration (SBA)-backed asset-backed securities traded in specified pool transactions.1 The amendment will become effective on May 17, 2021.
/jlne.ws/2YGR6MI

SEC Charges Former Executives of San Francisco Bay Area Company With Accounting Violations
SEC
The Securities and Exchange Commission today charged Joseph Jackson and Colm Callan, respectively the former CEO and CFO of WageWorks Inc. with making false and misleading statements and omissions, including to the company’s auditors, that resulted in the company’s improper recognition of revenue related to a contract with a large public-sector client. The settlements with both individuals include reimbursement of certain incentive-based compensation from the period during which the misconduct took place.
/jlne.ws/3toKNeD

Statement on Director Dalia Blass Departing from the Division of Investment Management
Commissioner Elad L. Roisman – SEC
Dalia Blass has led the Division of Investment Management in updating many of the most important and far-reaching SEC regulations affecting investment advisers and investment companies today. She and her team have also engaged in market monitoring, as well as industry and investor outreach efforts, on an unprecedented scale. Director Blass’s commitment to investors is unparalleled, as is her dedication to this agency and her team in the Division of Investment Management. I am incredibly grateful for all she has accomplished during her tenure here and the legacy she leaves with us in the Division of Investment Management.
/jlne.ws/2MtXzIl

FCA sets out its approach to international firms;The FCA today published its approach to the authorisation and supervision of international firms.
UK FCA
The publication explains how the FCA will assess international firms when they apply for authorisation to operate in the UK market. The FCA has considered responses to a consultation published last year (CP20/20) and today we have also published a feedback statement alongside the approach document.
/jlne.ws/3rgSD8h

FCA secures interim restitution order against illegal deposit takers
UK FCA
The Financial Conduct Authority (FCA) has secured an interim restitution order of just over £676,000 against 5 of the 7 defendants accused of carrying on unauthorised deposit taking by accepting money for projects including forex-trading and crypto-assets without FCA authorisation.
/jlne.ws/3rdj9iQ

Autorité Des Marchés financiers Designates Equifax Canada And Trans Union Of Canada As Credit Assessment Agents
Mondovisione
In accordance with the Credit Assessment Agents Act This link will open in a new window (the “Act”), which came into force on February 1, 2021, the Autorité des marchés financiers (the “AMF”) has designated Equifax Canada and Trans Union of Canada as credit assessment agents.
/jlne.ws/2zHDjvP

SIFMA Issues New MSRB Rule G-17 Model Risk Disclosure Documents for Additional Products
SIFMA
SIFMA today announced it has made new additions to its set of G-17 Model Risk Disclosure Documents to help municipal securities underwriters comply with the recently amended requirements for disclosure to municipal issuers set forth by the revised interpretive guidance to Municipal Securities Rulemaking Board (MSRB) Rule G-17.
/jlne.ws/3jfP4wg

ISDA Responds to European Commission Consultation on the Review of CSDR
ISDA
On February 2, ISDA, FIA and the FIA European Principal Traders Association (EPTA) submitted a joint response to the European Commission’s (EC) consultation on the settlement discipline regime under the Central Securities Depositories Regulation (CSDR). In the response, the associations outline concerns about detrimental effects arising from the application of the CSDR mandatory buy-in regime for the derivatives markets. The associations also request the EC and co-legislators clarify that the mandatory buy-in requirements of the CSDR settlement discipline regime do not apply in the context of margin transfers, physically settled derivatives and emission allowances.
/jlne.ws/3pXoSJL

Investing and Trading

The Game Moves On to Silver; GameStop, silver, WeWork SPAC, AMC and a maybe mega-merger.
Matt Levine – Bloomberg
We talked last week about possible endgames for the GameStop Corp. trade, but I forgot a weird one. The first possible endgame I mentioned was that GameStop’s stock price stays really high and the company grows into the valuation. Its turnaround plan works, it uses its elevated stock to do a transformative acquisition, something like that. In a few years, GameStop’s stock price is around where it is now, or up a bit, but by then it looks normal because GameStop has the revenue and margins and growth to make that stock price reasonable.
/jlne.ws/3tlXRS8

