Commodities King ADM Pivots to Pet Food, Veggie Burgers, and Probiotics; Google antitrust case shows the flaws in competition regulation

Oct 21, 2020

First Read

$8,241/$300,000 (2.8%)
Brian Mehta

 

Regulation and Enforcement Continue Apace Despite COVID’s Onslaught, Regulators Say
Suzanne Cosgrove and Sarah Rudolph – John Lothian News

Fresh from his exit from the CFTC several weeks ago, James McDonald, former director of the agency’s Enforcement Division, Tuesday addressed several “big picture” themes advanced by the CFTC during his tenure.

The goal was to “redouble our focus on what we view as the core violations of the (Commodity Exchange) Act,” including manipulation and fraud, McDonald said. “You saw that actually play out in a few different ways,” he said. “You saw it in terms of the number and the depth of our commitment in trying to root out manipulative trading in markets,” whether it was spoofing or something else.

During fiscal year 2020 (which ended September 30), the CFTC filed 113 enforcement actions, more than any other year in the agency’s history, and imposed the largest monetary relief in the agency’s history. In that case, JPMorgan Chase and Co. agreed to pay the U.S. government $920 million in fines and disgorgement to settle spoofing charges, the largest payment ever agreed to by a defendant to settle a futures market manipulation charge.

To read the rest of this story, go HERE.

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Hits & Takes
John Lothian & JLN Staff

Thank you to Brian Mehta, the chief marketing officer of Trading Technologies for his donation to the JLN MarketsWiki Education GoFundMe Campaign. Brian is a fellow resident of Elmhurst, IL and one of the thought leaders in our industry around marketing. Thank you to Brian, all who have given and all those who have yet to give. Please support our campaign and help us preserve industry history.

Right now is an excellent time to bone up on trading and investing opportunities. Some of our sponsors and friends are offering webinars looking at different markets, their role in your portfolio and other nuances. For example, I give you the FTSE Russell webinar for tomorrow. The webinar panel will look at “what factors may be driving its outperformance between US large- and small-cap stocks and suggest ways investors can use trading and product strategies to manage risk and tap into market opportunity.”

The panel of speakers will cover: drivers of US equity indexes outperformance, the weight of technology companies and other sector weighted contributions to returns, historical performance of US equities leading into and coming out of US general elections, and stock-level concentration performance effect.

The line-up of speakers is outstanding. It includes Kristy Akullian, CFA, director, iShares Americas markets coverage, BlackRock; Tim McCourt, MD, global head of equity products, CME Group; and Mark Barnes, Ph.D., head of investment research, Americas, FTSE Russell. The moderator is the brilliant Catherine Yoshimoto, director of product management at FTSE Russell.

So, don’t forget to register and attend the FTSE Russell webinar on Thursday, October 22 at 12 PM ET about “What’s been driving US equity markets outperformance?” You can register HERE.

Also, Greenwich Analytics is offering an opportunity to look at the equity markets from another angle. They are hosting a webinar on “Options Growth, Volatility & Outlook Following U.S. Elections” on Wednesday, October 28 starting at 4:30PM EDT. Ken Monahan, Senior Analyst, Market Structure & Technology, is moderating the event. Panelists include Stino Milito, Co-Chief Operating Officer at DASH Financial Technologies, Danny Kirsch, Head of Options Trading and Strategy at Cornerstone Macro, and Will Bartlett, Managing Member at Parallax Volatility Advisers. Register HERE.

Another event, on a subject for exchange professionals, is being offered by the Association of Futures Markets. The event will look at how to achieve innovation in commodity derivative product development. The panel includes moderator Chris Sturgess of South Africa, Brian Browne of Euronext, France, Clive Furness of Contango Markets, UK,, Rinjai Chakornpipat of Thailand and Mauricio Eduardo Perez Y Sosa of Mexico. Registration is by email via conference@afmorg.net

Today we have a video in our The Path to Electronic Trading series featuring Ralph Moses. Ralph was a pioneer in developing electronic trading systems and the one he built for Lind Waldock eventually became Ran Order, which I used in the early 2000s as the head of electronic trading at The Price Futures Group. I owe a debt of gratitude to Ralph for his work, as I used his system and grew my electronic trading business.

Were you an open outcry trader? Are you willing to tell your story to a camera? We can interview you over Zoom from the comfort of your home. Contact me at johnlothian@johnlothian.com

Do you have a story to tell about adapting to the world of electronic trading? We would like to talk to you about participating in our The Path to Electronic Trading video series. Contact me at the email above.

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

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The FIA has a webinar on October 27 at 10 to 11 AM ET on “Margin processing: the clearing firm perspective.” The moderator is Don Byron, Head of Global Industry Operations & Execution, FIA and the presenters are Alistair Sayers, Head of Funding & Optimisation, Collateral Management, UBS, Diane Sherman, Director Head of Global Collateral Management, Bank of America Securities and Jon Schlamp, Sr. Vice President, Macquarie Futures USA.~SR

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Ralph Moses – The Path to Electronic Trading
JohnLothianNews.com

Ralph Moses started in futures with Geldermann, helping them use a new IBM mainframe. He later started developing a system called Order Express for Lind Waldock, one of the first electronic trading front ends. He used an IBM System One mini computer with 2 MB of memory. He built a risk management system that could tell if an account was at risk depending on how markets were moving. This helped Lind Waldock avoid significant risk during the stock market crash of 1987.

Watch the video »

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Two top Morgan Stanley commodities traders lose jobs over use of WhatsApp; Wall Street continues clampdown on communications channels it cannot monitor
Laura Noonan – FT
Morgan Stanley’s two most senior commodities traders have lost their jobs for using WhatsApp and other unauthorised messaging platforms, reflecting Wall Street’s continued clampdown on communications channels that it cannot monitor. Nancy King, Morgan Stanley’s global head of commodities, and Jay Rubenstein, the bank’s head of commodities trading, are both leaving the bank after a probe into their use of unauthorised communications systems, according to a person familiar with the situation.
/on.ft.com/3kozzlO

*****A strong case for Symphony or other platforms that meet regulatory requirements. WhatsApp is a favorite of some criminals, some government officials and certain sons-in-laws.~JJL

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‘It Has Hit Us With a Vengeance’: Virus Surges Again Across the United States; Unlike earlier outbreaks concentrated in the Northeast and South, the virus is simmering at a worrisome level in most regions.
Sarah Mervosh and Lucy Tompkins – NY Times
As the coronavirus races across the country, it has reached every corner of a nursing home in Kansas, infecting all 62 residents inside. There are so few hospital beds available in North Dakota that patients sick with the virus are being ferried by ambulance to facilities 100 miles away. And in Ohio, more people are hospitalized with the virus than at any other time during the pandemic.
/nyti.ms/35lccTO

****At first we were unaware, naive or stupid, now we are just tired and wanting this to be over. But that is the wrong attitude. The right attitude is we need to persevere and stay safe. This is life until further notice – deal with it.~JJL

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How to Break the Hold of Conspiracy Theories; The big lesson of 2020 is that everything keeps getting more dishonest.
Farhad Manjoo – NY Times
Lately, I have been putting an embarrassing amount of thought into notions like jinxes and knocking on wood. The polls for Joe Biden look good, but in 2020, any hint of optimism feels dangerously naïve, and my brain has been working overtime in search of potential doom.
/nyti.ms/3m5ZBum

*****An important read.~JJL

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Tuesday’s Top Three
Our top story Tuesday was Bloomberg’s The Post-Covid Trading Floor Is Here — With Buffet Lunches, No Masks, about China in the wake of COVID-19. Second was Citadel Securities transformed US hotel into ‘Noah’s Ark’ for traders at height of pandemic, from The Trade. Third was, once again in the top three, Chicago is the ‘rattiest city’ in America for the sixth year in a row, from CNN. Yay Chicago.

