Confidence in German Capital Markets Has Been Shattered; Lessons From Europe’s Covid Surge: Control Is Fragile and Losing It Is Easy

Nov 25, 2020

First Read

$16,361/$300,000 (5.5%)
Steve Auerbach


Hits & Takes
JLN Staff

Steve Auerbach of the OCC is the latest contributor to the JLN MarketsWiki Education GofundMe campaign. Steve is a vice president for strategic planning and development with the OCC. He had a long career with Sungard, where he was the president of Sungard Futures Systems. Thank you to Steve and all who have given and all who have yet to give. We are thankful for all the support for our efforts to preserve industry history. He helped us do just that by donating to our GoFundMe campaign.

Recently I interviewed former CBOT employees John Van Der Bleek and Tom McCabe for The Path to Electronic Trading series. They were both at the CBOT and helped manage floor and screen trading. I also interviewed Nils Robert Persson, formerly of Cinnober and now of Vermiculus, who built trading and clearing systems that helped electronic trading flourish. He was also the chairman of OMLX and deputy CEO of OM, making him a true pioneer of electronic trading.

Additionally, I interviewed CBOE trader Sheldon Cohen, a long time options trader, and Tom Ascher, a former CBOE vice chairman and now executive chairman of Quantitative Brokers, for the Open Outcry Trades History Project. Tom Ascher’s interview also had some The Path to Electronic Trading in it as he was the CEO of Nasdaq-Liffe, which helped bring electronic trading to single stock futures.

I also interviewed David Prosperi about his long career in public relations and corporate communications. Look for these interviews to come out in the next few weeks.

Scott Knudsen, the former head of trading for IMC in Chicago who is now the CEO of Cove Markets, announced on LinkedIn that the latest version of their software is out, CoveTrader v.1.7.12. The software allows you to trade on multiple cryptocurrency exchanges and get the best price for your cryptocurrency pairs trading. The tool looks at price, fees and liquidity to help you get the best price for trade. He has an impressive team behind Cove Markets and it is an interesting concept for a multi exchange platform. I refuse to mention the fee reimbursement promotion.

The thought for today: on the day I was born, for a very short time, I was the youngest person in the world.

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


Women In Listed Derivatives (WILD) is partnering with Women’s MoneyLab to host a (virtual) lunchtime session of “The Power of Financial Courage”. It will take place December 8, 2020 from 12:00 PM – 1:15 PM CST. The description reads, in part: “Too often women are socially conditioned to believe that talking about money is impolite or even dangerous. This “money silence” often leads to a lack of confidence and/or courage relating to money issues. Studies show that financial courage for women is a far more important factor in improving financial wellness than actual financial knowledge. Join the Women’s Money Lab (“W$L'”) and WILD on an interactive discussion as we explore how to build your financial courage.” Zoom details will be provided upon registration. You can go here to register.~SR


James Murphy Talks Murphy & McGonigle and Law Firm of the Year Award

James Murphy is the co-founder and chairman of Murphy & McGonigle, a law firm that was recently named “Law Firm of the Year” by the 2021 edition of US News – “Best Lawyers.”
John Lothian interviewed Murphy over Zoom recently to ask about how the firm won the award, why it opened up offices in San Francisco and Chicago recently and what role innovation in the financial services industry plays in their approach to serving clients.

Watch the video »


Order Granting Conditional Exemptive Relief, Pursuant to Section 36 of the Securities
Exchange Act of 1934 (“Exchange Act”) with Respect to Futures Contracts on the
Securities and Exchange Commission.
ACTION: Exemptive order.
SUMMARY: The Minneapolis Grain Exchange, Inc. (or any successor thereto) (“MGEX”) has expressed an interest in listing and trading contracts for sale for future delivery on the SPIKESTM Index (“SPIKES”) (such futures contracts (and any options thereon) hereinafter referred to as the “Product”). After careful consideration, the Securities and Exchange Commission (“SEC” or “Commission”) believes that the Product has the potential to offer competition with the only comparable incumbent volatility product in the market, and is therefore conditionally exempting the Product from the definition of “security future” for all purposes other than as follows: first, the anti-fraud and anti-manipulation provisions under the Exchange Act will continue to apply

*****HOLY SEC, Batman!!!!~JJL


CFTC Approves Transfer of Minneapolis Grain Exchange’s Contract Market Designation
The Commodity Futures Trading Commission announced today it has issued an order approving a request from Minneapolis Grain Exchange, Inc. (MGEX) to transfer its CFTC contract market designation due to its acquisition by Miami International Holdings, Inc. (MIH). Upon closing of the acquisition, MGEX’s designation will be transferred to a new legal entity, Minneapolis Grain Exchange, LLC (MGEX LLC), which will be a wholly-owned subsidiary of MIH.

*****From Minneapolis to Miami, that is a good trade.~JJL


Tuesday’s Top Three
Our top story Tuesday was NYSE sales head departs for role at HFT Jump Trading (third time in the top three). Second was Quantitative Brokers’ jobs page – they are looking to fill a number of positions. Third was the download of the CFTC Interim Staff Report: Trading in NYMEX WTI Crude Oil Futures Contract Leading up to, on, and around April 20, 2020.


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Lead Stories

Confidence in German Capital Markets Has Been Shattered; Just like Porsche/Volkswagen, the regulatory lapses that let Wirecard go unchecked will live long in investors’ memory.
Chris Bryant – Bloomberg
When Wirecard AG’s former boss Markus Braun was taken from his Bavarian prison last week to give testimony to a German parliamentary enquiry, he declined to answer almost all questions about the payment-processing group’s sudden collapse.

Lessons From Europe’s Covid Surge: Control Is Fragile and Losing It Is Easy; As Americans travel for holidays, they might consider new evidence from across the Atlantic that summer tourists brought home a mutation from a corner of Spain
Xavier Fontdegloria and Max Colchester – WSJ
Europe seemed to have Covid-19 under control this summer, enough so that authorities let residents travel more freely among the region’s countries again. Then tourists flew home from vacations with the pathogen, seeding fresh outbreaks.

Glitches Hit Trading Platforms Run by Bank of America, TD Ameritrade, Vanguard
Investors face slowness, inability to log on amid heavy trading as the Dow Industrials surpass 30000 for the first time
Alexander Osipovich – WSJ
Popular trading platforms run by Bank of America Corp., BAC 5.81% TD Ameritrade Holding Corp. and Vanguard Group suffered glitches Tuesday that rendered them inaccessible or slow to use, frustrating investors on a landmark day for the U.S. stock market. The snafus began as markets opened at 9:30 a.m. ET, before the Dow Jones Industrial Average surpassed 30000 for the first time, according to the tech-service tracker Downdetector.

UK grip on European derivatives at risk in fight over post-Brexit rules; Esma says it will not tweak requirements, setting up clash with UK rules from January
Philip Stafford and Jim Brunsden – FT
European regulators have refused to soften rules on swaps trading by EU banks in the UK, threatening London’s post-Brexit hold on a derivatives market worth EUR50tn a year. The Paris-based European Securities and Markets Authority on Wednesday said EU banks operating in London would continue to be subject to Brussels regulations when the Brexit transition period ends next month.

