Climate fight will upheave fund sector, says archbishop

Feb 4, 2019

First Read

Hits & Takes
JLN Staff

Cboe Global Markets’ re-submitted application to the SEC for its bitcoin ETF on Friday is not the only one. NYSE Arca and Bitwise applied for a physically-backed bitcoin ETF last month.~JK

Reuters is reporting that Queen Elizabeth is to be evacuated in case of Brexit unrest.~JJL

The Winklevoss twins have a cameo appearance in the movie Ocean’s 8, a jewelry heist caper fashioned after Ocean’s 11.~JJL

FIA is offering a webinar on Wednesday, February 6 that will highlight the main trends in trading activity during 2018 in the exchange-traded derivatives market. It will cover the volume and open interest data for 2018 released by FIA on Jan. 25, which showed a 20.2% increase in volume over 2017, the fastest annual growth rate since 2010. You can go here to register.~SR

There are still two weeks left before the closing date of the CFTC’s request for input on crypto-asset mechanics and markets. The CFTC is gathering public input on how crypto-assets work so they can better understand how best to regulate them. If you would like to submit a public comment, you can do so here. You can also view comments that have already been posted here.~MR

As John mentioned on Friday, Weekend Unlimited Inc. won the Canadian raffle for the ticker “POT” replacing its previous ticker “YOLO.” It promptly surged 65 percent after winning the “POT” lotto.~SD

The 2019 Annual Arab Federation of Exchanges Conference will be at the Four Seasons Hotel Nile Plaza, Cairo, Egypt on Apr 23, 2019 – Apr 24, 2019.~JJL

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The Spread – Phil’s Shadow – 2/1

JohnLothianNews.com

What a January for the U.S. – the government shutdown, the polar vortex, and the Consolidated Audit Trail?! What’s next?

Watch the video and see the stories referenced here »

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January continues the positive trend: Eurex Exchange up by 6 percent
Eurex
Eurex Exchange, Europe’s largest derivatives exchange and part of Deutsche Börse Group has continued its upward trend in January. The number of traded contracts reached 147.8 million compared to 139.3 million in January 2018. This is an increase of 6 percent.
/jlne.ws/2DcK5YG

***** Eurex has returned as a sponsor of John Lothian News. Welcome back friends!~JJL

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Bill Gross to Retire From Janus Henderson
Bloomberg News
Bill Gross, who will be 75 years of age in April, will retire from Janus Henderson Investors and focus on managing his personal assets and private charitable foundation, Bloomberg News reports.
/jlne.ws/2DaN5os

***** Quote heard on a shuffleboard court in Florida, “You know they used to call me the bond king.”~JJL

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Crypto Fever Is Over, the Paris Fintech Summit Shows
Edward Robinson – Bloomberg
Crypto fever has truly broken. That was a big takeaway this week from the Paris Fintech Forum, one of the biggest annual gatherings of its kind in Europe. On Tuesday and Wednesday, about 3,000 entrepreneurs, investors, bankers, and regulators descended on the neo-classical Palais Brongniart, once home to the stock exchange. Last year, with Bitcoin and its imitators soaring, attendees jammed discussions on blockchain technology.
/jlne.ws/2D4Zies

***** Killing crypto fever sounds a lot like killing open outcry. Expect lots of stories about this in the coming months.~JJL

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Killing 22 Hogs a Minute, Meatpackers Test Old Limits of Safety
Trump’s USDA is looking to speed up the slaughter line.
Andrew Martin – Bloomberg
In an Illinois River town where Abe Lincoln once toiled as a country lawyer, the slaughterhouse of the future runs at a speed that generations of Midwestern farmers would have dismissed as fantasy. At other factories, as many as seven government inspectors are stationed along the slaughter line to look for signs of contamination or disease. Here, in Beardstown, Illinois, workers bear more of that responsibility.
/goo.gl/yFpAvu

***** What I want to know is what this does to the fingers cut off rate per minute?~JJL

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Spoofing; SEF Trading; Security Tokens; Bitcoin Sales
Gary DeWaal – Bridging the Week
Both the Securities and Exchange Commission and the Commodity Futures Trading Commission resumed full operations last week. Promptly, the CFTC and the Chicago Board of Trade resolved coordinated enforcement actions against an alleged spoofer of soybean futures products traded on CBOT. Separately, the SEC filed a supplemental brief with a US federal court in California to augment its effort to set aside a November 2018 decision denying the agency a preliminary injunction against defendants in connection with their presales of an initial coin offering and an ICO of a cryptoasset that the SEC alleged was an unregistered security. The SEC claimed that the court misapplied applicable law related to what constitutes a security as well as the standards for a preliminary injunction.
/jlne.ws/2GkHZt6

