Hits & Takes
John Lothian & JLN Staff
Coinbase is the most valuable U.S. exchange after its direct listing on Nasdaq (MarketWatch).
Messages of congratulations have flooded in for Gary Gensler on his confirmation by the U.S. Senate (WSJ) (Politico) to become the next chairman of the U.S. Securities and Exchange Commission, including from his new colleagues at the SEC. Here are the statements from FINRA, FIA, SIFMA, DTCC, and a MarketsMedia recap of welcoming tweets.
The Financial Times has a Special Report – Risk Management: Financial Institutions. Here are the stories from the report:
- Risk specialists draw lessons from Greensill saga
- Archegos shows reputational risk in picking partners
- Remote working fuels burnout in finance sector
- Hedge funds rethink after GameStop pain
- Loose monetary policy is today’s biggest market risk
- Banking regulators start climate stress tests
- How Intesa got a head start on homeworking
- Coronavirus triggers epidemic of cyber fraud
- Regulators keep watchful eye on remote workers
CFTC Commission Dawn Stump is the keynote speaker at WFE’s Clearing And Derivatives Conference 2021 on Monday, April 19, 2021. It is a virtual event.
The keepers of the flame of pure capitalism, the editorial board of the Wall Street Journal, have an editorial titled Down With Big Business, Again taking aim at the corporate CEOs who have spoken out about voting rights.
Cows that don’t fart as much are a big thing in the carbon markets (Bloomberg).
The world’s largest crop trader, Cargill, has named its first female CFO (Bloomberg).
New Hyde Park Alternative Funds has appointed Marc Lorin as chief investment officer.
Regular activity will reduce the chance of severe COVID-19, according to a study published in the British Journal of Sports Medicine (CNN).
Financial News has published their list of nominees for the Trading and Tech Awards 2021 (Financial News).
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. We did post a video from our The Path to Electronic Trading series, this one of Scott Knudsen. It is one you will not want to miss as he walks us through his experience at IMC and tells how they turned into a huge electronic trader.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Eurex has just published a “Derivatives Forum Frankfurt 2021 Report,” based on its conference held on March 23 and 24. The report covers five key topics that also were highlighted at the meeting and range from markets and regulation to responsible investing. You can read it here. ~SC
Scott Knudsen – From Open Outcry to Electronic Trading to Trading the GOAT
Scott Knudsen found his way to the world of trading by mistake on the online portal at the career center at Northwestern University, where he was studying electrical engineering. He ended up interviewing with a firm called Holland Trading House, which would later become IMC.
Brendan Bradley Is No ESG Investing Dummy and He Has a Book to Prove It
Brendan Bradley is no dummy, and he has two Dummy books to prove it. First he co-wrote “FinTech For Dummies.” Now he has written “ESG Investing For Dummies.” John Lothian News interviewed Bradley over Zoom about his new book and the ESG space.
Former world leaders call on Biden to suspend Covid-19 vaccine patents; Gordon Brown one of 175 figures urging action to boost inoculation rates in the developing world
Aime Williams – FT
A group of 175 former world leaders and Nobel laureates is urging the U.S. to take “urgent action” to suspend intellectual property rights for Covid-19 vaccines to help boost global inoculation rates. A measure to allow countries to temporarily override patent rights for Covid-related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by nearly 60 countries.
*****This would be a great thing to do from a humanitarian perspective and a bad thing from a capitalism perspective. Of course, we won’t have capitalism if there are no customers.~JJL
Symphony appoints Levy CEO as founder steps back from company; Former Goldman Sachs veteran and chief commercial officer at Symphony, Brad Levy, will succeed David Gurlé when he retires on 31 May.
Annabel Smith – The Trade
Symphony has appointed its president and chief commercial officer, Brad Levy, to replace chief executive and founder, David Gurlé, as he steps back from the day-to-day running of the company.
How Bernie Madoff Fooled the World; The deceased financier’s name has become shorthand for a certain kind of investment fraud. Here’s how he got away with what he did for so long.
John Authers – Bloomberg
Bernard Madoff has gone to meet his maker, but we have not heard the last of him. Like Charles Ponzi before him, his name has already become part of the financial lexicon, shorthand for how financiers can exploit human nature for profit.
*****Charles Ponzi’s scheme was for about one year. Madoff’s ran for a more than a decade.~JJL
The Grand Opening
Kapil Rathi – Crosstower
Today all eyes are on Coinbase and their IPO through direct listing. Today’s events mark a significant step forward for many reasons. Not only will the listing be one of the largest on record, and the first truly major IPO in the digital asset space, the fact that it will go public via direct listing and not through a traditional IPO process is another sign of the evolution of the investment banking industry. Rather than utilizing Wall Street firms to place large blocks of stock with select clients at a steep discount to anticipated valuation, a process through which banks generate huge fees and trade favors with their best clients, everyone will have an equal shot at purchasing shares when the stock opens for trading. This process on the whole seems significantly more efficient and democratic than a traditional IPO process, but it also carries more volatility risk.
*****Great title. Not the Big Bang, but in a similar vein.~JJL
SIFMA Partners with Texas Southern University on Diverse Talent Pipeline Resource: SIFMA Invest!
Today, SIFMA and Texas Southern University (TSU) announced the inaugural launch of SIFMA Invest! The SIFMA Invest! program and virtual platform offers students enrolled at TSU a myriad of educational, industry research and career development opportunities for those interested in pursuing a career in financial services.
*****I did not know that Texas Southern was such a hotbed of financial talent.~JJL
Wednesday’s Top Three
The most-read story on Wednesday was the Bloomberg obituary, Bernard Madoff, Mastermind of Giant Ponzi Scheme, Dies at 82. The No. 2 story was also from Bloomberg, Crypto Exchanges Usher in Era of Round-the-Clock Stock Trading. And No. 3 was a John Lothian News video interview, Scott Knudsen – The Path to Electronic Trading Led to a Best Execution Platform for Bitcoin.