Goldman in Paris Is Another Blow for London; The City won’t be able to count on Europe much longer for its hegemony in financial services.
Elisa Martinuzzi – Bloomberg
As Britain draws close to its exit from the European Union, a diminished role for the City of London looks ever more likely. This may be a gradual change, and its potential scale may be debated, but parts of the financial infrastructure built up over decades are ready to hop across the Channel.

ECB-Backed Body Studies Euribor Exit for $214 Trillion in Assets
William Shaw and John Ainger – Bloomberg
Euribor set to outlive Libor, which will retire at end of 2021; Group consults on scenario if Euribor ceased permanently
A European Central Bank-backed committee is exploring options for a transition should Euribor, one of the cornerstones of the European Union’s financial system, cease to exist. While the ECB working group on euro risk-free rates said there are no current plans to retire the interest-rate benchmark, which is linked to a notional 180 trillion euros ($214 trillion) in financial products, it’s testing the water for how an exit might work.

ECB Warns European Banks May Need More Bad-Loan Provisions
Alexander Weber and Nicholas Comfort – Bloomberg
Financial Stability Review cites pandemic strains on companies; Vice president says some bank provisions “look optimistic”
Euro-area banks will probably have to set aside more money to soak up losses when government pandemic support ends and the economy grapples with massively increased debt, the European Central Bank said.

Biden and Trump Are Making Dave Portnoy Look Like a Genius; No matter who wins or loses, stocks always go up.
Mark Gongloff – Bloomberg
Take the Dow Jones Industrial Average. It’s a fairly pointless stock index, but one the normies and a certain president of the United States obsess over. It rose to the round, satisfying number of 20,000 early in the term of that same president, despite warnings that his election would crash the market. Today, despite warnings from that same president that electing Joe Biden to replace him would crash the market, the Dow rose to the rounder, even more satisfying number of 30,000 — partly on confirmation Biden will soon be president. No matter what happens, it seems, stocks go up.

Germany’s blue-chip Dax to expand in wake of Wirecard debacle; Country’s benchmark stock index to increase by 10 members to 40 and apply tougher rules
Harry Dempsey and Olaf Storbeck – FT
Germany’s blue-chip Xetra Dax stock index will expand from 30 to 40 members and apply tougher qualification criteria in the wake of the Wirecard scandal.

Brussels criticised for giving BlackRock sustainable finance contract; EU ombudsman says decision exposed weakness of commission’s procedure on conflicts of interest
Mehreen Khan and Siobhan Riding – FT
Brussels has been reprimanded for awarding prestigious consulting work to BlackRock to advise on the EU’s sustainable finance regulation and told to tighten up its rules on potential conflicts of interest.

Covid Vaccine Hopes Send Record Funds to Emerging Markets; Money managers look to life after Covid-19, betting on a big rebound in emerging economies
Anna Hirtenstein – WSJ
The amount of money flowing into emerging-market funds last week hit an all-time high, as advances in vaccine development and a weaker dollar boosted investors’ risk appetite. Investors channeled $10.8 billion into funds that invest in emerging-market stocks and bonds, according to research from Bank of America and EPFR data, a sum the bank said was the highest ever. The largest net purchases by foreign investors included Indian and South Korean equities, as well as Mexican government debt, according to data from Capital Economics.

Gig Workers Could Be Paid Partially in Stock Under SEC Proposal; Clayton says workers should benefit from employers’ growth, but critics say firms avoid obligations
Paul Kiernan – WSJ
Privately held online platform companies such as DoorDash and UrbanSitter could pay their workers partially in stock under a rule proposed Tuesday by the Securities and Exchange Commission.

BitMEX Founder’s Charges Highlight Risks for DeFi
Grant Fondo, Meghan Spillane, and Galen Phillips – Coindesk
In October, the Commodity Futures Trading Commission (CFTC) and the U.S. Department of Justice (DOJ) filed enforcement actions against the entities and individuals that own and operate the Bitcoin Mercantile Exchange (BitMEX), a trading platform for cryptocurrency derivatives. The CFTC alleges that since 2014 BitMEX has operated an unregistered trading platform and violated CFTC regulations by, among other things, failing to implement required anti-money laundering (“AML”) procedures. The DOJ in turn is charging BitMEX’s three founders and its first employee with criminal violations of the Bank Secrecy Act (BSA) and conspiracy for willfully failing to establish, implement and maintain an adequate AML program.

Malaysia’s Coronavirus Resurgence Hits Top Glove Maker’s Plants
Yantoultra Ngui – Bloomberg
Bulk of new infections linked to Top Glove’s Selangor factory; Failure to check new virus resurgence to weaken recovery
The world’s biggest rubber-glove producer is now at the heart of Malaysia’s recent coronavirus resurgence, potentially threatening production of one of the most crucial pieces of protective equipment needed to fight the pandemic and the country’s broader economic recovery.

Half the Labor Force in Major U.S. Cities Is Working From Home
Alexandre Tanzi – Bloomberg
San Francisco, D.C., Boston are among top remote-work places; Across U.S., 37% of workers are teleworking, Census data says
In some of America’s major cities, about half the workforce is still working remotely almost nine months into the coronavirus pandemic, according to a survey by the U.S. Census Bureau.

The Derivatives Service Bureau Calls For New Product Committee Members – Reflecting Broader Geographic Representation And New Responsibilities
The Derivatives Service Bureau (DSB), founded by the Association of National Numbering Agencies (ANNA) to facilitate the allocation and maintenance of International Securities Identification Numbers (ISINs), Classification of Financial Instrument codes (CFIs) and Financial Instrument Short Names (FISNs), for OTC derivatives, is today calling for new members for its Product Committee (PC) with an application closing date of 13th January 2021.

Dow 30000 and the Problem With Long-Term Capitalism; Unprecedented economic support and the rapid development of vaccines have helped investors look far beyond the horizon, but that carries risks of its own
Mike Bird – WSJ
The Dow Jones Industrial Average hit 30000 for the first time on Tuesday, after a rally of more than 60% from its March lows. Contrary to popular criticism of financial markets as excessively preoccupied with the immediate future—sometimes referred to as quarterly capitalism—equities are now clearly demonstrating investors’ long-term horizon. In fact, that’s where the main risks to the rally now lie.

A US regulator fined JPMorgan Chase $250 million for ‘deficient’ risk management practices and insufficient controls
Michelle Price , Reuters
JPMorgan Chase & Co has agreed to pay $250 million for risk management and other control failings in its asset and wealth management business, a U.S. regulator said on Tuesday, in the second chunky penalty for the bank in less than two months.