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Friday’s Top Three
Our top story of the day on Friday was the JLN piece from Spencer Doar, How Many Lives Does This CAT Have Left? about the failed Consolidated Audit Trail project. Second was the Atlantic’s story about Michael Bloomberg, https://jlne.ws/2GlM28HBloomberg Is Building a Data Organization to Crush Trump. Third was FIA Marketvoice’s CME releases reference data API to support trading automation

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CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

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Lead Stories

Climate fight will upheave fund sector, says archbishop; ‘Young people no longer just want to avoid doing harm. They want to do good’
Chris Flood – FT
The fight against climate change will lead to profound changes across the investment industry as more younger workers demand action to save the planet, according to Justin Welby, the Archbishop of Canterbury.
/jlne.ws/2D4V3j8

Crypto Exchange Mystery Deepens as Board Seeks Court Protection
Doug Alexander – Bloomberg
QuadrigaCX filed for creditor protection in Nova Scotia; Vancouver startup announced Jan. 14 that founder, CEO died
The issues at cryptocurrency exchange QuadrigaCX keep getting more complicated. The Vancouver-based company’s board of directors said Thursday it filed for creditor protection in a Nova Scotia court to gain time to address “significant financial issues” affecting their ability to serve customers, according to a statement on its website. A hearing is scheduled Feb. 5.
/jlne.ws/2D8Np77

The ETF’s Wonky Cousin Can Trip Up a Sophisticated Investor; Some buyers still don’t appreciate differences between exchange-traded products.
Rachel Evans and Carolina Wilson – Bloomberg
Nick Cherney was still on the slopes when he realized something was wrong. The outdoor enthusiast, who runs exchange-traded products at Janus Henderson Investors, was just skiing back into Aspen after spending eight hours on some of Colorado’s toughest backcountry terrain. He’d been without a cell signal all day and, as he looked at his phone, he started to fear this was no ordinary Monday.
/jlne.ws/2D4I8h8

End the clash over EU research rule, SEC urged; MFS and CII call for permanent US alignment with Mifid II payment regulations
Siobhan Riding – FT
The US is being called on to align its regulations on funding investment research with those of the EU’s Mifid II as the Securities and Exchange Commission, Wall Street’s watchdog, examines the effect of a clash in rules between the jurisdictions.
/jlne.ws/2DcOQ4u

FCA Probing 48 Funds Over Fee-Disclosure Rules: Sunday Times
Maria Kolesnikova – Bloomberg
The U.K.’s financial watchdog is investigating 48 investment companies for potentially failing to follow new rules on disclosing the cost of fees for consumers, the Sunday Times reported.
/jlne.ws/2D4v3nT

Euronext may sweeten offer for Oslo Bors as Nasdaq makes rival bid
Inti Landauro and Gwladys Fouche – Reuters
Stock markets operator Euronext said on Monday it may increase its offer for Oslo Bors VPS after Nasdaq made a higher rival bid.
/jlne.ws/2DaKDyg

Euronext to reassess offer for Oslo Bors after being outbid by Nasdaq; Euronext could increase its bid for Oslo Bors after it was outbid by Nasdaq last week for the takeover.
Hayley McDowell – The Trade
Pan-European exchange operator Euronext has said it is looking at options to adjust its acquisition offer for Oslo Bors after Nasdaq swooped in with a higher bid for the Norwegian stock exchange.
/jlne.ws/2D2Tnq4

D-Day for Australian banks as bombshell inquiry report set for release
Byron Kaye – Reuters
The Australian government is due to release on Monday the final recommendations of the independent inquiry that exposed systemic wrongdoing in Australia’s financial sector last year, likely leading to sweeping changes to the country’s banking industry.
/jlne.ws/2D7T9hw

Australian regulator vows to tackle ‘cosy oligopoly’ of big banks; More competition and sense of ‘threat’ seen as best way to compel better conduct
Jamie Smyth – FT
Australia’s competition regulator plans to wrest open the “cosy oligopoly” of the country’s four largest banks and punish misconduct via the courts, saying competition is the best way to fix the troubled sector.
/jlne.ws/2DbSwDx

Royal commission calls for overhaul of Australian banking rules; Report backs ban on some commissions to mortgage brokers and other intermediaries
Jamie Smyth – FT
Australia’s government has unveiled plans to shake up the banking, insurance and pension sectors following publication of a report on Monday detailing how financial institutions and executives have ripped off consumers in the pursuit of profit and personal gain for years.
/jlne.ws/2D7JJTc