Benn Eifert Explains How Retail Trading Is Rocking Markets like Never Before
Tracy Alloway and Joe Weisenthal – Bloomberg
We know that retail activity, much of it on Robinhood, has been surging since last spring once the lockdowns began. But just how big of an impact is it really having? Is it going to be limited to just GameStop and a few others, or is this a permanent fixture of the new market landscape? We discuss this with Benn Eifert, CIO of QVR Advisors. Benn is an expert on volatility and derivatives, and he helps us make sense of what was so unique about GameStop, and what the ripple effects of this will be.
/jlne.ws/2LdGyS0

Jane Austen plot unfolds in the high-yield debt market; Shotgun marriage between credit investors and companies to be tested amid recovery from pandemic
Ellen Carr – FT
The story of the high-yield bond market in 2020 was a marriage plot. For those of you unfamiliar with this literary device, Jane Austen perfected, if not invented, it with her well-known novels, all of which end with happily-ever-after weddings.
/jlne.ws/3jesQuJ

GameStop shares slide 60% as Reddit rally deflates; Losses pile up on stocks favoured by army of day traders
Eric Platt, Colby Smith and Aziza Kasumov and Madison Darbyshire – FT
GameStop shares dropped 60 per cent on Tuesday as losses piled up on stocks favoured by the army of day traders that have organised on the social media site Reddit. The declines were so sharp that they triggered multiple trading halts in GameStop. Automatic curbs also kicked in to calm jittery trading in other stocks favoured by retail traders.
/jlne.ws/3pJFzYJ

For One GameStop Trader, the Wild Ride Was Almost as Good as the Enormous Payoff; A small-time trader turns $500 into more than $200,000
Gregory Zuckerman – WSJ
Anubhav Guha started day trading a few thousand dollars in March but managed to lose half of his money despite the stock market’s epic rally last year. He made that up and far, far more betting on GameStop Corp. GME -60.00% Mr. Guha turned $500 into $203,411 in less than three weeks with an options trade on the mall retailer. The rally and now collapse of GameStop was a dramatic clash of small-time traders against hedge funds, but for Mr. Guha it was more of a lottery ticket, though it had more ups and downs than a typical Powerball drawing.
/jlne.ws/3cDISxc

Can We Please Stop Talking About Stocks, Please? The stock market isn’t the economy, but that’s hard to remember in a bubble.
Farhad Manjoo – NY Times
This column is not about GameStop, though not for lack of trying. Last week the aging video game retailer emerged as the hottest stock on Wall Street, a story just unexpected and absurd enough to fill the new Trump-shaped void in our nation’s media diet. I was instantly hooked.
/jlne.ws/3pKWLNE

‘Wolf of Wall Street’ Jordan Belfort rallies behind Reddit uprising
Noah Manskar – NY Post
He’s the Wolf of WallStreetBets. Infamous stock broker Jordan Belfort threw his support behind the Reddit-fueled revolution in America’s financial markets, saying it would bring about “radical change.” “I believe this is a paradigm shift right now,” Belfort — the inspiration for the hit film “The Wolf of Wall Street” — told Fox News late Monday.
/jlne.ws/36BKWBM

Environmental, Social and Corporate Governance

A New Coal Mine Undercuts U.K.’s Claim to Climate Leadership; The government’s defense of the new mine is a good case study of the doublespeak rife in climate diplomacy.
Akshat Rathi – Bloomberg
As the U.K. prepares to host the next round of major global climate talks in November, Prime Minister Boris Johnson’s government has adopted the most ambitious emissions-reduction goal among large economies.
/jlne.ws/2MUDpas

FTSE 100 Companies Have No Black Leaders, Study Shows
Lisa Pham – Bloomberg
The number of Black executives at the top of Britain’s blue-chip companies has fallen to zero for the first time in six years, research by consultancy Green Park has found. There are no Black chairs, chief executive officers or chief financial officers at any company in the U.K.’s benchmark FTSE 100 stock index, according to early findings from the analysis. Only 10 of the 297 leaders in these three roles have ethnic minority backgrounds, the findings show.
/jlne.ws/2YH0oIs