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Lead Stories

Commodities King ADM Pivots to Pet Food, Veggie Burgers, and Probiotics; Fighting stagnation in its old-line businesses, the company is searching for growth in the future of nutrition.
Isis Almeida – Bloomberg
Grab a slice of bread in the U.S., a tortilla in Mexico, a glass of orange juice in the U.K., or a pork dumpling in China, and odds are Archer-Daniels Midland Co. has had a hand in it. For decades, ADM, once the self-styled supermarket to the world, helped put the big in Big Food. From trading soybeans to manufacturing high-fructose corn syrup to refining ethanol, it had reach and power rivaled by few in agriculture. But after years of slack growth in its old-line businesses, the 119-year-old giant is hitching its future to such things as pet food, veggie burgers, and probiotics.
/bloom.bg/2Tag5W1

Google antitrust case shows the flaws in competition regulation; Enforcement can bring harmful unintended consequences to the consumer and challengers
Jessica Melugin – FT
The US Department of Justice’s filing of an antitrust lawsuit against Google on Tuesday reflects growing concern in Washington about the power wielded by big technology companies. But it also highlights some of antitrust regulation’s fundamental flaws.
/on.ft.com/31snsN2

Shenzhen given new powers to attract key foreign workers and develop new financial market tools under plans to develop role as China’s tech hub; Central government outlines plans to give southern metropolis more autonomy in key areas following Xi Jinping’s pledge to promote next stage of reform; Southern metropolis to be given power to develop laws in fields such as artificial intelligence and big data and start a stock index futures contract
Kinling Lo, Georgina Lee, Kinling Lo and Georgina Lee – South China Morning Post
Shenzhen will be granted autonomy to make its own laws on artificial intelligence and big data, relax visa restrictions to attract foreign talent, and start a stock futures index under the latest plans to boost its role as tech and finance hub. The National Development and Reform Commission (NDRC) published a list of 40 specific areas in which Shenzhen could make reforms or undertake new ventures in coming years.
/bit.ly/2Hg2w4x

Apartment Rents Are Plunging in the World’s Richest Cities. It’s Time For You to Negotiate; Desire for space and stuck-at-home students weigh on formerly desirable areas — but for how long?
Emily Cadman and Charlie Wells – Bloomberg
In the world’s big financial centers — from New York to Toronto to London to Sydney — rents for inner-city apartments are plunging. International students who normally bolster demand are stuck at home and young renters — the most mobile group in real estate — are finding fewer reasons to pay a premium to live in what is, for now, no longer the center of things.
/bloom.bg/3jm5DFo

A vibrant vision of the City of London’s future; The financial district must reinvent itself for a post-Covid world
THE EDITORIAL BOARD – FT
In 2013, the Archbishop of Canterbury Justin Welby warned of a future in which global banks dominated an ever wealthier City of London with ever-spiralling property prices, served by a “disenfranchised population” commuting in daily from elsewhere. Then came the pandemic. Today, the City is a near-ghost town, its bankers and lawyers working from home offices and attics. To entice them back eventually — at least some of the time — the Square Mile has conjured a vision of a vibrant, diverse future where software designers and artists stroll beside derivatives traders on traffic-free streets. Achieving anything like it will require many stakeholders to work together. But it will strengthen the City’s defences, too, against its other big challenge: Brexit.
/on.ft.com/35ijx6t

Financial Firms Gear Up for Biden and an Emboldened Consumer Watchdog; Biden team envisions Consumer Financial Protection Bureau issuing harsher penalties; companies are pushing to resolve pending cases
Orla McCaffrey and AnnaMaria Andriotis – WSJ
Lenders are worried the days of a business-friendly Consumer Financial Protection Bureau are numbered. Mortgage lenders and financial-technology firms negotiating with the agency over potential settlements are pushing to resolve their cases quickly, according to people with knowledge of the cases. Their thinking, these people said, is that penalties and enforcement will be much harsher if Joe Biden becomes president in January.
/on.wsj.com/3o99Kbw

If Google Is Violating Antitrust Laws, What’s the Right Remedy? Breaking it up into a bunch of Googlettes might not be the best answer
Peter Coy – Bloomberg
This morning the U.S. Department of Justice filed an antitrust lawsuit against Alphabet Inc.’s Google, which Bloomberg News notes “started out as a college research project in the late 1990s” and “now generates about $100 billion in highly profitable revenue each year.” The accusations are strong and numerous but the remedies sought are vague and few.
/bloom.bg/3khPS3L

Traders Pick Up Pieces After Outages at European Exchange Giant; Glitch left traders with unintended exposures and unsure whether a portion of the trades they placed Monday had gone through
Joe Wallace and Ben Dummett – WSJ
Traders and investors across Europe scrambled Tuesday to understand how a series of failures at one of the continent’s biggest exchange-operators had affected their positions in stocks, bonds and derivatives.
/on.wsj.com/3odqWN6

The Fed’s $4 Trillion Lifeline Never Materialized. Here’s Why; The Federal Reserve was meant to take $454 billion and drastically expand it. So far, it has lent $20 billion.
Jeanna Smialek
Jeanna Smialek – NY Times
As companies furloughed millions of workers and stock prices plunged through late March, Treasury Secretary Steven Mnuchin offered a glimmer of hope: The government was about to step in with a $4 trillion bazooka.
/nyti.ms/31oTfhK

BoE and CFTC reinforce cross-border supervision of derivatives clearing in new agreement; UK and US derivatives watchdogs sign MOU to establish new framework for overseeing international clearing houses.
Joe Parsons – The Trade
Regulators for the UK and US derivatives markets have signed a new cross-border supervisory agreement for clearing houses operating in both countries. The Bank of England (BoE) and the US Commodity Futures Trading Commission (CFTC) announced the signing of a new memorandum of understanding (MOU) where they have established a cooperation framework for overseeing international clearing houses.
/bit.ly/2HcMI33

Trump’s H-1B Reforms Will Make America Poorer; The administration’s new rules for the immigrant visa program will punish small businesses and stifle innovation.
Editorial Board – Bloomberg
Newly announced reforms to the H-1B immigrant visa system have the potential to reduce the number of foreign workers allowed into the U.S., just as the Donald Trump administration intends. The problem is that goal makes no sense. If implemented, the changes will seriously harm many businesses — small firms and health-care providers especially. Overall, they’ll harm U.S. workers, not help them.
/bloom.bg/2TfVWhi

Reports of Shale’s Death Were Greatly Exaggerated; ConocoPhillips buying Concho caps a flurry of deals that show there’s life in the industry even with oil at around $40 a barrel.
David Fickling – Bloomberg
Remember seven months ago, when a three-way supply war between Saudi Arabia, Russia and the U.S. was about to deal a mortal blow to America’s shale oil industry? Whatever happened with that? All the evidence of late is that there’s life in the oil patch yet. Production from Texas’s Permian Basin in September was 4.49 million barrels a day. That’s down from a peak of 4.9 million in March, to be sure, but higher than in any month prior to September 2019 — and the cut is considerably smaller than those enacted by Saudi Arabia and Russia since they struck an agreement to bring the oil market back from the dead in April.
/bloom.bg/3kjt2sj

Japan Plans Hub for Foreign Brokers to File in English in Attempt to Recruit Banks
Emi Urabe and Emi Nobuhiro – Bloomberg
Japan is considering creating a hub where financial firms can file regulatory paperwork in English as Tokyo aims to recruit banks and brokerages away from Hong Kong and other parts of the world, according to people familiar with the matter. The one-stop venue could start operating as soon as next spring with English-language filing to begin before that in early 2021 via Japan’s Financial Services Agency, according to the people.
/bloom.bg/3kw87md