VIX Auction Bets Land Chicago Trader With $1.3 Million Fine
Cboe fines Akuna Securities for trying to affect monthly auction tied to the VIX volatility gauge
Gunjan Banerji – The Wall Street Journal
Cboe Global Markets Inc. fined a trading firm for trying to include improper options trades in an auction tied to its marquee product: the VIX volatility gauge.
The Cboe Volatility Index, or VIX, tracks investor expectations for future turbulence in the stock market by using S&P 500 options prices.
/goo.gl/Hg1VZm

Tell the politicians: asset managers aren’t monsters; Fund industry gears up to make itself heard in Westminster and Brussels
Siobhan Riding – FT
Three years ago UK minister Dominic Raab made a startling admission. In an interview on BBC Radio 4’s Today programme, Mr Raab was asked about BlackRock, the world’s largest asset manager.
/jlne.ws/2D4JxEq

Investors fret about dual-listed shares under a hard Brexit; Funds want to keep ability to trade London stocks of groups such as Shell and Unilever
Philip Stafford – FT
European investors are urging regulators to protect their ability to buy the London-listed shares of several major companies, including Royal Dutch Shell, Unilever and Ryanair, should the UK leave the EU abruptly at the end of next month.
/jlne.ws/2D7JcRc

Non-bank lenders thrive in the shadows; Explosive growth of US private debt market brings parallels to ‘wild west’
Robin Wigglesworth – FT
When the dotcom bubble burst, Chuck Doyle smelt an opportunity — arranging loans for companies shunned by big banks and too small to tap the bond market. It proved very fertile ground.
/jlne.ws/2D4nH3M

Standard Chartered pays $40m fine after forex rigging probe; US authorities claim UK traders tried to manipulate emerging markets currencies
Eva Szalay – FT
Standard Chartered has agreed to pay $40m in fines to settle claims from US authorities that the UK bank was involved in chat rooms called the “Old Gits” and “Butter the Comedian” that tried to manipulate the price of emerging markets currencies.
/jlne.ws/2D75CSQ

Women Claim New Turf on Wall Street; Women are managing billions of dollars and beating male competitors in the booming CLO market
Matt Wirz – WSJ
Women are fueling the growth of one of the most popular products on Wall Street, the $700 billion market for collateralized loan obligations.
/jlne.ws/2Da57Ht

Exchanges, OTC and Clearing

Nasdaq Announces Launch of Public Offer for Oslo Børs VPS
GlobeNewswire
Nasdaq AB, an indirect wholly-owned subsidiary of Nasdaq, Inc., today published the offer document for its public offer to acquire all of the issued shares of Oslo Børs VPS Holding ASA for NOK 152 per share, which was previously announced via joint press release by Nasdaq AB and Oslo Børs VPS on 30 January 2019.
/jlne.ws/2Da0JrZ

Props unhappy with reduced sterling tick at ICE
Louisa Chender – Global Investor Group
Brexit is “muddying the water” as ICE short sterling futures volumes drop
/jlne.ws/2D3dQeE

DGCX Starts 2019 Strongly Amidst Continued Global Volatility
DGCX press release
The Dubai Gold & Commodities Exchange (DGCX) has had its best start to a year on the back of continued global volatility, trading a total of 1.93 million contracts in January with a value of USD 38.09 billion, beating its previous best January recorded in 2018.
/goo.gl/9MeXFE

TAS and electronic Closing Price trial – Notice (PDF)
LME
/jlne.ws/2D8qI3b

Davos 2019: Shaping the future of finance
Eurex
Cross-border capital flows have fallen 65% since the financial crisis while new production and finance technologies are transforming the landscape for growth and investment. In a session at the World Economic Forum hosted by Geoff Cutmore from CNBC, the speakers discussed how global financial architecture needs to adapt. The panel participants were Christine Lagarde, managing director of the International Monetary Fund; Jörg Kukies, German’s State Secretary at the Federal Ministry of Finance; Mary Callahan Erdoes, CEO, Asset and Wealth Management, JP Morgan; Mark Carney, Governor of the Bank of England; Hugo Shong, Founding Chairman of IDG Capital and Sergio P. Ermotti, Chief Executive Officer of UBS.
/jlne.ws/2D4pPIN

MGEX Reports January 2019 Volume Numbers
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), reports January total exchange volume at 119,256 contracts.
/jlne.ws/2S3FX7N

