Hits & Takes
John Lothian & JLN Staff
The CFTC Market Risk Advisory Committee met on September 28 under the leadership of Commissioner Kristin N. Johnson for the first time. The CFTC chairman, Rostin Behnam, and Commissioner Christy Goldsmith Romero were also present for the meeting, while Commissioners Summer K. Mersinger and Caroline D. Pham sent pre-recorded messages to the meeting. You can watch the MRAC meeting HERE on the CFTC’s popular YouTube channel.
Deutsche Börse’s supervisory board extended the executive board mandate of Heike Eckert for five years until the end of June 2028. Eckert is responsible for the executive board division human resources & compliance and IS director of labour relations. She has been a member of the executive board since July 2020.
Hurricane Ian, after ripping through southwest Florida and turning into a tropical storm, has turned into a category one hurricane again and is threatening the coast of South Carolina, including the historic city of Charleston. The threat of flooding up and down the coast is life threatening and not to be underestimated.
The Florida Sun Sentinel has a story titled “‘No reason to come … there’s nothing here.’ Florida residents in shock at devastation left in Hurricane Ian’s wake” and NPR has photos of what Florida looks like after Hurricane Ian. It is not pretty.
Edward Yardeni says the bond vigilantes are back versus U.K. Prime Minister Liz Truss.
The New York Times has a podcast of The Ezra Klein Show about “Ethereum’s Founder on What Crypto Can – and Can’t – Do.” Vitalk Buterin explains digital currency’s potential to transform our world.
The new King Charles III coins in the U.K. will launch by Christmas with the new king facing right to left, Bloomberg reported. The coins with Elizabeth II have her facing left to right. Evidently it is a tradition to switch the orientation with each new monarch.
David Gottesman, a protege of Warren Buffett, whom he credited with making him a Wall Street billionaire, has died at the age of 96, the New York Times reported. Gottesman was a low key Wall Street power who founded the investment house First Manhattan. Here is a quote from the New York Times obituary that tells his story: “The only time a whale gets harpooned is when he surfaces,” Mr. Gottesman said in an interview for this obituary at his firm’s Park Avenue office in 2013.
Sean Moore, OCC’s director, strategic sourcing, is looking to hire an associate principal, strategic sourcing.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
MWE SHORT: Tom Sexton – Grasp Your Opportunities
In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Tom Sexton, president and CEO of the National Futures Association, discusses what opportunities lie in the regulatory arena. Sexton asks that when you look at all the different areas of finance, think about regulation and how important it is to not only the U.S. markets, but markets all around the world.
Don’t Spy on Employees to Ensure They’re Working, Microsoft Says; Microsoft poll shows that managers aren’t sure if employees are productive, but software giant advises against workplace surveillance
Dina Bass and Emily Chang – Bloomberg
More than two years after remote work and hybrid jobs became widespread, there’s still a stark divide over how it’s going: About 85% of managers worry they can’t tell if employees are getting enough done, while 87% of workers say their productivity is just fine. That was the finding of a survey on corporate attitudes by Microsoft Corp., the workplace software giant and owner of LinkedIn. Managers’ fears about idle workers are creating what Microsoft Chief Executive Officer Satya Nadella calls “productivity paranoia,” with undesirable results—like spying on employees.
****** I have learned how to hack into my employees’ cameras on their computers, but unfortunately those computers are the ones that are in a storage facility.~JJL
Hurricane Ian’s Toll Is Severe. Lack of Insurance Will Make It Worse.
Christopher Flavelle – The New York Times
Most of the Florida homes in the path of Hurricane Ian lack flood insurance, posing a major challenge to rebuilding efforts, new data show. In the counties whose residents were told to evacuate, just 18.5 percent of homes have coverage through the National Flood Insurance Program, according to Milliman, an actuarial firm that works with the program. Within those counties, homes inside the government-designated floodplain, the area most exposed to flooding, 47.3 percent of homes have flood insurance, Milliman found. In areas outside the floodplain — many of which are still likely to have been damaged by rain or storm surge from Ian — only an estimated 9.4 percent of homes have flood coverage.
***** My mom’s mobile home in Sarasota, Florida is so old we can’t get insurance for it. We normally get some water seepage from storms during the fall, so I have no idea what the damage to her trailer or park are yet. And any repairs will have to come out of pocket, up to and including pulling out the trailer and disposing of it if it is totaled.~JJL
Thursday’s Top Three
Our top story Thursday was Bitcoin Could ‘Double in Price’ Under CFTC Regulation, Chairman Behnam Says, from Coindesk. Second was the IncubEx post on LinkedIn that said, “Environmental markets on Nodal Exchange topped $1 billion in notional value yesterday.” Third was The UK’s Crisis of Confidence Was Years in the Making, from Bloomberg.
27,023 pages; 240,984 edits
Consumer Complaints About Crypto on the Rise Amid Crypto Slump, Data Shows; Although reports received on crypto are still a small portion of complaints received by the CFPB, the upward trend suggests concerns over consumer complaints could drive more scrutiny of the industry
Mengqi Sun – The Wall Street Journal
Consumer complaints about cryptocurrency have surged during an increase in its market volatility over the past two years, hitting not only crypto-trading platforms but also traditional financial institutions such as JPMorgan Chase & Co. and Wells Fargo & Co. The Consumer Financial Protection Bureau, prompted under a presidential order to increase efforts to monitor consumer complaints and “to enforce against unfair, deceptive or abusive practices” in cryptocurrency markets, received 2,734 confirmed crypto-related consumer complaints against digital-asset-centric companies in its public database between Jan. 1, 2020, and Aug. 26, 2022, according to analysis of data from Dynamic Securities Analytics Inc., a Tampa, Fla.-based compliance data firm. Of those, more than 1,800 came in the last calendar year alone.
Finra Spells Out Penalties for Anti-Money-Laundering Violations; For bigger companies, fines related to certain shortfalls come with no upper limit, Wall Street’s self-regulator says
David Smagalla – The Wall Street Journal
The Financial Industry Regulatory Authority, Wall Street’s self-regulator, has for the first time provided guidance to its member broker-dealers on the potential penalties it could impose for violating rules intended to prevent money laundering. The guidelines from Finra, announced Thursday, could signify it plans to step up scrutiny of member firms’ anti-money-laundering efforts, observers said.
Metal prices rise as LME considers banning Russian supplies; Exchange looks at eliciting views on whether to add material to sanctioned oil and coal
Leslie Hook – Financial Times
Aluminium and nickel prices rose sharply on Thursday as traders fretted about supply shortages after the London Metal Exchange announced that it was considering banning new Russian metals from entering the market. The exchange is deciding whether to publish a discussion paper about how to deal with Russian material, according to its chief executive Matthew Chamberlain. Market participants with knowledge of the plan said the paper would include the possibility of banning new Russian metal from entering the market.
Outlier Britain needs a credible economic plan in a hurry; The chancellor broke a cardinal rule at times of market stress — he must now come up with stabilising fiscal policies
Nicholas Macpherson – Financial Times
The story of the British economy is one of slow but steady growth punctuated by disasters. Few were as big as the Barber boom. In the early 1970s, Anthony Barber, the then chancellor, sought to unleash Britain’s growth potential through unfunded tax cuts and easy credit. Output briefly soared before hitting a wall of high inflation, industrial unrest and an oil crisis. When I joined the Treasury in 1985, senior officials still shuddered at the mention of his name. His boom was seen as triggering the series of policy errors that led inexorably to Britain’s emergency loan from the IMF in 1976.
Nasdaq reorganises corporate structure into three divisions; The new units, Market Platforms, Capital Access Platforms and Anti-Financial Crime are expected to take effect before the end of Q4.
Wesley Bray – The Trade
Nasdaq has developed a new corporate structure which will see its business organised into three new divisions: Market Platforms, Capital Access Platforms and Anti-Financial Crime. The company stated that the move will align itself more closely to the foundational shifts that are driving the evolution of the global financial system and evolving client needs.
Singapore Is 17 Years Behind Hong Kong as Wealth Hub; Singpore’s household wealth growth outpaces HK in recent years; Hong Kong is set to become world’s largest cross-border hub
Ainsley Thomson – Bloomberg
Singapore is slowly catching up with Hong Kong in the race to be Asia’s wealth hub. Make that very slowly. It’s going to take the Southeast Asian nation at least 17 years to displace its rival, according to Bloomberg Intelligence analysis. It’s been a bumper few years in Singapore when it comes to household finances, with family wealth rising 9.2% a year on average from 2019 to 2021. That far outpaces Hong Kong’s 2.3%, BI analyst Sharnie Wong calculated from Credit Suisse Group AG’s Global Wealth Report 2022 published last week.
