CME Group to Launch a Global Emissions Offset (GEO) Futures Contract on March 1

Jan 26, 2021

First Read

$27,051/$300,000 (9.0%)
Jeremy Grant

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Hits & Takes
John Lothian & JLN Staff

Janet Yellen was confirmed by the U.S. Senate as U.S. Treasury Secretary, the first woman to hold the position first occupied by Alexander Hamilton. The vote was 85-14 and the no votes included some people I am sure she would not have wanted to vote yes for her.

The DTCC and SIFMA issued statements congratulating Treasury Secretary Yellen on her confirmation.

Sarah Ponczek of Bloomberg News shared on Twitter that 32 million call options traded yesterday, the second most on record, only behind a day last November.

Former LabCFTC head Jeff Bandman has been appointed to the expert panel EU Blockchain Observatory and Forum to accelerate and strengthen Europe’s understanding and adoption of this transformative new technology. The EU Blockchain Observatory and Forum was created as a European Parliament pilot project in 2018, and is run under the aegis of the European Commission’s Directorate General for Communications Networks, Content and Technology.

Congratulations to Dan Davis, the former general counsel at the CFTC, for being hired by Katten in their financial markets and funds group as a partner in the Washington, DC office.

JLN recently negotiated a new sponsorship and subscription deal with the OCC, including a flat price deal for an unlimited number of readers for the newsletter. We already have over 35 new OCC readers.

Jeremy Grant, journalist and analyst extraordinaire, is the latest to donate to our JLN MarketsWiki Education GoFundMe campaign. Jeremy is most well known for his great work with the Financial Times, including stints in Chicago, London and Singapore. He is the creator of the Trading Room at the FT, now staffed by Phillip Stafford. Jeremy is now a freelance writer after a three-year stint with PWC. He is the type of journalist that inspires other journalists. And he is a friend. Thank you to Jeremy and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

I am going to start to swear more, gosh darnit. According to a CNN Health story, swearing is a sign of intelligence and honesty and helps manage pain.

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

*****

Late last week, the Illinois Criminal Justice Information Authority said it awarded 80 grants totaling $31.5 million to dozens of organizations that serve low-income communities in the state, using revenues from 2020 cannabis sales. The grants are the first under the Restore, Reinvest and Renew Program mandated by the Illinois’ Cannabis Regulation and Tax Act of 2019. The Act requires 25 percent of all cannabis revenue be used to support communities disproportionately affected by the war on drugs. More details here. ~SC

CQG and PanXchange today announced they have added a new widget to the CQG Desktop platform. The addition gives CQG clients direct access to PanXchange’s premium benchmarks and analysis content for hemp, frac sand and East African OTC commodities. More details are here. ~SC

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Sponsored Content
?Special Report? First year anniversary workshop of TOCOM/JPX Electricity Futures

Asia’s Most Successful Electricity Futures at Tokyo Commodity Exchange (TOCOM)/Japan Exchange Group (JPX) celebrated its first year of listing in a co-hosted webinar with Quick Corp. on December 15, 2020. The event was attended by over 250 people from 152 companies.

At the workshop, Mr. Hatakeyama, Director-General for Commerce and Service Industry Policy of METI gave an opening remarks and Mr. Ishibashi of Astmax Trading, Inc. gave a keynote speech on Electricity trading and Risk management. In the panel discussion, traders from different power companies shared their experiences in using TOCOM Electricity Futures and their internal risk control systems. They pointed out that there is still a huge opportunity in Electricity Futures market in Japan and requested the exchange to list new products such as those covering the Hokkaido and Kyushu areas and change the product design to extend contract months.

For more details, please refer to the following link
https://www.tocom.or.jp/uploads/en_news/2021/report_E.pdf

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Katten Adds Ex-CFTC General Counsel to Financial Markets and Funds Group
Katten
Katten announced today that Daniel J. Davis, formerly general counsel for the Commodity Futures Trading Commission (CFTC), has joined the firm’s Financial Markets and Funds group as a partner in its Washington, DC office, expanding Katten’s industry-leading proficiency in derivatives regulation and raising the award-winning group’s global profile.
/bit.ly/2KMkldy

*****Congratulations to Dan Davis on joining the great crew at Katten.~JJL

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Larry Fink’s New Climate Goal; The BlackRock chief plans to pressure companies to do more to cut carbon emissions, using the weight of his firm’s $9 trillion in assets.
Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
The BlackRock chief’s annual letter to C.E.O.s is going out this morning and Andrew has a copy, which he writes about in his latest column. Mr. Fink’s letter has driven the conversation inside corporate America’s boardrooms for years — such as his proclamation that companies must have a purpose beyond profit, which preceded the Business Roundtable’s statement on stakeholder capitalism, and his call for corporate climate disclosures, which was followed by a raft of climate pledges by companies.
/nyti.ms/3okAB3p

*****I like leadership when I see it. Larry Fink is offering leadership right now.~JJL

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IAC’s Vimeo Raises New Funds at $6 Billion Valuation
Brody Ford – Bloomberg
New round doubles Vimeo’s value in less than three months; Video software unit expected to be spun off by second quarter
Barry Diller’s IAC/InterActive Corp. said its video software company Vimeo is valued at about $6 billion after a recent funding round, nearly doubling the valuation before the unit is scheduled to be spun off early in the second quarter.
/bloom.bg/3qSecvI

*****Vimeo is one of two video platforms we use to publish JLN videos. Youtube is the other.~JJL

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What Leon Black Got for Paying Jeffrey Epstein $158 Million
Pierre Paulden and Ben Steverman – Bloomberg
Law firm report details advice on tax planning, art and planes; Services helped Apollo co-founder save at least $1 billion
Leon Black viewed Jeffrey Epstein as a “confirmed bachelor with eclectic tastes, who often employed attractive women.” The private equity titan was willing to overlook that Epstein had served 13 months in a Florida jail after soliciting an underage prostitute. That was partly because Epstein claimed the girl had lied about her age, while Black, co-founder of Apollo Global Management Inc., believed in second chances, particularly for his well-connected friend.
/bloom.bg/3poQSpa

******No matter what Leon Black paid, he overpaid for the return he is getting.~JJL

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There’s No Coronavirus Baby Boom — It’s More Like a Baby Bust
Noah Pransky – NBC Washington
Not even locking couples up and obliterating their social calendars could convince more Americans to have babies, as our quarantine-inspired baby boom has failed to materialize. Instead, America has entered a pandemic-inspired baby bust. Several states that keep track of births in near-real-time – as well as some hospital systems contacted by NBCLX – recorded significant drops in Dec. 2020 birth rates, compared to the same period from one year earlier. That includes Florida (down 8% from Dec. 2019); Ohio (down 7%); and Arizona (down 5%).
/bit.ly/3oogWzf

*****Who has time to boom boom when they are zoom zooming all day long.~JJL

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Monday’s Top Three
Our top story on Monday was Crain’s Chicago Business’s Ken Griffin’s Citadel Securities reaps record $6.7 billion on volatility. Second was Bloomberg’s Libor Marks ‘Important Day’ With Partial Fix for Derivative Risk. Third was The Trade’s Brazil’s B3 overtakes CME Group in rankings for largest derivatives exchange.