202,756,723 pages viewed; 25,638 pages; 231,700 edits
|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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Coinbase valued at $76bn in coming-of-age moment for cryptocurrency; Investors cheer direct listing of digital currency exchange though shares drift lower after debut
Miles Kruppa and Aziza Kasumov – FT
Stock market investors valued Coinbase at $75.9bn in its debut on Nasdaq on Wednesday, the first listing of a major cryptocurrency exchange and a moment of validation for the digital asset class some 12 years after the creation of bitcoin.
Coinbase’s Whipsaw Debut Takes It Past $100 Billion, Then Back
Crystal Tse, Katie Roof, and Olga Kharif – Bloomberg
Coinbase shares opened at $381 each, traded as high as $429.54; Offering the COIN ticker helped Nasdaq score first big listing
Cryptocurrency exchange Coinbase Global Inc. soared above a $112 billion valuation in its trading debut Wednesday, then slipped back below its opening price as Bitcoin fell from record highs and tech stocks fell across the board.
Biden SEC Pick Gary Gensler Confirmed to Police Wall Street
Benjamin Bain – Bloomberg
Agenda will include trading apps, crypto, SPACs and Archegos; Ex-CFTC chief, Goldman partner expected to be tough enforcer
The U.S. Senate cleared Gary Gensler to lead the Securities and Exchange Commission, allowing President Joe Biden’s choice for Wall Street’s top sheriff to take over the regulator as it faces myriad market threats. Gensler, whose nomination was approved Wednesday in a 53-to-45 vote, is poised to confront everything from the fallout of the GameStop Corp. trading frenzy to the deluge of special purpose acquisition companies and the collapse of Archegos Capital Management. As chairman, he’ll also face intense pressure from progressive Democrats, who want him to promptly toughen oversight that was weakened during the Trump administration.
Libor Contracts Caught in Limbo Spur Calls for Congressional Fix
Alex Harris – Bloomberg
House subcommittee scheduled to hold hearing on Thursday; Treasury, Fed representatives to voice support for legislation
President Joe Biden’s administration and the Federal Reserve are pushing for U.S. lawmakers to ease Wall Street’s transition away from the London interbank offered rate and help head off legal headaches for many contracts that risk being left in limbo under present plans.
‘Crypto Dad’ Giancarlo says DLT could have aided in Archegos; The former CFTC chair says managing collateral by using distributed ledger technology would enable the better oversight of risks. Chris Giancarlo: DLT can be “game-changer” for collateral management
Luke Clancy – Waters Technology
Christopher Giancarlo, former top regulator and now blockchain champion, says the risks associated with Archegos Capital Management’s $20 billion default might have been better monitored if the collateral in its trades had been managed using distributed ledger technology. “A distributed ledger, which all market participants would be on, is the way you could have a comprehensive view of any institution’s activities and all markets, whether it be a clearing house, or a prime broker’s exposure to
Bernard Madoff, Mastermind of Giant Ponzi Scheme, Dies at 82
Laurence Arnold – Bloomberg
Investors lost more than $19 billion when his firm collapsed; His clients included sports owners, economists, billionaires
Bernard Madoff, the Manhattan investment adviser who promised stellar returns to his A-list clients and instead defrauded them of more than $19 billion in history’s largest Ponzi scheme, has died. He was 82. He died Wednesday, according to an emailed statement from Brandon Sample, Madoff’s attorney. No cause was given. Madoff’s home since July 2009 was the Butner Federal Correctional Complex in Butner, North Carolina, where he was serving a 150-year term. He requested compassionate early release, citing end-stage kidney disease, in February 2020.
For Madoff Victims, ‘Tragedy Goes On’ After Scammer’s Death
Erik Larson, Sophie Alexander, and Patricia Hurtado – Bloomberg
King of Ponzi dies in prison at 82, leaving wake of despair; ‘I hope he rots in hell,’ says investor out ‘seven figures’
Bernard Madoff’s death in prison Wednesday doesn’t change much for his victims, many of whom are still waiting to be made whole on their share of $20 billion that vanished with the con man’s 2008 arrest. The recovery effort, still underway in court more than a decade later, has been remarkably successful at recouping the lost principal, under the circumstances. But that’s little comfort to investors who lost their life savings or otherwise had their lives turned upside down. And none of them will ever see a cent of the $45 billion in fake trading profits Madoff assured them was safely tucked away in their accounts for retirement.
Golden age of rich America’s tax evasion may be drawing to close
Properly funding the IRS would improve collection and reduce pressure to raise headline rates
Edward Luce – FT
A trillion here, a trillion there and pretty soon you are talking real money. Were the US Internal Revenue Service to collect all that it is owed under current law, the $1tn yearly shortfall would pay for Joe Biden’s infrastructure bill four times over. Most of this evasion is carried out by the top 1 per cent of US taxpayers — the group that complains most about headline rates. In practice, the rich pay considerably less than advertised.
U.S. Imposes Stiff New Sanctions on Russia; Following years of wrist slaps under President Donald J. Trump, the new measures are designed to have a noticeable impact on the Russian economy.
Michael D. Shear, Steven Erlanger and Andrew E. Kramer- NY Times
The Biden administration on Thursday announced tough new sanctions on Russia in response to the Kremlin’s interference in American elections and its sprawling hacking operation that breached vital government agencies and private companies.
Treasury Establishes New Office to Lead Implementation of Relief and Recovery Programs
US Department of Treasury
Today, the U.S. Department of the Treasury announced the establishment of the Office of Recovery Programs to lead the Department’s implementation of economic relief and recovery programs, including nearly $420 billion in programs from the American Rescue Plan Act of 2021. This new office, which will be led by the Chief Recovery Officer, will report to Treasury’s Deputy Secretary and will be principally focused on efficiently establishing and administering Treasury’s programs to support an equitable and swift recovery from the economic challenges precipitated by the COVID-19 pandemic.