BlackRock Moved to Unwind Trades at the Center of Gilt Selloff; The asset manager contacted pension clients on Wednesday; The Bank of England intervened in the UK gilt market
Loukia Gyftopoulou – Bloomberg
BlackRock Inc. told pension clients it would unwind some trades it managed for them before the Bank of England stepped into the UK government bond market on Wednesday. BlackRock said it would reduce or cut leveraged exposure in so-called liability-driven investment, or LDI, funds and move assets to cash rather than ask for additional collateral to meet margin calls, according to a memo the US asset manager sent customers Wednesday morning. It recommended a gilt fund for exposure to sterling-denominated rates and inflation. The FT reported the memo earlier.
Text messages reveal Sam Bankman-Fried’s guru told Elon Musk the crypto billionaire was ‘potentially interested’ in buying Twitter
Grace Kay and Kali Hays – Business Insider
Sam Bankman-Fried’s advisor told Elon Musk that the crypto billionaire was “potentially interested” in buying Twitter, according to a series of private texts that were released amid Musk’s court battle with the social media company. Will MacAskill, an altruism ethicist and top advisor to Bankman-Fried, texted Musk in March regarding the crypto billionaire’s interest in Twitter.
SocGen’s Krupa Is Emerging as Favorite to Replace Oudea as CEO; Nomination committee officials said to favor Krupa over Proto; Board meeting to make final appointment is still ongoing
Alexandre Rajbhandari – Bloomberg
Societe Generale SA investment bank head Slawomir Krupa is emerging as the lead candidate to replace outgoing Chief Executive Officer Frederic Oudea, according to a person familiar with the matter. The nomination committee of the board of directors, which is meeting in Paris Friday, is said to favor Krupa over his rival Sebastien Proto, the person said, who asked not to be named as the discussions are private. The board has not made a final decision yet, the person said. Le Figaro reported the committee’s stance earlier.
‘Scary’ market turmoil makes investors wary of UK private equity; Weak pound insufficient to lure overseas pensions managers and insurers into British funds
Kaye Wiggins – Financial Times
Pension funds and insurers are “spooked” about committing cash to UK-focused private equity groups, in a sign that chancellor Kwasi Kwarteng’s crisis-provoking fiscal plan has also dented Britain’s appeal for some global investors. The pound’s fall to an all-time low against the dollar this week made it cheap for overseas investors to commit money to UK buyout funds that target British businesses. Even so, industry figures said it is getting harder to persuade them to bet on the country.
China loosens FX restrictions in response to Fed rate rise; Regulators seek to allow more renminbi weakness but avoid runaway depreciation
Hudson Lockett and Cheng Leng, Thomas Hale – Financial Times
The renminbi’s sharp fall over the past week started after regulators told traders they were relaxing informal foreign exchange trading limits, according to people familiar with the matter. The State Administration of Foreign Exchange frequently uses informal “window guidance” to manage the exchange rate, sometimes discouraging participation in renminbi-dollar trading in order to slow depreciation of the Chinese currency.
Currency markets are about to learn a lesson in defying economic gravity; Sterling is under pressure, but rates are rising and the fiscal burden is soaring elsewhere
Gillian Tett – Financial Times
This spring, just after Russia’s invasion of Ukraine, Washington’s Institute of International Finance made a bold and idiosyncratic prediction: the euro was about to weaken dramatically from its $1.11 level because the region was heading for a current account deficit. Not many investors agreed. Data from the Commodity Futures Trading Commission suggests that there was a net “long” speculative position in the markets then — in other words, investors were betting the currency would strengthen — because the European Central Bank was raising interest rates.
SEC hits Barclays with $360mn penalty over $18bn sale error; UK lender offered ‘unprecedented’ amount of unregistered securities for sale, US regulator says
Joshua Franklin and Stefania Palma – Financial Times
Barclays has agreed to pay $361mn to settle charges that a clerical error led the UK bank to offer for sale billions of dollars worth of structured financial products that it was not permitted to trade. The error dated from 2019 to March this year, when Barclays offered $17.7bn worth of products that had not been registered for sale with the US Securities and Exchange Commission — an “unprecedented” amount of unregistered securities, the regulator said in announcing the penalty on Thursday.
Haiti crisis deepens amid fuel protests and gang warfare; Caribbean country is virtually ungovernable and faces ‘a humanitarian catastrophe’ UN warns
Joe Parkin Daniels – Financial Times
Haiti’s acting prime minister Ariel Henry is struggling to retain his fragile grip on power even as nationwide protests and gang warfare paralyse the Caribbean country. The UN this week warned of an increasingly desperate situation as protests flared following a government-mandated increase in the price of fuel. Gang violence has also rendered Haiti practically ungovernable, with Henry in office but unable to assert control.
Fund managers pull nearly 130 single-stock ETF applications; The funds would have been linked to the price of non-US companies such as Saudi Aramco and Alibaba
Steve Johnson – Financial Times
Three fund managers have withdrawn applications for almost 130 single-stock exchange traded funds prompting suggestions that US regulators had privately told them the ETFs would not be approved. Kelly Intelligence, Roundhill Investments and Tema Global had filed with the Securities and Exchange Commission to create ETFs linked to the share price of a slate of non-US companies, such as Saudi Aramco, Volkswagen and Tencent.
Exxon CEO Warns Biden Administration Against Limiting Fuel Exports; Exxon argues against push to get energy companies to slow overseas shipments and stash more fuel in storage tanks
Collin Eaton – The Wall Street Journal
Exxon Mobil Corp. is pushing back against reductions of U.S. fuel exports urged by the Biden administration in August, arguing that restricting shipments would further squeeze global supplies and lift pump prices at home. Exxon told the Energy Department this week that the oil industry should not slow fuel shipments in favor of putting more in storage tanks, according to a letter reviewed by The Wall Street Journal. Easing exports wouldn’t fill tanks in the Northeast—a region where U.S. officials said oil companies need to send more supplies—and instead would create a glut in the Gulf Coast that would lead refineries to cut output, according to the letter, which was signed by Exxon Chief Executive Darren Woods.
Fireside Friday… with Cowen’s James Baugh; The TRADE sits down with head of European market structure at Cowen, James Baugh, to explore the systematic internaliser regime and which areas of the market regulators in the UK and Europe could be focusing on in the year to come.
How is the systematic internaliser landscape developing in Europe and the UK? The electronic liquidity provider systematic internaliser (ELP SI) business is now dominated by a handful of larger players, making it increasingly important to understand when best to interact with this flow to optimise outcomes based on parent order intent and client strategy. Liquidity providers have become more adept at mitigating post-trade impact but only for a limited time period, after which information leakage may outweigh the impact of executing that business on a lit order book. Bank SIs provide further optionality and potentially more benign opportunities if you know what type of flow you’re interacting with.
Coinbase’s Path to Sustainable Profit Is Unclear, Says Analyst. The Stock Drops.
Angela Palumbo – Barron’s
Competition, regulatory uncertainties, pricing and an “unclear path to sustainable profitability” are all concerns one Wells Fargo analyst has when it comes to Coinbase Global COIN – 7.98% . Coinbase (ticker: COIN) is a platform that allows people to trade cryptocurrencies. The stock has fallen 76% in 2022 amid the “crypto winter” and questions surrounding government regulation as the White House puts pressure on the crypto industry.
How Cornell University’s Blockchain Club Is Working to Give Students a Foundational Crypto Education
Cornell University’s blockchain club president, Nick Stamm, says his group is working to teach students about crypto technology so they have a foundational level of understanding beyond what they see online. He tells “Community Crypto” Host Isaiah Jackson, “People are learning basically just what they are seeing through social media, or however they consume their news, and a lot of that news is negative.”
King Charles III Coins to Launch by Christmas With Monarch Facing Left
Eamon Akil Farhat – Bloomberg
Coins featuring King Charles III are set to enter use before Christmas in the UK, where they’ll circulate alongside existing ones depicting Queen Elizabeth II. Charles is shown facing from right to left, the opposite direction to his mother, following a royal tradition in which coins’ orientation is reversed for successive monarchs.
Singapore Regulator Warns Crypto Firms to Curb Their Enthusiasm; Monetary Authority of Singapore urges against speculation; Says crypto advertisements don’t adequately reflect risks
Suvashree Ghosh and Joanna Ossinger – Bloomberg
A senior Singapore central bank official is repeatedly warning cryptocurrency firms that policymakers will clamp down hard on crypto players who fan speculation in the country. Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore reminded the traders to be careful about how they lure customers. “Reduce your enthusiasm and be mindful of who you are selling to,” Mohanty said on Friday at an office opening ceremony of Cobo, a digital asset custody provider. “Singapore is not a place to speculate. We will be very, very hard on this behavior.”
BofA Strategists See Wall Street Rout Forcing Asset Sales; NYSE Composite Index breaks multiple technical support levels; BofA strategists stay tactically bearish until Fed intervenes
Michael Msika – Bloomberg
Spiraling losses on Wall Street are now snowballing into forced asset liquidation, according to Bank of America Corp. strategists. The NYSE Composite Index, which includes US stocks, depositary receipts and real estate investment trusts, has broken multiple technical support levels including its 200-week moving average, the 14,000 mark, as well as 2018 and 2020 highs. Now accumulated losses could be forcing funds to sell more assets to raise cash, accelerating the selloff, according to Bank of America.