OCC January Volume Down 11.9 Percent After Record-Breaking 2018
Volume was second-highest January in OCC history
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in January reached 422,610,940 contracts, the second-highest January volume in OCC history, following January of 2018. This was down 11.9 percent compared to last January. OCC’s year-to-date average daily contract volume is 20,124,330 contracts, 3.6 percent lower than 2018’s record-breaking average of 20,884,820 contracts a day.
/jlne.ws/2DO8Yvn

Nasdaq chooses Umeå for its new office
Uminovainnovation.se
As Cinnober becomes part of Nasdaq, Umeå will have a new global brand in town. Good for Umeå and its university, and good for Nasdaq, Brad Peterson CTO, emphasize.
/jlne.ws/2GaCgXn

Fintech

Goldman Sachs invests in HSBC-backed fintech app Bud
Reuters
Goldman Sachs (GS.N) is among the investors in a $20 million fundraising for financial technology firm Bud, the two companies said on Monday, the latest in a series of investments by big global banks seeking to partner with fintechs.
/jlne.ws/2D6nAop

Visa Adds InstaReM to Fintech Fast-Track Program
Bala Yogesh – Investing News
Visa (NYSE:V) announced on Friday (February 1) that InstaReM is joining its fintech fast-track program in the Asia-Pacific region. As quoted in the press release: This program makes it quicker and easier for fintech partners to build and deliver new commerce experiences on Visa’s payments network.
/bit.ly/2Gnawhx

Exit-Interview With A FinTech Regulator: Sweden Has Given Up To Be The European Fintech Leader
Michal Gromek – Forbes
Stig Johannson was the ‘Head of Fintech’ and ‘Head of Fintech Innovation Center’ at the Swedish Financial Supervisory Authority. While completing a transfer to a new professional challenge, Stig decided in this exit-interview after leaving the authority to share his thoughts on struggles, small victories, suggestions for improvements and needs of the Regulatory Fintech ecosystem.
/bit.ly/2HNBHV1

HSBC and Goldman Sachs back UK start-up that lets banks offer rivals’ products on their apps
Ryan Browne – CNBC
British fintech start-up Bud said Monday that it had secured $20 million in a funding round co-led by HSBC and Goldman Sachs. The London-based company’s platform lets banks update their apps to give users access to financial services products from rivals. Banks can also categorize a customer’s spending data using Bud’s technology to help them find more cost-efficient products.
/cnb.cx/2D5dwvU

Cryptocurrencies

Crypto Exchange Says It Can’t Repay $190 Million to Clients After Founder Dies With Only Password
Tom McKay – Gizmodo.com
Canadian crypto exchange QuadrigaCX says it cannot repay most of $190 million in client holdings after its 30-year-old founder Gerald Cotten, the only person who knew the passwords to its “cold storage,” unexpectedly died in India in December 2018, Coindesk reported on Friday.
/jlne.ws/2D8S0GE

Diversifying With Bitcoin
Russell Rhoads – TABB Forum
In late 2018 TABB Group conducted a comprehensive survey of institutional attitudes toward the cryptocurrency space. One finding was that investors were considering crypto exposure due to the lack of correlation with traditional asset classes. So, TABB Group decided to take a look at whether adding a small portion of bitcoin to a portfolio resulted in diversification benefits.
/jlne.ws/2CYwi85

How blockchain can help disrupt the fund admin chain; The technology behind distributed ledgers could result in many job losses
David Stevenson – FT
In most industries technological disruption has resulted in more choice and less cost to the end user. Not so in a large chunk of financial services.
/jlne.ws/2D7CRoX

Twitter CEO Jack Dorsey Has Made A Bold Prediction About Bitcoin
Billy Bambrough – Forbes
Bitcoin has had a troubled start to 2019 with many predicting the long-running bitcoin bear market, which has seen the bitcoin price fall by some 80% over the last 12 months, could run on well into this year.
/jlne.ws/2D5DTSq

US SEC Seeking Big Data Tool for Major Blockchains
Yogita Khatri – Coindesk
The U.S. Securities and Exchange Commission (SEC) is seeking a tool to provide a Big Data view across major blockchains. In a solicitation notice published Thursday, the regulator said it is looking for both small and large businesses who can provide data for the “most widely used” blockchain ledgers based on transaction volume, in order to “monitor risk and improve compliance” related to cryptocurrencies.
/jlne.ws/2D6edVR

