Hits & Takes
By JLN Staff
Happy Valentine’s Day! Do you want to make an impact and show your love on Valentine’s Day? Join our friends at Gate39 Media who are holding a virtual food drive with the Greater Chicago Food Depository. I bought some oranges for the drive in honor of my dear wife for Valentine’s Day, and bought her some roses too. What will you buy on the virtual food drive and show your love?~JJL
Just in time for Valentine’s Day, the CFTC and Kraft Foods told federal district court Judge John Blakely yesterday that they are finally getting along. They have agreed to settle the CFTC’s charges that Kraft manipulated the wheat futures market in 2011. According to Brad Rosen in Wolters Kluwer’s Securities Regulation Daily, the judge welcomed the news of the settlement while taking a bit of a wait-and-see attitude about how it plays out. After all, the CFTC’s conduct last summer blew up the August 2019 signed, sealed, delivered and entered-as-settled-by-the-court agreement. It will be interesting to see what information about the alleged manipulation the agency discloses, since the CFTC earlier agreed to be gagged. The previous settlement called for a $16 million fine. Who is listing the event contract on whether the next fine will be higher or lower? ~Thom Thompson
Here is your “did you know” moment from the London Metal Exchange: Copper was extensively mined by the ancient Greeks on the island of Cyprus, who called it “aes Cyprium” or “Cyprian metal.” In mythology, Cyprus was the birthplace of Aphrodite, goddess of love, and so copper is often seen as the metal of love.~JJL
Note to Bloomberg: Futures traders are used to getting squeezed. It is part of the job.~JJL
We shot some videos at the STAC annual mid-winter meeting but had some problems with the video, so we are releasing the interviews as podcasts. They will come out soon.~JJL
Ice Bonds Completes Integration With Blackrock’s Aladdin To Offer Fixed Income Portfolio Auction Functionality To Investment Managers
ICE Press Release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Bonds has completed its integration with BlackRock’s Aladdin, offering access to ICE Bonds’ Portfolio Auction functionality, an automated execution protocol for portfolio trading. Aladdin is a premier portfolio management system for investment managers that combines sophisticated risk analytics with comprehensive trading and position monitoring tools.
*****I am still trying to figure out how the flying carpet works into this deal.~JJL
In wake of Brexit, EU to put Cayman Islands on tax haven blacklist
Daniel Boffey – The Guardian
The Cayman Islands, a British overseas territory, is to be put on an EU blacklist of tax havens, less than two weeks after the UK’s withdrawal from the bloc. In a clear indication of the country’s loss of influence on the EU’s decision-making, the bloc’s 27 finance ministers are expected to sign off on the decision next week.
*****At least they are on a list. The worst thing is to be listless.~JJL
NFA permanently bars former Chicago, Ill. commodity pool operator and commodity trading advisor Elkhorn Investments LLC from membership
NFA has permanently barred Elkhorn Investments LLC (Elkhorn), a former NFA Member, commodity pool operator and commodity trading advisor located in Chicago, Ill., from membership. The Decision, issued by NFA’s Business Conduct Committee (BCC), is based on a Complaint issued by the BCC. The BCC found that Elkhorn failed to file certified annual statements and liquidation statements for its pools.
IRS quietly deletes guideline that Fortnite virtual currency must be reported on tax returns
Brian Fung – CNN
For months leading up to this tax season, a section of the IRS’s website advised players of Fortnite, the popular online video game, that their use of in-game virtual currency could be subject to federal taxes. The little-noticed provision, which dated back at least to October according to the cached version of an IRS webpage on Archive.org, appeared to mark the first time the agency has ruled on video game currencies, including Fortnite’s V-bucks, purchased with real dollars. By applying the same policy to in-game money that it enforces on bitcoin, ether and other cryptocurrencies, the IRS guide seemed poised to affect millions of gamers — or their parents.