Nord Stream Gas Leak Is Same as Three Days’ Demand for Germany
Elena Mazneva – Bloomberg
Whichever way you look at it, the amount of natural gas bubbling up in the Baltic Sea from Russia’s ruptured Nord Stream pipelines is massive. The underwater pipes, damaged by what European and US leaders say was sabotage, contained 778 million cubic meters of gas, based on data compiled by the Danish Energy Agency. That would be enough to meet three days’ supply for Germany, Europe’s biggest user of the fuel. It’s also the same as two-and-a-half days of production from Norway, currently the continent’s top gas supplier.
Mexico Targets Pemex Oil Trader for $1 Million Storage Payment; Emilio Sampayo found to have acted improperly in payment; Probe comes as Mexico’s AMLO vows to root out corruption
Lucia Kassai and Amy Stillman – Bloomberg
Mexican authorities say an oil trader at state-owned Petroleos Mexicanos acted improperly when he struck a deal in 2017 to store crude at sea after Hurricane Harvey. Emilio Sampayo, who recently resigned as deputy director of crude trading at Pemex’s trading arm PMI is being targeted for authorizing payments totaling $1.14 million to keep a million barrels of oil floating in a tanker for 38 days until a buyer could take delivery, according to people familiar with the matter. Pemex auditors flagged the transaction to the federal comptroller, which ruled that Sampayo acted improperly by paying storage fees not typically shouldered by PMI, said the people, who asked not to be named because the information isn’t public.
Vladimir Putin annexes four south-eastern Ukrainian regions; President vows to defend territory ‘with all the means’ at Russia’s disposal following staged referendums
Max Seddon – The Financial Times
Vladimir Putin annexed four regions of south-eastern Ukraine and vowed Russia would use “all the means at our disposal” to defend them, in a further escalation of his war against Kyiv. The Russian president spoke as Ukrainian troops pushed further east in north-east Donetsk, one of the provinces Moscow plans to annex, coming close to surrounding the town of Lyman, a key staging ground for Russian forces. Putin said an attack on the four regions, which he said he now considered part of his country’s territory, would be treated as an attack on Russia and met with full force.
Ukraine advance on Russian outpost challenges Putin’s grip on Donbas
Tom Balmforth and Jonathan Landay – Reuters
Ukrainian troops are moving to capture the Russian-held eastern town of Lyman, threatening a new setback for Kremlin leader Vladimir Putin’s campaign in the Donbas as he prepares to declare the region part of Russia. The capture of the town in the north of Donetsk region could pave the way for Ukraine to make inroads into the adjacent Luhansk province, foiling Putin’s goal of seizing all of the industrial Donbas region declared after his forces failed to subdue the entire country in February, military analysts said.
Russia Blows Up Gas Pipelines, Declaring an All-Out Energy War It May Already Have Lost
Suriya Jayanti – Time
There may be no clearer sign of an enemy in retreat than his scuttling his own ships, which is what Putin appears to have done on Monday by blowing up the main pipelines for exporting Russia’s natural gas to Europe. Putin may be in effect declaring an all-out energy war by completely cutting off fossil fuel exports to the West, but by waiting seven months after invading Ukraine to do so he has lost the advantage. Although the energy crisis will rage on, Russia has lost the energy war.
Russians Stock Up for Battlefield, Fearing Army Lacks Supplies; Regulator to probe price spikes for outdoor, military goods; Mobilization order has draftees buying up camping equipment
Russians called up to fight in President Vladimir Putin’s invasion of Ukraine are buying up everything from camping gear to body armor, worried that his undersupplied army won’t be able to provide them with even the basics when they arrive at the front.
Delaware Freezes Out Russia-Linked Startups, Extending Sanctions’ Reach; Delaware, a global hub for business, has blocked startups from maintaining their corporate standing based on individuals’ ties to Russia
Andrew Scurria – The Wall Street Journal
The commercial hub of Delaware is blocking startup ventures with past ties to Russia from maintaining their corporate standing in the state, ensnaring some tech firms that say they have little or no current connection to Russia following its invasion of Ukraine.
Exchanges, OTC and Clearing
Openfinance celebrates its 20th anniversary with the launch of Openfinance Ecosystem; The new service presents a novel approach to open and collaborative innovation between start-ups and companies; The solution’s partners are Clarity, Fexer, Finveris, Flanks, Inveert, Neuroprofiler, Pibisi, Serfiex and Talento Mobile
Openfinance, BME’s fintech subsidiary, SIX, has celebrated its 20th anniversary with the launch of its new service, Openfinance Ecosystem, a marketplace that incorporates the best wealthtech solutions in the market, fully integrated with Openfinance products. It is an open ecosystem that, together with other wealthtech companies, offers its clients the opportunity to take advantage of the wave of innovation in the wealth management sector.
CME Group Inc. Announces Third-Quarter 2022 Earnings Release, Conference Call
CME Group Inc. will announce earnings for the third quarter of 2022 before the markets open on Wednesday, October 26, 2022. Written highlights for the quarter will be posted on the company’s website at 6:00 a.m. Central Time, the same time it provides its earnings press release. The company will also hold an investor conference call that day at 7:30 a.m. Central Time, at which time company executives will take analysts’ questions. A live audio Webcast of the conference call will be available on the Investor Relations section of the company’s website, www.cmegroup.com. Following the conference call, an archived recording will be available at the same site.
The Supervisory Board of Deutsche Börse AG extends the Executive Board mandate of Heike Eckert
The Supervisory Board of Deutsche Börse AG has prematurely extended Heike Eckert’s (54) Management Board mandate by five years until the end of June 2028. Heike Eckert is responsible for the Human Resources & Compliance board department and is Labor Director at Deutsche Börse AG. She has been a member of the Management Board since July 2020. Her current contract runs until the end of June 2023.
Successful start of pan-European spot market for Guarantees of Origin; First auction completed by EPEX SPOT with clearing and delivery through ECC and EEX
The European Power Exchange (EPEX SPOT), European Energy Exchange (EEX) and European Commodity Clearing (ECC) jointly launched a pan-European market for Guarantees of Origin (GOs). It is the first secondary market for GOs, involving no primary allocation by states but only trading of previously emitted certificates. The first spot auction took place on 28 September 2022 with 26 market participants registered and 19,171 MWh of certified green energy were sold. The orderbook of this new spot auction reflected a strong market interest on the buy-side, with over 4.5 TWh of buy orders registered. This is a promising outset for the upcoming auction, which will furthermore cover all completed production months of 2022. The next GOs spot auction is scheduled for 26.10.2022.
Appointment Of Company Secretary
ASX Limited (ASX) advises that Johanna O’Rourke has been appointed as a Company Secretary of ASX. Ms O’Rourke will be the acting Group General Counsel and Company Secretary from 1 October 2022. Daniel Moran continues as a Company Secretary of ASX. Mr Moran will be the acting Chief Compliance Officer from 1 October 2022.
Invitation to apply for acting as Authorized Brokers of Hong Kong Securities Clearing Company Limited
Hong Kong Securities Clearing Company Limited (“HKSCC”) invites interested participants (“Participants”) of The Stock Exchange of Hong Kong Limited (“SEHK”) to apply for acting as HKSCC’s Authorized Brokers (“ABs”). Selected ABs will be dealing in securities on HKSCC’s behalf for various purposes including execution of buy-in/closing-out transactions and selling of fractional shares. Existing ABs who are interested need to reapply in accordance with the procedures set out in this circular in order to continue providing buy-in services for HKSCC. All Participants appointed as ABs will start providing services to HKSCC tentatively in the third quarter of 2023. HKSCC will notify the relevant ABs of the exact date of the appointment.
U.K. Financial Conduct Authority Announces Cessation of One and Six Month “synthetic” Sterling LIBOR at the end of March 2023
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced that the U.K. Financial Conduct Authority (FCA) has decided to require ICE Benchmark Administration Limited (IBA) to continue to publish 1- and 6-Month “synthetic” sterling LIBOR settings until March 31, 2023. The FCA has announced that, following the results of a consultation, it has no intention to use its powers to compel IBA to continue to publish the 1- and 6-Month “synthetic” sterling LIBOR settings beyond this date, and that therefore these settings will permanently cease immediately after final publication on March 31, 2023.
JPX Report 2022
The JPX Report 2022 is available on the JPX website.
LME says it is mulling consultation on banning Russian metal
Pratima Desai – Reuters
The London Metal Exchange (LME) is considering a consultation on whether Russian metal such as aluminium, nickel and copper should continue to be traded and stored in its system, the exchange said on Thursday. The LME issued a statement after three sources familiar with the matter told Reuters the exchange was planning to discuss banning new deliveries of Russian metal so its warehouses cannot be used to offload hard-to-sell stock.