Basel Committee publishes analytical reports on climate-related financial risks
The two reports discuss transmission channels of climate-related risks to the banking system, and the measurement methodologies of climate-related financial risks;Climate risk drivers can be captured in traditional financial risk categories, but additional progress is needed to better estimate these risks; The reports provide a conceptual foundation for the Basel Committee’s next phase of work to identify potential gaps in the Basel Framework and consider measures to address them.
The Basel Committee on Banking Supervision today publishes two analytical reports: Climate-related risk drivers and their transmission channels and Climate-related financial risks – measurement methodologies.
Wall Street Banks Do More With Less; JPMorgan, Goldman posted huge returns in their Wall Street arms, suggesting investors might be undervaluing that part of their business
Telis Demos – WSJ
The resilience of big banks’ lending books may be the big news this quarter. But their Wall Street arms may not be getting enough credit for their own performance.
India’s Covid Crisis Has a Familiar Culprit; The same government flaws that have long plagued Indian entrepreneurs are now jeopardizing the world’s battle to end the pandemic.
Mihir Sharma – Bloomberg
Just a few short weeks ago, Indian government officials were patting themselves on the back. India was the “pharmacy of the world,” they said, and its cheaply produced vaccines would help end the Covid-19 pandemic globally. The federal health minister declared that the country had entered “the endgame” of its own battle against the pandemic. Even the Reserve Bank of India announced in unusually enthusiastic tones that India had “bent [the Covid-19 curve] like Beckham” and that “soon the winter of our discontent will be made glorious summer.”
India’s Second Wave Gathers Pace With Record 200,000 Covid Cases
Bhuma Shrivastava – Bloomberg
India has world’s worst coronavirus outbreak after the U.S.; The country has fast-tracked approval of vaccines this week
India reported more than 200,000 new Covid-19 infections on Thursday — its highest one-day surge since the pandemic broke out — as a deadlier new wave grips the world’s second worst-hit country. With 200,739 new cases, the outbreak in the South Asian nation has now recorded more than 14 million infections. Total deaths rose to 173,123, while more than 114 million vaccine doses have been administered, according to latest data from India’s health ministry.
Pfizer Boosts EU Vaccine Supply as J&J Review Accelerates
Naomi Kresge and Viktoria Dendrinou – Bloomberg
Drugmaker accelerates deliveries from later in the year; EU regulator to issue recommendation on J&J next week
Pfizer Inc. and BioNTech SE will raise Covid-19 vaccine deliveries to the European Union by 25% this quarter, helping the bloc overcome delays to the shot from Johnson & Johnson as the drug regulator speeds up its safety review.
Risk of Clots Higher With Covid Than After Vaccine, Study Says
Todd Gillespie – Bloomberg
The risk of blood clots among those who’ve been diagnosed with Covid-19 is higher than among those who’ve received vaccines against the disease, according to a new study from the University of Oxford. Covid patients saw a clot risk of 39 in a million. That compared with four in a million in mRNA vaccines like those developed by Pfizer Inc. and BioNTech SE or Moderna Inc., and five in a million people after AstraZeneca Plc’s vaccine. Though the analyses for the three vaccines are based on different data sets, making comparisons difficult, the study suggests that the risk of a clot among those with the disease is about eight to 10 times higher than after vaccination.
How China Passed Up a Vaccine Opportunity and Fell Behind
Bruce Einhorn – Bloomberg
Moderna, Pfizer cornered the mRNA technology for their shots; China’s leading shots are less effective; use older techniques
The call came early in the Covid-19 pandemic. Drew Weissman, an infectious diseases professor at the University of Pennsylvania and an expert in messenger RNA, received a query from a Chinese company interested in using the new technology to make a vaccine against the coronavirus.
J&J vaccine pause set to last another week amid blood clot fears; Guidance that jab should not be used remains in place after US meeting of experts
Kiran Stacey and Nikou Asgari – FT
A recommendation that Johnson & Johnson’s Covid-19 vaccine should not be used in the US is likely to remain in place for another week after members of a government advisory committee said they did not have enough information to change their advice.
EU bets big on BioNTech/Pfizer jab as Danes stop giving AstraZeneca; Brussels puts focus on mRNA vaccines amid concern over rare blood clots linked to other shots
Michael Peel and Jim Brunsden Richard Milne and Hannah Kuchler – FT
The European Union has unveiled plans to increase massively its supply of the BioNTech/Pfizer coronavirus vaccine, as Denmark became the first European country to end use of the Oxford/AstraZeneca jab.
Variants Fuel Covid-19 Surge, but Scientists Voice Optimism for Vaccines; As coronavirus strains spread, experts say public-health measures remain critical to curbing infections
Jason Douglas, Gabriele Steinhauser and Samantha Pearson – FT
Covid-19 cases are surging across the world, fueled by highly contagious variants of the coronavirus that are popping up far from where they were first detected.
Covid vaccines show government can be a force for good; ‘Perhaps they mark the moment when the state begins to be seen not just as a problem, but as a solution too’
Gillian Tett – FT
Last week, I participated in a solemn ritual that almost half a million other New Yorkers had already experienced. I travelled to the cavernous Javits convention centre in Manhattan, identity documents in hand, where US soldiers waved me into a line. With hundreds of others, I followed colour-coded paths through the cathedral-like auditorium to tables staffed by nurses (and more soldiers), who jabbed my arm with a BioNTech/Pfizer vaccine, then gave me a sticker, a bottle of water and a vaccination card
Exchanges, OTC and Clearing
Coinbase coins it on Nasdaq; Virgin-O2 cleared, Facebook GDPR probe, Surface Laptop 4
Chris Nuttall – FT
The New York Stock Exchange has just suffered a double indignity at the hands of the newest listed stock in the US: Coinbase chose the Nasdaq instead for its direct listing — partly swayed by the offer of the COIN ticker — and the cryptocurrency exchange has soared to a valuation way beyond that of the NYSE’s operator, Intercontinental Exchange, on its debut.