Russia Covid-19 Deaths Hit New Record as Disease Ravages Regions
Henry Meyer – Bloomberg
Daily death toll rises above 500 for first time in epidemic; Russia has resisted national lockdown in second wave of crisis
The daily toll of Covid-19 deaths in Russia exceeded 500 for the first time as the rise in infections across the country puts increasing strain on hospitals and medical staff complain about a lack of medicines and protective gear. There were 507 deaths and 23,675 new cases in the past 24 hours, the government’s virus response center said Wednesday. The seven-day average number of Covid-19 deaths has reached 450, the highest so far, compared to less than 400 a week ago.

Money Could Motivate Some People to Get a Covid-19 Vaccine, Survey Shows; A quarter of Americans say $100 or less would be enough.
Peter Coy – Bloomberg
Economists have suggested paying people to get a Covid-19 vaccine, but there’s never been a survey to find out whether payments would work. Now there is, and the results are … murky.

Hospitals Cancel Surgeries to Preserve Staff During Covid Surge; As beds fill with more than 85,000 Covid-19 cases, U.S. facilities struggle again to treat other patients
John Tozzi – Bloomberg
A growing number of hospitals around the U.S. have canceled or delayed some planned medical procedures to preserve staff and beds for a surging number of Americans sick with Covid-19. Conditions remain especially acute in the Midwest and West. From Illinois to Idaho, health systems are limiting non-emergency surgeries as the pandemic’s strain on personnel grows. Putting off planned procedures that patients can defer safely is one of the few levers hospitals have to adjust their capacity as the virus spreads unchecked.

Russia’s Richest Man Seeks Global Market for Local Covid-19 Drug
Yuliya Fedorinova – Bloomberg
Potanin’s Petrovax to begin testing Covid-19 drug in Slovakia; No medicines to treat Covid-19 have been approved by WHO yet
A Russian pharmaceutical company owned by the country’s richest man, Vladimir Potanin, is hoping its domestically-developed Covid-19 drug can help it break into lucrative export markets.

NYC Will Have Covid Checkpoints at Key Bridges and Crossings
Stacie Sherman – Bloomberg
New York City will have vehicle checkpoints at key bridges and crossings, and will strictly enforce the travel quarantine, Sheriff Joseph Fucito said. The sheriff’s office will conduct spot checks when out-of-state buses drop riders off at the curb. Test and tracing teams will be on the ground to direct individuals to testing sites and provide education on quarantine, Fucito said.

Sweden Sees No Signs So Far Herd Immunity Is Stopping Virus
Rafaela Lindeberg – Bloomberg
There’s little evidence that herd immunity is helping Sweden combat the coronavirus, according to the country’s top epidemiologist. “The issue of herd immunity is difficult,” Anders Tegnell said at a briefing in Stockholm on Tuesday. “We see no signs of immunity in the population that are slowing down the infection right now.”

Swedish Life Expectancy to Drop for First Time in Century Due to Covid-19
Anton Wilen – Bloomberg
Life expectancy is falling in Sweden, which the country’s statistics agency says is directly tied to the coronavirus pandemic. The average age people live “has increased steadily in Sweden from 1900 to 2019,” the agency said in a statement on Wednesday. “The fact that it’s now falling stands out.”

‘Locked down and locked in’: the pandemic plight of UK university students; The crisis has exposed deep cracks in the country’s market-driven higher education system
Bethan Staton – FT
In the two months since she arrived at the University of Manchester, Hannah Virgo has been nowhere near a lecture theatre, sports hall or student bar. But she has occupied an empty tower block.

Vaccine cements Oxford’s place as leader in battle against Covid; University recognised the virus threat early and launched a full-scale research onslaught
Clive Cookson – FT
Oxford university has emerged as a global leader in the scientific battle against coronavirus — a bright spot in the UK’s generally less than stellar record in handling the pandemic.

What the world can learn from the Covid-19 pandemic; Important lessons are already emerging to help us manage the impact of such diseases better in future
Martin Wolf – FT
The most important single thing we have learnt from Covid-19 is how much damage may be done by a relatively mild pandemic by long-term historical standards. To call it mild is not to belittle the suffering it has caused, and will continue to cause, before an effective vaccination programme is rolled out and sustained globally. But Covid-19 has demonstrated a social and economic vulnerability far greater than experts imagined. It is important to understand why this is the case and learn how to manage the impact of such diseases better in future.

Vaccinations are a key test for the UK government; Technology has offered Boris Johnson an opportunity he must seize
The editorial board – FT
News that a third anti-coronavirus vaccine has proved effective is positive for the world. The Oxford-AstraZeneca inoculation is cheaper and easier to transport than those from Pfizer-BioNTech and Moderna, making it especially suitable for developing countries, to whom it will be sold at cost. But it is a particular boost for the UK government.

France’s Macron Charts Exit From Covid-19 Lockdown; With his cabinet divided, president seeks balance between keeping people apart and reopening the French economy
Noemie Bisserbe and Stacy Meichtry – WSJ
PARIS—President Emmanuel Macron charted a painstaking exit from France’s coronavirus lockdown on Tuesday amid a tug of war inside his cabinet over how quickly to reopen the economy. On one side stands Mr. Macron’s prime minister and a panoply of health authorities and epidemiologists pulling for lockdown measures to remain in place. On the other lies Mr. Macron’s economy minister, backed by an army of retailers, who considers the Christmas-shopping season a make-or-break moment.

A U.S. Record: Two Million New Virus Cases in Two Weeks
Lauren Leatherby – NY Times
For the first time since the coronavirus outbreak hit the United States, the country has added more than one million cases in each of the past two consecutive weeks. Covid deaths, which lag reported cases by weeks, are also at a level not seen since the spring.

Rural Americans Stopped Staying In. Then Covid-19 Hit; Coronavirus cases rise to record highs and hospitalizations surge as people return to some semblance of normality
Andrea Fuller and Tawnell D. Hobbs – WSJ
The coronavirus is resurging across the U.S. But it’s hitting hardest in rural places, where people have been sheltering less than anywhere else in the country.

CDC Finalizing Recommendation to Shorten Covid-19 Quarantines; Agency is considering shortening the advised quarantine time to between seven and 10 days
Betsy McKay – WSJ
The U.S. Centers for Disease Control and Prevention may soon shorten the length of time it recommends that a person self-quarantine after potential exposure to the coronavirus, hoping that such a step will encourage more people to comply, a top agency official said.

Special Report: 50,000 COVID-19 deaths and rising. How Britain failed to stop the second wave
Reuters Staff
On the doorstep of a terraced house in northern England, virus hunter Colin Hutchinson came face-to-face with the new wave of COVID-19, and the obstacles to slowing its spread. A retired surgeon, Hutchinson is part of a local team of “contact tracers” in Halifax, Yorkshire, that aims to reach infected people before they infect others. His experience that day in mid-October, he said, summed up why Britain’s “tracking of the virus is very, very poor.”

‘COVID chat’: Officials urge Americans to stay home over holiday
Susan Heavey, Maria Caspani – Reuters
U.S. health officials and politicians pleaded with Americans on Tuesday to stay at home over the Thanksgiving holiday and abide by constraints placed on social and economic life as record coronavirus caseloads pushed hospitals to their limits.