Speculation Around Consultation On Ongoing Warrantability Of Russia Origin Metal
The LME notes the media speculation as to the issuance of a consultation in respect of the ongoing warrantability of Russia origin metal.
Option for Discussion Paper. The LME confirms that the issuance of a market-wide Discussion Paper is an option currently under active consideration. If issued, such a Discussion Paper would be with the aim of eliciting market views as to the ongoing acceptability of Russian metal in the broader physical market, especially in the context of current negotiations for 2023 physical supply agreements. A Discussion Paper could also lay out potential options which could be pursued, on the basis of market feedback gathered, including the option to take no action. It is important to note that, although a potential Discussion Paper is under consideration by the LME, no decision has yet been taken whether to issue such a paper. Furthermore, if a Discussion Paper is issued in due course, any further steps that may be taken by the LME will have regard to the feedback received from respondents. The market will be further updated via Notice as soon as practicable.
SGX-ST Listings Disciplinary Committee reprimands former Executive Director of Yamada Green Resources Limited, Lin Wei Bin
The SGX-ST Listings Disciplinary Committee (“LDC”) reprimands Lin Wei Bin (“Lin”) for breaching SGX-ST Mainboard Rules 1014(1), 1014(2) and 719(1) in connection with the disposal of leases to moso bamboo plantations in Fujian Province, People’s Republic of China, (“Disposal”) previously held by Yamada Green Resources Limited (“Company”) and its subsidiaries. Having regard to Mainboard Rule 1402(6), Lin breached the aforementioned Mainboard Rules in 2017 by causing the Company to be in breach of such rules.
CME ClearPort API Notices: USI to UTI Support in CME ClearPort API To CME ClearPort API Customers
Effective Sunday, December 4 (trade date Monday, December 5), as required by CFTC regulation § 45.5, CME Group will add support for Global Unique Transaction Identifiers (UTI) to ClearPort API.
EBS Market on CME Globex Notice
Topics in this issue include: Critical Information; Product Launch; Announcements and Additional Resources.
The interest rate derivative market is closed today, September 30, 2022.
Glimpse Markets and Wave Labs extend relationship with new strategic partnership; Wave Labs will provide access to a free web-based dashboard which can be used to view and analyse live and historical buy-side trade data shared over Glimpse’s network.
Wesley Bray – The Trade
Buy-side data pooling network Glimpse Markets and Wave Labs have formed a strategic partnership in which the latter will provide Glimpse’s clients with access to a free web-based dashboard. The move will allow clients to view and analyse the live and historical buy-side trade data that has been shared over the Glimpse network.
TradeTech FX: “Automation needs to expand its focus away from the point of trade execution”; Panel found regulation and codes of conduct restricted what traders could do during this window and that automation could be put to better use further up in workflows.
Annabel Smith – The Trade
Shifting the focus of automation upwards in workflows away from the point of trade execution could uncover improvement in multiples, a buy-side panellist has concluded. Speaking at TradeTech FX, eFX lead for British-American hedge fund, BlueCrest Capital Management, Garrod Treverton, said automation was too focused on the point of trade execution which lasts anything from a few seconds to a few minutes and where restrictions make innovation more difficult.
The Cyber Guild Celebrates the ‘Who’s Who’ of Cybersecurity at Annual VIP Awards Reception
The Cyber Guild held their annual VIP Celebration and Awards on Tuesday evening at the Ritz Carlton Hotel, where they honored seven cybersecurity VIPs.Each year, The Cyber Guild recognizes individuals who emulate the purpose of The Cyber Guild by helping to advance cybersecurity as part of the “fabric of everyday living”. Marybeth Borgwing, Cyber Guild founder and chair shares “we are delighted to recognize such amazing individuals and organizations. We depend on leaders such as this to keep our families, communities, organizations, and nations safe.”
Heightened Cyber Threat Brings CIOs, CISOs Closer
Isabelle Bousquette – WSJ
In a year of high-profile cyberattacks, chief information officers say cybersecurity has sprinted up their agenda and got them working more closely than ever with chief information security officers. A combination of factors—the shift to hybrid work, the sophistication of cybercriminals and the digital front accompanying Russia’s invasion of Ukraine—have pushed digital security to the forefront of the CIO brief, they say.
US lawmakers propose amending cybersecurity bill to include crypto firms reporting potential threats
Turner Wright – CoinTelegraph
Under the proposed amendment, the 2015 legislation would be renamed the Cryptocurrency Cybersecurity Information Sharing Act. United States Senators Marsha Blackburn and Cynthia Lummis have introduced proposed changes to a 2015 bill that would allow “voluntary information sharing of cyber threat indicators among cryptocurrency companies.”
Quantifying the risk of cybersecurity
Devin Jones – Security Magazine
If cybersecurity is a significant threat, why aren’t business leaders putting their money where their mouths are? Most (89%) C-suite executives claim cybersecurity is a high priority. Yet, budgets are a tell-tale of organizational priorities: the average spend is 0.5% of company revenue. So why doesn’t the spend match the claims? The answer is simple. It’s because C-suite executives don’t know how much risk they have concerning cybercrime and have no idea how to quantify it.
BlackRock Plans Another Crypto ETF After Weak Debut of Its First One; Interest in digital assets has waned as prices for coins drop; BlackRock’s IBLC has seen sporadic inflows since its launch
Vildana Hajric and Katherine Greifeld – Bloomberg
The world’s largest exchange-traded fund issuer is taking another step into cryptocurrencies with the filing of a new metaverse product, just months after launching a digital-assets fund that has so far failed to interest investors. BlackRock Inc. is aiming to track companies that have exposure to the metaverse via the iShares Future Metaverse Tech and Communications ETF, according to a Thursday filing. The fund, for which fees and a ticker weren’t yet listed, might include firms that have products or services tied to virtual platforms, social media, gaming, digital assets, augmented reality and more.
Binance is launching a training program for law enforcement to catch crypto criminals around the world
Carla Mozée – Business Insider
Binance, the world’s largest crypto trading platform, said Tuesday it has launched a global program to train law enforcement on how to spot cyber crimes, moving in response to greater demand for help by public and private entities. Binance said in a statement the program is the first globally coordinated effort in the industry. The focus expands beyond crime detection to include aiding in the prosecution of “bad actors who exploit digital assets,” it said.
Binance Registers in New Zealand and Opens Local Office
Amitoj Singh – CoinDesk
Cryptocurrency exchange Binance has registered as a financial service provider in New Zealand and launched Binance New Zealand, according to an emailed announcement. The registration was made with New Zealand’s Ministry of Business, Innovation and Employment (MBIE) on Sept. 10 and comes after similar recent moves toward global expansion in France, Italy, and Spain, among others.
Crypto CEOs are leaving their jobs. Here’s why
Frances Yue – MarketWatch
Hello, welcome back to Distributed Ledger, our weekly crypto newsletter that reaches your inbox every Thursday. I’m Frances Yue, crypto reporter at MarketWatch. I’ll walk you through the latest and greatest in the digital asset world this week. During the past few weeks, chief executives at several major crypto companies left their positions. I caught up with R.A. Farrokhnia, professor at Columbia Business School to discuss reasons behind such moves. Find me on Twitter at @FrancesYue_ to send feedback, or tell us what you think we should cover. You can also reach me through email to share your personal stories with crypto.
The Metaverse and NFTs Are ‘Here to Stay,’ Says CAA’s Head of Business Development (Audio); “Tech vs Media” podcast: Michael Yanover predicts non-fungible tokens will shape our daily lives, entertainment and anything IP-based
Loree Seitz – The Wrap
Michael Yanover, CAA’s head of business development, insisted that the Metaverse and NFTs are not fads or the latest technology trend, but are in fact “here to stay.” “It’s a big space and I don’t think it’s going away at all,” Yanover said of NFTs and the Metaverse on TheWrap’s “Tech vs Media” podcast with host Richard Wolpert, adding that CAA recently hired a chief metaverse officer. “I think it needs to find its footing for sure. Was there maybe a little bit more excitement than there ought to have been at the beginning? Maybe. But man, this is this a powerful thing. This is not going away.”
Banks’ Crypto Asset Holdings May Be Just 0.01% of Total Risk Exposure, Basel Study Finds
Jack Schickler – CoinDesk
The world’s largest banks are exposed to about 9.4 billion euros ($9 billion) of crypto assets, a study by the Basel Committee on Banking Supervision found as the international standard-setter considers new rules for the capital that lenders must hold against innovative assets.
Robinhood Is in Stablecoins. To Really Boost Revenue, It Needs a Deal Like Coinbase’s.
Jack Denton – Barron’s
Robinhood Markets HOOD – 2.40% has struck a deal with Circle Internet Financial to make the group’s U.S. dollar stablecoin available on Robinhood ‘s retail-focused trading platform, marking the broker’s latest push into cryptocurrency amid a wider slowdown.