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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.Recently Updated Pages

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Lead Stories

CME Group to Launch a Global Emissions Offset (GEO) Futures Contract on March 1
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will launch a Global Emissions Offset (GEO) futures contract on March 1, 2021, pending all relevant regulatory reviews. The new contract, which will provide customers with a market-based solution to manage global emissions risk, was jointly developed with Xpansiv market CBL, a leader in spot energy and environmental markets.
/bit.ly/39lyQyF

EU Turns the Screws on Bankers Clinging to Their London Desks
Viren Vaghela – Bloomberg
Messages from Europe signal difficult path forward for finance; World’s biggest interdealer broker was left out in the cold
London financiers are discovering that warnings from the European Union over the cost of Brexit are more than tough talk. Even the global pandemic’s fallout didn’t provide any wiggle room for the world’s largest interdealer broker, TP ICAP Plc. The London-based firm said Monday it was prevented from serving all its EU clients because it hadn’t completed its planned relocation of staff to Paris. The company’s disclosure came hours before a Dutch member of the European Central Bank’s executive board emphasized the need for banks to build out their units in the bloc.
/bloom.bg/39kiYfH

Companies raise $400bn over three weeks in blistering start to 2021; Blitz of debt and equity fundraising comes as stimulus measures boost global markets
Nikou Asgari, Joe Rennison and Philip Stafford and Hudson Lockett – FT
Companies have raised $400bn in funds in the first three weeks of 2021 as the torrent of government and central bank stimulus to rescue global economies cascades across capital markets. The global bond and equity fundraising spree marks one of the biggest hauls of the past two decades for the comparable period and is about $170bn above the average for this time of year, a Financial Times analysis of Refinitiv data shows.
/on.ft.com/3okxpEA

Robinhood Traders Face the Taxman After Falling In Love With Stocks; What should you know if you made money on your investments last year?
Misyrlena Egkolfopoulou and Ben Steverman – Bloomberg
Almost everyone who makes money must get acquainted with the taxman. That’s the reality dawning on U.S. investors who began buying and selling stocks on apps such as Robinhood last year, when they were cut off from other pastimes during pandemic lockdowns. At least 8 million people opened new brokerage accounts in the first nine months of 2020 — many of them young traders who were dipping their toes into the investing pool for the first time.
/bloom.bg/36dQHW1

US hoovers up derivatives trading post-Brexit; A report by IHS Markit showed that in the first few weeks following the UK’s departure from the EU the US venues saw global trading in dollar swaps rise from 36% to 48%.
Annabel Smith – The Trade
The US has snapped up market share in the derivatives market following the UK and the EU’s failure to reach a financial services agreement in the post-Brexit deal. A report from data and analytics provider IHS Markit showed that in the first two weeks of January following Brexit, the US saw its saw global trading in dollar swaps on US venues rise from 36% to 48%.
/bit.ly/3oqyHOM

Black Cedes Apollo Reins to Rowan in Wake of Epstein Scandal
Heather Perlberg, Sabrina Willmer, and Sonali Basak – Bloomberg
Black will remain chairman of the firm he co-founded in 1990; Law firm finds Apollo never retained Epstein for any services
Leon Black, who founded Apollo Global Management Inc. three decades ago in the aftermath of one scandal, is retiring as chief executive officer in the aftermath of another, this time involving the notorious sex offender Jeffrey Epstein. Just months after Apollo announced an internal investigation into Black’s long association with the late financier, the investment firm said in a statement Monday that he would retire as CEO no later than July 31, while remaining chairman. Marc Rowan, one of Black’s top lieutenants, will succeed him as CEO as part of a governance overhaul that will also eliminate weighted voting rights.
/bloom.bg/3a7B0AU

Black steps down as Apollo CEO after report into payments to Epstein; Private equity billionaire paid $158m to late paedophile for tax and other advice
Mark Vandevelde – FT
Leon Black is to step aside as chief executive of Apollo Global Management, the company announced on Monday, as it revealed he had made far larger payments than previously known to the late paedophile Jeffrey Epstein.
/on.ft.com/3iJPVW5

City warned EU will do London no favours on financial services; Former Brussels commissioner Jonathan Hill says threat to Square Mile from Europe reinforces need for reform
Daniel Thomas – FT
The former minister leading the UK government’s review into the City has warned that Brussels is targeting London’s position as a global financial services centre and has predicted the EU will not grant British-based firms the highly prized access they are seeking to the European market.
/on.ft.com/36bTBe8

Broker TP ICAP forced to stop serving some EU clients; UK group’s post-Brexit plans for new office in Paris were delayed by pandemic
Philip Stafford – FT
UK broker TP ICAP has been forced to stop serving some customers in Europe after the pandemic delayed its post-Brexit plans to shift 80 to 100 employees to a new office in Paris.
/on.ft.com/3r4p4Hh

New Adventures for Hedge Fund Rogue in $200 Million Swiss Fraud Trial
Hugo Miller – Bloomberg
German indicted in U.S. in 2013 but never faced trial there; 2012 memoir billed as ‘Adventures of an Estranged Capitalist’
A German hedge-fund manager who fended off U.S. extradition over an alleged $200-million fraud is finding legal troubles closer to home. Florian Homm’s trial on charges of fraud, criminal mismanagement, money laundering and forgery is scheduled to begin in a Swiss court on Tuesday. Swiss prosecutors, in a 275-page indictment, allege the founder and chief investment officer of Cayman Islands-based Absolute Capital Management Holdings Ltd. made “massive” investments in thinly-traded penny stocks through a series of cross trades to fraudulently inflate their value.
/bloom.bg/3ojijj0

Optiver becomes first non-bank options market-maker on FXall; Dutch e-trading firm joins OTC FX options platform in a market taking electronic baby steps
Robert Mackenzie Smith – Risk.net
Listed options liquidity provider Optiver has become the first FX options non-bank market-maker on foreign exchange trading platform FXall. The move marks another milestone in the evolution of the over-the-counter FX options market – a market making ponderous progress toward electronic trading. The market-maker joins more than 66 other firms now providing electronic options liquidity on FXall, which has traditionally been a haven for banks dealing FX options to clients. Overall volumes on the To continue reading..
/bit.ly/2YmgAyx

Gensler clashed with SEC investor-advice rule in sign of changes to come at regulator; If confirmed, he’s likely to lead the market regulator in a sharply different direction from the one charted by his predecessor, Wall Street lawyer Jay Clayton.
Kellie Mejdrich – Politico
When Gary Gensler chaired a Maryland financial protection commission in 2019, the group called on state lawmakers to adopt a strict standard to prohibit conflicts of interest by professionals offering investment advice. What was striking about Gensler’s move is that it came just before the Securities and Exchange Commission in Washington finalized its own national rule, one of the agency’s most significant regulations during the Trump administration — and one that investor advocates had denounced as too weak.
/politi.co/3qX2jof

Brace for the unexpected after COVID-19, Refinitiv CEO Craig says
Reuters Staff
Refinitiv CEO David Craig said on Tuesday that the COVID-19 pandemic had shown how fragile and complacent the world was so leaders should prepare for the unexpected by challenging their thinking amid the volatility.
/reut.rs/2YcPom5

CEO who jumped the COVID vaccine line is out of a job
Bloomberg
The chief executive officer of a Canadian casino company that’s being bought by Apollo Global Management Inc. has resigned after being ticketed for breaking emergency rules to travel to a remote town in northern Canada to receive a COVID-19 vaccine.
/bit.ly/3pkjfov

Covid-19 Surge Leaves Doctors, Nurses Reeling From Burnout; The pandemic’s longest and most deadly surge has posed risks to quality of care and left medical professionals exhausted
Melanie Evans – WSJ
After finishing her shift, Katherina Faustino waits for other intensive-care nurses at the Nevada hospital where they work. They don’t leave immediately. “We go to the chapel,” she said. “We pray.”
/on.wsj.com/3pnDku4