Row Over England Flu Shots Prompts Fear of Covid Vaccine ‘Chaos’
Emily Ashton – Bloomberg
Family doctors say they weren’t told of over-50s flu program; Medics flag risk of communication breakdown with government
Communication failures risk derailing the mass roll-out of a potential Covid-19 vaccine in England, family doctors warned after they were blindsided by a government announcement on free flu shots for the over-50s.

Exchanges, OTC and Clearing

Kingfish admitted to trading
The seafood company Kingfish has today been admitted to trading on Merkur Market (ticker code: KING-ME). The Kingfish Company produces the Dutch Yellowtail, a high-quality, antibiotic-free marine finfish species.

Euronext announces 2021 holiday calendar for its cash and derivatives markets
Euronext today announced the 2021 trading days for its markets in Amsterdam, Brussels, Dublin, Lisbon, Oslo and Paris.

Trading hours at Eurex Exchange on 30 December 2020
Eurex Circular 092/20 Trading hours at Eurex Exchange on 30 December 2020

HKEX Releases Cash Market Transaction Survey 2019
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Wednesday) pleased to present the results of its Cash Market Transaction Survey 2019, which examines the trading composition of Exchange Participants on Hong Kong’s securities market. The survey found that the contribution of local Hong Kong retail investors to the cash market trading value, increased to 13.6 per cent in 2019, from 10.3 per cent in 2018. The contribution of overseas institutional and retail investors also rose, to 36.6 per cent and 6.7 per cent respectively for 2019, from 35.1 per cent, and 6.0 per cent respectively in 2018.

TMX Group Holiday Operating Schedule
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Friday, December 25, 2020 for Christmas Day, Monday, December 28, 2020 in lieu of Boxing Day, and on Friday, January 1, 2021 for New Year’s Day.

ICE Endex Announces Results of European Gas Storage Auction for GasTerra
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced the results of the ICE Endex gas storage auction held on November 25, 2020, on behalf of GasTerra. On November 25, a total of 1,696,084 Standard Bundled Units (SBUs) for the contract period 2021/2022 were offered to the market and after five auction rounds, all SBUs were allocated. The outcome of the auction is an average weighted price per SBU of 3.35 EUR.

Nasdaq Announces Mid-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date November 13, 2020
At the end of the settlement date of November 13, 2020, short interest in 2,541 Nasdaq Global MarketSM securities totaled 8,236,111,320 shares compared with 8,257,390,516 shares in 2,529 Global Market issues reported for the prior settlement date of October 30, 2020. The mid-August short interest represents 3.03 days compared with 3.43 days for the prior reporting period.

OSE and TFEX Signed Agreement to Provide OSE Delivery Price for Launching New Rubber Futures to be Listed on TFEX
Osaka Exchange, Inc. (OSE) and Thailand Futures Exchange Pcl (TFEX) announced today that the two exchanges signed an Agreement related to the launch of new rubber futures contracts at TFEX. Based on the Agreement, TFEX will be listing on November 30, 2020, Japanese Rubber Futures or cash-settled rubber futures (RSS3) contracts, which will use the OSE RSS3 Futures contract delivery price as the final settlement price.

India’s NSE warned Future Retail of action over disclosures on Amazon dispute: emails
Aditya Kalra, Abhirup Roy – Reuters
India’s National Stock Exchange (NSE) privately warned Future Retail it risked regulatory action for not making timely market disclosures about efforts by to block a disputed asset sale, according to e-mails reviewed by Reuters.

Moscow Exchange To Further Facilitate Its Automatic Debiting Service
Beginning December 2020, Moscow Exchange will streamline the service for automatic debiting of participants’ clearing accounts.


France demands digital tax payments from US tech groups; Facebook and Amazon among companies issued with requests that could trigger retaliatory tariffs
Aime Williams, Hannah Murphy and Victor Mallet – FT
French tax authorities have begun demanding millions of euros from US technology groups as they push ahead with a new digital services tax that has enraged Washington.

EY faces mounting pressure to disclose Wirecard details to German parliament; Defunct payments provider’s management board releases Big Four firm of its duty of confidentiality
Olaf Storbeck and Tabby Kinder – FT
EY partners are facing mounting pressure to provide detailed evidence to Germany’s parliament about a decade of their work auditing Wirecard after the defunct payments provider’s management board released the Big Four firm of its duty of confidentiality.

Digital payments deepen the threat of online fraud in Covid era; Shift to cashless transactions exposes consumers and businesses to new variations of crime
Javier Espinoza – FT
One of the many effects of the Covid-19 pandemic has been an acceleration of the rise of digital payments and the demise of cash, driven by social distancing measures and fears that the virus could linger for weeks on currency notes and coins.

BlackRock should split off its Aladdin tech platform, says think-tank; Report also recommends curbs on influence of State Street and Vanguard, the two other asset management behemoths
Chris Flood – FT
BlackRock should be forced to split off its technology platform Aladdin to curb the growing influence of the world’s biggest asset manager, according to a report by a think-tank that is advising incoming US president Joe Biden.

Most Americans Object to Government Tracking of Their Activities Through Cellphones; Quarter of poll respondents say they will change behavior to avoid surveillance
Byron Tau – WSJ
A new survey found widespread concern among Americans about government tracking of their whereabouts through their digital devices, with an overwhelming majority saying that a warrant should be required to obtain such data.

Europe Doubles Down on Data Protection to Ward Off Silicon Valley, Chinese Influence; New EU proposal aims to offer protections for corporate and public-service data as GDPR covers individuals
Sam Schechner – WSJ
The European Union wants to take control of its own data, part of a broader effort to wrest digital influence from large companies in the U.S. and China. The EU’s executive arm on Wednesday proposed new legislation aimed at creating an EU-wide data marketplace to facilitate sharing of industrial and government information—provided the data is protected according to European standards, under the eyes of the bloc’s regulators.

JP Morgan and ITG veteran joins Pico as revenue chief; Brian Pomraning joins Pico as chief revenue officer after senior roles at ITG and JP Morgan.
Annabel Smith – The Trade
Infrastructure and technology provider Pico has hired former JP Morgan electronic trading executive and ITG global product head, Brian Pomraning.

Algomi founder departs BGC for head of electronic bond trading role at MUFG; Stu Taylor will lead electronic trading for fixed income at MUFG after departing BGC following its acquisition of Algomi.
Hayley McDowell – The Trade
Fixed income industry veteran and co-founder of pre-trade bond analytics provider Algomi has left BGC after just over a year to join broker-dealer MUFG in a senior role.