FTX Ventures, Jump Crypto Lead $20M Fundraise for Executable NFT Wallet
Brandy Betz – CoinDesk
Solana-based developer Coral has raised $20 million in a strategic funding round co-led by the venture capital arm of FTX and Jump Crypto. The capital will go toward building out the first flagship product, Backpack, a wallet for executable non-fungible tokens (xNFT).
On Starting A Crypto Career In The Dead Of Winter
David Z. Morris – CoinDesk
This week at CoinDesk we’ve been highlighting the growing number of university programs that focus on blockchains and cryptocurrency. College isn’t necessarily a requirement for a solid career in the field, but for most people it’s the surest first step.
Texas Objects to Celsius Plan to Fund Operations With Stablecoin Sales
Jesse Hamilton – CoinDesk
Texas state agencies are raising an objection to a plan by bankrupt crypto lender Celsius Network to sell off its stablecoin holdings to pay for ongoing operations, according to a new court filing. The state recorded its objection in bankruptcy court on Thursday, arguing that Celsius is asking for “troublingly broad permission to sell assets insufficiently defined for purposes that are also insufficiently defined.”
Jack Mallers’ Crypto Payment Firm Strike Raises $80M
Jack Mallers, CEO and founder of Chicago-based bitcoin payment provider Strike, discusses bitcoin as a store of value, use cases of the Bitcoin payments system, and the Lightning Network. Plus, Mallers’ take on El Salvador’s bitcoin experiment and how Strike plans to use its latest $80 million raise.
FT Cryptofinance: The hunt for Do Kwon goes global; Plus, US burrito chain Chipotle gets on the Ethereum ‘Merge’ bandwagon
Scott Chipolina – Financial Times
When the collapse of Terra’s stablecoin started making headlines in May, I think it’s fair to say not many people outside the niche sphere of crypto knew who Do Kwon was. Well, one $40bn collapse later, and the mind behind the unstable terra stablecoin has garnered worldwide infamy.
Warner Music Group partners with OpenSea amid broader push for NFTs in the music industry
Anushree Dave – MarketWatch
Warner Music Group WMG, -3.95% has partnered with popular non-fungible token marketplace OpenSea to help artists create fan communities using NFTs. The partnership will let artists signed to WMG create unique NFT drop pages to engage fans and build an online community, according to a press release from WMG. Fans who purchase an NFT from an artist have the opportunity to get access to limited-edition projects or engage directly with the artist. This isn’t WMG’s first foray into the Web3 space. Last year, the music label partnered with technology company Genies to create avatars and digital NFT wearables for WMG artists. Earlier this year, WMG partnered with digital collectible platform Blockparty to allow artists and creators to participate in NFT swaps.
The World Sees Brazil’s Election as a Climate Flashpoint. Brazilians Have Other Concerns; Lula, the favorite against Bolsonaro, is promising to reverse rainforest-destroying policies and protect the climate. He’ll also have to keep the country from going hungry.
ByJessica Brice, Andrew Rosati, and Tatiana Freitas – Bloomberg
At the edge of the Amazon rainforest in Brazil’s northern states, there’s no avoiding the billboards. Most any drive through Pará or Rondônia is going to bring you face-to-much-larger-face with President Jair Bolsonaro, who’s up for reelection on Oct. 2. Bolsonaro’s billboards, which sit in freshly plowed soybean fields and at the edges of sprawling cattle ranches carved from the rainforest, praise him as a patriot and Christian who stands for quem produz, those who produce. They don’t bother with subtext when contrasting the incumbent with his opponent, former President Luiz Inácio Lula da Silva. Lula, the signs declare, wants to take guns away, free criminals, and raise taxes for his leftist agenda.
How Long Can Liz Truss Survive as Prime Minister?
Ben Sills – Bloomberg
UK financial markets have been plunged into chaos since the government announced £160 billion ($174 billion) of unfunded tax cuts last Friday. The pound has hit a record low against the dollar, gilt yields have spiked and on Wednesday the Bank of England pledged unlimited buying of long-dated bonds to avert an imminent market crash.
The Tories have become unmoored from the British people; The government may have adopted the most extreme economic position of any major party in the developed world
John Burn-Murdoch – Financial Times
In a single week, Britain has gone from being one among many nations facing fierce economic headwinds to being a financial basket case, its currency plunging, bond yields and mortgage rates rising and pension funds scrambling to stay afloat.
Highly sanctioned Russian oligarch with close ties to Putin indicted for sending flowers, arranging for child to be born in the U.S.
Lukas I. Alpert – MarketWatch
Aluminum tycoon Oleg Deripaska, a Russian oligarch with close ties to Vladimir Putin, has been indicted for allegedly evading U.S. sanctions through hidden financial transactions, including sending people flowers and arranging for his girlfriend to give birth to his child in America. Deripaska, 52, who owns a majority stake in United Co. Rusal PLC 486, +3.45%, one of the world’s largest aluminum producers, was placed on the U.S. sanctions list in 2018 along with the conglomerate he controls, Basic Element Ltd. That barred him from doing any business in the U.S. The sanctions were tightened earlier this year, following Russia’s invasion of Ukraine, after Rusal was removed in January 2019 from the sanctions list by the Treasury Department under then-President Donald Trump.
More than half of Russians feel anxious or angry about mobilisation, poll indicates
More than half of Russians felt fearful or anxious after hearing that the Kremlin was drafting hundreds of thousands of soldiers to fight in Ukraine, according to a poll released by the independent Levada Centre on Thursday. In the poll, conducted from Sept. 22-28, 47% of respondents said they had felt anxiety, fear or dread following President Vladimir Putin’s announcement on Sept. 21. Another 13% said they had felt anger, while 23% said they had felt pride in Russia.
Breaking Down the SEC and CFTC’s Autumn Wave of Enforcement Actions
Daniel Kuhn – CoinDesk
Fall is here, and U.S. financial regulators are well on their way to making this the worst season for criminal enforcement yet. Every year at this time, due to budgetary considerations and perhaps quotas to fill, agencies like the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ) ramp up their enforcement against crypto’s alleged bad actors. In September 2019, you may remember, the SEC and CFTC sued and settled with the perpetrators of EOS, the largest ($4 billion) initial coin offering of all time. In December 2020, the SEC announced it was building a case against Ripple Labs. and that two of its executives had supposedly held illegal token sales totaling over $1 billion. And every year, a slew of cases are brought against lower-profile crypto projects – for any number of reasons.
Johnson City, Texas, official sentenced to 37 months for embezzlement
Connor Hussey – The Bond Buyer
Anthony Michael Holland, former chief administrative officer and secretary of Johnson City, Texas, has been sentenced to 37 months in federal prison and ordered to pay $1.175 million in restitution for the embezzlement of state government funds, according to his second amended judgment filed on Sept. 21. Holland pleaded guilty to one count of theft from state or local government that receives federal funds on Dec. 15, 2021 and following his imprisonment, will be on supervised release for three years.
Money Laundering via Metaverse, DeFi, NFTs Targeted by EU Lawmakers’ Latest Draft
Jack Schickler – CoinDesk
Members of the European Parliament looking to tackle money laundering want to target large crypto transactions as well as the metaverse, decentralized finance (DeFi) and non-fungible tokens (NFT), a draft bill seen by CoinDesk shows. The European Parliament is currently deliberating on an overhaul of European Union money-laundering laws proposed by the European Commission in 2021. The draft, badged as a set of “compromise amendments” to the law which seek to find consensus among different political factions, incorporates a July idea from left-wing lawmakers to include decentralized finance within the law’s scope.
Treasury Department and Department of Justice signal further regulation of digital asset industry
The U.S. Treasury and Justice Department released regulatory and legislative recommendations and priorities to address illicit finance risks connected to the digital assets ecosystem, following President Biden’s executive order on the regulation of digital assets. On September 16, 2022, the U.S. Department of the Treasury (the “Treasury Department” or “Treasury”) and the Justice Department (DOJ) released reports setting out the agencies’ respective legislative, regulatory, and policy recommendations and priorities on the regulation of digital assets.
CFTC Orders Designated Contract Market to Pay $6.5 Million for System Safeguard, Reporting, and False Statement Violations
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against CX Futures Exchange, L.P. (CX), a designated contract market headquartered in New York, N.Y., for violations of the Commodity Exchange Act (CEA) and CFTC regulations relating to system safeguards, swap reporting, option reporting, and a giving a false statement to the CFTC.
CFTC Orders tpSEF to Pay $850,000 for Violation of 15-Second Delay Rule for Execution of Cross Transactions on a SEF
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against tpSEF, Inc., a registered swap execution facility (SEF), for failing to comply with the CFTC 15-second delay requirement for certain required transactions on a SEF order book.