The threat of long economic Covid looms; Governments need to focus on the cost of inaction, not the cost of supporting economies
Martin Wolf – FT
Covid-19 has left many patients with debilitating symptoms after the initial infection has cleared. This is “long Covid”. What is true of health is likely to be true of the economy, too. The pandemic is likely to give the world not just a deep recession, but years of debility. To meet the threat of a “long economic Covid”, policymakers must avoid repeating the mistake of withdrawing support too soon, as they did after the 2008 financial crisis.
/on.ft.com/2HcYRoF

Applying for PPP Forgiveness? Here Are Some Things to Know; Borrowers should apply to the bank that originally extended the loan; some lenders haven’t started accepting applications
Amara Omeokwe – NY Times
U.S. lenders issued more than five million forgivable loans through the federal government’s coronavirus aid initiative for small businesses, the Paycheck Protection Program. The Small Business Administration in August started accepting applications to have the loans forgiven, and it began approving them this month. Here are some things to know.
/on.wsj.com/3meqyMF

Coronavirus

The Pandemic Guts Airbus. It’s Worse for Thousands of Suppliers
Tara Patel and Charlotte Ryan – Bloomberg
Agnes Timbre-Sauniere’s family business near Montauban, in southwestern France, survived two world wars and more than a century of booms and busts, but the unprecedented collapse in global air travel has her worried.
/bloom.bg/3dJ98EA

Covid-19 Vaccines to Be Stored Secretly Under Tight Security; Drugmakers and others plan to use fake shipments and GPS trackers to prevent potential thefts
Jared S. Hopkins – WSJ
Health authorities, hospitals and pharmaceutical companies are storing Covid-19 vaccines in secure, undisclosed locations and taking other steps to protect the shots against a looming threat: theft. As the leading vaccine candidates advance closer to use, vaccine makers such as Pfizer Inc. PFE -0.82% are deploying GPS software for tracking distribution and plotting fake shipments in dummy trucks to confuse criminals. Glassmaker Corning Inc. is equipping vials with black-light verification to curb counterfeiting. And some hospitals expected to be among the first vaccination sites are beefing up their pharmacies’ security systems.
/on.wsj.com/2IHhVvl

Schools play limited role in spread of Covid-19, studies signal; European research boosts policymakers who fear shutdown harms students and leaves parents unable to work
Andrew Jack and Bethan Staton and Guy Chazan – FT
A series of studies has cast doubt on the role of schools in spreading the coronavirus as governments across Europe weigh fresh restrictions to slow a second wave of infections. Studies in Germany and Norway, as well as two reviews focusing on education globally, suggest a renewal of widespread school closures would have a limited effect on curbing Sars-Cov-2, the virus that causes Covid-19.
/on.ft.com/2TdIlqG

Italian PM Considers New Curbs After Regions Tighten Restrictions
John Follain, Chiara Albanese, and Alberto Brambilla – Bloomberg
Lombardy region including Milan adds curfew starting Thursday; Rome weighing new national decree as cases rise, officials say
Milan, Italy’s financial capital, will be under night-time curfew starting Thursday in a bid to contain the renewed spread of the coronavirus, even as Giuseppe Conte’s government weighs softer nationwide measures. The curfew in Lombardy, Italy’s most populous region which includes Milan, will go into effect on Thursday and be enforced from 11 p.m. to 5 a.m., according to a copy of a decree seen by Bloomberg.
/bloom.bg/3kjmqKC

U.K. Expands Areas With Highest Restrictions as Virus Surges
Alex Morales and Kitty Donaldson – Bloomberg
South Yorkshire joins Manchester, Liverpool under tier 3 curbs; Local leaders demand more financial help for people affected
The U.K. announced tougher coronavirus restrictions for South Yorkshire on Wednesday as arguments raged over support for businesses and workers affected by curbs being imposed across the north of England. Sheffield City Region Mayor Dan Jarvis said pubs and bars will be closed from 00:01 a.m. on Saturday, as the area becomes the fourth region subjected to the government’s highest tier of coronavirus restrictions.
/bloom.bg/34jPTyB

Airlines Will Face a Reckoning Like the Banks Did; When the pandemic is over, travel groups should be forced to rethink their dependence on customer prepayments.
Chris Bryant – Bloomberg
When U.K. travel brand Thomas Cook relaunched as an online travel agent last month, it needed a way to convince customers that it’s become a more reliable custodian of their money since its 2019 bankruptcy and that they’ve nothing to fear from booking a holiday during a pandemic.
/bloom.bg/2Tggbvf

Short, Strict Lockdowns Can Make a Big Difference; Short, strict lockdowns should be considered just one essential tool we can use to live our lives safely in the age of Covid-19.
Mark Buchanan – Bloomberg
As the coronavirus pandemic continues its sweep through the U.S., India and Brazil, the dreaded second wave is now gathering strength in nations that had once contained the virus. Numbers are rocketing upward, especially in Europe, even as winter approaches, which will bring the added burden of seasonal illnesses such as influenza. Attempting to tamp things down, and to avoid overwhelming their health services, authorities in France, Germany and the U.K. are now considering stronger social distancing measures, with others — including in Ireland and Israel — ordering short, strict “circuit breaker” lockdowns.
/bloom.bg/34i8rit

Boris Johnson’s Bet on British Common Sense Isn’t Paying Off; The prime minister has been reluctant to set rules for fighting the coronavirus, counting on people to behave responsibly. That approach hasn’t worked.
Rosalind Mathieson – Bloomberg
Boris Johnson does not like rules. The U.K. prime minister presumes his compatriots don’t either. Good old British “common sense” will always save the day.
/bloom.bg/2HpWXQY

Every resident of Kansas nursing home infected with Covid-19; All 62 residents of the Andbe Home in Norton tested positive and 10 have died, the county health department said.
Phil Helsel
All 62 residents of a Kansas nursing home have tested positive for the coronavirus, and 10 have died, health officials said. One resident is in the hospital, and the rest are being quarantined.
/nbcnews.to/3obhGJp

The coronavirus pandemic has caused nearly 300,000 more deaths than expected in a typical year
Lenny Bernstein – Washington Post
The coronavirus pandemic has left about 299,000 more people dead in the United States than would be expected in a typical year, two-thirds of them from covid-19 and the rest from other causes, the Centers for Disease Control and Prevention reported Tuesday.
/wapo.st/35cYPVq

Exchanges, OTC and Clearing

NYSE Says It’s Ready to Leave N.J. With Trade Tax Threatened
Elise Young – Bloomberg
Biggest exchange already shifting some operations out of state; Lawmakers counting on $1 billion in revenue over two years
The New York Stock Exchange told New Jersey lawmakers that it’s prepared to move operations out of state should they impose a new tax on electronic trades via data servers.
/bloom.bg/2HiSrUD

NZX / EEX partnership selected to provide emissions auctions for NZ Government
EEX
A joint bid by NZX and the European Energy Exchange (EEX) has been selected to
develop and operate the managed auction service for the New Zealand Emissions Trading Scheme (NZ ETS) – one of the Government’s main tools for meeting domestic and international climate policy targets.