*****Compared to the ’80s and ’90s, there are a huge number of video games now, and there are even more every year. Many of them use in-game currencies these days; keeping track of them all and creating procedures for reporting one’s digital currency would be a mammoth task for the IRS. That effort could probably be better spent elsewhere, especially since most in-game currencies are not fungible outside of the game, except through alternative markets. Speaking as someone with a lot of, let’s say, “gaming experience,” the vast majority of gamers tend not to trade in said alternative markets. Most of them just want to play the game.~MR
CryptoMarketsWiki Coin of the Week: OKB
OKB, a cryptocurrency issued by the Maltese exchange OKEx, increased in value by over 60 percent this week. The spike began one day before it launched OKDEx, a decentralized exchange running off of its blockchain, OKChain. You might say this coin did “OK” this week.
Thursday’s Top Three
Our top story Thursday was Matt Leising of Bloomberg’s Futures Traders Are Getting Squeezed and More Job Cuts Are Expected. Next was Seeking Alpha’s CME Group’s Murky Future, which suggested that the exchange is vulnerable to competition in its Eurodollar futures and S&P 500 futures contracts. Third was Bloomberg’s The Woman Rising From Goldman Trader to Its Face on Wall Street, about Goldman treasurer and longtime trader Beth Hammack.
172,250,787 pages viewed; 24,056 pages; 223,343 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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Coronavirus Could Infect Two-Thirds of Globe, Research Shows
John Lauerman – Bloomberg
Disease scientist bases estimate on transmissibility of virus; WHO has said China quarantines provide a ‘window’ to prepare
As the number of coronavirus cases jumps dramatically in China, a top infectious-disease scientist warns that things could get far worse: Two-thirds of the world’s population could catch it.
ICE teams up with BlackRock Aladdin for automated portfolio trading; ICE Bonds and BlackRock provide automated execution for portfolio trading as protocol continues to rise in popularity with the buy-side.
Hayley McDowell – The Trade
US exchange group ICE has integrated its fixed-income trading platform with the BlackRock Aladdin investment operations system to offer the buy-side automated portfolio trading protocols.
Barclays and regulators must find speedy solution to Jes Staley; FCA probes bank’s boss; Centrica’s strategic exposure; Woodford induces amnesia
Kate Burgess – FT
It is pretty much unprecedented for City watchdogs to launch an enforcement investigation into the chief executive of a big UK bank. That they have now twice initiated a probe into James E Staley, aka Jes, is jaw-dropping.
Brexit Hardball Is Bad for the City of London; It gets the U.K. and European Union no closer to a face-saving compromise, and spooks firms on both sides.
Lionel Laurent – Bloomberg
Remember when financial regulation was just…not that interesting? These days, it looks more like the 21st-century trade equivalent of a military provocation.
The Rising Value of Data in Financial Markets
Michael Chin – Traders Magazine
‘New oil’ or ‘new gold’ are just some of the phrases used to describe the value of data in financial markets. And rightly so. Data fuels every aspect of the trading process. From the very beginning, trading has always been about information. Whoever has the best and the fastest information gains the edge.
Coronavirus ‘Hits All the Hot Buttons’ for How We Misjudge Risk; Psychologists say that differing responses to coronavirus and the flu illustrate our shortcomings when it comes to evaluating danger.
Max Fisher – WSJ
Shortly after the University of Washington announced that the school’s fourth suspected case of the new coronavirus had turned out negative, two professors, one of public policy and the other of public health, held a small dinner for students and faculty members. Like everywhere else on campus, and in much of the world, the coronavirus was all anybody could talk about.
Fixed-income fund flows rise as investors fear coronavirus impact; Safe-haven assets see inflows even as riskier corners of the market largely unaffected
Colby Smith and Richard Henderson – FT
Global investors poured a record amount of cash into fixed-income funds for the week ending Wednesday, as the coronavirus outbreak intensified fears of a global growth slowdown.
U.S.-China Bickering Threatens to Hobble World’s Virus Fight
Iain Marlow, Dandan Li and Peter Martin – Bloomberg
Confusion over whether China will allow U.S. health experts; Failure to cooperate may hurt preparation for broader outbreak
The U.S. says China won’t let its health workers help fight the virus. Beijing says they’re welcome to come. The World Health Organization says nothing has been decided.