China’s Covid Comeback Is Bad News for Climate as Emissions Rise
Bloomberg News
December surge pushed 2020 emissions over 2019: Carbon Monitor; China was the only major economy with emissions growth in 2020
China was likely the only major economy that grew last year after swiftly containing the coronavirus. It’s also the only major economy that saw carbon emissions rise.
/jlne.ws/3jbyvBV

Black representation at top of FTSE 100 companies falls to zero; Just 10 out of 297 leaders in top three roles have ethnic minority backgrounds, report says.
Delphine Strauss – FT
The number of black people at the top of Britain’s biggest listed companies has fallen to zero, despite public commitments to increase diversity in leadership.
/jlne.ws/3oK4iuH

Big Oil hit by record losses from pandemic and clean fuel; Exxon racks up first annual loss of $20bn while BP loses $5.7bn as energy demand plunged last year
Derek Brower and Anjli Raval – FT
The pandemic’s devastating impact on Big Oil was illustrated on Tuesday when some of the world’s biggest energy groups reported record annual losses, marking a brutal 12 months for an industry under mounting pressure to speed up a transition to cleaner fuels.
/jlne.ws/2NTx4MG

ExxonMobil reports $22bn annual loss; First ever full-year loss caps dismal 12 months for US oil group
Derek Brower and Justin Jacobs – FT
ExxonMobil slumped to its first annual loss, capping a year of crisis for a US corporate titan in which it has slashed jobs and spending, lost its place in the Dow Jones Industrial Average and been hit by a growing proxy shareholder battle.
/jlne.ws/2YCjW0C

BP reports a $5.7 billion annual loss, its first in a decade.
Stanley Reed – NY Times
BP on Tuesday reported its first loss in at least a decade, taking a $5.7 billion loss for the year compared with a $10 billion profit for 2019. The company said it eked out a $115 million profit for the fourth quarter of 2020, representing a year-on-year decline of about 95 percent.
/jlne.ws/3oOqqUF

Institutions

Guggenheim Investments Appoints Former Allianz Global Investments Executive John Andrews, Regional Vice President, Intermediary Distribution; Latest Addition Reflects Growing Demand for Guggenheim’s Mutual Funds
Guggenheim Investments
Guggenheim Investments, the global asset management and investment advisory business of Guggenheim Partners, today announced the appointment of John Andrews, CIMA, as a Regional Vice President. Mr. Andrews will be responsible for Wirehouse and Regional Broker-Dealer sales in Louisiana, Oklahoma, and Texas.
/jlne.ws/2MqRrk5

HSBC Considers Moving Top Executives to Asia to Strengthen Push
Ambereen Choudhury and Harry Wilson – Blomnberg
Guyett and Elhedery, co-heads of investment bank, may relocate; Bank is preparing to announce strategic review outcome
HSBC Holdings Plc is considering relocating a handful of senior executives from London to Hong Kong or Singapore as Europe’s largest lender bets its future on Asia.
/jlne.ws/2Mu74Hu

Former Morgan Stanley India Head’s SPAC to Tap Diaspora in U.S.
Baiju Kalesh and Anto Antony – Bloomberg
Citadel-backed blank-check firm seeks over $1.5 billion deal; Leadership team says Indian diaspora a great talent pool
A blank-check company backed by former Morgan Stanley India head Narayan Ramachandran has set its sights on acquiring a U.S. software firm with links to the South Asian country. KludeIn 1 Acquisition Corp., a special purpose acquisition company, raised about $173 million in an initial public offering in January. The Nasdaq-listed firm aims to combine with a software or technology-enabled business serving consumers or companies in the U.S., according to its IPO prospectus.
/jlne.ws/3pO4Px5

Steve Cohen’s Point72 raises $1.5bn; Hedge fund takes in new cash after 10% decline in January
Ortenca Aliaj and Laurence Fletcher – FT
Steve Cohen’s Point72 Asset Management has raised $1.5bn from investors, boosting the hedge fund’s assets under management after it lost 10 per cent in January and provided emergency financing to Melvin Capital, the firm at the centre of the GameStop short squeeze.
/jlne.ws/2NTwQ8i