South Korea Unveils AI Chip to Maintain Semiconductor Leadership
Sam Kim – Bloomberg
South Korea is adding a new artificial intelligence chip to its arsenal of semiconductors as the nation seeks a bigger slice of the global tech market and an upgrade of its industrial capabilities. The Sapeon X220, unveiled Wednesday by the largest local carrier SK Telecom Co., is designed to speed up servers that cater to a growing number of mobile devices — from drones to self-driving vehicles — that perform better with AI. It’s the latest product of the nation’s decade-long push to broaden its dominance beyond memory chips, where Samsung Electronics Co. and SK Hynix Inc. control roughly two-thirds of the global market.

Payments Startup Stripe in Talks for Funding at $70 Billion Valuation or More
Katie Roof and Scott Deveau – Bloomberg
Valuation could double — or more — valuation in April round; Payment processing software maker competes with Square, Paypal
Private financial technology business Stripe Inc. is in talks to raise a new funding round valuing it higher than its last private valuation of $36 billion, according to people familiar with the matter.


Ethereum Upgrade Adds to Crypto Mania Sparked by Bitcoin’s Surge
Joanna Ossinger – Bloomberg
An upcoming upgrade for Ethereum, the most-actively used blockchain in the world, is adding to the mania around cryptocurrencies sparked by the jump in Bitcoin. Ethereum has reached a milestone toward a network change that would allow it to process a similar number of transactions as Mastercard Inc. and Visa Inc. The shift to the new system — Ethereum 2.0 — could curb the total supply of digital currency Ether, which is already up more than 350% so far in 2020.

DeFi’s first M&A deal? Yearn.Finance and Pickle Finance are set to merge
Yogita Khatri – The Block
Decentralized finance (DeFi) protocols Yearn.Finance and Pickle Finance are set to merge in what appears to be the first M&A agreement of the DeFi space. Announcing the merger on Tuesday, both teams behind the protocols said they would work together to leverage shared expertise and increase specialization. The actual merger would occur when the second version of Yearn launches, which is currently under development. The development comes days after Pickle.Finance was exploited for nearly $20 million worth of DAI.

Coinbase Will Suspend All Margin Trading Tomorrow, Citing CFTC Guidance
Nikhilesh De – Coindesk
Crypto exchange Coinbase plans to end all margin trading effective Nov. 25, 2020, due to recent regulations by the Commodity Futures Trading Commission (CFTC). The San Francisco-based trading platform announced Tuesday that it would prevent customers from placing new margin trades beginning at 2 p.m. PT (22:00 UTC) on Wednesday, while simultaneously canceling any open limit orders.

In India, a Clash of Digital Innovation and Internet Censorship
Sandali Handagama and Jaspreet Kalra – Coindesk
Earlier this month, reacting to a decision by India’s highest court, prominent comedian Kunal Kamra tweeted that India’s Supreme Court is the “most Supreme joke of this country.” The following day, local media reported that Attorney General K. K. Venugopal greenlighted court proceedings against the comedian, based on a few tweets criticizing the Supreme Court. The charge levied against him: contempt of court. Kamra has refused to apologize for his tweets and local reports indicate proceedings have yet to begin.

Korean lawmakers propose delaying crypto tax rule to January 2022
Wolfie Zhao – The Block
The South Korean congress is reportedly proposing to delay the commencement of a crypto income tax rule by three months to January 2022. According to a report from South Korean media The Dong-a Ilbo on Wednesday, the National Assembly’s planning and finance committee has recently issued a report suggesting it’s necessary to consider implementing the crypto income tax rule from at least January 1, 2022. South Korea’s Ministry of Economy and Finance amended its tax code in July this year where it finalized a plan for charging local residents a 20% tax on gains from crypto trading that are worth more than 2.5 million Korean won, or about $2,000.

Bitcoin Options Market Suggests Investors Preparing for All-Time High
Omkar Godbole – Coindesk
Activity in bitcoin’s options market shows investors are eyeing more gains for the top cryptocurrency, which is now just 2.8% below a record high. Bitcoin’s one-month implied volatility, which is influenced by demand for call (bullish) and put (bearish) options, has risen to 81%, the highest level since May, having begun the month at 58%, according to data source Skew.

Binance is now blocking users ‘identified as a US person’ with a 14-day deadline
Yogita Khatri – The Block
Binance has now brought in stricter measures for blocking U.S. persons from accessing its platform. The exchange is asking users who have identified themselves as U.S. persons to withdraw funds within 14 days.

Coinbase Ditches US Customer Tax Form That Set Off False Alarms at IRS
Jaspreet Kalra – Coindesk
Cryptocurrency exchange Coinbase has decided to discontinue sending customers 1099-Ks, the U.S. tax form which led the Internal Revenue Service (IRS) to mistakenly think traders had underreported their gains. The exchange will instead use the 1099-MISC form, at least for customers who earn interest on lending and similar products, it said in a Tuesday blog post, The post appeared to suggest that traders who do not meet the criteria for the 1099-MISC will likely not receive any kind of forms from Coinbase to help prepare their returns. When asked for comment, a Coinbase spokesperson simply sent CoinDesk a link to the post.

BIS Paper Says There’s Potential to Embed Regulation Into Stablecoin Systems
Sebastian Sinclair – Coindesk
Regulatory responses to private, “global” stablecoins like Libra need to take into account the potential of the technology in payments, according to economists working at the Bank for International Settlements (BIS) In a new working paper published Tuesday, Raphael Auer and Jon Frost, as well as Melbourne Law School finance lawyer Douglas Arner, drew a line between centralized and decentralized stablecoins, and said the potential of Libra to quickly be adopted by hundreds of millions of Facebook product users means regulators will need to adapt quickly.

Digital Yen Would Make Crypto Markets ‘More Lively,’ Says CEO of Monex Group
Sebastian Sinclair – Coindesk
The chief executive of Monex Group, a financial services firm based in Tokyo, believes central bank digital currencies (CBDCs) would be a boon for the cryptocurrency market. As reported by Reuters on Wednesday, Oki Matsumoto said the introduction of a digital version of the yen by the Bank of Japan (BoJ) would “significantly enhance the interoperability of cryptocurrencies” by smoothing the process of exchanging them into legal tender. Further, smaller brokers don’t always have bank accounts, he said.

Bitcoin Mania Grips Retail Traders in Flashback to Fall 2017
Claire Ballentine and Edward Robinson – Bloomberg
Token tops $19,000 and climbs within $100 of all-time high; Google searches for Coinbase spike as small traders pile in
Celebrity endorsements, exchange outages, rafts of new trading accounts — Bitcoin mania is back. In a flashback to the frenzied run-up to Thanksgiving 2017, retail traders are piling into cryptocurrencies and driving prices back toward all-time highs. The number of first-time buyers is on course to eclipse December 2017, EToro, an Israeli-British firm, said. Bitcoin trades per day are 81% greater than the rest of 2020 combined. Google searches for “coinbase,” the crypto exchange, reached the highest level in at least a year, according to Google Trends.

Digital Yen Would Make Crypto Markets ‘More Lively,’ Says CEO of Monex Group
Sebastian Sinclair – Coindesk
The chief executive of Monex Group, a financial services firm based in Tokyo, believes central bank digital currencies (CBDCs) would be a boon for the cryptocurrency market.