Wall Street is trying to catch up on climate change; Banks are feeling pressure on the issue from investors and their own employees
Gillian Tett – FT
This winter Jamie Dimon, chief executive of JPMorgan, has become a whipping boy for climate change campaigners. Check out, by way of example, an online video where the actress Jane Fonda wears a red hat to lambast him for the bank’s “money pipeline” to fossil fuels.
Climate Change Pushes January 2020 to Hottest in 141 Years
Eric Roston – Bloomberg
The year has started with the hottest January in the 141 years that global records have been kept, and it’s the biggest record-breaking margin—1.14° Celsius above the 20th century average—achieved without help from a warming El Niño event in the Pacific Ocean.
MSCI Says ESG Indexes Will Be Bigger Than Traditional Gauges
Ishika Mookerjee and Abhishek Vishnoi – Bloomberg
More funds to use ESG indexes than traditional gauges: Briand; Money tracking MSCI’s ESG benchmarks to likely double in 2020
Responsible investing is going to be big — so much so that MSCI Inc. expects its ESG indexes to eventually get more following than its traditional benchmark offerings.
US buy-side traders pour cold water on new exchange market entrants; The latest research from Greenwich Associates reveals traders are not in favour of increased fragmentation, as three exchanges prepare to launch this year.
Hayley McDowell – The Trade
The majority of buy-side traders in the US are not supportive of new exchange venues entering the equity landscape, with some agreeing that new entrants should achieve a minimum market share before qualifying for protected quote status.
Buy-side bosses join board at Investment Association; Standard Life Aberdeen’s Keith Skeoch replaces Peter Harrison, CEO of Schroders, as chair of the board at the Investment Association.
Hayley McDowell – The Trade
Chief executives at Standard Life Aberdeen, Legal & General Investment Management and JP Morgan Asset Management have joined the board of the Investment Association in the most senior positions.
FCA appoints interim strategy and competition executive director; Sheldon Mills will step into Christopher Woolard’s shoes following his appointment as interim chief executive.
Kiays Khalil – The Trade
The UK’s Financial Conduct Authority (FCA) has named Sheldon Mills as its new interim executive director of strategy and competition, replacing Christopher Woolard as he takes on the interim chief executive role.
Royal Bank of Scotland to Rebrand Bank as NatWest
Stefania Spezzati – Bloomberg
Rose overhauls lender in debut earnings, targets lower profit; Shares slide as bank’s dividend disappoints some analysts
Royal Bank of Scotland Group Plc’s new boss, Alison Rose, is abandoning the bank’s three-century-old name and slashing its markets business as the state-controlled lender steps away from its tumultuous past.
An Industry With Purpose: Environmental Solutions
Brian Clarke – via LinkedIn
As a new decade kicks off, my colleagues around the world and I have been reflecting on Veolia’s purpose and vision. These are complicated times for the world on a number of fronts and I am encouraged by the work the Veolia North America team does every day to make a difference. We have a purpose and that feels good, and we recognize that we need a diverse workforce of STEM innovators to keep ahead of environmental challenges.
****Hat-tip to Brad Rosen for finding this story from a school classmate of his.~JJL
Exchanges, OTC and Clearing
SGX RegCo uses AI to enhance surveillance activities
Singapore Exchange Regulation (SGX RegCo) is making its surveillance and regulation of the securities market more targeted and effective with the application of artificial intelligence (AI) enhancements to its real-time monitoring system. The introduction of AI can help to better isolate unusual activity, by learning from historical trading patterns and filtering out noise caused by developments across intricate relationships between multiple markets. This allows regulatory attention to be more sharply focused on a smaller set of potentially unusual trading signals identified through the surveillance system, which are then further analysed and reviewed by the surveillance team.
SGX welcomes Don Agro International Limited to Catalist
Singapore Exchange (SGX) today welcomed Don Agro International Limited to its Catalist under the stock code “GRQ”. Don Agro International Limited is one of the largest agricultural companies in the Rostov region of Russia. Its main business activities include the cultivation of agricultural crops like winter wheat, sunflower, sorghum and corn, as well as the production of raw milk.