Barclays offers client clearing through LCH ForexClear; After launching client clearing at ForexClear, Barclays was the first bank to process a client trade through LCH’s international clearing broker model.
Hayley McDowell – The Trade
Barclays has become the latest investment bank to offer client clearing through the international clearing broker model at LCH ForexClear. LCH confirmed that Barclays was the first institution to clear a client trade under the broker model, and the bank is now offering clients clearing of FX derivatives for risk management with ForexClear.
FactSet expands portfolio analytics with ICE liquidity indicators; The integration of ICE Liquidity Indicators by FactSet will offer clients a solution for the analysis, management and reporting on fund liquidity risk.
Annabel Smith – The Trade
FactSet has integrated ICE Liquidity Indicators, part of the Intercontinental Exchange, into its portfolio analytics offering to enhance risk analysis for institutional investors.
Lit volumes on LSEG’s Turquoise Europe venue surge post-Brexit; LSEG’s European trading venue saw lit average daily volumes increase 30% from January to March 2021.
Annabel Smith – The Trade
Average daily volume (ADV) on the London Stock Exchange Group’s (LSEG) European lit order book has increased 30% in the first three months following Brexit. Lit ADV at Turquoise Europe – the LSEG’s European-based trading venue which went live on 30 November before the end of the Brexit transition period – increased by 10.1% from January to February and then by a further 20.5% from February to March.
Equity Derivatives: Introduction of 20 Single Stock Dividend Futures
The Management Board of Eurex Deutschland took the following decisions with effect from 26 April 2021: Introduction of 20 Single Stock Dividend Futures pursuant to Annex D of Attachment 2,
CME Globex Notices: April 12, 2021
Critical System Updates
GLink Network Infrastructure Upgrade at Aurora Co-Location Facility – This Week
New – Changes to CME Globex New Release and Certification Maintenance Window – April 28 NEW
New – Amendments to References of CME Globex Terminal Operators – May 2 NEW
CME FX Link Enhancements – May 2
CME FX Link Enhancements: Drop Copy Impact – May 2
iLink 3 SBE Schema Update – May 16
CME STP Notices: April 15, 2021
CME STP FIXML API Connectivity Documentation
BrokerTec Production Service Availability
Changes to Italian Repo Collateral Clean Price – Postponed
Update – Postponed Enhancements for Exercise and Assignment Trades on CME STP – April 26 UPDATE
Update – Enhancement to CME STP Transaction Type – May 23 UPDATE
Enhancement to Security Sub Type for Exercise and Assignments on Options – June 6
Darktrace IPO filing contradicted earlier claim on Mike Lynch role; Complication for cyber security group’s efforts to distance itself from Autonomy founder
Kadhim Shubber – FT
Darktrace has issued contradictory information about the role of British tech billionaire Mike Lynch, who has been charged with fraud in the US, complicating the cyber security company’s efforts to distance itself from the Autonomy founder ahead of its potential £3bn float.
The vanishing billionaire: how Jack Ma fell foul of Xi Jinping; The Alibaba founder’s dramatic rise and fall illustrates China’s wary embrace of the tycoons who power the country’s economic growth
Ryan McMorrow and Sun Yu – FT
China’s most outspoken billionaire has gone silent. No one has seen Jack Ma at the business school he founded. Nor at his tai chi studio. His raucous speeches headlining an annual meeting of entrepreneurs in his home province of Zhejiang have been put on hold.
JP Morgan expands use of Acin risk management platform; The expansion of JP Morgan’s use of the platform by Acin will give it access to benchmarking data for risks and controls to be used across its global markets business.
Annabel Smith – The Trade
Investment bank JP Morgan has extended its use of the Acin risk management and benchmarking platform to cover its global markets business. JP Morgan has been working with Acin for the last two years, piloting the platform within a subset of its trading business.
American Fintech Council Grows to More Than 75 Members, Announces New Leadership Initiatives
Today, the American Fintech Council (AFC), announced further growth in membership and the launch of two new membership groups, the Regulatory Technology Committee and Legal Advisory Committee. “We are thrilled to welcome these new members and leadership groups to the AFC team and look forward to working with them to promote policies that create an open and efficient marketplace that benefits everyone,” said Garry Reeder, newly appointed CEO of the AFC. “Our members are constantly working to better serve consumers and communities around the country. Expanding access to quality financial products and services is essential to forwarding our commitment to diversity, equity, and inclusion. We are excited to have these two groups help lead that effort.”
Fintech apps outperform banks as pandemic shakes consumer finances
Finance app downloads spiked by 15% during the pandemic, with mobile fintech applications outperforming banks by a factor of up to 10.8x, according to figures from mobile anlaytics platform App Annie. The report found that amid economic uncertainty, demand grew for finance apps across investing, banking, cash transfers and government aid. Finance apps were downloaded 4.6 billion times in 2020, with consumers spending 16.3 billion hours scanning their mobiles to check their finances.
These Crypto Bros Want to Be the Guggenheims of NFT Art; Perhaps you’ve heard of nonfungible tokens? A handful of collectors already have millions of dollars’ worth.
James Tarmy, Olga Kharif – Bloomberg
A few months before nonfungible tokens exploded into the public consciousness, the field was already pretty big, with some 75,000 buyers in 2020, according to a report by market researcher NonFungible and L’Atelier BNP Paribas. But it was also still sleepy.
Coinbase CEO Says Listing Is a ‘Shift in Legitimacy’ for Crypto
Joanna Ossinger – Bloomberg
Crypto exchange debuted on Nasdaq via direct listing; Shares slid 14% on first day after earlier popping higher
The direct listing of Coinbase Global Inc. on Nasdaq is a turning point for the whole cryptocurrency sector, according to the firm’s Chief Executive Officer Brian Armstrong.