Compleo Charging Solutions AG new in the Prime Standard of the Frankfurt Stock Exchange
Deutsche Boerse
Compleo Charging Solutions AG (ISIN: DE000A2QDNX9 ) has been listed in the Prime Standard segment of the Frankfurt Stock Exchange since today . At the start of trading, the shares were quoted at EUR 44.00. The issue price was 49.00 euros.
/bit.ly/31v3XDp

TMX Group Adds Two New Directors to its Board
TMX
TMX Group Limited is pleased to introduce Moe Kermani and Claude Tessier as the company’s newest additions to its Board of Directors. Mr. Kermani has extensive experience in the technology industry as a senior executive and director of several leading-edge, entrepreneurial companies. He currently serves as Managing Director at Vanedge Capital, an early-stage venture capital fund, where he focuses on investments in cloud computing, machine intelligence, analytics and cybersecurity. He holds an M.Sc. and Ph.D. in physics from the University of British Columbia.
/bit.ly/31oY7U4

Nasdaq Announces Retirement of Chief Financial Officer Michael Ptasznik; Appoints Controller and Chief Accounting Officer Ann Dennison as CFO
Nasdaq
Nasdaq (Nasdaq: NDAQ) today announced that Michael Ptasznik has decided to retire from his position as Chief Financial Officer effective February 28, 2021. Ptasznik will be succeeded by Ann Dennison, Nasdaq’s Senior Vice President, Controller and Chief Accounting Officer. Dennison will assume the role of Chief Financial Officer effective March 1, 2021.
/bit.ly/3ofmbCw

Nasdaq Reports Third Quarter 2020 Results; Delivers Broad-Based 13% Revenue Growth vs. Prior Year Period
Nasdaq
Third quarter 2020 net revenues were $715 million, an increase of 13% over the third quarter of 2019. Compared to the prior year period, revenues in the non-trading segments2 increased 12% primarily due to organic growth while Market Services revenues increased 15%, due to elevated trading volumes in U.S. equities and options. The GAAP operating margin was 46% in the third quarter of 2020, up from 36% in the prior year period, while the non-GAAP3 operating margin of 52% increased from 50% in the prior year period.
/bit.ly/2IKlTU0

Nasdaq Announces Quarterly Dividend of $0.49 Per Share
Nasdaq
The Board of Directors of Nasdaq, Inc. (Nasdaq: NDAQ) has declared a regular quarterly dividend of $0.49 per share on the company’s outstanding common stock. The dividend is payable on December 18, 2020 to shareholders of record at the close of business on December 4, 2020. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.
/bit.ly/31vpfRn

Clearing Member Firms; Back Office Managers
CME Group
Listed are the relevant delivery dates for the November 2020 contracts for the Chicago Mercantile Exchange Inc. (“CME”), Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”), Commodity Exchange Inc. (“COMEX”) and the Dubai Mercantile Exchange Limited (“DME”).
/bit.ly/3m938bc

Implementation in SPAN of New Categories to Reflect CFTC Regulatory Revisions – Effective: January 27, 2021
CME Group
On January 27, 2021, the CFTC will adopt revised Regulation 39.13(g)(8)(ii) relating to customer margining. The revisions affect long-standing practices for classifying client accounts for margining purposes. The relevant Federal Register release can be found at https://www.cftc.gov/sites/default/files/2020/01/2020-01065a.pdf.
/bit.ly/3o9J36t

SGX welcomes GSUM-Titanland as Accredited Issue Manager
SGX
Singapore Exchange (SGX) is pleased to welcome GSUM-Titanland Capital Pte Ltd (GSUM-Titanland) as a newly accredited Issue Manager for SGX Mainboard listings. GSUM-Titanland is a corporate finance advisory firm and an associate company of GSUM Fund Management. The company helps clients to raise funds globally through capital market solutions including REIT and Business Trust listings, company IPOs, pre-IPO investments, M&As and secondary fundraisings. As an accredited Issue Manager, GSUM-Titanland is qualified to advise companies seeking to list on the SGX Mainboard.
/bit.ly/3m64GTt

DTCC Launches Enhanced Access To Critical Money Markets Data As Firms Navigate Heightened Volatility
Mondovisione
The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today announced that its DTCC Money Market Kinetics service has been enhanced to deliver more frequent updates to critical data, helping to provide increased transparency into the volatility that has been impacting money markets since the start of the COVID-19 pandemic.
/bit.ly/3m9bPlQ

Fintech

Applied Derivatives becomes first broker to distribute Trading Technologies platform in South Africa; Applied Derivatives is providing Trading Technologies clients with access to the Johannesburg Stock Exchange (JSE) for the trading of all equity and currency derivatives.
Annabel Smith – The Trade
Chicago-based technology provider Trading Technologies (TT) has signed an agreement with Applied Derivatives which becomes the first broker to distribute its TT platform in South Africa.
/bit.ly/31tdLOc

Virtu enhances FX products and services with a view to provide one-stop solution; New initiatives include execution management platform?for FX, broker-neutral access to?dealer liquidity, FX?trade?analytics?and data.
Jonathan Watkins – The Trade
Virtu Financial has made a number of product and service enhancements in its broker-neutral FX offering, supporting the firm’s strategic initiative to deliver a one-stop solution for buy-side FX execution. The new products include an execution management platform?for FX, broker-neutral access to?dealer liquidity, FX?trade?analytics?and data and post-trade services.
/bit.ly/2IV1SdL

LINK Mobility lists on Oslo Børs
Euronext
The software company LINK Mobility has today been listed on Oslo Børs (ticker code: LINK). LINK Mobility is one of Europe’s leading providers of mobile messaging and Communications Platform as a Service («CPaaS») solutions. “Becoming a stock exchange listed company marks a significant milestone on the way to our ambitious goal of becoming a global leader in the CPaaS industry”, commented Guillaume Van Gaver, Group CEO.
/bit.ly/35jpZtZ

Fintech unicorn Ant Group gets CSRC regulatory nod for Shanghai leg of jumbo IPO; China Securities Regulatory Commission approves registration for Ant Group’s listing in Shanghai
Chad Bray and Alison Tudor-Ackroyd – South China Morning Post
China’s top security regulator approved the Shanghai leg of fintech unicorn Ant Group’s initial public offering on Wednesday, the final regulatory hurdle for what is expected to be the biggest IPO ever.
/bit.ly/2HnYdEi

Low latency trading solutions vendor continues Asian expansion
Mondovisione
The changing dynamics of the currency markets in the Asia-Pacific region is driving trading venues and market participants to invest in trading infrastructure to compete. Chronicle Software (Chronicle), a multi-asset low latency trading software provider, has expanded its global footprint with an office in Singapore to serve as an additional local base to support these requirements across the region.
In line with the region’s rapid development, the diverse currency markets in Asia are continuing to show strong growth. Over the last four years, Chronicle has seen increasing demand from local trading venues and market participants needing to build low latency, high performance trading capability to capitalise on these opportunities.
/bit.ly/2IJykiS

Hong Kong FinTech Week 2020 To Humanise FinTech And Drive Growth
Mondovisione
Invest Hong Kong (InvestHK) today (October 21) revealed details about Hong Kong FinTech Week 2020, which will take place virtually from November 2 to 6. The Week highlights a golden opportunity to humanise fintech to reignite growth, build trust and financially empower society and business in the post-COVID-19 era. A global reset will put people first in the policy-setting agenda worldwide, with Asia emerging as the engine for global recovery. Themed “Humanising FinTech”, the week-long event will explore how fintech can unlock the power of financial services to drive positive impacts for society and business.
/bit.ly/35o8GI8

Cryptocurrencies

PayPal to enable crypto purchases with the help of Paxos
Aislinn Keely and Frank Chaparro – The Block
Payments giant PayPal and its social payments platform Venmo are set to offer crypto buying and selling, people familiar with the matter said. Crypto will solely be offered on PayPal to start, with Venmo slated to follow in 2021, the people said. PayPal has obtained a conditional license from the New York Department of Financial Services (NYDFS), allowing the firm to offer crypto buying and selling. The news was first reported by Reuters. A conditional license allows a new firm to be compliant through collaboration with an authorized licensee, with the expectation that the new firm will eventually seek its own. For its part, PayPal is collaborating with Paxos.
/bit.ly/3kdENR7

BitMEX Accelerates Mandatory ID Verification After Charges of Lax Anti-Money Laundering Controls
Zack Voell – Coindesk
BitMEX, which has been charged by the U.S. government and a regulator with facilitating unregistered trading, has accelerated its mandate for all customers to verify their identities by Nov. 5, three months earlier than its original deadline of early February.
/bit.ly/2HelyJ4