LME ASIA WEEK 2020
Against the backdrop of the novel coronavirus, HKEX Group has made the difficult decision to cancel the LME Asia Dinner and postpone the LME Asia Seminar this year. Both were due to be held in Hong Kong on Wednesday 6 May 2020. This decision has been taken for the safety of staff, customers and friends in the metals industry across the region.
Nadex Amends Rule 2.3 Officers Of Nadex And Rule 10.3 Arbitration Of Nadex Member Disputes
Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and section §40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission (the “Commission”) under the Act (the “Regulations”), North American Derivatives Exchange, Inc. (“Nadex”, the “Exchange”) submitted to the Commission on February 13, 2020 notice of its intent to amend its Rule 2.3 (Officers of Nadex) to amend the number of Board Directors that may be appointed, and remove references to the position of “Chief Operating Officer”. Additionally, Nadex is amending its Rule 10.3 (Arbitration of Nadex Member Disputes) to remove reference to the NFA.
NYSE argues some exchange-related fees fall outside SEC’s domain
John McCrank – Reuters
The New York Stock Exchange has told the U.S. Securities and Exchange Commission it does not believe it legally needs to make public the fees for a new high-speed connection to the exchange, questioning the scope of the regulator’s authority.
Intercontinental Exchange Announces Record Daily Trading Volume for Sugar Futures
ICE Press Release
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced record trading volume for its sugar futures contracts.
Unscheduled adjustment in SDAX; TLG Immobilien AG leaves the index, LPKF Laser & Electronics AG is included
Deutsche Börse Group
Qontigo announced an unscheduled adjustment in the SDAX index on Thursday. Following a takeover of TLG Immobilien AG (DE000A12B8Z4) by Aroundtown (LU1673108939), the free float of TLG Immobilien AG fell below 10 percent. Thus, according to the rules of the ” Guide to the DAX Equity Indices “, Chapter 5.1.5, Adjustments in the Event of Mergers and Acquisitions, TLG Immobilien AG shares are removed from the SDAX index. The successor is LPKF Laser & Electronics AG (DE0006450000).
Barchart Partners with Quicken to Power Personal Finance Application, Simplifi by Quicken
Barchart, a leading provider of data and technology services to the financial, media, and commodity industries, has announced a partnership with Quicken – the leader in money management software – to power the new Simplifi by Quicken application with data and tools that allow users to track their investment portfolio. Simplifi offers a comprehensive yet simple way to see a consolidated view of all your accounts, effortlessly track your day to day spending, and confidently achieve your savings goals.
Big Tech’s ‘buy and kill’ tactics come under scrutiny; Companies such as Microsoft have been acquiring their most threatening competitors for decades
Richard Waters – FT
When Microsoft bought task management app Wunderlist and mobile calendar Sunrise in 2015, it picked up two newcomers that were attracting considerable buzz in Silicon Valley. Microsoft’s own Office dominates the market for “productivity” software, but the start-ups represented a new wave of technology designed from the ground up for the smartphone world.
How The Transparency Of Blockchain Drives Value
Charles Silver – Forbes Technology Council
The increasing regulatory burden on public companies is causing deleterious effects. Corporate finance has become more of an art than a reporting of objective facts, and the cost of navigating the SEC’s and FASB’s rulings has become prohibitive, except for multibillion-revenue companies. Instead of putting capital and manpower to use in product development and competitive hiring, companies are forced into navigating a draconian regulatory system that does more harm than good.
The Future Of Personal Finance: Fintech 50 2020
Kelly Anne Smith – Forbes
The 11 personal finance start-ups on this year’s Fintech 50 reflect both the rise of the digital bank and the growing areas of consumer financial behavior that fintechs are seeking to influence.
Galaxy Digital shaves 15% of global staff – report
Frank Chaparro – The Block
Crypto investment bank Galaxy Digital has shaved 15% of its global workforce, according to a CoinDesk report. Led by former Fortress Investment Group trader Michael Novogratz, the firm has struggled to turn a profit since its founding. CoinDesk reported the cuts were part of “standard year-end activity.” 13 people were laid off as part of the cuts, leaving a staff of around 80. Publicly listed, the company’s stock is up 27% since the beginning of the year — lagging behind the performance of the spot cryptocurrency market.