What’s at Stake in the U.S. Case Against a Crypto Rebel; The prosecution of BitMEX co-founder Arthur Hayes could lay down legal markers as digital currency moves into the mainstream.
Benjamin Robertson, Edward Robinson – Bloomberg
Ever since Arthur Hayes became a star in the Bitcoin universe, he’s been called many things, from trailblazer to anarchist. On April 6 the former chief executive officer of crypto exchange BitMEX surrendered to U.S. authorities in Hawaii to face a more consequential label: alleged criminal. Six months ago, prosecutors accused him and three others of failing to implement adequate money laundering controls. Hayes pleaded not guilty and was released on $10 million bond pending federal court proceedings in New York.
Coinbase, A Bitcoin Startup, Goes Public. Is Crypto Really The ‘Future Of Finance’?
Bobby Allyn – NPR
Coinbase, a San Francisco startup that allows people to buy and sell digital currency, became the first major cryptocurrency company to go public when it made its stock market debut on Wednesday. Trading began around $381 a share, pushing the company’s valuation close to $100 billion. That’s about what Facebook was worth when it had its initial public offering in 2012. Coinbase’s listing on the Nasdaq under the ticker symbol “COIN” was heralded by enthusiasts as a turning point for once-obscure digital currencies. “Today was a landmark moment,” said cryptocurrency investor Ian Lee. “Crypto is the future of finance.”
Coinbase Fetches $85 Billion Valuation in Market Debut
Paul Vigna – WSJ
Coinbase Global Inc. fetched an $85 billion valuation in its stock market debut Wednesday, a watershed moment for an industry that began a decade ago as an experiment in digital money. Shares of Coinbase, the first major bitcoin-focused company to test the U.S. public market, opened at $381 on the Nasdaq Global Select Market. They rose as high as $429.54 in the first few minutes of trading and ended the session at $328.28. Coinbase went public through a direct listing under the ticker symbol COIN. The exchange had set a reference price of $250 on Tuesday, but no trades were executed at that price. While Coinbase was last valued at about $8 billion in a 2018 fundraising round, some analysts had projected its valuation could top $100 billion based on private market trading. It surpassed that level Wednesday before pulling back.
Bitcoin and Dogecoin Prices Soar to Records as Coinbase Lists
Caitlin Ostroff – WSJ
Prices of cryptocurrencies surged to records Wednesday as the listing of exchange Coinbase Global Inc. propelled interest in digital assets. Bitcoin climbed to a record of $64,829 apiece, ether climbed to $2,400 and dogecoin—the meme cryptocurrency created as a joke—surged to 14 cents, according to CoinDesk. The rally in dogecoin came despite Coinbase not offering trading in it. Shares of Coinbase started trading Wednesday and ended a volatile session with an $85 billion valuation.
Digital Artist Pak Sells NFT Works for $17 Million at Sotheby’s; Three-day auction featured works that show a single pixel, can be destroyed or switched by their owners; ‘Pak is our Picasso’
Kelly Crow – WSJ
A series of digital artworks created by an enigmatic artist who goes by the pseudonym Pak sold for more than $17 million during a three-day sale that ended Wednesday. The sale, capped by a marathon, three-way bidding war for one work that stretched over an hour, was conducted by the digital platform Nifty Gateway and auction house Sotheby’s—the house’s first foray into the booming market for nonfungible tokens, or NFTs.
VanEck launches new ETF on Nasdaq to offer exposure to digital asset-focused companies
Yogita Khatri – The Block
Asset manager VanEck has launched a new exchange-traded fund (ETF) on Nasdaq that aims to track companies working in the digital asset space or those that have exposure to the nascent asset class. The ETF, dubbed Digital Transformation ETF, would provide exposure to various companies in the digital assets space, including crypto exchanges, miners, payment gateways, hardware, and technology providers. The fund, however, will not invest in cryptocurrencies directly or indirectly through derivatives, said VanEck. The ETF has a ticker symbol of DAPP.
Coinbase CEO expects 50% of company’s future revenues to come from non-trading businesses
Yogita Khatri – The Block
Coinbase CEO Brian Armstrong expects the company’s non-trading businesses to grow substantially in the long term.
U.K. Watchdog Calls for Urgent Lobbying Reform on Greensill
Emily Ashton – Bloomberg
No ‘boundaries’ to prevent conflict of interest, Pickles warns; Says advisers like Greensill should sign public memorandums
The head of the U.K. watchdog scrutinizing politicians and top civil servants taking up private sector jobs called for urgent reform, warning there are no “boundaries at all” to prevent conflicts of interest. Eric Pickles, chairman of the Advisory Committee on Business Appointments, was responding in a parliamentary hearing Tuesday to the revelation that Bill Crothers — then the government’s chief commercial officer — was allowed to work for the now insolvent Greensill Capital while still in post in 2015.
Forgiveness should also extend to the living; The demise of ‘problematic’ figures shows that cancel culture can be suspended, at least for the dead
Jemima Kelly – FT
A colleague’s wise words jumped out at me last Friday: “Reminder that it’s OK to mourn imperfect people,” she tweeted. Why do we so often seem incapable of mustering the same kind of generosity of spirit when it comes to the living, I wondered?
Biden to impose tough new sanctions against Moscow; Measures set to include restrictions on Russia’s sovereign debt market
Henry Foy and Max Seddon and Michael Peel – FT
US president Joe Biden is set to announce a fresh package of sanctions against Russia including long-feared measures targeting the country’s government debt, in a sharp escalation of Washington’s measures against Moscow.
Gensler confirmed as top Wall Street cop, bringing new era of tough scrutiny; Gary Gensler will lead work on new federal regulations that would require companies to disclose their contributions and exposure to climate change.
Kellie Mejdrich – Politico
The Senate on Wednesday confirmed Gary Gensler to lead the Securities and Exchange Commission, putting in place a battle-tested Wall Street watchdog at a moment when Democrats are looking to rein in financial market risk.