China approves establishment of Guangzhou Futures Exchange
Global Times
China’s securities regulator approved the establishment of the Guangzhou Futures Exchange in South China’s Guangdong Province on Friday, making it the fifth futures exchange center in China. Approved by the State Council, the China Securities Regulatory Commission (CSRC) officially approved the establishment of the Guangzhou Futures Exchange, which will play a critical role in improving the capital market system, Gao Li, spokesperson for the CSRC, said on Friday.
/bit.ly/2YiTR6J

Coronavirus

Pandemic Gets Increasingly Local as U.S. Cases Keep Dropping
Jonathan Levin – Bloomberg
U.S. Covid-19 cases and hospitalizations are receding from recent highs, but discrete outbreaks are still raging in places such as the Texas-Mexico border and parts of Alabama. The pattern provides a preview of how the pandemic may look during the months to come.
/bloom.bg/3a5YBSr

Biden Says All Americans Could Have Access to Vaccine by Spring
Josh Wingrove and Jennifer Epstein – Bloomberg
U.S. ‘well on our way’ by summer to herd immunity, Biden says; Biden urges masks, says pandemic will still exist in fall
President Joe Biden says he anticipates that coronavirus vaccines will be available to anyone in the nation by Spring — an ambitious target that can only be met with sharp increases in the current pace of inoculations.
/bloom.bg/3qQSIzl

California Lifts Stay-at-Home Orders as Worst of Virus Eases
Brian Eckhouse – Bloomberg
San Francisco, L.A. among areas to see some rules pared back; Outdoor dining, personal services permitted, subject to county
California lifted its regional stay-at-home orders, allowing businesses such as outdoor dining to open, as its coronavirus cases slow after an unprecedented surge that strained the state’s health-care system.
/bloom.bg/36cCTuY

UK residents flying back from Covid hotspots face hotel quarantine; Initial curbs to hit arrivals in England from countries including South Africa and Brazil, but No 10 reserves right to go further
Jim Pickard and Philip Georgiadis – FT
A limited system of hotel quarantine will be introduced in England this week but initially only for British residents returning from countries with new, more virulent forms of coronavirus, including Portugal, South Africa and Brazil.
/on.ft.com/2M5dfkX

Brussels moves to tighten rules on Covid vaccine exports; Action comes as EU holds talks with AstraZeneca over company’s cut to delivery pledges
Michael Peel and Anna Gross -FT
Brussels has moved to tighten rules on exports of coronavirus vaccines outside the EU as the fallout escalates from AstraZeneca’s shock cut to planned deliveries to the bloc over the next weeks. Stella Kyriakides, EU health commissioner, on Monday proposed forcing companies to give notice beforehand of any plans to send shipments elsewhere in the world, as the bloc scrambles to boost its supplies of jabs.
/on.ft.com/2M5diNF

Moderna develops new vaccine to tackle mutant Covid strain; US drugmaker warns current jab is less effective against South Africa variant
Hannah Kuchler – FT
Moderna is launching a trial of a new Covid-19 vaccine to tackle the coronavirus strain that has emerged in South Africa after warning that its existing jab was less effective at tackling the new variant.
/on.ft.com/3a2OaPB

Covid-19 Surge Leaves Doctors, Nurses Reeling From Burnout; The pandemic’s longest and most deadly surge has posed risks to quality of care and left medical professionals exhausted
Melanie Evans – WSJ
After finishing her shift, Katherina Faustino waits for other intensive-care nurses at the Nevada hospital where they work. They don’t leave immediately. “We go to the chapel,” she said. “We pray.” Ms. Faustino has been shaken by the sheer number of Covid-19 deaths she has witnessed in recent months as Dignity Health-St. Rose Dominican, Siena Campus faced a flood of patients that filled its ICU beds for weeks.
/on.wsj.com/3pnDku4

EU’s Escalating Spat With AstraZeneca Highlights Vaccine Fiasco
Nikos Chrysoloras and Katharina Rosskopf – Bloomberg
German health minister urges limits on exporting Covid shots; AstraZeneca under pressure as EU struggles with pandemic
The European Union’s standoff with AstraZeneca Plc intensified as Germany urged the bloc to limit vaccine exports, risking tensions with the U.K. and other buyers of the British drugmaker’s shot.
/bloom.bg/3iNQNJ6

U.K. Warns EU Against ‘Vaccine Nationalism’ in Row Over Supplies
Joe Mayes – Bloomberg
Minister Zahawi says supply is ‘tight’ but program is on track; EU proposes flagging exports, may threaten U.K. Pfizer supply
The U.K.’s vaccine minister warned the European Union against engaging in “vaccine nationalism,” but said Britain remains confident of hitting a mid-February target to inoculate its most vulnerable citizens despite the brewing row over supplies. EU regulators have proposed requiring drugmakers to flag exports of coronavirus vaccines, a move that could disrupt deliveries of the shot made by Pfizer Inc. and BioNTech SE, which is manufactured in Belgium.
/bloom.bg/2MsDvFH

England and Wales Covid Deaths Surge to Highest Level Since April
David Goodman – Bloomberg
Deaths linked to Covid-19 in England & Wales rose to the highest since the first wave of the disease amid government warnings that the U.K. strain of the virus may be more deadly than first thought.
/bloom.bg/2KUOmYU

U.S. Lags in DNA Surveillance of Worrisome Covid-19 Variants
Kristen V Brown – Bloomberg
Sequencing rate for U.S. is 32nd in world per 1,000 cases; Not a public health priority, experts say, but that’s changing
The U.S. faces a steep uphill struggle in gearing up to monitor Covid-19 variants, a key part of watching for the emergence of dangerous mutations that might spread quickly, evade vaccines or kill more infected people.
/bloom.bg/39h19xW

Vaccines have been oversold as the pandemic exit strategy; Covid will be around for a long time — virus suppression is the right policy
Anjana Ahuja – FT
Logistics permitting, about 15m people in the UK will have received at least one dose of a Covid-19 vaccine by some time in February. Provided the second doses are delivered in a timely manner, this should keep the most vulnerable out of hospital.
/on.ft.com/3iM4qII

How Israel secured more vaccines than it can use; Promise to share data from rapid inoculation drive helps win supply deal with Pfizer
Mehul Srivastava and Quique Kierszenbaum – FT
Late last year Israel was competing furiously with much larger countries to secure vaccine supplies from global manufacturers as the coronavirus pandemic raged. Now, it finds itself spearheading one of the world’s fastest vaccination drives, with more vaccine — both in-country and en route — than it will use.
/on.ft.com/3ojm9IW

U.K. Coronavirus Variant Probed for Increased Risk to Younger People; Public-health officials are racing to understand a strain that is more transmissible and could be deadlier
Joanna Sugden and Max Colchester – WSJ
Doctors began noticing the change last month as the U.K.’s new coronavirus variant spread. In hospital critical-care units, they were seeing more younger people and women with serious cases of Covid-19, a disease that previously inflicted its worst symptoms largely on older patients and men.
/on.wsj.com/2NCTiCF