$5 million penalty proposed between SEC and Kik to end ICO lawsuit
Michael McSweeney – The Block
Less than a month after a critical court decision in their ongoing legal fight, software firm Kik and the U.S. Securities and Exchange Commission have agreed to a proposed settlement that would involve a $5 million penalty. The two sides had until Tuesday to submit their proposal, as previously reported. According to newly published court documents, the $5 million penalty forms part of a proposed agreement in the case over Kik’s $100 million initial coin offering, or ICO.
/bit.ly/3kjzjEz

Central Bank of Bahamas Launches Landmark ‘Sand Dollar’ Digital Currency
Sebastian Sinclair – Coindesk
The Central Bank of the Bahamas has officially launched its national digital currency. The first of its kind in the world to have been fully deployed, the sand dollar is a digital version of the Bahamian dollar. Issued by the country’s monetary authority as a central bank digital currency (CBDC), the announcement of the launch came via a tweet on Wednesday.
/bit.ly/3dLOkwh

OKEx is resuming peer-to-peer fiat trading for Chinese yuan
Wolfie Zhao – The Block
Cryptocurrency exchange OKEx said in an announcement on Wednesday that it will resume the peer-to-peer (P2P) fiat-to-crypto trading tunnel for Chinese yuan, Vietnamese dong, and Indian rupee, starting from 20:00 Hong Kong Time on October 21. OKEx disabled the P2P fiat-to-crypto trading interface after it announced the suspension of withdrawal of crypto assets on the platform last Friday, saying that it was “out of touch” with a private key holder who was “cooperating with a public security bureau in investigations where required. At the moment, OKEx’s P2P fiat trading page shows no active bid or ask quotes for any crypto assets against fiat currencies.
/bit.ly/37tvsB8

CBDCs Mean Evolution, Not Revolution
Benoit Coeure – Coindesk
Who wants a central bank digital currency (CBDC)? Plenty of people, apparently; industry groups are advocating digital cash, millions of people have reportedly signed up to a lottery to receive digital renminbi in Shenzhen as part of the Chinese central bank’s pilot project, and the Libra Association wants to “integrate” CBDCs. Technology firms, banks, NGOs and consultancies are now jostling to ride the next wave of innovation. Benoît Cœuré is head of the Innovation Hub at the Bank for International Settlements and a member of the bank’s Executive Committee. Previously, he was a member of the executive board of the European Central Bank. From 2013 to 2019, he chaired the BIS’ Committee on Payments and Market Infrastructures.
/bit.ly/34fhtg8

Tether Still Dominates Stablecoins, but USDC and Dai Are Winning DeFi
Muyao Shen – Coindesk
While tether (USDT), with a market cap surpassing $16 billion, continues to hold the lion’s share of stablecoins in circulation, two smaller rivals are trouncing it in crypto’s hottest market this year, decentralized finance (DeFi). Measured by the total value locked in six of the most popular DeFi protocols – Compound, Maker, Uniswap, Curve, Aave and Balancer – USD coin (USDC) is in the lead among stablecoins followed by dai (DAI), the native stablecoin to MakerDAO. That’s according to data compiled by Flipside Crypto as of Oct. 19.
/bit.ly/31sy1zr

UK-Listed Firm Mode Putting up to 10% of Cash Reserves Into Bitcoin
Daniel Palmer – Coindesk
Mode Global Holdings PLC, a London Stock Exchange-listed company, has announced plans to make a “significant purchase” of bitcoin as part of its treasury investment strategy. In a press release on Wednesday, the fintech group said it will convert up to 10% of its cash reserves into the cryptocurrency as part of a long-term strategy to “protect investors’ assets from currency debasement.”
/bit.ly/34hApLx

Validators Drop Off Ethereum 2.0 Testnets as Mainnet Release Looms
William Foxley – Coindesk
If testnet participation is any indication, Ethereum 2.0 validators are itching for the real thing as the network kickoff looms. Only 36% of the necessary 66% participants needed to secure the Medalla testnet have stuck around, according to beaconcha.in. That’s echoed by the more recent Zinken testnet, which has just under the 66% needed to function properly as of Monday, according to beaconcha.in. Those testnets – meant to practice the launch of Eth 2.0’s Phase 0 this fall – launched in September and October, respectively.
/bit.ly/2HlnUFN

Predictions Platform Polymarket Raises $4M From Polychain, Naval Ravikant and More
Sebastian Sinclair – Coindesk
Polymarket, a decentralized information marketplace, has closed a $4 million funding round led by Polychain Capital. Announced on Monday, the round was joined by some of the industry’s most well-known advocates and investors such as former AngelList CEO Naval Ravikant, former Coinbase CTO Balaji Srinivasan, CoinShares CSO Meltem Demirors among others. The startup said the investment will help it move to stage 2 of its beta release, which will remove technical complexities and make it easier for mainstream users to onboard and trade on the platform.
/bit.ly/3kdFo5j

Politics

Sen. Loeffler under fire in free-for-all Georgia Senate special election debate
The Associated Press, NBC News
Georgia Sen. Kelly Loeffler and Rep. Doug Collins both accused the other of lying and touted their own conservative credentials in their first debate, while Democrat Raphael Warnock assailed Loeffler for associating herself with a congressional candidate who has embraced baseless QAnon conspiracy theories and made racist remarks.
/yhoo.it/37omsNv

Trump Records Shed New Light on Chinese Business Pursuits; As he raises questions about his opponent’s standing with China, President Trump’s taxes reveal details about his own activities there, including a previously unknown bank account.
Mike McIntire, Russ Buettner and Susanne Craig – NY Times
President Trump and his allies have tried to paint the Democratic nominee, Joseph R. Biden Jr., as soft on China, in part by pointing to his son’s business dealings there.
/nyti.ms/37rtTDL

Report: Tax records show Trump tried to land China projects
Associated Press
President Donald Trump spent a decade unsuccessfully pursuing projects in China, operating an office there during his first run for president and forging a partnership with a major government-controlled company, The New York Times reported Tuesday.
/yhoo.it/3jiyWc7

Why Militias, Part of America’s Past, Are a Worry Today
Erik Larson – Bloomberg
The self-styled militia groups raising alarm in the U.S. today draw inspiration from the early days of the republic, when civilian militias served as local defense forces and some fought alongside George Washington’s Continental Army in the Revolutionary War. But today’s militias are associated with anti-government and (at times) White supremacist ideology, making noise during sometimes violent clashes with the authorities before receding from public view. One militia’s alleged plot to kidnap Michigan’s governor in response to coronavirus lockdown measures put the groups back in the spotlight weeks before a presidential election.
/bloom.bg/3jisXUr

Markets pivot for ‘blue wave’
FT
Find out how investors are preparing for a possible Joe Biden win with a rotation towards value stocks and a focus on currencies, fixed income, energy and virtue investing — and how some are bracing for a contested result.
/on.ft.com/37qp3qe

Trump Urges Barr to Initiate Investigation Into Joe Biden and Son; President increases calls for probes of rival as other inquiries fail to produce indictments or show wrongdoing
Andrew Restuccia and Sadie Gurman – WSJ
President Trump urged Attorney General William Barr to initiate an investigation into former Vice President Joe Biden and his son Hunter, escalating his efforts to discredit his Democratic opponent two weeks before the election.
/on.wsj.com/3m5XdDV

Voters in Two States Report Threatening ‘Vote for Trump’ Emails; One of the emails, obtained by The Times, seemed to suggest that it was sent by an American far-right group, but its metadata showed that it originated from an Estonian server.
Nick Corasaniti, Ben Decker and Stephanie Saul – NY Times
Voters in Florida and Alaska reported receiving menacing and deceptive emails on Tuesday that used false claims about public voting information to threaten voters: “Vote for Trump on Election Day or we will come after you.” (There is no way for any group to know for whom individual voters cast their ballots.)
/nyti.ms/3o6YMDv