Glencore names former Anglo American chief Cynthia Carroll to board; Commodity group now has three women in its nine-person boardroom
Neil Hume – FT
Glencore has added a third female director to its nine-strong board with the appointment of former Anglo American chief executive Cynthia Carroll as a non-executive director.
/jlne.ws/3tgU9Js

Apollo’s Earnings Climb Despite Epstein-Related Turmoil; The test will be whether Leon Black’s recently announced decision to cede the CEO role will put to rest any investor concerns
Miriam Gottfried – WSJ
Apollo Global Management Inc. APO 2.62% reported higher fourth-quarter earnings Wednesday as the private-equity giant’s business weathered a storm kicked up by Chief Executive Leon Black’s ties to disgraced financier Jeffrey Epstein.
/jlne.ws/39L9RVm

Goldman Sachs derivatives sales trader joins Optiver to grow institutional business; Leaf Wade joins Optiver as an institutional trader from Goldman Sachs where he spent over three years as an equity derivatives sales trader.
Annabel Smith – The Trade
Dutch market maker and proprietary trading firm Optiver has appointed a former derivatives sales trader from Goldman Sachs to grow its institutional trading business in London.
/jlne.ws/3to0cw4

Regions

Taiwan to Tighten Rules on Local Companies’ FX Transactions
Miaojung Lin and Argin Chang – Bloomberg
Revised rules designed to curb foreign currency speculation; Taiwan dollar has strengthened to highest in 23 years
Taiwan’s central bank said it plans to tighten rules on local companies’ foreign exchange transactions in the latest move to curb speculation after the Taiwan dollar rose to its strongest in 23 Years. The monetary authority will be able to order firms to seek approval for forex transactions when necessary, according to draft revisions to existing rules announced on the central bank’s website.
/jlne.ws/36Gj7bs

Italy’s Warren Buffett Is Missing a Few Billion Dollars; The pandemic has left John Elkann with less financial firepower for deals and his Exor holding company trades at a steep discount to net asset value.
Chris Bryant – Bloomberg
John Elkann, scion of Italy’s billionaire Agnelli family, makes a point of hiring the highest-quality managers to oversee the clan’s automotive, reinsurance and media holdings — leaders who can “walk the talk” as he puts it. One hopes he applies the same rigor when recruiting someone to organize his calendar.
/jlne.ws/2MyplDo

Italy’s Investors Laud the Return of Draghi to Keep Markets Calm
John Ainger – Bloomberg
Bond yields slide toward record lows, stock market rallies; Former ECB chief Draghi helped save Italy debt market in 2012
Italy’s markets might have their savior back. The nation’s bonds and stocks surged after Mario Draghi, the former European Central Bank president who brought calm to the region’s markets, was tapped to be the next prime minister. Investors hope he can usher in political stability after the collapse of the ruling coalition and utilize European Union funds to help the economy recover from Covid-19. “He is really a known quantity for markets,” said Imogen Bachra, European rates strategist at NatWest Markets. “We know that he is pro-EU and in favor of the European project, which markets will take comfort in.”
/jlne.ws/2MR8cEK

Ant Reaches Agreement With China Regulators on Overhaul
Bloomberg News
Ant Group Co. and Chinese regulators have agreed on a restructuring plan that will turn Jack Ma’s fintech giant into a financial holding company, making it subject to capital requirements similar to those for banks. The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas like blockchain and food delivery, people familiar with the matter said. One of Ant’s early proposals to regulators had envisioned putting only financial operations into the new structure.
/jlne.ws/3ap7maA

South Korea partially lifts short-selling ban; Seoul to allow practice for large-cap stocks amid growing power for retail investors
Song Jung-a – FT
South Korea will allow the short selling of large-cap shares from May 3, following heavy criticism from hedge funds and other financial institutions against a year-long ban.
/jlne.ws/3pK0NGb

Brexit

UK starts process to form post-Brexit state-aid watchdog; Business secretary insists UK not seeking return to bailouts of 1970s as consultation on body’s powers launched
Jim Pickard and Peter Foster – FT
The UK will take an important step towards the creation of an independent authority to oversee its post-Brexit subsidy regime on Wednesday when it launches a consultation on how the new body will operate and whether it should have enforcement powers.
/jlne.ws/3rfARSY