Regeneron Cocktail Shows Promise as ‘Passive Vaccine’ in Trial
Tim Loh – Bloomberg
Antibody treatment prevented all Covid symptoms in analysis; Study looks at cocktail in people living with Covid patients
Regeneron Pharmaceuticals Inc. said its antibody cocktail reduced Covid-19 cases by half and prevented all symptoms in people at high risk of catching the coronavirus. The treatment could be used as a “passive vaccine” to protect those living with others who are already infected, Regeneron said in a statement Tuesday, citing an early analysis of 409 people participating in a phase 3 trial.
/bloom.bg/2YfHZCl

Germany denies claim AstraZeneca vaccine is less effective among elderly; Denial comes in response to suggestion efficacy is as low as 8 per cent in over 65s
Rory Sullivan – Independent
Germany and AstraZeneca have both denied media reports that its coronavirus vaccine is less effective among the over 65s, with the pharmaceutical giant calling the claim “completely incorrect”.
/bit.ly/2KTkiwK

A New Coronavirus Variant From Brazil, Is Found In Minnesota
Dustin Jones – NPR
A new variant of coronavirus first detected in Brazil has been confirmed in Minnesota. The variant was detected by the Minnesota Department of Health, which announced Monday that the new strain is thought to be more transmissible. This is the first documented case of the variant in the United States.
/n.pr/3iL3btw

Everyday activities are more dangerous now that new Covid-19 variants are circulating, expert says
Christina Maxouris – CNN
Health officials are “extremely” worried about the new Covid-19 variants that have been detected in the US and what they could mean over the coming months, one expert said Monday night. “We’ve seen what happens in other countries that have actually had coronavirus under relatively good control, then these variants took over and they had explosive spread of the virus, and then overwhelmed hospitals,” emergency physician Dr. Leana Wen told CNN’s Anderson Cooper.
/cnn.it/3onmdqS

Beware Goldman’s latest prediction about the stock market
Shawn Tully – Fortune
In a new report, Goldman Sach’s U.S. equities chief David Kostin warned that the S&P looks alarmingly rich. Kostin writes that “equity valuations are extremely elevated on an absolute basis,” that prices appear stretched based on virtually every standard metric, metric, including price to earnings, price to book and market cap to GDP. Then Kostin notes that looks can be deceiving, and argues that U.S. large caps are still a good deal. He predicts the S&P will jump 11.5% from the all-time high of 3855 posted on January 25 to 4300 by year end.
/bit.ly/2YcQhep

Exchanges, OTC and Clearing

Cboe expands ETP incentive scheme options for market makers; The expanded program will provide more incentive options for market makers in ETPs on Cboe BZX Exchange from 1 February.
Annabel Smith – The Trade
Exchange operator Cboe Global Markets has confirmed plans to launch a new exchange-traded product (ETP) incentive scheme for market makers on 1 February. The scheme is an extended version of its existing program, which encourages lead marker makers (LMMs) to provide liquidity in newly launched or thinly traded ETPs by awarding them a flat daily fee instead of payment based on transaction volume.
/bit.ly/2Mo1Tsb

SGX and FTSE Russell launch ESG index futures; New derivatives from SGX and FTSE aim to provide investors the opportunity to integrate ESG factors into investment portfolios.
Annabel Smith – The Trade
Singapore Exchange (SGX) and FTSE Russell have partnered to launch a suite of environmental social and corporate governance (ESG) derivatives contracts. The launch is comprised of four new ESG index futures as part of SGX’s Future in Reshaping Sustainability Agenda (FIRST) sustainability agenda which it launched in December.
/bit.ly/2Mig2XT

Implementation of IBOR Fallbacks for OTC IRS Products
CME Group
Advisory Notice on the implementation of the ISDA IBOR Fallbacks for CME cleared OTC IRS Products.
/bit.ly/39gNWW6

Performance Bond Requirements: Agriculture – Effective January 26, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/39hHluh

Performance Bond Requirements: Agriculture and Energy Margins – Effective January 26, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/39jeXYP

Product Modification Summary: Amendments to the Strike Price and Listing Schedule for Certain Options on Great British Pound/U.S. Dollar (GBP/USD) Futures Contracts- Revised – Effective February 22, 2021
CME Group
Amendments to the Strike Price and Listing Schedule for Certain Options on Great British Pound/U.S. Dollar (GBP/USD) Futures Contracts.
/bit.ly/2YiZxxi

Amendments to the Strike Price and Listing Schedule for Certain Options on Great British Pound/U.S. Dollar (GBP/USD) Futures Contracts
CME Group
Effective Sunday, February 21, 2021, for trade date Monday, February 22, 2021, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will amend the strike price and listing schedule for certain Options on Great British Pound/U.S. Dollar (GBP/USD) Futures contracts (collectively, the “Option Contracts”) as described below.
/bit.ly/2YhUuNY

SGX accelerates sustainability drive with launch of ESG derivatives
SGX
Suite of four new derivatives a key thrust of SGX FIRST initiative; Launch further broadens multi-asset partnership with FTSE Russell
Singapore Exchange (SGX) is accelerating its SGX FIRST sustainability agenda with the launch of its pioneering suite of ESG derivatives today. SGX developed the new contracts in partnership with FTSE Russell to offer investors more choice in promoting the integration of Environment, Social and Governance (ESG) factors into institutional investment portfolios on an award-winning market infrastructure. The SGX FIRST (Future in Reshaping Sustainability Together) initiative, announced in December, is a multi-pronged expansion of the exchange’s sustainability capabilities and supports the introduction of new ESG-focused products, services and platforms.
/bit.ly/3ogkOT4

CONNEQTOR started accepting application for the production
JPC
Tokyo Stock Exchange, Inc. (TSE) has been developing RFQ (Request for Quote) functions and CONNEQTOR with the aim of improving the liquidity of ETFs. We are pleased to announce that applications for the production use of CONNEQTOR have been accepted as of today. For details, please refer to the attachment. (Updated on January 26: Tokai Tokyo Securities Co., Ltd. was added as Trading Participants through which Investors are scheduled to be able to trade ETFs from the first day of operations.)
/bit.ly/35OuONy

The 2nd Japan-China Capital Markets Forum was Held Online
JPX
The 2nd Japan-China Capital Markets Forum was held online on Monday, January 25, 2021 by the securities regulators and related industry organizations of both countries, based on the agreement reached at the Japan-China Summit Meeting in October 2018.
/bit.ly/3iPFfoA

Overview Of The M&A And Restructuring Market Of Shenzhen Stock Exchange In 2020
Mondovisione
M&A and restructuring are important instruments of the capital market to optimize resource allocation and serve high-quality development of the real economy. In 2020, SZSE actively practiced the principles of “system building, non-intervention, and zero tolerance” and followed the working requirements of China Securities Regulatory Commission (CSRC) of “standing in awe of the market, rule of law, professionalism and risks and pooling the efforts of all sides to develop the capital market”. SZSE gave full play to the role of M&A and restructuring as the main channel and deeply engaged in regulatory services that cover the whole chain of M&A and restructuring. In addition, it continued to optimize market functions and energize market entities, and effectively supported listed companies in accelerating transformation and upgrading, forestalling risks and addressing challenges and achieving high-quality development.
/bit.ly/3pkTsfW

SIX Welcomes New Structured Product Issuer Exane Solutions (Luxembourg) SA
Mondovisione
The Swiss Stock Exchange welcomes Exane Solutions (Luxembourg) SA as the 21st issuer for structured products and Exane Derivatives SNC as a new trading participant.
/bit.ly/3pjURn3