Token Issuers Must Stop Paying for Market Making
Eric Gravengaard – Coindesk
I have spent much of my career in financial services working for Chicago’s proprietary trading firms which act as market makers on the derivatives exchanges. These firms are responsible for providing prices to the derivatives exchanges (CBOT, CME, CBOE) for options contracts, futures, etc. and are an important part of an orderly marketplace.
/jlne.ws/2D7pepH

SWIFT Chief Announces Trial DLT Integration With R3
Ian Allison – Coindesk
SWIFT, the global banking payments network, is to begin testing its GPI payments standard through R3’s Corda platform. Speaking on stage at the Paris Fintech Forum this morning, SWIFT CEO Gottfried Leibbrandt said: “Later today we are announcing an integration with R3.”
/jlne.ws/2D7ReJQ

Cboe Resubmits the VanEck/SolidX Bitcoin ETF Proposal for SEC Approval
Nikhilesh De – Coindesk
The race is back on to launch the first U.S. bitcoin exchange-traded fund (ETF), after Cboe resubmitted its joint proposal with VanEck and SolidX.
/jlne.ws/2D74rmo

Death Endangers Cryptocurrency Treasures: Plan Your Estate
Robert Hackett – Fortune
On my last evening at the World Economic Forum in Switzerland a week ago, I encountered a man who picks locks for a living—digital locks, that is. I had overheard the Swedish safe-cracker discussing his work and its relation to cryptocurrency while dining in the barroom of the Hotel Chesa Grischuna in Klosters. (You don’t need FaceTime to eavesdrop!) I invited him to share a beer later that evening.
/bit.ly/2DSYD1j

Stories from Alternative Crypto Sources

Bloomberg: Proof-of-Stake Token Investors Could Use Staking For Gains During Bear Market
Marie Huillet – Cointelegraph
/bit.ly/2GfXEKf

Here’s What Every Major 2020 US Presidential Candidate Has Said about Bitcoin
Josiah Wilmoth – CCN
/bit.ly/2UCWwnH

Politics

Trump Organization Sought Loan From Deutsche Bank in 2016, Was Rebuffed
Deutsche bank raised questions internally about whether it had enough information about the use of the funds, according to people familiar with the matter
Jenny Strasburg and Rebecca Ballhaus – The Wall Street Journal
Deutsche Bank AG rebuffed a request from the Trump Organization in March 2016 to increase a loan for the Trump National Doral, a Florida golf resort, because of concerns about expanding the bank’s relationship with then-candidate Donald Trump or his company, according to people familiar with the matter.
/goo.gl/VCjRbe

Trump Sought a Loan During the 2016 Campaign. Deutsche Bank Said No.
David Enrich, Jesse Drucker and Ben Protess – NY Times
Donald J. Trump was burning through cash. It was early 2016, and he was lending tens of millions of dollars to his presidential campaign and had been spending large sums to expand the Trump Organization’s roster of high-end properties.
/jlne.ws/2D9XAsb

Investigators Expected to Probe Deutsche Efforts to Shed Loan to Russian Bank; German lender, seeking to slash its exposure to Russia in late 2016, scrambled to sell a $600 million loan
Jenny Strasburg, Rebecca Ballhaus and Dustin Volz – WSJ
Congressional investigators expect the House Financial Services Committee to examine Deutsche Bank AG’s efforts after the 2016 election to shed a loan it made to VTB Group, a large Russian state-owned bank.
/jlne.ws/2Dad13J

Herman Cain Exemplifies Trump’s Dysfunction; A bizarre candidate for the Federal Reserve Board shows the president has learned nothing on the job.
Jonathan Bernstein – Bloomberg
Let’s just pause for a moment to consider all the ways that President Donald Trump’s plan to nominate pizza magnate Herman Cain to the Federal Reserve Board is evidence that he has no idea how to do his job.
/jlne.ws/2D4tBls

Want a Hot Stock Tip? Watch Trump’s State of the Union Speech
Felice Maranz – Bloomberg
China, Nafta remarks might move apparel, auto-parts shares; Trump probably won’t focus on banks, housing or Fannie Mae
Clues on trade policy are likely to be top of mind for stocks investors watching President Trump’s State of the Union speech Tuesday. Trade remarks may influence equity sectors from footwear to auto parts and pharma stocks may be volatile if the president zeros in on drug costs reforms, while financials and housing are likely to be overlooked.
/jlne.ws/2D74gaI

Here are the two presidential candidates that terrify Wall Street the most; President Donald Trump has alienated many in the financial industry with his erratic leadership, his trade wars…
Cody Fenwick – Salon
Despite his boasting about supposedly invigorating the economy, President Donald Trump has alienated many on Wall Street and in the financial industry with his erratic leadership, his trade wars, and his opposition to immigration.
/jlne.ws/2Da4Kg3