An equivalence ‘deal’ for the City and EU is doomed to fail; A binding treaty on financial services is needed instead if Europe and the UK are to prosper post-Brexit
Andreas Dombret – FT
There are those in Europe who would be delighted to see the City of London cut down to size and suffer as a result of the UK’s departure from the EU. I am not one of them.
/jlne.ws/3rdb2Tq

Brexit: Welsh Shellfish producers facing block on exports to EU
Sarah Dickins – BBC Wales
Many cockles and mussels producers in Wales have been told they cannot continue exporting to the EU because the water quality is not good enough. Most Welsh waters are Grade B which means shellfish have to be cleaned and purified before being sent to Europe. But there are not enough facilities in the UK – and pre-Brexit, produce was sent to the EU to be purified and then delivered around the mainland. Wales’ environment minister wants an urgent meeting with the UK Government. James Wilson, of Deep Dock, is one of several mussel producers on the Menai Straits and his company has been exporting live mussels to EU countries since the 1990s.
jlne.ws/2O3nPK4

U.K. Seeks Views on New Post-Brexit Subsidies System
Emily Ashton – Bloomberg
The U.K. is launching a consultation on its post-Brexit subsidies system, which the government has hailed as a “significant milestone” in the country’s future outside the European Union. The new U.K.-wide “subsidy control system” will replace the E.U.’s state aid regime, which was a major stumbling block in Brexit talks last year. Prime Minister Boris Johnson’s government believes the system will allow the U.K. to be “more dynamic” in providing financial aid to businesses, and better support start-ups, small firms and new industries. Prime Minister Boris Johnson’s government believes the system will allow the U.K. to be “more dynamic” in providing financial aid to businesses, and better support start-ups, small firms and new industries.
jlne.ws/3oJAVZI

U.K. Says Brexit Trade Flow With EU Is Nearly Back to Normal
Tim Ross – Bloomberg
Cross-border goods trade with the European Union is almost back to normal levels, U.K. Transport Secretary Grant Shapps said, despite concerns from haulers that post-Brexit paperwork is choking their operations. The number of trucks leaving the U.K. for France via the Eurotunnel from the port of Dover is about 6,000 per day, approximately 1,000 a day fewer than at the same point last year, the minister told Parliament’s transport committee. Some of the decline is down to stockpiling of goods in the run-up to the deadline of Dec. 31, when the U.K. left the EU customs and market regimes, he said. Only about 3% of trucks are being turned back as they try to leave and that is partly because drivers need to take coronavirus tests, Shapps told the panel.
jlne.ws/2MmZONL

Brexit And Pandemic Double Whammy Hit Ireland in Early 2021
Jana Randow – Bloomberg
Ireland’s economy took a double hit in January as the impact of renewed pandemic lockdowns was aggravated by post-Brexit trade chaos. A measure of service-sector activity plunged to an eight-month low, with transport, tourism and leisure services particularly badly affected. The AIB gauge, based on a survey of purchasing managers, fell to 36.2 from 50.1.
jlne.ws/2YFeNov

Second-hand clothing mountain piles up as Brexit halts exports to EU
Richard Partington – The Guardian
A mountain of used goods is building up in the north-east of England as one of the biggest exporters of second-hand clothing to the EU has suffered a breakdown in trade caused by Brexit. Since January, exports to the EU from ECS Textiles in North Shields have ground to a halt due to border delays, piles of paperwork and confusion over post-Brexit rules, costing charities thousands of pounds in lost donations each week.
jlne.ws/2O4Krd9

Miscellaneous

Wine Recommendation App Raises $155 Million Fueled by Pandemic
Ivan Levingston – Bloomberg
Vivino to hire, expand Netflix-style recommendation engine; Investors include: Kinnevik, Sprints Capital, GP BullHound
Wine startup Vivino has raised $155 million to expand into new countries, add staff and build out its wine-recommendation engine after more than doubling wine sales during the pandemic. The round, the company’s first since 2018, was led by Swedish investors Kinnevik AB, Vivino said in a statement Wednesday.
/jlne.ws/2NTUeCE

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