Trump’s Next Two Months of Mayhem; Even while sulking, the president and his minions will keep swinging the wrecking ball at Biden.
Timothy L. O’Brien – Bloomberg
Now that Donald Trump’s administration has allowed Joe Biden’s team to formally begin its transition into the White House, the president is running out of overt ways to disrupt an election he clearly lost 18 days ago. His flimsy and misbegotten lawsuits challenging the vote are all but deflated and he’s been less active than usual on TV and Twitter. Perhaps he’ll make his traditional visit to Mar-a-Lago for the Christmas holidays and then stay put, preferring to endure his humiliation over Biden’s Jan. 20 inauguration outside the capital.

Yellen Would Assume Vast Policy Portfolio as Treasury Secretary; From trade and sanctions to tax policy and financial regulation, the former Fed chair will be at the center of the new administration’s agenda.
Alan Rappeport, Ana Swanson, Jim Tankersley and Jeanna Smialek – NY Times
Janet L. Yellen’s expected nomination as Treasury secretary will place the former Federal Reserve chair into a critical role overseeing President-elect Joseph R. Biden Jr.’s economic and national security agenda at an agency that has increasingly become a center of power.

Biden becomes first presidential candidate to win more than 80 million votes
Devan Cole – CNN
Joe Biden has become the first presidential candidate to win more than 80 million votes, with his record-breaking number of popular votes still likely to increase in the coming days as ballots continue to be counted across the nation.


ECB signals lifting of ban on bank dividends next year; Senior official says regulator may not have power to extend blanket restriction
Martin Arnold – FT
Eurozone banks will be allowed to pay dividends again from next year if they convince supervisors that their balance sheets are strong enough to survive the economic and financial fallout from the coronavirus pandemic, a senior European Central Bank executive has said.

EU Official Raises Vetting Concerns Over BlackRock Contract; European Commission is urged to update guidance on hiring contractors with potential conflicts of interest
Dieter Holger and Dawn Lim – WSJ
A European Union watchdog said Wednesday the bloc’s executive branch failed to properly consider potential conflicts of interest when it chose BlackRock Inc. BLK 2.41% to advise the EU on future banking regulations.

Information Sheet 251: AFS licensing requirement for trustees of unregistered managed investment schemes
ASIC has released Information Sheet 251 AFS licensing requirement for trustees of unregistered managed investment schemes (INFO 251) for trustees of unregistered managed investment schemes that issue, vary or dispose of interests in unregistered schemes that are financial products.

ESMA Newsletter – Nº18
Welcome to the 18th edition of ESMA’s newsletter. Since our last newsletter, key publications have been ESMA’s report on Wirecard, the Share Trading Obligation (STO) and the Derivatives Trading Obligation (DTO) statements and the first statistical report on EU securities markets. More, throughout the month we released ESMA 2021 Work Programme and launched an important Consultation on Taxonomy Regulation.

ESMA sets out its final view on the derivatives trading obligation (DTO)
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has released a public statement that clarifies the application of the European Union’s (EU) trading obligation for derivatives (DTO) following the end of the UK’s transition from the EU on 31 December 2020.

ADF Technical Notice
As of 11/16/20, Luminex (MPID: LMNX) is no longer a registered ADF Trade Reporting Only (TRO) participant on the FINRA Alternative Display Facility (ADF). For any questions, please contact FINRA Business Services at (212) 858-4342.

FINRA Reminds Firms of Exercise Cut-Off Time for Options Expiring on the Friday After Thanksgiving
The national options exchanges are closing at 1:00 p.m. Eastern Time (ET) on Friday, November 27, 2020 (the Friday after Thanksgiving), which will modify the exercise cut-off time for expiring options. FINRA reminds firms that pursuant to FINRA Rule 2360(b)(23)(A)(viii), if a national options exchange or The Options Clearing Corporation announces a modified time for the close of trading in standardized equity options, then the deadline for an option holder to make a final decision to exercise or not exercise an expiring option will be 1 hour 30 minutes following the time announced for the close of trading on that day instead of the 5:30 p.m. ET deadline. Accordingly, option holders must make a final decision to exercise or not exercise options expiring on November 27, 2020, by 2:30 p.m. ET.

SEC Proposes Amendments to Modernize Framework for Securities Offerings and Sales to Workers
The Securities and Exchange Commission today announced that it has voted to propose amendments to Securities Act Rule 701, which provides an exemption from registration for the issuance of compensatory securities by non-reporting issuers, and Form S-8, the Securities Act registration statement for compensatory offerings by reporting issuers.

SEC Proposes Temporary Rules to Facilitate Measured Participation by Certain “Platform Workers” in Compensatory Offerings Under Rule 701 and Form S-8
The Securities and Exchange Commission today voted to propose rules that, on a temporary basis and subject to percentage limits (no more than 15% of annual compensation), dollar limits (no more than $75,000 in three years) and other conditions, would permit an issuer provide equity compensation to certain “platform workers” who provide services available through the issuer’s technology-based platform or system.

SEC Investor Advisory Committee to Meet Remotely on Dec. 3
The Securities and Exchange Commission’s Investor Advisory Committee will hold a public meeting on Dec. 3 by remote means. The meeting will begin at 10 a.m. ET, is open to the public via live webcast, and will be archived on the committee’s website for later viewing.

Statement on Third Meeting with Audit Firm Representatives Regarding Audit Quality in Emerging Markets and Recent Developments; SEC Chairman Jay Clayton, SEC Chief Accountant Sagar Teotia, PCAOB Chairman William D. Duhnke III
Over the past several years, the exposure of U.S. investors and our capital markets to companies with significant operations in emerging markets, including China, has increased.[1] This increased exposure carries with it a number of significant risks and challenges, many of which we described in our statement of December 7, 2018[2] and our more recent joint statement along with other SEC staff, Emerging Market Investments Entail Significant Disclosure, Financial Reporting and Other Risks; Remedies are Limited, on April 21, 2020.[3]

Opening Doors for Gig Workers to Receive Stock Compensation; Commissioner Hester M. Peirce, Commissioner Elad L. Roisman
Today the Commission voted to propose rules that, on a trial basis, would allow public and private companies to offer equity compensation to their gig workers.[1] Taking a cue from the flexibility that the gig economy provides to its platform workers, the proposal demonstrates the Commission’s willingness to open the door to opportunities for gig workers to participate in the growth of the companies that sign their checks. As our economy and work arrangements evolve, we must be willing to experiment with concomitant changes to our regulations.