Senator Tillis Should Care More About Americans Than Big Banks
Mayra Rodriguez Valladares – Forbes
In an opinion piece yesterday, Big-bank rule may have fueled December’s stock market rout, Senator Thom Tillis argued that the Globally Systemically Important Bank (GSIB) surcharge could be one of the causes for the market volatility in December. He argued that this type of volatility should move “should not be happening with the economic fundamentals we currently have.”
/jlne.ws/2D8XNM9

Regulation

Follow ESMA’s open hearing on sustainable finance live
ESMA
You can follow ESMA’s hearing on sustainable finance, currently taking place at ESMA’s premises in Paris, live online now. You can also directly follow the livestream through ESMA’s Twitter account.
/jlne.ws/2DhOmKL

Access to API Files
FINRA
Some firms have reported experiencing intermittent difficulties accessing the FINRA secure API reference data (includes security master data and daily list) and the TRAQS secure website. FINRA is investigating the issue and will send updates as soon as possible. Contact FINRA Market Operations or call (866) 776-0800 if there are questions.
/jlne.ws/2D5D4ZQ

Update – API Access
FINRA
FINRA has resolved the problem which intermittently prevented some firms access to the FINRA API reference data and the TRAQS secure website this morning.
/jlne.ws/2D54iQg

FCA publishes its second set of rules following its Asset Management Market Study
UK FCA
The Financial Conduct Authority (FCA) has published new rules and guidance to improve the quality of the information available to consumers about the funds they invest in.
/jlne.ws/2D54or6

ASIC requires Commonwealth Financial Planning Limited to stop charging fees for ongoing services
ASIC
Commonwealth Financial Planning Limited (CFPL) has failed to provide ASIC with an attestation and with an acceptable Final Report from the independent expert, both of which were required under a Court Enforceable Undertaking (EU) entered into with ASIC in April 2018 in relation to CFPL’s fees for no service conduct.
/jlne.ws/2D4OInQ

Former Adelaide financial adviser pleads guilty to theft of $4.88 million
ASIC
Former Adelaide financial adviser, James Gibbs, has pleaded guilty to 28 dishonesty offences committed when he was a financial planner and director of James Gibbs Investments Pty Ltd (JGI). JGI operated in Franklin St, Adelaide.
/jlne.ws/2D72hDi

Statement from ASIC Chair James Shipton on the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry
ASIC
ASIC today welcomed the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and acknowledged its important work.
/jlne.ws/2Dajbkn

UK’s FCA forces further disclosure of fund performance and use of benchmarks; The latest set of rules introduced by the FCA come in response to its extensive asset management study which raised concerns about fund fees.
Hayley McDowell – The Trade
The UK’s financial watchdog has moved forward with plans to assert further disclosure on fund performance and objectives through a set of new rules and guidelines for asset managers.
/jlne.ws/2DaruNb

Australia to Add Muscle to Regulators After Bank Probe; Commission is asking regulators to look at 24 cases in which financial institutions may have broken laws
Robb M. Stewart and Rob Taylor – WSJ
Australia plans to hand financial regulators new powers of enforcement following a year-long probe into misconduct in the country’s banking industry, which long had a reputation for being among the world’s safest for investors.
/jlne.ws/2Daph4l

Australian regulator orders CBA unit to stop charging fees
Hudson Lockett – FT
Australia’s finance watchdog has ordered the financial planning unit of Commonwealth Bank of Australia to stop charging and receiving customer fees for ongoing services, a fresh blow for the country’s biggest bank by assets that comes ahead of a final report on widespread misconduct in the Australian banking sector.
/jlne.ws/2D4LfWm

Investing and Trading

How to Invest When Markets Are Down (For Those Who Don’t Remember); It has been nearly 10 years since U.S. stocks were in a bear market. Time to brush up on some proven techniques.
Chana R. Schoenberger – WSJ
Many investors might have forgotten (or, for the younger ones, never knew) how to survive a bear market—after all, there hasn’t been one, by the most common definition, since the last one ended in March 2009.
/jlne.ws/2D4p0jc

January’s Stock-Market Rally Revives Appetite for Risky Margin Loans; Margin debt tumbled with shares in December, but a rebound last month indicates investors’ taste for risk is recovering
Michael Wursthorn and Lisa Beilfuss – WSJ
Nick Restaino is bullish on stocks again after January’s dramatic rebound and is using money borrowed against his investments to buy shares of popular technology companies such as Nvidia Corp. and Roku Inc.
/jlne.ws/2D4LWPs