The Dystopian Police State the Trump Administration Wants; Law enforcement’s problems could get even worse.
Phillip Atiba Goff – NY Times
Jenée Desmond-Harris, a staff editor in Opinion, wrote about this essay in today’s Opinion Today newsletter. You can read it here. Since this spring, when Americans watched George Floyd take his last breaths as a Minneapolis police officer, Derek Chauvin, knelt on his neck, we’ve borne witness to the worst that this country’s criminal justice system has to offer: continued extrajudicial killings, failure to hold officers accountable and state-sponsored violence against those standing up for justice.
/nyti.ms/2TatwFr

Wall Street could call the 2020 election before the media does
Matt Egan, CNN Business
With an unprecedented number of mail-in ballots to count, news organizations will probably exercise extreme caution before declaring a winner on the night of the election. Wall Street, on the other hand, isn’t known for its patience.
/cnn.it/3dS3W1l

Scaramucci Says Trump Tried to ‘Shake Down China’ Amid Bank Account Revelations
David Brennan – Newsweek
Former White House Communications Director Anthony Scarramucci has accused President Donald Trump of trying to “shake down China for personal gain,” amid revelations of the president’s previously undisclosed business interests in China, as reported by The New York Times on Tuesday.
/bit.ly/3m8DbZv

Regulation

CFTC and BoE Sign New MOU for Supervision of Cross-Border Clearing Organizations
CFTC
The Commodity Futures Trading Commission (CFTC) and the Bank of England (BoE) have today announced that they have signed an updated Memorandum of Understanding (MOU) regarding cooperation and the exchange of information in the supervision and oversight of clearing organizations that operate on a cross-border basis in the United States and in the United Kingdom. CFTC Chairman Heath P. Tarbert and BoE Deputy Governor for Financial Stability Jon Cunliffe published a joint op-ed for Risk.net outlining the agreement.
/bit.ly/3m4z9RL

Trial of Russian charged in bitcoin fraud begins in Paris; The trial of a Russian man alleged to have used ransomware in a 135 million euros ($157 million) bitcoin fraud will begin Monday
Nicolas Vaux-Montagny, Suylvie Corbet – Associated Press
The trial of a Russian man alleged to have used ransomware in a 135 million euros ($157 million) bitcoin fraud will begin Monday.
/abcn.ws/3ohlWHt

ICYMI: Chairman Tarbert in Risk.Net: Strengthening Supervisory Cooperation in Derivatives Markets
CFTC
Excerpts from Chairman Heath Tarbert’s Op-ed with the Bank of England’s Jon Cunliffe on the CFTC-BoE MOU for Supervision of Cross-Border Clearing Organizations
“The financial relationship between the United States and United Kingdom is a hugely important one. The UK is the single largest investor in the US – UK firms invested more than $560 billion in the region in 2018 – while the US is the largest investor in the UK, with firms investing more than $750 billion in the UK market in that same year.
/bit.ly/3o7oLuq

Societe Generale Securities Australia Pty Ltd receive $30,000 penalty for breaching client money rules
ASIC
Societe Generale Securities Australia Pty Ltd (SGSAPL) has been sentenced in Sydney’s Downing Centre Local Court on charges brought by ASIC relating to breaches of client money obligations.
/bit.ly/35hy1n1

NFA orders Colorado commodity pool operator Highland Quantitative Driven Investments LLC to withdraw from and not reapply for NFA membership
NFA
NFA has ordered Highland Quantitative Driven Investments LLC (Highland), an NFA Member commodity pool operator located in Colorado, to withdraw from and not reapply for NFA membership.
/bit.ly/34hq9Tk

UK regulator proposes to beef up auditors’ obligation on fraud; Reforms in accounting standard sought after series of scandals damaged industry’s reputation
Tabby Kinder – FT
The UK accounting regulator has proposed enhanced requirements on auditors to identify fraud in company accounts, the first such reform in 16 years after a series of scandals that damaged the industry’s reputation.
/on.ft.com/3dMTSqA

SEC plan to cut fund disclosures faces almost unanimous opposition; Higher threshold for reporting stock holdings would benefit activist investors, US markets regulator told
Ortenca Aliaj and Eric Platt – FT
The US Securities and Exchange Commission has received almost unanimous opposition from companies and investors against plans to allow most hedge funds to obscure their stock holdings. The change to reporting requirements, proposed this July, would allow money managers with less than $3.5bn of assets to skirt quarterly disclosures of their stock positions, up from the current threshold of $100m.
/on.ft.com/35eXVb8

Notice of SFAC Election and Mailing of Ballots; Ballot Due Date: November 19, 2020
FINRA
The purpose of this Election Notice is to notify FINRA small firm members of the process to fill one South and one Midwest Region vacancy on the Small Firm Advisory Committee (SFAC). In response to the Election Notice published on September 1, 2020, individuals only self-nominated to run for the South Region seat. Therefore, ballots will be distributed to elect one SFAC South Region representative; and because no individuals self-nominated to run for the Midwest Region seat, this seat will be filled by appointment. FINRA small firm members1 in the South Region as of the close of business on October 19, 2020, are eligible to vote in this election. All eligible firms are urged to vote in this election. The successful candidate for the South Region seat (and the appointed individual for the Midwest Region seat) will serve a three-year term beginning on January 1, 2021.
/bit.ly/34eDEDf

Notice of FINRA Regional Committee Elections and Mailing of Ballots; Ballots Due: November 19, 2020
FINRA
The purpose of this Election Notice is to notify firms of the upcoming elections to fill vacancies on the FINRA Regional Committees, and the mailing of ballots to eligible firms.
/bit.ly/2TcBVbt

The National Adjudicatory Council (NAC) Revises the Sanction Guidelines; Effective Date: Effective Immediately
FINRA
The NAC has revised the principal considerations in the Sanction Guidelines to expressly contemplate a customer’s age or physical or mental impairment that renders the individual unable to protect his or her own interests.
/bit.ly/3klXQca

CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Amend its Fees Schedule (Release No. 34-90232; File No. SR-CBOE-2020-097; October 20, 2020); see also Exhibit 5
Cboe
/bit.ly/2Tc5g5w

CBOE: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend its Fees Schedule to Adopt New Fee Codes Related to the Execution of Equity Legs of a Stock-option Order (Release No. 34-90229; File No. SR-CBOE-2020-095; October 20, 2020); see also Exhibit 5
Cboe
/bit.ly/2ThzEeM

FINRA: Notice of Filing of a Proposed Rule Change to Amend the FINRA Codes of Arbitration Procedure to Increase Arbitrator Chairperson Honoraria and Certain Arbitration Fees (Release No. 34-90227; File No. SR-FINRA-2020-035; October 20, 2020)
FINRA
/bit.ly/3kjiWb0

Phlx: Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change to List and Trade Options on a Nasdaq-100 Volatility Index (Release No. 34-90226; File No. SR-Phlx-2020-41; October 20, 2020)
Nasdaq
/bit.ly/3klYx5g

Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Current Pilot Program Related to EDGX Rule 11.15, Clearly Erroneous Executions, to the Close of Business on April 20, 2021 (Release No. 34-90233; File No. SR-CboeEDGX-2020-051; October 20, 2020)
Cboe
/bit.ly/3dJkmJe

Exhibit 5 (Release No. 34-90233; File No. SR-CboeEDGX-2020-051; October 20, 2020)
Cboe
/bit.ly/3dSSra4

Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend its Fees Schedule to Adopt New Fee Codes Related to the Execution of Equity Legs of a Stock-option Order (Release No. 34-90228; File No. SR-CboeEDGX-2020-048; October 20, 2020)
Cboe
/bit.ly/2Tahqfs

Exhibit 5 (Release No. 34-90228; File No. SR-CboeEDGX-2020-048; October 20, 2020)
Cboe
/bit.ly/3dJpIEq

Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Current Pilot Program Related to BZX Rule 11.17, Clearly Erroneous Executions, to the Close of Business on April 20, 2021 (Release No. 34-90231; File No. SR-CboeBZX-2020-077; October 20, 2020)
Cboe
/bit.ly/3jmhxPA