Joint Statement on the Proposal to Facilitate Non-Cash Compensation for Certain Gig Workers; Commissioner Allison Herren Lee, Commission Caroline A. Crenshaw
Commissioner Caroline A. Crenshaw
A broad swath of companies in the U.S. now rely on workers who are not treated as traditional employees. Indeed, depending on how you define the term, alternative or contingent workers may make up as much as 40 percent of the workforce.[1] Today the Commission singles out one narrowly-defined subset of companies who depend on these workers—companies that provide services through internet platforms—and proposes to create a new exemption from traditional registration requirements just for them. The proposed exemption would expressly permit these internet platform companies, and only these internet platform companies, to pay a portion of compensation to alternative workers with equity in the company rather than cash. Whatever the potential merits of equity compensation for alternative workers, the proposal does not establish a basis for selectively conferring a benefit on this particular business model. Consequently, we cannot support it.

BOX: Notice of Designation of Longer Period for Commission Action on Proposed Rule Change, as Modified by Amendment No. 1, a Proposed Rule Change in Connection with the Proposed Establishment of the Boston Security Token Exchange LLC as a Facility of the Exchange (Release No. 34-90513; File No. SR-BOX-2020-16; November 24, 2020)

BOX: Notice of Designation of Longer Period for Commission Action on Proposed Rule Change, as Modified by Amendment No. 1, to Adopt Rules Governing the Trading of Equity Securities on the Exchange Through a Facility of the Exchange Known as the Boston Security Token Exchange LLC (Release No. 34-90512; File No. SR-BOX-2020-14; November 24, 2020)

CFTC Staff Extends Existing Brexit-Related Relief to Provide Market Certainty
The Commodity Futures Trading Commission’s Market Participants Division (MPD) and Division of Market Oversight (DMO) announced today they are extending previously granted temporary no-action relief to provide greater certainty to the global marketplace in connection with the withdrawal of the United Kingdom from the European Union, known as Brexit.

CFTC Staff Grants Temporary Relief to DTCC Data Repository LLC and Related Entities from Reporting Requirements
The Commodity Futures Trading Commission’s Division of Data (DOD) today granted temporary no-action relief to DTCC Data Repository LLC (DDR) from certain requirements of the swaps data repository (SDR) rules in Part 49 of the CFTC’s regulations. The relief is also extended to registered entities and swap counterparties reporting swaps data to DDR from certain requirements of the swaps data reporting rules in Parts 45 and 46 of the CFTC’s regulations.

CFTC Designates LMX Labs as a Contract Market
The Commodity Futures Trading Commission today announced it has issued an Order of Designation to LMX Labs, LLC, granting it status as a designated contract market (DCM), effective November 23, 2020. LMX Labs is a limited liability company headquartered in Chicago, Ill. and incorporated under Delaware state law.

Statement of Chairman Heath P. Tarbert Regarding the Transition Away from IBORs
On October 23, 2020, ISDA launched its protocol to introduce robust fallback language for interest rate swaps. This is a key step in the broader effort to transition financial markets away from interbank offered rates (IBORs)—and in particular the London Interbank Offered Rate (LIBOR)—to relevant alternative reference rates. There is broad recognition that adherence to the protocol by all market participants with open positions in interest rate swaps referencing various IBORs is critical to strengthening the integrity of the derivatives markets and the stability of the global financial system.

Stephen Allen pleads not guilty to conspiracy to pervert the course of justice
Stephen Allen has pleaded not guilty by video link at Southwark Crown Court to the FCA’s charge that he conspired with Renwick Haddow to pervert the course of justice.

Investing and Trading

IBM Planning 10,000 Job Cuts in Europe Ahead of Unit Sale
Olivia Carville, Helene Fouquet, and Daniele Lepido – Bloomberg
U.K. and Germany are set to be most impacted regions; Big Blue focuses on hybrid cloud computing, AI businesses
International Business Machines Corp. is planning to cut about 10,000 jobs in Europe in an attempt to lower costs at its slow-growth services unit and prepare the business for a spinoff.

From CeFi To DeFi: How Banking And Investing Are Evolving At Warp Speed
Lawrence Wintermeyer – Forbes
A seismic shift is underway in the financial markets and no, I am not talking about everyone piling into Bitcoin. Decentralized Finance, or DeFi, is becoming increasingly important to millions of people as they leave the traditional centralized financial institutions (CeFi) that have until now dominated activities including investing, loans, savings accounts and even regular checking accounts and merchant services. This CeFi to DeFi shift first gained momentum earlier in the year before cooling off only to rebound in recent weeks.

For Retail Stock Traders, This Is a Party They Can’t See Ending
Katherine Greifeld, Claire Ballentine, and Vildana Hajric – Bloomberg
Mom-and-pop stock traders, reaping the rewards of a faith that has proved prescient all year, are doubling down on a rally that has pushed valuations into uncharted land. Their voracious appetite for equities, unchecked by the pandemic or presidential transition, has sent markets to records and is whipping up volume in the normally sleepy Thanksgiving week. More than 26 billion shares changed hands on American exchanges over the last two days, up 72% from the same stretch a year ago. Demand is swamping brokerage websites, with both Vanguard and Merrill Lynch confirming their platforms experienced outages today.

Global Investing Giants Are Making Their Post-Covid Stock Bets
Abhishek Vishnoi – Bloomberg
Strategies include rotating into stocks beaten down by virus; Some investors say shift into Europe, others stick with Asia
Some of the world’s biggest investors say it’s time to position portfolios for an end to the pandemic. That doesn’t mean they agree on how best to do it. One of JP Morgan Asset Management Inc.’s recommendations is to buy beaten-down shares of travel companies, airlines and hotels. Fidelity International Ltd.’s multi-asset team is increasing holdings in regions such as Europe that are badly hit by the virus, betting they’ll get better. Franklin Templeton contends it’s still too early to move away from places like Asia that have better handled the crisis.

Opinion: Beware of ‘zombie’ companies running rampant in the stock market
William Barritt – MarketWatch
Few would dispute that the Federal Reserve’s enormous doses of monetary medicine this year were necessary to alleviate the worst economic impacts of the coronavirus pandemic.

Environmental, Social and Corporate Governance

EU Watchdog Criticizes BlackRock Appointment as ESG Adviser; The ruling is a small win for environmentalists, who have targeted the world’s largest asset manager for investing in fossil fuels
Todd Gillespie and Alastair Marsh – Bloomberg
The European Commission failed to fully consider conflicts of interest when it appointed BlackRock Inc. to advise on new sustainable-finance rules for banks, according to a ruling by the European Union’s watchdog.

Ethical funds are booming but there are obstacles to momentum; A momentum trade in ESG stocks seems unlikely amid disagreement over what even is such an investment
Stephen Foley – FT
It looks as if 2020 will be another year of outperformance for ESG funds — those focused on investments with a positive environmental (E) or social (S) impact, and companies with a record of good governance (G). Some conclude that we are in the early stages of a “momentum trade” that favours sustainable investments.


Virgin Money profits hit by £500m of provisions; UK bank warns of vulnerability to economic effects of multiple lockdowns
Owen Walker – FT
Virgin Money’s pre-tax profit fell by three-quarters in the year to October after it set aside £501m to cover bad loans in case the pandemic causes longer-term financial problems for its customers.