Billionaires should be seen and not heard; Alibaba’s Jack Ma champions middle age, dismissing young and old alike
Pilita Clark – FT
When Jack Ma handed out some career advice to a group of young leaders the other day, people were bowled over.
/jlne.ws/2D2QXru

Forget fear and greed. Confusion is now markets’ watchword; Despite January’s bounce in stocks, there are plenty of signs that conviction is lacking
Robin Wigglesworth – FT
Markets tend to veer between two extremes: fear and greed. But right now, the dominant emotion appears to be confusion.
/jlne.ws/2D2QUvO

The Wealthy Are Victims of Their Own Propaganda; To escape higher taxes, they must embrace deficits.
Stephanie Kelton – Bloomberg
A friend sent me an email the other day, complaining about the 70 percent marginal tax rate floated by Democratic Representative Alexandria Ocasio-Cortez and the new wealth tax proposed by Democratic Senator Elizabeth Warren.
/jlne.ws/2D7IGTg

Toward a New Alpha
Greyspark
Buyside Bond Traders Can Win the Spread with the Right FI-EMS Technology
A new generation of trading solutions allows buyside bond trading desks to create a new source of alpha by maximising their opportunities in an increasingly fast-moving electronic trading environment through the use of the surfeit of data in fixed income markets in 2019.
/jlne.ws/2G91g1d

Institutions

Marex Spectron Completes Acquisition Of Rosenthal Collins Group’s Customer Business
RCG
Marex Spectron, one of the world’s largest commodities brokers, today announced that it has completed the acquisition of the customer business of Rosenthal Collins Group LLC (RCG), a leading independent Futures Commission Merchant (FCM). Through the acquisition, which was announced on 20 December 2018, Marex Spectron maintains the RCG name and brand, 14,000 client accounts and balances, 150 associated staff and the Chicago headquarters.
/goo.gl/mrkqXd

Memo to Danske Staff: Don’t Worry About Your Bonus
Frances Schwartzkopff – Bloomberg
Interim CEO addresses low morale at Denmark’s biggest bank; The $230 billion dirty money scandal overshadows everything
Danske CEO To Step Down As Estonian Flows Seen At $234 Billion
Danske Bank A/S may be facing billions of dollars in fines for its Estonian laundering scandal, but its employees don’t need to worry about having their bonuses cut.
/jlne.ws/2D77omM

How Deutsche Bank Drifted Into Its Whirlpool of Woes
Steven Arons – Bloomberg
At this point, Deutsche Bank AG’s biggest problem may simply be how many problems it has, how long they’ve gone on and how they’ve fueled one another. Four years of sliding revenue has spawned four failed turnaround plans and the steady departure of senior executives. That’s alongside an equally steady stream of lawsuits and investigations, topped by a raid on the bank’s headquarters in November. Its next obstacle may be the solution the German government seems to have in mind — merging it with its troubled cross-town rival, Commerzbank AG.
/jlne.ws/2D7I3ZU

Gold Is One Wealth Fund’s Refuge in World Gripped by Turmoil
Zulfugar Agayev – Bloomberg
Azeri fund plans to grow gold holdings to 100 tons by year-end; Movsumov sees Sofaz’s total assets rise to $40 billion in 2019
For Azerbaijan’s sovereign wealth fund, nothing beats the safety of gold in a world increasingly vulnerable to trade disputes and geopolitical risk.
/jlne.ws/2D9UwMH

America First Is Top Trade for State Street Investment Chief
Adam Haigh and Haidi Lun – Bloomberg
Richard Lacaille prefers U.S. stocks over Europe, EM; State Street CIO says trade relief to spur risk taking
Buying U.S. stocks in 2018 was among the most popular trades for global investors. State Street Global Advisors says you still can’t beat it.
/jlne.ws/2D6fhsP

Goldman Execs’ Pay Packages Risk a Hit From 1MDB Scandal
Anders Melin and Sridhar Natarajan – Bloomberg
Board says it could claw back awards based on investigation; Bank defers paying 2011 incentives to three former executives
Goldman Sachs Group Inc.’s top executives now have millions at risk from the firm’s 1MDB scandal.
/jlne.ws/2DayTfr