ASIC extends temporary financial advice relief measure in COVID-19 instrument
ASIC has today announced that it will extend one of three temporary relief measures designed to help the financial advice industry provide consumers with affordable and timely advice during the COVID-19 pandemic.
SEC Charges Felon and Six Others in Oil-and-Gas Offering Fraud
The Securities and Exchange Commission today charged seven individuals, including criminal recidivist Richard Dale Sterritt, Jr., with defrauding investors through a multimillion dollar oil-and-gas offering fraud and related market manipulation scheme.
Rethinking Global ESG Metrics
Commissioner Hester Peirce – SEC
Many advocates behind the global environmental, social, and governance movement argue that prosperity alone is not a sufficient measure of society’s progress, a position that I believe is unassailable. The challenge we face in addressing the ever-increasing number of issues underlying E, S, and G is daunting. The task before us is to find a way to bring about lasting, positive change to our countries on a range of issues without sacrificing in the process the very means by which so many lives have been enriched and bettered. Accordingly, a shared desire to address these and other societal problems should compel us to rethink our prescriptive approach to ESG and instead find ways to encourage our most precious resource—our people—to devise solutions to the climate-related and other challenges our societies face.
Token Safe Harbor Proposal 2.0
Commissioner Hester Peirce – SEC
Earlier today, I released on GitHub, an updated version of the token safe harbor proposal that I originally suggested in February 2020. The safe harbor seeks to provide network developers with a three-year grace period within which, under certain conditions, they can facilitate participation in and the development of a functional or decentralized network, exempted from the registration provisions of the federal securities laws. The updated version reflects constructive feedback provided by the crypto community, securities lawyers, and members of the public. I am grateful for the thoughtful engagement and believe it demonstrates the need for regulatory clarity in this space. There is, however, more work to be done, which is why I, as a believer in the va
ESMA highlights need for increased efforts on EMIR and SFTR data quality
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today published its final report on the European Markets Infrastructure Regulations (EMIR) and Securitised Financing Transactions Regulation (SFTR) data quality. The report covers the progress made to date in improving EMIR data quality for regulatory and supervisory use and concludes that, while good progress has been made, additional efforts are needed by national competent authorities (NCAs) and ESMA to further improve EMIR data quality.
CFTC Staff Issues Continuation of Certain No-Action Relief to Market Participants in Response to COVID-19
The Commodity Futures Trading Commission today announced the Market Participants Division (MPD) and the Division of Market Oversight (DMO) are providing a continuation of certain parts of the temporary no-action relief issued in response to the COVID-19 (coronavirus) pandemic that is scheduled to expire on April 15, 2021. Any prior relief not extended by CFTC Staff Letter No. 21-10 has expired or will expire pursuant to the terms of the applicable CFTC Staff Letter.
FCA bans and fines financial adviser £68,300 for lacking honesty and integrity
The FCA has banned Simon Varley from working in financial services and fined him £68,300 for knowingly performing a controlled function without approval and for providing investment advice to retail customers when he knew he was not qualified or approved to do so.
Dubai Financial Services Authority and the Bank of Italy sign a Memorandum of Understanding
On 23 March, the Dubai Financial Services Authority and the Bank of Italy signed a Memorandum of Understanding (MoU) to facilitate continued cooperation in the area of financial supervision. This MoU focuses on cooperation and information exchange in supervision and resolution of financial institutions including the important area of fighting financial crime.
Commissioner Stump To Keynote Speaker At WFE’s Clearing And Derivatives Conference 2021 Mondovisione
Two Charged in High-Risk International Financial Scheme
U.S. Department of Justice
Allegedly Facilitated more than $1 Billion in High-Risk Transactions Without Anti-Money Laundering Controls
An indictment was unsealed today in the Eastern District of New York charging two defendants with failing to maintain anti-money laundering controls, failing to file suspicious activity reports, and operating an unlicensed money transmitting business.
The Council Of Experts Concerning The Follow-Up Of Japan’s Stewardship Code And Japan’s Corporate Governance Code
Investing and Trading
How to invest for the 22nd century
Rey Mashayekhi – Fortune
In an era of “meme stocks,” FOMO, and Reddit-fueled trading insanity, the notion of mapping out the long-term future of the stock market can come across as quaint at best and condescending at worst. After all, how could anyone confidently claim to have the answers in a world where day traders can double their life savings by timing the stock fluctuations of a bankrupt car rental company?
Investing in future winners
Ellie Duncan – FT
Equity markets have rebounded strongly from the falls of February and March 2020, to deliver significant outperformance to investors. Most of the returns have been generated by a few US technology stocks though, which have been riding high on the back of the global shift to remote working. “The Covid-19 crisis exacerbated market concentration within the S&P 500 [index], resulting in a cohort of just a handful of tech stocks making up more than 25 per cent of the index. These stocks drove markets higher as investors looked for clarity on future earnings and jumped onboard the ‘stay at home’ theme,” says Shane Balkham, chief investment officer at Beaufort Investment.
5 things this index pioneer wants you to know about today’s investing challenges
David Booth – MarketWatch
Early in my career, I was lucky enough to work on one of the first index funds. It was an incredibly exciting time, because before that the only equity option for investors was to pick stocks. The academic evidence from people like Gene Fama — my graduate school adviser, who later would be recognized as a Nobel laureate — showed there was a better way to approach investing, but no one had put it into practice yet. Forty years later, more than half of the wealth held in mutual funds and ETFs is in index funds, and Dimensional Fund Advisors has grown to more than $600 billion in assets under management. The investment management industry has made incredible progress driving down costs, encouraging diversification, and developing innovative solutions that benefit investors. These advances have been profound for investors — and I believe it’s just the beginning.
Environmental, Social and Corporate Governance
JPMorgan Embarks on $2.5 Trillion Climate, Sustainability Effort
Hannah Levitt – Bloomberg
Ten-year funding goal includes $1 trillion for green solutions; U.S. banks boost efforts to fight climate change amid pressure
JPMorgan Chase & Co. set a goal to finance $2.5 trillion in initiatives that combat climate change and advance sustainable development, amid a push by U.S. banks to step up their environmental and social activities.