Fintech

Ant IPO Could Resume Once Issues Resolved, Central Bank Says
Bloomberg News
Ant Group Co. could resume its plans for an initial public offering once problems are resolved, China’s central bank chief said, offering some relief to global investors seeking signs on what the future holds for the world’s largest fintech giant.
/bloom.bg/3iPvJSo

Fintechs could see $100 billion of liquidity in 2021
Jake Jolis, Dana Stalder and Ben Altshuler – TechCrunch
Three years ago, we released the first edition of the Matrix Fintech Index. We believed then, as we do now, that fintech represents one of the most exciting major innovation cycles of this decade. In 2020, all the long-term trends forcing change in this sector continued and even accelerated.
/tcrn.ch/3cdZriH

Victory Park seeks $225 million for next fintech SPAC
Victor Chatenay – Business Insider
Global investment firm Victory Park’s latest special purpose acquisition company (SPAC), VPC Impact Acquisition Holdings II, has filed for an IPO, per Crowdfund Insider.
SPACs are shell companies that go public and use the IPO funds to merge with private firms, making them public without having to go through the IPO process themselves. The new SPAC will seek to raise $225 million to then acquire fintechs outside of the US that are valued between $800 million and $3 billion. Earlier this month, Victory Park’s first SPAC merged with crypto exchange Bakkt, with the combined firm valued at $2.1 billion.
/bit.ly/3qQIsHk

Employers Look To Fintech Partners To Pilot Alternative Pay Cards And Faster Employee Payouts
Lindsay Davis – Forbes
Employers are ramping their entry into financial services to give employees on-demand payouts, earned wage access (EWA) and other incoming smoothing benefits. Spurred by tech-favorable regulations and employee demand for faster payouts, fintech companies are now taking aim at digitizing cash-heavy industries, reducing physical checks, and piloting cheaper pay card products.
/bit.ly/2ND5iUJ

Matrix Executions Announces 2021 Plans After Quadrupling Volumes and Increasing Market Share in 2020; Firm completes record year in revenues, product development, client acquisition, and volume executed, with several client-requested solution rollouts planned for Q1 2021
Matrix Executions, LLC
Matrix Executions, LLC (“Matrix”), a broker-dealer specializing in trading workflow automation and execution, today laid out the road ahead for the firm on the heels of a successful 2020. Matrix captured an increased percentage of market share of the options industry’s record-setting volumes in 2020, and with the expected delivery of additional product offerings in 2021, anticipates to continue that success.
/bwnews.pr/3iM13BA

CQG Releases New PanXchange Widget on CQG Desktop; New Offering Provides Direct Access to Premium Benchmarks and Analysis Content for Hemp, Frac Sand, East African Commodities
CQG
CQG, a leading global provider of high-performance technology solutions for traders, brokers, commercial hedgers, and exchanges, and PanXchange, a Denver-based over-the-counter (OTC) physical commodity exchange and price discovery platform, today announced the launch of a new PanXchange widget within the CQG Desktop platform. The offering gives CQG’s global clients direct access to PanXchange’s premium benchmarks and analysis content for hemp, frac sand and East African OTC commodities.
/prn.to/3olx0BS

Cryptocurrencies

Crypto Hedge Funds Underperformed Bitcoin During Rally Last Year
Olga Kharif – Bloomberg
Average returns were 166%, while Bitcoin quadrupled in 2020; One fund returned more than 700%, Crypto Fund Research says
Actively managed cryptocurrency hedge-funds underperformed Bitcoin during the largest digital asset’s bull run last year, according to Crypto Fund Research. The funds’ average rate of return was 166%, compared with a more than 300% increase in Bitcoin. During 2017’s surge, gains were about 1,100% as the dominant token burst into the mainstream consciousness with a 1,375% increase, according to the researcher. The data tracker didn’t release the names of the top performing funds.
/bloom.bg/3sTUu4F

DeFi Cryptocurrencies Hit Record Highs In Tandem With Ethereum
Neer Varshney – Benzinga
Several decentralized finance (DeFi)-based cryptocurrencies hit their all-time highs late Sunday in tandem with Ethereum (ETH) rally. Aave (AAVE) hit an all-time high of $291.60 at press time, up 13.8% over 24 hours. The DeFi coin has registered a surge of 259.8% over a period of one month against the U.S. dollar, according to data from Messari.
/yhoo.it/3sTUgKN

Bitcoin Seen Topping $50,000 Long Term as it Vies With Gold
Eric Lam and Gregor Stuart Hunter -Bloomberg
Crypto firms say it’s being used as hedge not just in trading; Bitcoin has steadied after dropping from record near $42,000
Bitcoin’s price could exceed $50,000 over the longer term as the digital asset vies with gold for investment flows, according to cryptocurrency exchange Luno and brokerage OSL. “We’re talking about Bitcoin over the next three, five, 10 years slowly inching away at gold’s market capitalization,” Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore, said in an online question and answer session with Bloomberg Tuesday. If that happens, “you are way over $50,000,” he said.
/bloom.bg/3pwM94E

Harvard and Yale Endowments Among Those Reportedly Buying Crypto
Joanna Ossinger – Bloomberg
Some endowments got Coinbase accounts as long as 18 months ago; Universities moving into crypto show broadening marketplace
Harvard University, Yale University, Brown University and the University of Michigan are among schools whose multibillion-dollar endowments have begun buying cryptocurrency directly on exchanges, according to a report.
/bloom.bg/3onQYvU

Crypto Markets Show More Signs of Excess Amid Bitcoin Rebound
Olivia Raimonde and Claire Ballentine – Bloomberg
Marathon Patent buys Bitcoin as “pure-play”investment option; Bitcoin funds face soaring markups amid retail buying
In financial markets filled to the brim with froth, one of the more speculative corners is showing signs of bubbling yet again. Bitcoin rebounded from its sharp sell off last week which saw prices plunge more than 12%, the steepest weekly drop since last March. The digital asset bounced back from below $30,000 Friday to trade around $34,400 as of 10:22 a.m. Monday in New York.
/bloom.bg/2Mu9KnZ

Treasury Secretary Nominee Janet Yellen Touts Crypto ‘Benefits,’ with Regulation
Scott Reeves – Newsweek
Janet Yellen, President Joe Biden’s nominee for U.S. Treasury Secretary, softened her comments of Bitcoin and other crypto-currencies, but said additional regulations are needed.
“I think many (crypto-currencies) are used, at least in a transaction sense, mainly for illicit financing,” Yellen said last week. “I think we really need to examine ways in which we can curtail their use and make sure that money laundering doesn’t occur through those channels.”
/bit.ly/2Yep4YP

Bitcoin, crypto inflows hit record last week: CoinShares
Gertrude Chavez-Dreyfuss – Reuters
Investment flows into cryptocurrency funds and products hit a record $1.31 billion last week after a few weeks of small outflows, as investors took advantage of the decline in bitcoin and other digital asset prices, according to the latest data on Monday from asset manager CoinShares.
/reut.rs/3iLozil

Crypto Miner Marathon Patent Group Buys $150M in Bitcoin
Danny Nelson – CoinDesk
Cryptocurrency mining company Marathon Patent Group (MARA) bought $150 million in bitcoin for around $31,100 apiece during the crypto asset’s recent price rout.
The Nasdaq-listed firm said Monday it purchased the cryptocurrency through institutional bitcoin shop NYDIG. Marathon is the latest publicly traded company to swap a cash treasury for bitcoin, and, with 4,812.66 BTC now on the books, one of the largest by sheer investment size.
/bit.ly/3om7LQ1