Exhibit 5 (Release No. 34-90231; File No. SR-CboeBZX-2020-077; October 20, 2020)
Cboe
/bit.ly/3jf9nbH

Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Current Pilot Program Related to BYX Rule 11.17, Clearly Erroneous Executions, to the Close of Business on April 20, 2021 (Release No. 34-90230; File No. SR-CboeBYX-2020-030; October 20, 2020)
Cboe
/bit.ly/3dJ0PsD

Exhibit 5 (Release No. 34-90230; File No. SR-CboeBYX-2020-030; October 20, 2020)
Cboe
/bit.ly/3jk39aq

Investing and Trading

Investors opt for the ‘do nothing’ trade ahead of US election; Memories of shock 2016 result discourage asset managers from making big directional bets
Katie Martin and Laurence Fletcher – FT
As the days count down to a US presidential election that could alter the course of global markets, some investors have crafted an odd-sounding strategy for navigating the outcome: they plan to do nothing.
/on.ft.com/3kiemtJ

United throws ‘kitchen sink’ at investors to secure $3bn borrowing; Goldman agrees to pay interest costs for 18 months if airline runs into trouble
Joe Rennison and Claire Bushey – FT
United Airlines pledged 352 aircraft, 99 engines and a host of spare parts to investors to refinance emergency loans taken out when the pandemic struck this year, after a similar deal failed to get off the ground in May.
/on.ft.com/37sCdDa

UK dividend cuts deliver another blow to investors; Shareholder payouts by listed businesses have halved in space of a year
Madison Darbyshire – FT
UK companies looking to conserve cash during the pandemic halved the amount they paid in dividends in the third quarter compared with last year, with two-thirds of listed businesses cutting or cancelling payouts altogether.
/on.ft.com/2HntPKx

Buy a gold bar – help save a rhino; How the rush to buy bullion could promote a good cause
Pilita Clark – FT
In the middle of February, as the coronavirus crisis was gathering force, a Canadian gold-mining company made an unusual announcement. B2Gold said it was donating 1,000 ounces of gold to help save what it called a “critically endangered global treasure”: the black rhinoceros in the southern African country of Namibia.
/on.ft.com/2IUVpiZ

Big U.S. Treasuries Wagers Bet Against Election Fireworks
Stephen Spratt and Edward Bolingbroke – Bloomberg
New Treasury volatility trades bet against significant moves; Trades pay out if yields are little changed following the vote
The latest big options wagers on Treasuries are bucking the trend of betting on a tempestuous U.S. election. One trader spent around $2.5 million on Tuesday on a bet that Treasuries will experience just modest declines following the Nov. 3 vote. The other eye-catching position was a hefty punt on the weeks following the vote, calling for bond yields to remain stuck in a range.
/bloom.bg/2Hm5cO3

Blank-Check Company Deals Driven by Speculation, Chanos Says
Ilya Banares – Bloomberg
Short-seller contends SPACs don’t perform well historically; Chanos says companies are putting aside metrics like earnings
The surge in blank-check company deals is a sign of unfettered speculation and investors may see lackluster returns from these offerings, legendary short-seller Jim Chanos said. “We are going to blow through the records of 1999 and 2000 in terms of new issuance,” Chanos said at Grant’s Interest Rate Observer’s fall conference on Tuesday. “We are now seeing speculation in all its glory come back.”
/bloom.bg/31uao9R

ECB’s Lagarde Says Virus Resurgence Is a Clear Risk to Economy
William Horobin – Bloomberg
Central bank meets next week to set policy as pandemic spreads; Economists expect stimulus in December; BOE may act next month
European Central Bank President Christine Lagarde said the unexpectedly early pickup in coronavirus infections is a “clear risk” to the economic outlook, in a sign that policy makers are gearing up for more monetary stimulus. “Most scientists in the euro zone were expecting the resurgence of the epidemic in November or December, with the cold,” Lagarde said in a pre-recorded interview with France’s LCI on Tuesday evening. “It’s come earlier, and from that point of view that has surprised. It’s not a good omen.”
/bloom.bg/31rZ0LH

Environmental, Social and Corporate Governance

Trump Administration Moves at ‘Warp Speed’ to Scrap ESG Rule; The White House bid to make green investing more difficult would likely face legal obstacles.
Tim Quinson – Bloomerg
Despite widespread objections from the money management industry, President Donald Trump, through the U.S. Department of Labor led by Eugene Scalia, is speeding ahead with a proposal to make it more difficult for fiduciaries of retirement plans to direct money to ESG-focused funds.
/bloom.bg/3dNraFG

Hedge Funds Shunned on Principle by $20 Billion ESG Manager
Christian Wienberg – Bloomberg
A pension firm in Denmark that has a reputation for enforcing some of Europe’s toughest ethical investing standards says it won’t do business with hedge funds. Anders Schelde, the chief investment officer of AkademikerPension, says the external allocations the $20 billion investor makes exclude hedge funds because “I don’t think they create the value they say they do.”
/bloom.bg/3kjmhXF

SPACs Will Have a Tough Time Cleaning Up on Renewables; Special purpose acquisition companies are targeting the renewable-energy industry, but there is less of a direct incentive for going public
Jinjoo Lee – WSJ
Investor appetite for sustainable investments and yield have both been huge lately, but there have hardly been any debuts of cash-generating renewable-energy companies recently. Could SPACs, or special purpose acquisition companies, be the answer?
/on.wsj.com/3ofqVYO

Institutions

Vanguard exit from China state fund mandates prompts speculation; Move coincides with decision to move regional HQ to Shanghai
Selina Li and Echo Huang – FT
Vanguard’s decision to abandon millions of dollars in fees from China’s most influential state-backed asset owners at the same time as announcing plans to move its regional headquarters to Shanghai has shocked many industry observers.
/on.ft.com/3o991ai

Goldman Sachs to Pay $2.8 Billion, Admit Wrongdoing to Settle 1MDB Charges; A bank subsidiary in Asia tied to the misconduct is expected to plead guilty this week, while the parent company will accept deferred prosecution agreement
Dave Michaels, Liz Hoffman and Bradley Hope – WSJ
Goldman Sachs GS 1.14% Group Inc. will pay about $2.8 billion and admit wrongdoing to end a bribery probe that stretched from Southeast Asia to Hollywood and reinforced a reputation for scandal that the Wall Street firm has spent years trying to shed.
/on.wsj.com/3of0kLN

Apollo Board Panel to Review Leon Black’s Ties With Jeffrey Epstein; Law firm Dechert is selected to examine private-equity firm CEO’s dealings with disgraced financier
Miriam Gottfried – WSJ
A group of Apollo Global Management Inc.’s APO 3.16% independent board members will review Chief Executive Leon Black’s relationship with disgraced financier Jeffrey Epstein, according to people familiar with the matter.
/on.wsj.com/3ob3Ma4

Apollo Board to Examine Leon Black’s Ties to Jeffrey Epstein
Heather Perlberg – Bloomberg
Black asked board panel to review dealings at regular meeting; Board members tapped law firm Dechert to conduct interviews
Apollo Global Management Inc. board members are investigating co-founder Leon Black’s ties to disgraced financier Jeffrey Epstein after more information emerged this month about their longtime business dealings.
/bloom.bg/3dJoEQQ

Blankfein and Cohn Must Testify in Goldman Sex-Bias Case
Bob Van Voris – Bloomberg
Judge says he will decide later on request to depose Solomon; Suit claims Goldman denied women pay raises and promotions
Two former top Goldman Sachs executives must testify in one of the biggest gender-discrimination cases in Wall Street history, a federal judge ruled. U.S. Magistrate Judge Robert W. Lehrburger on Tuesday denied a move by the bank to block pre-trial depositions of former Chief Executive Officer Lloyd Blankfein and former President Gary Cohn, ruling in favor of a group of women who claim they were denied equal pay and promotions by the bank.
/bloom.bg/2ThD4hC