CFTC Orders Futures Commission Merchant to Pay $500,000 for Supervision Failures Relating to Improper or Fictitious Trade Transfer Requests
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against ADM Investor Services Inc. (ADMIS), a registered futures commission merchant (FCM) in Chicago, Illinois. The order finds that ADMIS failed to supervise its employees and agents in their handling of commodity interest accounts, and failed to perform its supervisory duties diligently. The order requires ADMIS to pay a $500,000 civil monetary penalty and to cease and desist from any further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
Morgan Stanley’s Reason for FX Trader’s Exit Found ‘Defamatory’; Finra panel rules language in regulatory filing should change; Head of FX options Thiago Melzer left Morgan Stanley last year
Donal Griffin – Bloomberg
The reason Morgan Stanley gave for the dismissal of senior currencies trader Thiago Melzer was defamatory, an arbitration panel found. A Financial Industry Regulatory Authority panel of independent arbitrators said that the reason set out on a regulatory filing for Melzer’s exit should be “deleted in its entirety.” Instead, it should show that the bank terminated him because of its “perception of his supervisory actions which were not related to any securities, customer interaction or sales practices,” according to a copy of the September judgment obtained by Bloomberg.
U.S. SEC fines Deloitte’s China affiliate $20 million for auditing violations
John McCrank – Reuters
The U.S. Securities and Exchange Commission on Thursday fined the Chinese affiliate of Deloitte, one of the “Big Four” accounting firms, $20 million for letting some clients, including foreign companies listed on U.S. exchanges, conduct their own audit work. Over multiple years, Deloitte’s Chinese affiliate asked some clients to select their own samples for testing and to prepare documentation that gave the appearance that Deloitte-China had tested the clients’ financial statements and internal controls, when there was no evidence it had in fact done so, the SEC said.
Deloitte’s Chinese Affiliate to Pay $20 Million Penalty for Asking Audit Clients to Conduct Their Own Audit Work
The Securities and Exchange Commission today charged Deloitte Touche Tohmatsu Certified Public Accountants LLP (Deloitte-China), the Chinese affiliate of the Deloitte global network of accounting firms, with failing to comply with fundamental U.S. auditing requirements in its component audits of U.S. issuers and its audits of foreign companies listed on U.S. exchanges. Deloitte-China agreed to settle the charges by paying a $20 million penalty and agreeing to extensive remedial measures.
SEC Publishes Draft FY22-26 Strategic Plan for Public Comment
The Securities and Exchange Commission today released for public comment a draft strategic plan for fiscal years 2022 to 2026. “We can’t take our leadership in capital markets for granted,” said SEC Chair Gary Gensler. “Technology and business models always are changing, and it is important for our agency to evolve in kind. Through the goals we’ve laid out in this strategic plan, we will continue to bring a skilled and steady hand to the capital markets of a changing world. We look forward to reviewing public comments.”
Barclays Agrees to a $361 Million Settlement to Resolve SEC Charges Relating to Over-Issuances of Securities
The Securities and Exchange Commission today charged Barclays PLC and Barclays Bank PLC (BBPLC) in connection with the unregistered offer and sale of an unprecedented amount of securities due to a failure to implement any internal control to track such transactions in real time. Both firms restated their year-end 2021 audited financial statements filed with the Commission as a result of the over-issuances and internal control failure. The firms agreed to pay a $200 million civil penalty and the SEC additionally ordered BBPLC to pay disgorgement and prejudgment interest of more than $161 million, which was deemed satisfied by an offer of rescission BBPLC made to investors in the unregistered offerings.
SEC Monitoring Impact of Hurricanes Ian and Fiona on Capital Markets
SEC Chair Gary Gensler has directed the staff to carefully monitor developments as a result of Hurricanes Ian and Fiona. While the safety of local residents is the highest priority, the SEC invites inquiries from any person with obligations under the federal securities laws that may be affected by the storms. The staff will evaluate the appropriateness of providing regulatory relief for those as applicable.
SEC Charges Man for Defrauding Investors out of Millions of Dollars by Posing as Hedge Fund Billionaire
The Securities and Exchange Commission today charged Justin Costello for using a false persona, as a Harvard-educated military veteran and hedge fund billionaire, to defraud investors out of millions of dollars. The SEC also charged Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.
SEC Charges Former Chicago-Area Investment Professional with Defrauding Elderly Client of $1.2 Million
The Securities and Exchange Commission today charged Bradley A. Goodbred, a former investment professional, with stealing $1,295,000 from an elderly client who currently suffers from dementia, and using the funds for his personal and business expenses.
SEC Charges Minneapolis Hedge Fund Manager in Alleged Market Manipulation Scheme
On September 29, 2022, the Securities and Exchange Commission charged Jason Nordlund, a resident of Minneapolis, Minnesota, with manipulating the share price of Affinity Gold Corporation’s stock to enhance the performance results of a hedge fund he managed.
Licensing and professional registration activities – 2022 update
ASIC has today released its annual licensing report. Report 738 Licensing and professional registration activities: 2022 update (REP 738) outlines ASIC’s licensing and professional registration activities, discusses new and proposed changes to our licensing processes, and notes other work that affects licensees.
ASIC remakes business introduction services relief for managed investment schemes
Australian Securities & Investments Commission
ASIC has extended the relief for business introduction services for registered managed investment schemes until 1 April 2025. The relief was due to expire on 1 October 2022. ASIC considers that the relief remains useful for registered managed investment schemes with fewer than 20 members seeking to raise up to $5 million. The extended relief clarifies that the design and distribution obligations (DDO) apply to persons who, but for the relief, would otherwise need to comply with the DDO.
ASIC places interim stop order on APIL Essential Retail Income Fund
ASIC has made an interim stop order preventing Australasian Property Investments Limited (APIL) from offering or distributing the APIL Essential Retail Income Fund (the Fund) to retail investors because of a non-compliant target market determination (TMD).
AIA to pay $700,000 penalty for false and misleading representations to customers
Financial Markets Authority
The Auckland High Court has ordered life insurer AIA to pay a pecuniary penalty of $700,000 for making false and/or misleading representations to some customers, following proceedings brought by the Financial Markets Authority (FMA) – Te Mana Tatai Hokohoko. AIA admitted to the conduct last year in court. The FMA and AIA agreed a penalty of $700,000 reflected the seriousness of the breaches. In his judgment, Justice Michael Robinson was satisfied a penalty of this amount was appropriate, taking into account AIA’s:
Financial watchdog warns insurers to protect customers’ wellbeing during cost of living squeeze
The government has announced further support for consumers and businesses for energy costs and in the September fiscal event, including a two-year energy-price guarantee for households. While this will help tackle the pressure on household budgets, some people may still consider cutting back on insurance cover.
FCA announces decision on cessation of 1- and 6-month synthetic sterling LIBOR at end-March 2023
We previously required ICE Benchmark Administration (IBA), the administrator of LIBOR, to continue publication of the 1-, 3- and 6-month sterling and yen LIBOR settings for an additional year after end-2021, using a synthetic methodology. This was to help mitigate the risk of widespread disruption to legacy LIBOR contracts which had not transitioned by end-2021, when the sterling and yen LIBOR panels ended.
Thirteen people charged following SFC and Police joint operation against ramp-and-dump syndicate
Securities & Futures Commission of Hong Kong
Thirteen suspects were charged with various criminal offences following an earlier joint operation of the Securities and Futures Commission (SFC) and the Police against a sophisticated ramp-and-dump syndicate (Note 1). Five of them were charged with the offences of conspiracy to defraud and conspiracy to employ a scheme with intent to defraud or deceive in transactions involving securities under common law, section 300 of the Securities and Futures Ordinance (SFO) and section 159A and 159C of the Crimes Ordinance. Among them, two face additional charges of money laundering together with eight other defendants.
Investing and Trading
Boaz Weinstein Reveals the Secret Trade That Helped Make Him Famous
Katherine Burton – Bloomberg
Boaz Weinstein thinks about markets differently than most credit traders. The 49-year-old founder of hedge fund Saba Capital Management spent his early career at Deutsche Bank AG, when credit-default swaps were just hitting the market. Over the next decade, he made a lot of money for the German lender trading CDS—effectively insurance against a corporate default—and the instruments remain a big part of his portfolio.
‘Don’t try to be a hero’: The stock market will — eventually — roar back, history shows
Brian Sozzi – Yahoo! Finance
On the bright side of what has increasingly been a terrible year for stocks is that over time, history is filled with self-corrections and comebacks. The S&P 500 has gone on to increase on average by 29% in the three years following a 20% plus decline dating back to 1950, according to data mined by Truist chief market strategist Keith Lerner. Stocks have gained 26% on average after a 20% plus fall zooming out and using a two-year timeframe.
Global Market Risk Is Building Like in August 2007, Summers Says; Crisis firefighters had better not book vacations, he says; Japan’s bond holdings need watching, ex-Treasury chief says
Chris Anstey – Bloomberg
Former Treasury Secretary Lawrence Summers likened the array of risks confronting the global economy to the pre-crisis summer of 2007, with the UK’s current troubles just one example of potential breakdowns. “We’re living through a period of elevated risk,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “In the same way that people became anxious in August of 2007, I think this is a moment when there should be increased anxiety.” The summer of 2007 saw the first signs of strains over a collapsing US housing market, eventually morphing the following year into the worst financial crisis since the Great Depression.