Bitcoin Is an Incredibly Dirty Business; This is virtual money with a real carbon footprint.
Lionel Laurent – Bloomberg
Institutional investors diving into Bitcoin — namely hedge funds — are eager to promote its unpredictable price swings as the sign of a new asset class in the making. The cryptocurrency has traded at between $5,000 and $40,000 over the past year, and arguing over its true value is like a scholastic spat about angels on a pin. Could it go to six figures? Seven? Is it actually worth nothing at all? The mystery only adds to its allure.
/bloom.bg/3oss9zb

Politics

The World Is Dangerously Dependent on Taiwan for Semiconductors; A shortage of auto chips has exposed TSMC’s key role in the supply chain
Alan Crawford, Jarrell Dillard, Helene Fouquet, Isabel Reynolds – Bloomberg
As China pushes the world to avoid official dealings with Taiwan, leaders across the globe are realizing just how dependent they’ve become on the island democracy. Taiwan, which China regards as a province, is being courted for its capacity to make leading-edge computer chips. That’s mostly down to Taiwan Semiconductor Manufacturing Co., the world’s largest foundry and go-to producer of chips for Apple Inc. smartphones, artificial intelligence and high-performance computing.
/bloom.bg/36bJZ32

Biden Looks to Speed Up Putting Harriet Tubman on $20 Bill
Josh Wingrove and Mario Parker – Bloomberg
Trump administration had slowed Obama-era plans on currency; Tubman was a former slave who helped others to freedom
The U.S. Treasury Department will resume Obama-era plans to put abolitionist Harriet Tubman on the $20 bill and President Joe Biden wants to accelerate the process, White House Press Secretary Jen Psaki said.
/bloom.bg/3c8aWIE

National Guard Plans 5,000 Troops in Washington Until Mid-March
Travis J Tritten – Bloomberg
About 7,000 troops now providing security in nation’s capital; Capitol Police requested that support continue, officials say
The National Guard will keep 5,000 troops in Washington until at least mid-March at the request of U.S. Capitol Police amid continuing security threats following violent protests earlier this month by supporters of then-President Donald Trump.
/bloom.bg/3qOYIsu

Regulation

ESMA call experts on commodity derivatives to join consultative industry group
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a call for candidates to renew a Consultative Working Group (CWG) for the ESMA’s Commodity Derivatives Task Force (CDTF). Interested experts are asked to send their application to ESMA by 7 March 2021.
/bit.ly/3ph7Vti

FINRA/Nasdaq TRF Networking issue
FINRA
On Monday, January 25, 2021, from 9:30 a.m. ET until approximately 9:57 a.m. ET, the FINRA/Nasdaq TRF Carteret experienced a networking issue that resulted in trades in Nasdaq-listed symbols being disseminated to the SIP in an untimely manner. Reporting by clients to the FINRA/Nasdaq TRF Carteret was unaffected. There are no actions that need to be taken by clients as a result of this issue. Questions can be forwarded to FINRA Business
/bit.ly/2KOkLQG

Coronavirus (COVID-19) Update—Limited Extension to Certain Relief for FCMs and IBs
NFA
The CFTC’s Market Participants Division (MPD), formerly the Division of Swap Dealer and Intermediary Oversight, recently issued no-action letter 21-05 extending certain no-action relief for futures commission merchants (FCM) and introducing brokers (IB) with respect to regulatory obligations for time-stamping of orders. This no-action relief is extended through April 15, 2021. NFA is also extending through April 15, 2021, similar relief for Members that are in compliance with the terms of MPD’s no-action relief.
/bit.ly/39kwj7L

LIBOR – are you ready for life without LIBOR from end-2021?
UK FCA
Speech by Edwin Schooling Latter, Director Markets and Wholesale Policy at the FCA, delivered at City & Financial’s Managing LIBOR transition event on 26 January 2021.
/bit.ly/3osm71v

SIFMA Statement on Confirmation of Treasury Secretary Yellen
SIFMA
SIFMA today released the following statement from Kenneth E. Bentsen, Jr., SIFMA president and CEO, on the confirmation of U.S. Treasury Secretary Janet Yellen: “We congratulate Dr. Yellen on her confirmation as Treasury Secretary and SIFMA and our members look forward to working with the Secretary to ensure our nation’s capital markets play their part in fueling economic growth and job creation.”
/bit.ly/3pmtAAa

Press Conference By ASO Taro, Japan’s Deputy Prime Minister, Minister Of Finance, And Minister Of State For Financial Services – Sustainable Finance
Mondovisione
I would like to mention about the establishment of a panel of experts on sustainable finance.
/bit.ly/2MrmWtM

DTCC Comments on Senate Confirmation of new U.S. Treasury Secretary Janet Yellen
DTCC
The Depository Trust & Clearing Corporation (DTCC) issued the following statement in response to Senate confirmation of new U.S. Treasury Secretary Janet Yellen: “We congratulate Janet Yellen on her historic confirmation as the first woman to serve as US Secretary of the Treasury. The Senate confirmation recognizes Secretary Yellen’s distinguished record of public service and her dedication to ensuring the transparency and security of global financial markets. Her previous work as chair of the Federal Reserve, as president of the Federal Reserve Bank of San Francisco, and as chair of the Council of Economic Advisers established her as a leader in economic thought and finance policy. We look forward to collaborating with Secretary Yellen on the critical issues facing our industry and working together to protect the safety and stability of markets globally.”
/bit.ly/3pgnPEa

Investing and Trading

Chamath Palihapitiya Invests in Two Deals in One Day During SPAC Boom
Crystal Tse – Bloomberg
Five companies announced mergers via blank-check firms Monday; Palihapitiya teased investment via Twitter last week
Serial blank-check dealmaker Chamath Palihapitiya has doubled down on SPACs and has now participated in at least half a dozen deals that his own blank-check vehicles aren’t even involved in. On Monday, Palihapitiya, the former Facebook Inc. executive and venture capitalist, invested in two companies going public via a special purpose acquisition company — smart lockmaker Latch Inc. and solar lender Sunlight Financial LLC — through the equity raised to support the deals. That’s on top of the six blank-check vehicles he’s helped raise.
/bloom.bg/2LUtRvZ

World’s Largest Crop Traders Are Finally Rewarding Wall Street
Isis Almeida and Dominic Carey – Bloomberg
ADM’s stock recently hit a record, Bunge reached a 2-year high; U.S. soy and corn exports rose to record in fourth quarter
Wall Street is finally reaping the benefits of investing in the world’s top agricultural commodities traders. Archer-Daniels-Midland Co.’s shares recently reached a record and Bunge’s touched the highest in more than two years. The backdrop couldn’t be any better. China is scooping up American crops, resulting in surging soybean shipments. That’s lifting profits for companies exporting from ports at the Gulf of Mexico and the Pacific Northwest.
/bloom.bg/3cbHcdV

A ‘Bear’ in This Market Is Someone Who Is Only 75% Long Stocks
Lu Wang – Bloomberg
Day traders pile in GameStop, others with heavy short-interest; ‘You hold your nose and you buy stocks,’ says Mainstay’s Kudla
When someone identifies as a bear, normally it means they’re selling. In this market, where anyone who dares do that gets crushed, it just means you’re a little less bullish than everyone else. That’s according to a survey by the National Association of Active Investment Managers, which found that in the current distribution of sentiment, a bear is someone who is 75% invested in stocks.
/bloom.bg/3sT4riO