UBS Facilitates Bonus Collection for Exiting Employees
Marion Halftermeyer and Patrick Winters – Bloomberg
Bank changes deferred compensation to pay bonuses more quickly; Executives say staff should have more career flexibility
UBS Group AG is allowing employees to collect bonuses immediately after leaving the bank as the Covid-19 crisis prompts more workers to reconsider their careers. The Swiss wealth manager changed its rules on deferred compensation for former staff who exit the financial industry entirely. UBS says the aim is to give more flexibility to employees as many reevaluate their life choices.
/bloom.bg/2Hm4hNB

U.S. Banking Regulator Backs New Liquidity Requirements; FDIC board votes 3-1 to approve final rule for net stable funding ratio
Paul Kiernan – WSJ
WASHINGTON—U.S. financial regulators moved Tuesday to adopt new rules obliging large banks to hold enough funding to meet their needs for up to a year. The board of the Federal Deposit Insurance Corp. voted 3-1 to adopt the final rule to set a so-called net stable funding ratio, or NSFR. Other banking regulators, the Office of the Comptroller of the Currency and the Federal Reserve Board, were expected to follow suit.
/on.wsj.com/3mc2V7p

Goldman Sachs Is Said to Admit Mistakes in 1MDB Scandal; A foreign subsidiary of the Wall Street giant will plead guilty under an agreement with the Justice Department, according to a person familiar with the deal.
Matthew Goldstein – NY Times
An Asian subsidiary of Goldman Sachs will plead guilty to charges in the United States to resolve a foreign corruption and bribery case over the looting of billions of dollars from a Malaysian sovereign wealth fund, according to a person familiar with the agreement.
/nyti.ms/37t4glS

Duet-Backed Fund’s Bond Trades With H2O Probed by Watchdog
Lucca De Paoli and Donal Griffin – Bloomberg
Belgian regulator looks into trades between H2O, Merit Capital; Managers at Belgian fund left the firm amid investigation
Belgium’s top financial watchdog is investigating a batch of controversial trades linking a local investment fund to H2O Asset Management LLP and bonds sold by financier Lars Windhorst.
/bloom.bg/2ISttfu

Regions

From Fixing to Signaling, How China Manages the Yuan
Richard Frost and Tian Chen – Bloomberg
Monitoring how the People’s Bank of China handles its “managed float” system for the foreign-exchange market isn’t easy: The central bank has various tools at its disposal, some public, some hidden. Its thinking is essentially unknowable to outsiders. But there are ways to observe how it seeks to influence the currency. In mid-October, for example, with the yuan surging after its best quarter in 12 years, Chinese officials pulled a regulatory lever, scrapping a reserve requirement that made betting against the currency expensive. The rule had been imposed in 2018, when the yuan was depreciating amid trade friction with the U.S.
/bloom.bg/3dKmFMg

Dubai Financial Services Authority To Host Second RegTech Live Event
Mondovisione
The Dubai Financial Services Authority (DFSA) will be hosting a virtual event on the 10th and 11th of November. The event, “RegTech Live: Driving Compliance through Innovation”, will be held in partnership with the Dubai International Financial Centre Authority (DIFCA).
/bit.ly/3m8pZE2

Russia Will Wait a Month Before Deciding on Future of OPEC+ Cuts
Evgenia Pismennaya – Bloomberg
Moscow aims to see how the situation evolves in a month: Novak; Saudi Arabia urged OPEC+ to be ‘proactive’ amid uncertainty
Russia, OPEC’s key ally in the deal to balance the global oil market, won’t be making any decisions about the future of the group’s production cuts before next month’s meeting.
/bloom.bg/37zv2sO

Brexit

The EU’s Plan to Get a Brexit Deal: Let Johnson Claim He Won
Ian Wishart – Bloomberg
Deep in the European Commission’s Brussels headquarters, officials are plotting how to make it look like Boris Johnson is a brilliant negotiator. With talks between the U.K. and European Union still deadlocked after the British prime minister nearly-but-didn’t-quite stage a walkout Friday, that’s the only way EU officials say they can secure the trade deal both sides say they want. Johnson, who had been unhappy about the pace of negotiations and at the EU’s repeated demands for concessions, said on Friday he would only reopen discussions if the bloc showed “some fundamental change of approach.”
/bloom.bg/2Tf0a8I

EU’s Barnier Highlights U.K. Sovereignty in Bid to Resume Talks
Ian Wishart – Bloomberg
EU negotiator says he recognizes British sovereignty as issue; Barnier and U.K.’s Frost to speak again on Wednesday
The U.K. welcomed European Union chief Brexit negotiator Michel Barnier’s remarks on the importance of the U.K.’s sovereignty, in a sign the two sides are ready to resume trade talks.
/bloom.bg/3kjeUPN

British sausage makers face EU freeze after Brexit; European rules requiring prepared meat imports to be frozen set to devastate UK trade, industry warns
Peter Foster and Judith Evans – FT
British makers of sausages, pies and minced beef are facing a potentially crippling hit to their trade with Europe because of EU rules requiring prepared meat products to be imported in frozen form, the industry has warned.
/on.ft.com/34g5HlD

U.K. Finance Remains Downbeat on EU Access Without a Brexit Deal
Marion Dakers – Bloomberg
The British finance industry won’t secure more access to European Union markets while politicians disagree over the broader post-Brexit trade deal, industry figures told a parliamentary hearing Wednesday. Finance barely features in the deadlocked political talks, yet the lack of progress has snarled up separate work that will enable U.K. firms to trade within the bloc in limited ways, replacing the sweeping “passport” rights of EU membership, they said.
/bloom.bg/2Tg6uNb

Brexit: Will the UK and the EU co-operate on security?
Chris Morris – BBC News
CFormer Prime Minister Theresa May has told Cabinet Office Minister Michael Gove that the government “should not be resigned to the prospect of no deal” when it comes to post-Brexit police and security co-operation with the EU.
But Mr Gove insisted “there are many, many areas in which we can co-operate more effectively to safeguard our borders outside the European Union”, which provoked a bemused reaction from Mrs May that subsequently went viral.
/bbc.in/2HlzGzV

EU carmakers call on Brussels to ‘reconsider’ Brexit stance
Jim Brunsden – FT
Europe’s car manufacturers have called on Brussels to take a less restrictive stance on future market access to the UK, warning that aspects of the bloc’s current position are “not in the long-term interests of the EU automotive industry”. The letter from the European Automobile Manufacturers’ Association (ACEA) — a group that represents companies including BMW, Toyota and Fiat — urges Brussels to “reconsider its position” on rules for determining whether goods will qualify for tariff-free trade.
/on.ft.com/35gXT2E

EU tells Britain to make up its mind as Brexit deal ‘within reach’
Gabriela Baczynska, Marine Strauss – Reuters
The European Union told Britain on Wednesday to make up its mind on Brexit, putting the onus back on London to unlock trade talks as the bloc’s chief negotiator said an agreement was still within reach with 10 weeks to go.
/reut.rs/3jiDwqG

Miscellaneous

Rising Interest in Recreational Vehicles Helps Rental Platform Secure Investment; KKR leads investment of more than $100 million in RVshare, an online marketplace connecting RV owners with renters
Matt Grossman – WSJ
Private-equity firm KKR KKR 1.82% & Co. Inc. is spearheading an investment of more than $100 million in a peer-to-peer rental platform for recreational vehicles as the coronavirus pandemic brings new interest to the pastime. The platform, RVshare, will use the new capital to seize upon RV rentals’ growing popularity during the public-health crisis, which has brought a substantial increase in bookings, Chief Executive Jon Gray said. Over the summer, bookings nearly tripled from the previous year, and the volume has more than doubled in the September-through-November period, the company said.
/on.wsj.com/34gggFj

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