Banks Dealt Fresh Blow With Collapse of Brightspeed Debt Sale; Underwriters shelve $3.9 billion offering for buyout by Apollo; Investors are fleeing risky debt amid recession fears
Davide Scigliuzzo and Paula Seligson – Bloomberg
For the second time in two weeks, Wall Street bankers suffered a painful reminder of how quickly risk appetite is evaporating from credit markets as a $3.9 billion debt sale for a leveraged buyout collapsed. A group of underwriters led by Bank of America Corp. and Barclays Plc pulled the loan and bond offering for telecom provider Brightspeed on Thursday after struggling to attract demand from investors. The transaction, which was meant to help fund Apollo Global Management Inc.’s purchase of the company, is the latest large acquisition financing to stumble. Banks face significant losses on tens of billions of dollars in buyout debt that they committed to months ago and are trying to offload just as rising interest rates and fears of a deep recession are causing investors to flee risky debt.
Cash Is King for Pension Funds After UK Funding Market Shocks; Some desperate for cash, others have buffers: M&G’s Moylett; Unclear if could spill over into broader liquidity breakdown
Greg Ritchie – Bloomberg
A dash for cash among sterling investors after market turmoil sparked by pension fund margin calls is coming at a bad time, according to an M&G Investments executive. Nina Moylett, the firm’s head of cash and currency, sees her markets as divided between pension funds desperate for cash and others who have built up sufficient buffers. That’s become a crunch issue in UK funding markets and beyond this week after forced selling for collateral led the Bank of England to intervene to stem a rout in bond markets.
Environmental, Social and Corporate Governance
The aspiring ‘coral factory’ restoring reefs wrecked by climate change; Coral Vita, a for-profit company, aims to grow corals up to 50 times faster than in nature, improve their resilience to climate change and provide large-scale restoration services through land-based farms
Allyson Chiu – The Washington Post
Sam Teicher hovers over a section of Rainbow Reef, his yellow and black scuba fins stilling in the turquoise waters of the Atlantic Ocean. Contrary to the reef’s colorful name, the corals below him make up a bleak palette of grays. He looks up from the broken, stick-like pieces and uses one hand to make a slicing motion across his throat. Dead. Leaving the coral graveyard behind, Teicher swims to another area of the reef nearby, carefully steering clear of healthy elkhorn corals that dot the seascape. Tiny, yellow fish dart away as he moves closer to a cluster of finger-sized staghorn corals — a critically endangered species essential for reef-building — protruding from a plate attached to the reef. Teicher gestures toward the lemon-hued branches, then points at himself. Ours.
Princeton to Cut Holdings in Publicly Traded Fossil-Fuel Companies; School is poised to break ties with 90 firms, including Exxon; Harvard, Brown among others that have pulled back from sector
Francesca Maglione – Bloomberg
Princeton University is moving to sever financial ties with fossil-fuel companies, including energy giants Exxon Mobil Corp. and Suncor Energy Inc., as the school distances itself from major greenhouse-gas emitters. The university’s endowment, the fourth-largest in the US, “will also eliminate all holdings in publicly traded fossil-fuel companies,” Princeton said Thursday in a statement.
There’s an ESG backlash inside the executive ranks at top corporations
Eric Rosenbaum – CNBC
Top corporations have embraced ESG publicly as core to their shareholder and stakeholder policies, but behind the scenes, executives exhibit less support for the rising influence of the investing philosophy. Only 25% of CFOs surveyed by CNBC say they support the Securities and Exchange Commission’s climate disclosure proposal. Meanwhile, CFOs are more likely than not to say they support the moves by Texas and Florida to ban pension funds from investing based on ESG factors. In public, U.S. corporations say the right things about environment, social and governance factors as part of their mindset. But how do executives really feel about the push to make ESG a core component of management philosophy? Inside the C-suite, there is concern about the value of ESG metrics, while there is also support for recent political pushback against ESG by Republican leaders at the state level including Florida Governor Ron DeSantis and Texas Governor Greg Abbott.
Chart of the Week: Advisors Are Still Learning About ESG
ETF Trends via Nasdaq
While investing based on environmental, social, and governance (ESG) metrics may be a wave of the ETF future, it is not much more than a drip in the present. A few weeks back, I wrote an article that declared that ESG was not the anti-energy villain that some in the financial industry and in politics were making it into; the ETF asset base remained small at less than 2% of assets, and the lineup of products available was so diverse that it was wrong to call them anti-energy. Since then, VettaFi took things further. During a September webcast with State Street Global Advisors that focused solely on the merits and use cases of ESG investing, we surveyed advisors about how they were presently using such strategies. Nearly half of the respondents (47%) said that ESG comprised less than 5% of their assets, while an additional one in five (20%) had between 5% and 10% invested in ESG. Meanwhile, nearly one in seven (13%) did not invest at all in ESG strategies, despite attending the webcast on the topic. Even as many advisors are eager to learn more about ESG, they have not come close to embracing these approaches.
Bitcoin Could Be as Bad for the Planet as Beef; A look at the relative value of the cryptocurrency’s climate damage puts it in the same league as cattle farming or gasoline burning, according to a new study.
Laura Millan Lombrana – Bloomberg
Bitcoin mining’s climate impact is comparable to farming cattle or burning gasoline when taken as a proportion of market value, according to researchers at the University of New Mexico in Albuquerque. Cryptocurrency mining is energy intensive because it requires highly specialized computers — and most of the electricity it consumes is generated by burning planet-warming fossil fuels. The climate-related economic damage caused by mining the popular digital token, Bitcoin, exceeded its market value on 6.4% of the days it traded between 2016 and 2021, the paper published in Scientific Reports on Thursday found.
Giant EUR20 Billion Wind Projects Planned for Baltic Sea Vie as World’s Largest; Latest projects near Aland would be biggest in the world; Firm is on track to reach installation targets for 2023-24
Lars Paulsson – Bloomberg
Swedish wind power developer OX2 AB and investment firm Alandsbanken Fondbolag are developing two offshore wind projects in the Baltic Sea that combined would be the biggest in the world. It’s yet another clear sign that the biggest listed Swedish wind developer sees giant turbines as tall as skyscrapers at sea as the future after almost two decades of building parks at land. In June, it announced another giant offshore wind project and recently sold a 49% stake in three developments to the investment arm of Ikea’s biggest retailing group.
JPMorgan CEO tells business leaders at UNC why remote work isn’t sustainable
Lauren Ohnesorge – The Business Journal
When it comes to remote work, the leader of one of the largest investment banks in the country is ready to cancel the Zoom calls. JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon, an outspoken advocate for bringing workers back to the office, told leaders in Chapel Hill Thursday that “management by Hollywood Squares doesn’t work well.” Dimon, the keynote speaker at UNC Kenan-Flagler Business School’s groundbreaking event for its new building, put out a lot of one-liners, telling the crowd that while wise people learn from mistakes, the wisest “learns by other people’s mistakes.” And one mistake might be not showing up to the office.
More Pain Ahead for Banks as Investors Balk at Risky Buyout Debt; Buyer pushback leads to $3.9 billion debt deal being pulled; Two LBOs with $14 billion of debt sit in near-term pipeline
Olivia Raimonde and Paula Seligson – Bloomberg
Wall Street banks trying to offload tens of billions of dollars in high-risk leveraged buyout debt are finding it increasingly tough as yields surge. On Thursday, a group led by Bank of America Corp. and Barclays Plc scrapped a $3.9 billion debt sale for the buyout of an Apollo Global Management Inc.-backed telecom business called Brightspeed. The retreat follows an LBO fundraising for Citrix Systems Inc., which sold at rock-bottom prices last week, leaving lenders with about $600 million in losses.
BOE Pledges Unlimited Bond-Buying to Avert Imminent Gilts Crash; 30-year yield falls most on record in wake of intervention; Officials warned of risk to stability if dysfunction continued
David Goodman and Philip Aldrick – Bloomberg
The Bank of England staged a dramatic intervention to stave off an imminent crash in the gilt market by pledging unlimited purchases of long-dated bonds. With the fallout from Prime Minister Liz Truss’s tax cuts still ripping through UK asset prices, the central bank had been warned that collateral calls on Wednesday afternoon could force investors to dump government bonds, according to a person familiar with its decision making.
Rothschild Plans to Hire Seven Bankers in India Before Year-End; Firm is expanding its 18-member team in India across sectors; India has been bucking global slowdown in M&A activities
Baiju Kalesh – Bloomberg
Rothschild & Co. is planning to add seven bankers in India before the end of this year as the firm looks to expand its footprint in Asia’s third-largest economy. The firm, which currently has 18 staff in the country, is looking to hire from analyst to vice president levels across sectors such as health care and technology, according to Aalok Shah, managing director for India.