Booming Blank Check Companies Are the Talk of Reddit and TikTok; Retail investors are pouring money into SPACS, which make it easier for a business to go public.
Jennifer Surane, Crystal Tse – Bloomberg
The SPAC boom that seemed to come out of nowhere in 2020 is still going strong. Billionaires, celebrities, and money managers are lining up to start special-purpose acquisition companies and hedge funds are clamoring to buy an early piece of them. Retail investors are piling in, with Reddit boards and even a corner of TikTok lighting up with discussions about these unusual stocks. SPACs, also known as blank check companies, are empty corporate shells that raise money from investors and then aim to merge with a private business, essentially taking that company public through the back door.
/bloom.bg/2YgjPb6

The 1920s Roared After a Pandemic, and the 2020s Will Try; The modern economy sprang to life in the Jazz Age, but today’s secular stagnation will be tough to overcome.
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Peter Coy – Bloomberg
The day was cold and windy. Standing outside the Capitol, the just-sworn-in president called for “a new unity of spirit and purpose” to bind together a nation that had been wracked by a pandemic and high unemployment. His predecessor wasn’t on stage. The inauguration of Warren G. Harding on March 4, 1921, marked the inauspicious, unofficial start of an historic decade. The somber mood gave no hint that America was about to go on a tear.
/bloom.bg/2MkHqEF

Internet Entrepreneur Patrick Grove Files for $250 Million SPAC
Yoolim Lee – Bloomberg
Catcha’s SPAC will focus on tech in Southeast Asia, Australia; It’s among the first Asia-focused SPACs by tech entrepreneurs
Patrick Grove, a serial entrepreneur in Southeast Asia who runs internet-focused investment company Catcha Group, is the latest figure to seek capital through a blank-check firm. The 45-year-old Australian is listed as chief executive officer and chairman of Catcha Investment Corp., a special purpose acquisition company that filed to raise $250 million through an initial public offering on the New York Stock Exchange, according to a filing on Tuesday.
/bloom.bg/3ohmdsn

Environmental, Social and Corporate Governance

Dot-com Era Stock Valuations Bring Bubble Fears to ESG Funds
Ksenia Galouchko and Lucca De Paoli – Bloomberg
Rich valuations of stocks may drive funds to hit the brakes; The funds may underperform this year after a stellar 2020
It’s reality-check time for ESG funds. Exchange-traded funds investing in companies with responsible environmental, social and corporate governance practices lured a record $85 billion in the U.S. and Europe in 2020, and are still raking it in. Pumped up by the flows, stocks in many of these funds are trading at frothy price-to-earnings multiples that are increasingly hard to justify. Take U.S. fuel-cell maker Plug Power Inc., for instance. The unprofitable company’s more than 2,000% rally since early 2020 outpaces even Tesla Inc’s.
/bloom.bg/2MrfOh2

Hong Kong’s Government Starts Marketing U.S. Dollar Green Bond
Rebecca Choong Wilkins – Bloomberg
Hong Kong is seeking to price its second U.S. dollar-denominated green bond Tuesday, tapping rising demand for socially-responsible debt to help meet its own environmental goals.
/bloom.bg/3oe97w8

Commodities Traders, Producers Earn Cheaper Rates From Banks for Lowering Carbon Production; The lending also helps banks meet their own green-investing targets
Julia-Ambra Verlaine – WSJ
Wall Street is offering bargains to the commodities industry for going green. Two of the world’s largest commodity traders, Trafigura Group Pte. Ltd. and Gunvor Group, have lines of credit from banks that give them cheaper rates to finance reduced-carbon production of everything from oil to aluminum. JPMorgan Chase & Co. has a deal with European energy giant Enel ENEL 0.48% SpA that offers incentives for the company to meet certain environmental targets by the end of 2022—and a penalty if those targets aren’t met.
/on.wsj.com/3a4k7XY

BlackRock to vote against directors, flag companies for sale that are slow to address climate change risks; World’s biggest asset manager to incorporate climate risks in markets assumptions, introduce new products aligned to emissions goals; Pandemic drove BlackRock to ‘confront the global threat of climate change more forcefully’, CEO Larry Fink says
Chad Bray – South China Morning Post
BlackRock, the world’s biggest asset manager, said on Tuesday that it would vote against directors at companies who are not moving fast enough to address climate-related risks as part of a new “heightened scrutiny model” in its portfolios and would flag investments for sale if those risks threaten client returns.
/bit.ly/3pggZP0

BlackRock pushes companies to adopt 2050 net-zero emissions goal; World’s largest asset manager warns it may drop climate laggards from active portfolios
Michael Mackenzie and Billy Nauman – FT
BlackRock, the world’s largest asset manager, will push companies to commit to achieving net-zero emissions by 2050 and raised the prospect of dumping companies that fail to do so from its actively-managed funds.
/on.ft.com/3olGoW6

Institutions

Vanguard, Robinhood Among Brokers That Had Platform Glitches
Annie Massa – Bloomberg
Vanguard Group, Robinhood Markets Inc. and other major brokerages said they had technical glitches with their platforms Monday morning. Vanguard said on Twitter that some clients had been having problems accessing their accounts, but the issues were resolved. Robinhood was having issues with crypto trading, it said on its status page. The page was updated later to reflect that all systems were operating normally.
/bloom.bg/3a2cEbP

Steve Cohen provides funds for hedge fund protégé Gabe Plotkin; Point72 and Ken Griffin’s Citadel invest $2.75bn with Melvin Capital
Ortenca Aliaj – FT
Citadel and Point72 Asset Management have agreed to invest $2.75bn in the hedge fund Melvin Capital after its difficult start to the year, in a rare move that sees two industry titans help a smaller rival.
/on.ft.com/3qU3mWm

Apollo CEO Leon Black to Step Down Following Review of Jeffrey Epstein Ties; Independent probe finds Black wasn’t involved in disgraced financier’s criminal activities; Marc Rowan to take over top job by July 31
Miriam Gottfried – WSJ
Leon Black plans to step down as chief executive of Apollo Global Management Inc. APO -1.18% after an independent review revealed larger-than-expected payments to disgraced financier Jeffrey Epstein that it nevertheless deemed justified.
/on.wsj.com/2YhCaUQ

Citadel, Point72 to Invest $2.75 Billion Into Melvin Capital Management; Investments are for non-controlling revenue shares in the hedge fund, which is down nearly 30% for 2021 through Friday
Juliet Chung – WSJ
Citadel LLC and Point72 Asset Management are investing $2.75 billion into hedge fund Melvin Capital Management, which has been hard hit by a series of short bets to start the year. The influx of cash is expected to help stabilize Melvin, which in 2021 has lost 30% through Friday, said people familiar with the firm. Melvin started the year with $12.5 billion and had been one of the best performing hedge funds on Wall Street in recent years. The losses stem from Melvin’s array of short bets against companies and have stunned clients and other traders. Among other short positions, Melvin bet against the surging stock of videogame retailer GameStop Corp.
/on.wsj.com/3pnDykU

UBS Plans $4.5 Billion Buyback After Wealth Management Surge
Marion Halftermeyer – Bloomberg
Bank beats targets some analysts said weren’t ambitious enough; Sees higher activity continued into first quarter of this year
UBS Group AG plans to buy back as much as 4 billion francs ($4.5 billion) of shares over the next three years, bolstering shareholder returns after income from managing client assets and investment banking propelled gains at the world’s largest wealth manager.
/bloom.bg/3oiagTp