BlackRock aims for wealthy business with $1.05bn Aperio deal; Asset manager is paying a hefty 50 times earnings for personalised indexing specialist
Steve Johnson – FT
BlackRock is paying an estimated 50 times underlying earnings to buy a specialist in personalised index investing, demonstrating its keenness to expand in the arena that services very wealthy clients.

Pictet Asset Management opens Shanghai office in China expansion; The new office will complement the overall China strategy at Pictet Asset Management, including investing onshore in China for global clients.
Annabel Smith – The Trade
Geneva-based Pictet Group has opened a new office in Shanghai for its asset management business to expand its presence in China, in what it describes as a milestone for the buy-side house.

PEAK6 Adds Andrew McGuire to Co-Lead Technology-Driven Insurance Operation
PEAK6, an investing and technology company, announced today that Andrew McGuire has been named Managing Director to co-lead an insurance operations effort with Deb Franklin. McGuire is a recognized leader in the insurance industry and brings more than 25 years of experience to PEAK6.


Hoped-for boom in public investment risks paving road to nowhere; Lessons from Japan: Past public works projects hint at what to expect as IMF urges governments to loosen purse strings
Robin Harding and Chris Giles and Ben Hall – FT
On the northern Japanese island of Hokkaido, the motorway from Honbetsu to Ashoro is engineered to the highest standards: stretches of dual carriageway for overtaking, a hard shoulder, and no minor intersections. What it lacks is vehicles.

Britons understand little about economics, report finds; Majority fail to grasp concept of GDP or deficit and lack trust in data, according to ONS think-tank
Chris Giles – FT
British people “lack a basic understanding” of economic statistics such as unemployment or the government’s deficit, and at the same time mistrust official data, a hard-hitting report funded by the Office for National Statistics concluded on Wednesday.

Regulatory Pressure Mounts on Coal Miner that Rattled China’s Bond Market; Investigation into state-owned Yongcheng Coal is escalated to country’s securities regulator
Chong Koh Ping – WSJ
An investigation into a troubled Chinese state-owned coal miner was escalated to the country’s securities regulator, as authorities pile pressure on the company whose recent default rattled the bond market. The National Association of Financial Market Institutional Investors, a self-regulating body supervised by China’s central bank, said late Tuesday that it had sent leads related to suspected violations of laws and regulations by Yongcheng Coal & Electricity Holding Group Co. to the China Securities Regulatory Commission. The industry group said it would also impose unspecified sanctions on the company and start an investigation into its parent, an energy and chemicals conglomerate.

In a Year of No Trade Fairs, Germany Takes It Hard; Some big companies say they can do without them. But trade fairs are essential for those that can’t afford an international sales force, and play an important role in the German economy.
Jack Ewing – NY Times
The funeral directors will have to wait for their big get-together. So will the toymakers, the equestrians and the vegans. All those groups and many more had scheduled trade fairs to take place in Germany in recent months. But these rituals of business life, a chance for people to make deals, check out the competition and commune with others in the same walk of life, are in crisis.

Chinese buyers look to cancel U.S. soybean orders as processing margins shrink
Naveen Thukral, Hallie Gu – Reuters
Some Chinese soybean importers and processors are looking to cancel deals signed for U.S. cargoes for December and January shipment, after crushing margins collapsed following a steep rally in Chicago futures, three trade sources said.


Brexit Talks Entering Decisive Days, EU’s Von Der Leyen Says
Ian Wishart and Viktoria Dendrinou – Bloomberg
Major differences remain in talks, in particular on standards; European Commission president also talks Covid, rule of law
European Commission President Ursula von der Leyen said the coming days will be “decisive” for trade negotiations with the U.K. and crucial differences between the two sides remain.

EU trading obligation sparks Brexit stalemate for derivatives market; ESMA will uphold its approach to derivatives trading obligation requiring activity take place on venues within the EU once Brexit transition period ends.
Hayley McDowell – The Trade
The EU markets watchdog has refused to change its stance on rules that mean most liquid derivatives will no longer be able to trade on UK venues once the Brexit transition period ends. Under the rules, known as the derivatives trading obligation, derivatives that are in-scope of the requirements must be traded on venues within the EU or in third-country venues that have been granted equivalence.

Brexit Deal Will Leave Carbon Market Question Wide Open
Ewa Krukowska and Jess Shankleman – Bloomberg
The Brexit trade deal still under negotiation between the U.K. and European Union will probably exclude any explicit agreement on carbon trading, leaving it to authorities in London to decide on how to price pollution starting Jan. 1. British negotiators are poised to commit to building an emissions pricing system that’s at least as strong as the EU’s cap-and-trade program, according to two officials with knowledge of the matter. They are likely to stop short of giving any more clarity about the new arrangements, leaving industry and power market traders guessing about what will be in place in just five weeks.

UK facing risk of ‘systemic economic crisis’, official paper says
Emma Graham-Harrison and Carole Cadwalladr – The Guardian
The government has privately admitted the UK faces an increased likelihood of “systemic economic crisis” as it completes its exit from the European Union in the middle of a second wave of the coronavirus pandemic. A confidential Cabinet Office briefing seen by the Guardian also warns of a “notable risk” that in coming months the country could face a perfect storm of simultaneous disasters, including the prospect of a bad flu season on top of the medical strains caused by Covid.

EU derivatives decision leaves London in the lurch
Huw Jones – Reuters
London’s dominance of the multi-billion dollar derivatives market is at risk after a European regulator said on Wednesday banks in the European Union will have to use trading platforms within the bloc once Britain fully leaves the EU on Dec. 31. The City of London’s unfettered access to the European Union, its biggest customer, ends when Brexit transition arrangements expire and Brussels wants trading in euro-denominated derivatives to remain within its jurisdiction or in a country with “equivalent” standards to the bloc.

(Opinion) Brexit stems from a civil war in capitalism – we are all just collateral damage
George Monbiot – The Guardian
Where there is chaos, the government will multiply it. Where people are pushed to the brink, it will shove them over. Boris Johnson ignored the pleas of businesses and politicians across the UK – especially in Northern Ireland – to extend the Brexit transition process. Never mind the pandemic, never mind unemployment, poverty and insecurity – nothing must prevent our experiment in unassisted flight. We will leap from the white cliffs on 1 January, come what may.

Why are fish a sticking point in the Brexit talks?
Antonio Voce, Seán Clarke, Lisa O’Carroll and Frank Hulley-Jones – The Guardian
Arguments over fish stocks have been blocking a wider trade deal. How did it come to this and why does it matter?

Brexit talks: Joe Biden says UK and Ireland must not have hard border
The US president-elect, Joe Biden, has repeated his call for the border between Ireland and the United Kingdom to remain open as the contentious issue threatens to complicate the final stages of the Brexit process. Biden had stressed the importance of protecting Northern Ireland’s peace deal in the Brexit process in a call with the UK’s prime minister, Boris Johnson, after the Democrat won the US election against Donald Trump. He also said that he had discussed the issue with other European leaders.

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