FTSE Russell announces the results of its 2022 annual country classification review for equities and fixed income
FTSE Russell, a leading global index, data and analytics provider, has published the results of the annual country classification review for countries monitored by its global equity and fixed income indices. FTSE Russell announces that South Korea will be placed on the Watch List for a potential upgrade to Market Accessibility Level ‘2’ and for consideration for inclusion in the FTSE World Government Bond Index (WGBI). This follows announcements by the South Korean market authorities of several proposed initiatives intended to improve the market’s structure and the accessibility of South Korean capital markets. FTSE Russell will gather feedback from market participants as the proposed reforms are implemented to assess the practical experiences of international investors against the requirements for a market accessibility level upgrade.
Jefferies Financial Group shrinks staff by 5%
Aaron Elstein – Crain’s New York Business
Jefferies Financial Group shrank its workforce by 5% last quarter, the first of many such expected announcements as the bear market takes a bite out of Wall Street.
Macro Hedge Funds Turn In Banner Year in Volatile Market; Biggest interest-rate and currency moves in decades fuel gains after years of subpar returns
Juliet Chung – The Wall Street Journal
Hedge funds that bet on macroeconomic shifts have been a rare bright spot in a dismal market, racking up their highest returns in years on the back of some of the biggest interest-rate and currency moves in decades.
Hong Kong’s Abrupt Quarantine End Triggers New Crisis for Hotels; Ovolo group saw 1,500 cancellations after city axed measure; Tourists unlikely to fill void until virus curbs further eased
Lisa Du and Shirley Zhao – Bloomberg
Hong Kong’s former quarantine hotels are awash with empty rooms, after the city axed its dreaded mandatory isolation rule for arrivals but kept other virus curbs likely to repel inbound tourists. The Ovolo group’s Southside and Central properties had just four bookings left on Monday after logging some 1,500 quarantine cancellations over the weekend, said Mael Vastine, director of operations in Hong Kong. “Business has been impacted and it will take some time to recover,” he added, noting that neither hotel had taken a new reservation in recent days.
HK Will Keep Reopening Unless New Variant Emerges, Lo Says; City’s easing must not seed outbreaks in mainland China; Businesses are pushing for a full reopening of financial hub
Jinshan Hong and Stephen Engle – Bloomberg
Hong Kong will stick with its push to reopen to the world unless a dangerous new virus variant emerges, said the city’s top health official, while stressing the financial hub has an obligation to protect mainland China from major Covid-19 outbreaks. “We have to be prepared. Emerging diseases may come anytime,” Secretary for Health Lo Chung-mau said in a Bloomberg TV interview on Thursday, highlighting that decisions around an easing of rules will be made after reviewing data. “This is our obligation: to make sure that we won’t cause a major outbreak in the rest of China.”
Export Ban Triples Nickel Investment in Indonesia’s Morowali; Investment in the industrial park seen to hit $18 billion; More nickel smelter projects being completed this year
Eko Listiyorini – Bloomberg
Indonesia’s nickel investment is set to triple in one of the country’s biggest industrial parks, following a 2019 ban on raw ore exports that President Joko Widodo says will help the economy produce higher-value goods. Spending on projects in Morowali Industrial Park in Sulawesi will reach $18 billion in 2022, compared with $6.7 billion in 2019, when the ban was imposed, according to Luhut Panjaitan, the coordinating minister for investment & maritime affairs.
China tells state banks to prepare for a massive dollar dump and yuan buying spree as Beijing’s prior interventions have failed to stem its currency’s worst year since 1994
Phil Rosen – Business Insider
The People’s Bank of China has told major state-run banks to prepare to shed dollar holdings while snapping up offshore yuan, which has continued to fall despite prior interventions, sources told Reuters. The scale of this latest effort to prop up the yuan will be big and could provide a floor to the Chinese currency, according to the report. The amount of dollars to be sold hasn’t been decided yet, but Reuters said it will primarily involve the state banks’ currency reserves. Their offshore branches, including those based in Hong Kong, New York and London, were ordered to review offshore yuan holdings and check to see that dollar reserves are ready.
Chinese Regulator Tells Banks to Avoid Political Talk Ahead of Party Congress; Units of Goldman and JPMorgan were among institutions recently contacted by the China Securities Regulatory Commission
Rebecca Feng – The Wall Street Journal
China’s securities regulator has told investment banks operating in the country to avoid publishing politically sensitive research ahead of a twice-in-a-decade meeting of the Communist Party next month, according to people familiar with the matter. The China Securities Regulatory Commission recently sent an advisory to multiple securities houses, including the domestic units of large international banks, the people said. The mainland China businesses of Goldman Sachs Group Inc. and JPMorgan Chase & Co. were among those contacted by the regulator, the people added.
Record Norwegian Oil Exports to Help Europe Fill Russian Gap; Johan Sverdrup loadings to jump to fresh high in November; North Sea cargoes rise as continent to shun Moscow’s supplies
Sherry Su – Bloomberg
Record exports of Norway’s Johan Sverdrup crude oil are set to help meet European refineries’ needs as a deadline to phase out Russian supplies draws closer. Loadings from the huge Johan Sverdrup field in the North Sea, operated by Norway’s Equinor ASA, will rise to 587,000 barrels a day in November, according to a program seen by Bloomberg. That compares with an average of 500,000 barrels a day in the first three quarters of this year. The European Union’s planned sanctions on Russian seaborne crude are due to come into force in early December. While refineries have reduced the purchases of Russia’s Urals crude markedly since Moscow’s invasion of Ukraine, they still imported about 840,000 barrels a day of the flagship grade last month, according to ship-tracking data compiled by Bloomberg.
HSBC Considers Quitting Global HQ in London’s Canary Wharf; Bank could leave iconic skyscraper when lease expires in 2027; Other options being considered include renovating the building
Jack Sidders and Harry Wilson – Bloomberg
HSBC Holdings Plc is considering quitting its global headquarters in London’s Canary Wharf district when its lease expires in early 2027. The bank is undertaking a review of the “best future location in London for our global headquarters” as it aims to create a more flexible workspace, according to a memo sent by the bank’s chief operating officer John Hinshaw. Options include renovating the existing building as well as moving to new premises, it said. The bank said it will keep its global headquarters in London. The lender is already in the process of reducing its office footprint globally by about 40% from 2019 levels following the pandemic.
Mongolian Banks Curb FX Flows to Fight Worsening Cash Crunch; Commercial banks capping FX transactions to $300 a day; Reserves shrank 40% in past year, helping drive currency lower
Terrence Edwards – Bloomberg
Mongolia is facing a worsening foreign currency crunch following Russia’s war with Ukraine and a slump in China’s economy, forcing local banks to restrict the amount of dollars customers can buy. Khan Bank, the country’s largest bank measured by total assets, limited the daily amount of cash that can be converted into foreign currencies to 1 million tugrik ($300) from this month, Vice President of Wholesale Banking Uuganbayar Terbish said in an interview on Thursday. That’s down from as much as 300 million tugrik under normal banking conditions and 100 million tugrik in June, he said.
‘No reason to come … there’s nothing here.’ Florida residents in shock at devastation left in Hurricane Ian’s wake
Angie DiMichele and Amy Beth Bennett – South Florida Sun Sentinel
Eerie scenes of destruction punctuated by jarring lighthearted moments replayed themselves over and over along Florida’s Gulf coast on Thursday as residents who fled the wrath of Hurricane Ian returned to discover what’s left of their homes. Hurricane Ian, one of the most powerful storms ever recorded in the U.S., made landfall first near Coya Costa, an island off Fort Myers, and then finally on the mainland near Punta Gorda, on Wednesday. For hours, the near-Category 5 storm pummeled the region before barreling through Central Florida, leaving devastation and major flooding in its wake across the state.
Photos: This is what Florida looks like after Hurricane Ian
Virginia Lozano, Joe Hernandez and Catie Dull – NPR
Floridians are finding themselves in a changed landscape after Hurricane Ian swept through the region on Wednesday. Images of the aftermath show a glimpse of the destruction caused by the powerful Category 4 storm: homes washed out, boats yanked from their moorings, and decimated neighborhoods. Rescue and recovery efforts got underway after some of the more dangerous conditions subsided, but the full scope of Ian’s destruction is still unclear. Here are some photos of what Hurricane Ian left behind:
Meta to Cut Headcount for First Time, Slash Budgets Across Teams; Zuckerberg says social giant will end 2023 as a “somewhat smaller” organization
Kurt Wagner – Bloomberg
Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg outlined sweeping plans to reorganize teams and reduce headcount for the first time ever, calling an end to an era of rapid growth at the social media giant. In what would be the first major budget cut since the founding of Facebook in 2004, Zuckerberg said the company will freeze hiring and restructure some teams to trim expenses and realign priorities. Meta will likely be smaller in 2023 than it was this year, he said.