Regions

How a ‘Monster’ Texas Oil Field Made the U.S. a Star in the World Market; Innovation, investment and inviting geology have given new life to an oil patch that once seemed spent. The oil field is now the world’s second most productive.
Clifford Krauss – NY Times
In a global collapse of oil prices five years ago, scores of American oil companies went bankrupt. But one field withstood the onslaught, and even thrived: the Permian Basin, straddling Texas and New Mexico.
/jlne.ws/2D6affV

The Curious Case of Norway’s 60 Million Barrels of Missing Oil
Mikael Holter – Bloomberg
Forecast slashed after production rose during market slump; Maintenance, technical issues, delays, among explanations
Norway has built a reputation as one of the calmest and most predictable corners of the global oil industry, but lately it’s been full of surprises.
/jlne.ws/2D6U6a4

How China Pressured MSCI to Add Its Market to Major Benchmark; The move raises questions about the independence of MSCI as the index giant wields increasing market power
Mike Bird 0- WSJ
Last summer, the world’s largest index provider added stocks in China to one of its most prominent global benchmarks, leading billions of dollars to flow into Chinese shares and advancing China’s plans to draw more foreign investors to its markets.
/jlne.ws/2D8LBuR

Barings: from collapsed royal bank to global asset manager; Chief Tom Finke is caught in Charlotte’s web but hopes to grow in Asian market
Owen Walker – FT
For more than 200 years, Barings was an eminent institution, known for financing the emerging US in the late 1700s and for its ties to the British monarchy in the 1900s. Then in 1995 came rogue trader Nick Leeson’s speculative bets and the bank’s stunning collapse.
/jlne.ws/2D4uNFr

A Dividend Bonanza Is Set to Hit Investors in Australia
Matthew Burgess – Bloomberg
Election favorite Labor is pledging to curb tax concessions; Companies expected to boost payouts to avert rule change
Australian investors are set to receive a boost in dividend payouts this month as companies rush to avoid a looming overhaul of tax rules if there’s a change of government.
/jlne.ws/2D58tLW

Brexit

How to play a winning Brexit game; It is important to remember that many choices appear binary when they are not
Wolfgang Münchau – FT
During the French election campaign in 2017, a well-known US political analyst shocked everybody by placing a 40 per cent probability on Marine Le Pen of the National Rally becoming president. You could say that he was proved right in the end. The leader of the National Front did not win.
/jlne.ws/2D9z5ey

UK’s finance chiefs say Brexit is biggest risk to business; Other factors include weak demand and US protectionism, Deloitte report shows
Kate Beioley- FT
Finance chiefs at UK companies believe that Brexit presents the biggest risk to their business, with almost 80 per cent predicting a worsening corporate environment after the country leaves the EU, according to new survey data.
/jlne.ws/2D6lHIb

Banks fret over investor inaction on Brexit; Few clients have returned documents allowing them to trade smoothly in event of no-deal
Laura Noonan , Philip Stafford, David Crow and Stephen Morris – FT
Leading banks have appealed for help from regulators after as few as 10 per cent of clients returned paperwork allowing them to trade smoothly in the event of a no-deal Brexit.
/jlne.ws/2D8T6Cg

Now Banks Look Like They’re Worried About Brexit; Lenders have moved business out of London for two quarters in a row.
Mark Whitehouse – Bloomberg
The exodus from London is getting real. Ever since the U.K. voted to leave the European Union in June 2016, people have been watching for signs of how the prospect might affect London’s role as a global financial center. It stood to reason that it should: Assuming the breakup meant that the U.K. units of global banks would lose their passports to sell services throughout the EU, they would have to move staff and assets onto the continent — to Paris, to Frankfurt, to Dublin.
/jlne.ws/2D4VOsu

Miscellaneous

The Cost of Dirty Money
Alan Katz – Bloomberg
Since the financial crisis, dozens of crackdowns have targeted money launderers who effectively rely on banks, shell companies, and other mechanisms to cover their tracks. Fines have surged into the billions of dollars, but it’s unclear whether the enforcement efforts—some of the more notable ones are described here—have made much of a dent. According to the United Nations Office on Drugs and Crime, shady transactions continue to reach as much as $2 trillion a year.
/jlne.ws/2D8Wjl3

There’s a new movie coming out about high-speed trading on Wall Street, and it looks bonkers
Trista Kelley – Business Insider
Rarely is the uber-geeky term “high-frequency trading” put in the same sentence as “thriller,” but the writer and director Kim Nguyen is giving it a shot with a new movie called “The Hummingbird Project.”
/jlne.ws/2D7Ump4

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Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffThe CFTC Kraft/Mondelez Global announcement is not worth two bits. Claiming to win the case, without clarity of the specific actions that were manipulative,...

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