*****Here is the WSJ version of this story.
Oil companies are now a more complex foe for environmentalists; Scrutiny of fossil-fuel producers also has to be more nuanced
Anjli Raval – FT
Investors that have stuck by oil companies, despite the growing backlash against their role in enabling climate change, have argued that it is better to be in than out.
Banking regulators start climate stress tests; Lenders are being assessed on risks arising from extreme weather and the energy transition
Laura Noonan – FT
Over the past decade, financial regulators have used stress tests to measure banks’ exposure to anything from losses on derivatives to fat-finger trades and cyber crime. Now, they have a more complex target in sight: assessing banks’ vulnerability to the effects of climate change.
Sustainable investing is not new to China — but complying to a formal framework is, says CEO
Abigail Ng – CNBC
Asset managers in China are no strangers to sustainable and responsible investing, said Li Yimei, CEO of China Asset Management. “Responsible investing and looking at the long-term sustainability of our portfolio is not new to the investment community in China, but we didn’t really comply it within the regime of ESG,” she told CNBC, referring to an environmental, social and governance framework. She also discussed the Chinese government efforts to create standardized ESG disclosures.
JPMorgan shoots for green finance stratosphere as ESG target tops peer plans
Elizabeth Dilts Marshall – Reuters
JPMorgan Chase & Co aims to lend, invest and provide other financial services for up to $2.5 trillion of banking business to be done for companies and projects tackling climate change and social inequality over the next decade. In a statement on Thursday, JPMorgan said green initiatives will account for $1 trillion of that total – the largest environmental, sustainable and governance (ESG) financing target announced by a U.S. bank to date. That could mean lending or investing in companies that develop clean-energy technology for the trucking, aviation or industrial manufacturing sectors, the bank’s head of sustainability, Marisa Buchanan, told Reuters in an interview.
Anglo Pacific open to selling thermal coal royalties to boost ESG credentials
Mining streaming company Anglo Pacific could be open to selling its thermal coal royalties to accelerate its transition away from the most polluting fossil fuel, chief executive Julian Treger said on Wednesday. The London-listed company aims to decrease its reliance on coal and steel and attract a broader base of investors by adding more battery metals, including lithium, manganese and copper, to its streaming and royalty portfolio, Treger said. A form of mining financing, royalties are payments that give the owner the right to receive a percentage of production from a mining operation, or retain a stake in it, in exchange for upfront payments to the producer.
BlackRock Assets Hit $9 Trillion on Stimulus, Vaccine Hopes
Annie Massa – Bloomberg
Fixed-income attracted the biggest inflows of any product type; Adjusted earnings per share of $7.77 beat analysts’ estimates
BlackRock Inc.’s assets under management rose to a record $9 trillion in the first quarter as equity markets climbed, buoyed by fresh government stimulus and the accelerating deployment of vaccines. Fixed-income attracted the biggest inflows with a net $60.8 billion in the period, followed by equities at $49.9 billion, New York-based BlackRock said Thursday in a statement. Total net flows reached a record $172 billion.
BofA Joins Bonanza as Wall Street Units Drive Solid Quarter
Lananh Nguyen – Bloomberg
Trading revenue jumps more than expected, banking fees surge; Lender releases $2.7 billion of reserves on improving economy
Bank of America Corp.’s traders and investment bankers reaped another windfall, joining their Wall Street rivals in capitalizing on the stock market’s wild ride this year.
Hedge funds post best start to year since before financial crisis; Market shake-up has created ‘fertile’ environment for managers to make bets
Laurence Fletcher – FT
Hedge funds have navigated the GameStop short squeeze and the collapse of family office Archegos Capital to post their best first quarter of performance since before the global financial crisis.
Archegos shows reputational risk in picking partners; Financial institutions need a clear set of values if they are to prosper in a murky world
Robert Armstrong – FT
What on earth were the banks thinking? That was the collective refrain of Wall Street observers in the final week of March, when it became clear that several global banks had extended billions of dollars of leverage to Archegos Capital Management. Archegos defaulted on its margin loans when some of its highly concentrated bets went wrong, leaving both Credit Suisse and Nomura with billions of dollars in losses.
Surging inflows into ETFs hit $1tn in record-breaking 12-month streak; Demand for the funds accelerated in the first quarter on growing optimism for an economic recovery
Chris Flood – FT
A trillion dollars in new cash has surged into exchange traded funds over the past 12 months in a powerful demonstration of growing confidence in the global economy’s recovery from the coronavirus pandemic.
Citigroup Reports Higher Earnings, Plans to Trim Consumer Businesses in Asia; Bank says it would exit consumer operations in parts of Asia to focus on wealth management and other businesses
Orla McCaffrey – WSJ
Citigroup Inc. C 1.18% on Thursday reported sharply higher first-quarter profit and said it is shutting down most of its consumer-banking operations in Asia, Europe and the Middle East.
Bank of America Profit Doubles After It Releases Reserves for Bad Loans; First-quarter results beat analysts’ expectations, but revenue was flat
Ben Eisen – WSJ
Bank of America Corp. BAC 1.42% said Thursday that its profit doubled in the first three months of the year. The Charlotte, N.C.-based lender posted earnings of $8.05 billion in the first quarter. That compared with $4.01 billion a year earlier, when banks took big hits to their earnings to begin stockpiling rainy-day reserves at the beginning of the pandemic.
Why Barclays Is One of the Year’s Best-Performing Bank Stocks; Activity in the U.K. lender’s investment banking arm is spurring the recovery, a vindication for Chief Executive Jes Staley
Simon Clark – WSJ
Barclays BCS 0.59% PLC’s stock has long been stuck in the mud, but so far this year it is zooming ahead of the likes of JPMorgan Chase & Co. and Morgan Stanley.