Thematic ETFs can deliver significant losses, academics find; Research shows average returns underperform the market by about 4 percentage points a year
Emma Boyde – FT
Interest in thematic exchange traded funds has accelerated in recent years, but research shows buyers should beware. Academics have found that thematic ETFs, which serve specialist investment interests such as biotechnology, renewable energy or gender equality, on average underperform the stock market on a risk-adjusted basis by about 4 percentage points a year for at least five years following their launch.
/on.ft.com/3qTarX3

Fixed income head at Citi to lead markets business in Germany and Austria; Christian Keller has become head of the markets and securities services division at Citi for Germany and Austria after more than 10 years with the bank.
Hayley McDowell – The Trade
The head of fixed income at US investment bank Citi has taken up a new role as head of the markets and securities services (MSS) business for Germany and Austria.
/bit.ly/2KPU5iD

Vontobel Asset Management transitions trading operations to State Street Alpha; Vontobel Asset Management will use State Street Alpha for front-office technology, investment operations and data services, and liquidity risk solutions.
Joe Parsons – The Trade
Vontobel Asset Management will adopt the flagship front-to-back outsourcing platform from State Street to manage its entire trading operations. Through a multi-year service agreement, Vontobel Asset Management will use State Street Alpha for front-office technology, investment operations services, Alpha data services and liquidity risk solutions.
/bit.ly/3pmiQlh

Regions

Brokerages Want a Piece of Korea’s Lucrative Foreign Bond Sales
Kyungji Cho – Bloomberg
KB Securities wants to be top-10 Korea offshore bond arranger; Europe, U.S. firms dominate Korea overseas debt underwriting
South Korean bond sales have been on a tear recently in global markets, but the country’s brokerages have been involved in very few of those deals. Some Korean firms want to change that.
/bloom.bg/3sV6Dq0

Foreign workers flee UK as pandemic and Brexit bite; An estimated 1.3m have gone home, with hospitality and retail the sectors most heavily affected
Alice Hancock, Jasmine Cameron-Chileshe and Peggy Hollinger – FT
Lorenzo di Cretico, a manager at the central London restaurant and club 100 Wardour Street, moved to the UK 12 years ago with high hopes. He had been a manager at a trattoria in Rome but wanted to learn English and said London “had always been my dream”. He found a waiting job within a week.
/on.ft.com/3iKcY31

Finland Targets Investors in Bid to Create New Battery Industry
Kati Pohjanpalo – Bloomberg
Battery strategy through 2025 unveiled in Helsinki on Tuesday; Proximity to markets, conflict-free minerals selling points
Finland is looking for investors to help it build a new industry around electric-vehicle batteries over the next half decade. The country, which refines more than half the cobalt produced in Europe, published a report on Tuesday laying out its case.
/bloom.bg/2YsVxe5

African Bank Reports Loss a Day After CEO’s Surprise Resignation
Loni Prinsloo – Bloomberg
Basani Maluleke leaving after three years at African Bank; Investors plan to exit bank saved from collapse in 2014
African Bank Holdings Ltd. reported a full-year loss a day after announcing the unexpected resignation of Basani Maluleke, the only Black women to lead one of South Africa’s top banks. The unsecured lender swung to a 560 million-rand ($37 million) loss in the 12 months through September, compared with a year-earlier profit of 267 million rand, Johannesburg-based African Bank said in a statement Tuesday. The coronavirus pandemic and the nation’s moribund economy caused credit impairments to soar 58%, resulting in a credit-loss ratio of 11.7% from 7.5% previously, it said.
/bloom.bg/39j3Q2j

Chinese city suffers food shortages during Covid-19 lockdown; Officials in Tonghua battle rare public outcry over late deliveries of daily necessities
Yuan Yang – FT
Residents of a locked-down Chinese city have raised an outcry about food and medicine shortages, spurring a rare public debate about the country’s strict epidemic controls. Citizens in Tonghua, near China’s border with North Korea in northeastern Jilin province, complained on blogging platform Weibo that a sudden lockdown has left some trapped in their apartments without supplies for more than a week.
/on.ft.com/2MnXm99

Denmark offers mink farmers more than $3bn in Covid compensation; Botched cull of up to 17m animals over fears of virus mutation sparked anger against government
Richard Milne – FT
Denmark is to offer more than $3bn in compensation to mink farmers following a controversial decision last year to eradicate the country’s stock of the creatures in an effort to curb the Covid-19 pandemic.
/on.ft.com/39ktnIe

Brexit

Brexit leaves UK and EU diminished in fight against international crime; Britain risks erosion of capabilities and influence in security matters
Helen Warrell and Michael Peel – FT
The Brexit agreement brokered on Christmas Eve between the UK and the EU on trade issues is leaving both parties diminished in their efforts to fight terrorists and cross-border crime gangs, experts have warned.
/on.ft.com/2YdpTAP

British Auto Industry Risks Slow Decline After Brexit
Jack Ewing – NY Times
Aston Martin, Austin-Healey, Jaguar, Lotus, Triumph, MG. Those are just a few of the legendary auto brands that have rolled out of British factories over the years.
The list of British-made cars that consistently earned money is a lot shorter. Now that Britain is firmly outside the European Union, it could be on the verge of dwindling even more.
/nyti.ms/3iPiNw3

British Economy, Post-Brexit and Pummeled by Covid, Is Worst in G-7
Jason Douglas and Andrew Barnett – WSJ
The U.K.’s economy shrank more last year than any of the G-7, in what the Bank of England says will be the country’s biggest economic slump in more than 300 years.
What went wrong? Shutdowns caused greater pain for the U.K. than other members of the Group of Seven advanced economies in part because it is especially dependent on consumer spending, which evaporated amid one of Europe’s deadliest Covid-19 outbreaks. The economy was already weak after the four years of negotiations over Britain’s exit from the European Union, during which business investment sagged and households held back on spending.
/on.wsj.com/3pxsUZ7

Miscellaneous

Cactus League Proposes Delaying Arizona Spring Training
Luke McGrath – Bloomberg
Arizona’s Cactus League is asking Major League Baseball to consider postponing next month’s start of spring training, with that state and fellow preseason site Florida both reeling from the surge of Covid-19 cases. We believe it is wise to delay the start of spring training to allow for the Covid-19 situation to improve here,” the Cactus League’s executive director and nine local leaders said in a letter to MLB Commissioner Rob Manfred.
/bloom.bg/3qRFvXb

Business Insider Did Nothing When the Pandemic Hit. It Worked; Business-news site generated 30% revenue growth in 2020 despite Covid-19 crisis thanks to subscriptions, automated ads
Lukas I. Alpert – WSJ
In the early days of the pandemic, Business Insider co-founder Henry Blodget spoke with the website’s owner to discuss a collapse in advertising revenue that had hit the news industry. Across American corporations, leaders were responding to the Covid-19 crisis with a flurry of activity and strategy shifts. Mr. Blodget persuaded the company’s owner, German media conglomerate Axel Springer SE, SPR 7.84% to do nothing and let the storm pass. It worked.
/on.wsj.com/39jdBgK

Vimeo Raises $300 Million in Equity, Valuing Company at $5 Billion; Oberndorf Enterprises and funds affiliated with T. Rowe Price Associated led the round, which comes just one month after IAC said it intends to spin off the online-video platform
Kimberly Chin – WSJ
Video platform Vimeo Inc. has completed a $300 million fundraising round that values the company at $5 billion, an 82% boost from a raise three months ago.
/on.wsj.com/2MmG4cv

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