Barclays Stock Tumbles in Mini Flash Crash Before Quick Rebound; 10% plunge in one of the U.K.’s most prominent stocks triggered a trading halt
Ben Dummett and Simon Clark – WSJ
Shares in Barclays PLC, BCS 0.59% one of the U.K.’s most prominent stocks, plunged 10% at the opening bell Wednesday and then recovered, triggering a trading halt and an auction process to sort out the messy activity.
London Finance Job Vacancies Up 70% With Industry Optimistic
Tom Metcalf – Bloomberg
People changing jobs saw average 18% boost to salary; Majority of finance firms now optimistic about future: CBI
Job openings in London’s finance industry grew 70% in the three months through March compared to the previous quarter as the U.K. began to ease out of its third national lockdown. People changing jobs could expect an average 18% boost to their salary during the first quarter, the highest in more than a year, according to data from recruitment firm Morgan McKinley published Thursday.
Singapore Trader’s Lavish Lifestyle Allegedly Fueled By $740 Million Fraud
Alfred Cang, David Ramli and Chanyaporn Chanjaroen – Bloomberg
Ng Yu Zhi was charged last month with four counts of fraud; It’s the latest in a series of financial scandals in Singapore
At 33, Ng Yu Zhi had all the trappings of a wildly successful trader: a Rolodex full of rich clients, a three-story villa in a posh Singapore neighborhood and a Pagani Huayra supercar reportedly worth more than $5 million. Local prosecutors allege Ng also had a dark secret: His lavish lifestyle, they say, was built on lies.
China’s Very Bad Bank: Inside the Huarong Debt Debacle
Huarong’s troubles raise questions about government support; The distressed debt manager borrowed $23.2 billion overseas
It’s been 11 weeks since Lai Xiaomin, the man once known as the God of Wealth, was executed on a cold Friday morning in the Chinese city of Tianjin. But his shadow still hangs over one of the most dramatic corruption stories ever to come out of China – a tale that has now set nerves on edge around the financial world.
What ‘Keepwell’ Means in Case of China Bond Defaults
A potential restructuring at one of China’s largest state-run asset managers of distressed debt — China Huarong Asset Management Co. — is stoking fresh concern about the labyrinthine structures that the nation’s borrowers use to issue and guarantee offshore debt. The so-called keepwell provisions are supposed to protect a bondholder in case the mainland company runs into financial trouble. Nearly all of China Huarong’s $22 billion in dollar bonds have them. The problem is the clause essentially amounts to a “gentlemen’s agreement,” and is only starting to be tested in court.
Bank Fines, Suspensions Weighed by Zimbabwe for Currency Gouging
Ray Ndlovu – Bloomberg
Central bank auction system is at center of latest action; Fines and suspensions contemplated, says central bank governor
Zimbabwe is considering penalizing domestic banks, telecommunications operators and other businesses over what the government describes as profiteering off the hard currency it makes available at auctions.
Brexit: Irish Sea border posts ‘delayed by two years’
Conor Macauley – BBC News
The timeframe for permanent facilities to operate the Irish Sea border has slipped by two years, a Stormont committee has been told. They are now not expected to be built before 2023. The agreement of the executive will also be needed, potentially complicating the process of approval. Earlier this week it emerged that a Whitehall minister had written to the DUP’s agriculture minister, telling him to get on with permanent buildings. Edwin Poots has been resisting that, and a halt to work on the full-time facilities and staff to operate them has been ordered. Checks are currently being run from temporary buildings in the various ports.
Lit volumes on LSEG’s Turquoise Europe venue surge post-Brexit
Annabel Smith – The Trade
Average daily volume (ADV) on the London Stock Exchange Group’s (LSEG) European lit order book has increased 30% in the first three months following Brexit. Lit ADV at Turquoise Europe – the LSEG’s European-based trading venue which went live on 30 November before the end of the Brexit transition period – increased by 10.1% from January to February and then by a further 20.5% from February to March. Turquoise Europe’s lit growth in ADV per month outperformed its competitors, with statistics showing that rival exchange Cboe Europe’s lit venue ADV increased 21% in the first three months of the year, while Aquis Europe’s lit ADV grew 17.4%.
Northern Ireland Dispute Far From Resolved as EU, U.K. Meet
Alberto Nardelli and Emily Ashton – Bloomberg
U.K. Minister David Frost travels to Brussels on Thursday to discuss the tussle over Northern Ireland over dinner with European Commission Vice President Maros Sefcovic, but there’s little expectation of a breakthrough. A British official said the meeting was best described as a staging post, while a European Union official said it was about taking stock of technical discussions that have taken place over the past weeks. The two sides are trying to unlock a dispute over the implementation of the protocol after the U.K. unilaterally extended a waiver on checks on some goods entering Northern Ireland from Great Britain. The temporary exemption was part of the trade agreement aimed at keeping the Irish border free of checkpoints after the U.K. left the bloc. The EU argues that the British decision breaches the post-Brexit accords and breaks international law.
North East pigeon racers fear Brexit quarantine impact
Pigeon fanciers fear new Brexit rules forcing birds to be quarantined for long-distance European races could “kill” their sport. Under EU rules due to become law next week, UK birds must be detained for three weeks before they can be released in France for trans-Channel races. North East pigeon owners claim their birds would be unfit to race after being cooped up for so long. The Royal Pigeon Racing Association is seeking an exemption from the EU.
Madoff Nearly Ruined the Mets. The Team Has Moved On; The death of the infamous investment banker who was serving a 150-year prison sentence recalls a chapter where a major-market team was forced to scramble to survive.
David Waldstein – NY Times
There was a high-flying, if brief, period in Mets history when virtually every available dollar was cycled through investment accounts managed by Bernard L. Madoff. If the team signed a deal for radio rights, the station was asked for much of the money up front and it was handed over to Madoff, who made it multiply, seemingly without fail.