It’s Time For Crypto Investors to Diversify Their Portfolios
Nick Hill – Nasdaq
Crypto is famous for its cult-like investor following. Risk-seeking individuals, seemingly hypnotized by the unlimited upside potential offered by crypto, are only too eager to go all in. Famous tales of Bitcoin having minted millionaires in record time often cloud judgement and leave novice investors unaware of the potential risks.
OKEx Partners With Bain-Backed Crypto Exchange to Launch Leveraged Futures in India
Paddy Baker – Coindesk
An Indian cryptocurrency exchange has partnered with Malta-based trading platform OKEx to offer futures products specifically for the subcontinent market. Mumbai-based CoinDCX announced Friday that it had formed a strategic partnership under which OKEx will help it develop a new derivative facility – known as DCXfutures – in return for providing OKEx with a foothold in the Indian market.
Nasdaq, Morgan Stanley Trading Vets Build Startup to Unite Crypto Market Price Ranges
Danny Nelson – Coindesk
A group of trading vets from NASDAQ, Visa and Morgan Stanley say they’ve built a liquidity solution for the world’s disparate cryptocurrency markets. After 18 months of development, their project, Apifiny, came out of stealth Wednesday with a new platform targeting exchanges hampered by low liquidity: ExOne. It is an emerging finances back-end tool tied to technological advances in traditional markets, which, despite their off-chain standing, have myriad advantages over crypto exchanges.
U.S. Consumers Need A Mobile Banking Bridge To Encourage Bitcoin Payments. BlockFi Raised $30 Million To Build One.
Robert Anzalone – Forbes
Bitcoin, as a means of payment, is limited. People cannot use it as cash. But what if U.S. Consumers on a large scale could use Bitcoin as cash? For Uber rides or groceries? BlockFi believes a mobile banking service, with credit loans, and a rewards system will be the holy grail. They received $30 million in a Series B investment to build it.
Is bitcoin’s 2020 rally another flash in the pan?
Tom Wilson – Reuters
Crypto analysts are split on whether bitcoin’s rise this year is driven by unique factors or is just its latest bout of volatility. But many agree on one factor: an upcoming cut to the supply of bitcoin. Bitcoin has soared by almost half this year, to more than $10,000, for the first time since October. On Tuesday it hit its highest in five months. The cryptocurrency’s 11-year history is replete with fast ascents and equally rapid plunges. In late 2017, it rose three and a half times in just 35 days to reach almost $20,000. It then slumped 70% in seven weeks.
Warning Signs Cropping Up in Crypto Sphere Amid 2020 Resurgence
Vildana Hajric – Bloomberg
Ether has more than doubled this year, but technical indicators are starting to flash worrying signals for the second-biggest cryptocurrency. Based on the GTI Global Strength Indicator, which measures upward and downward movements of successive closing prices, the coin is at its most overbought level since May 2019. An asset is considered overbought if the indicator exceeds 70 and oversold if it’s below 30 — Ether touched as high as 92.7 this week.
Deriving a venture capital strategy in crypto: the LP’s perspective
Ha Duong – The Block
Deriving a VC strategy in crypto is hard and requires a) the definition of the opportunity set, b) the right structuring, c) a good strategy to deal with earlier liquidity, and d) an innovative view on value-adding activities as an investor, writes Cambrial Capital’s Ha Duong. “This piece touches upon a few key parameters for venture strategies and offers our perspective as professional investors in crypto funds,” he writes.
Nvidia surges back to growth as chip market recovers
Richard Waters – FT
Nvidia surged back to growth in its latest quarter, after four quarters of contraction caused by a sharp drop-off in demand in the crypto-mining and data centre markets. The strength of the recovery, which pushed revenue up by 41 per cent from a year before to $3.1bn, surprised Wall Street and drove shares in the US chip company up by 7 per cent in after-market trading. Earnings also topped forecasts, as the company’s pro forma earnings per share bounced 136 per cent, to $1.89. The after-market rally extended a recovery that had already seen the shares more than double from a low point last May, lifting them back above the record high set 18 months ago for the first time. Nvidia also projected that revenue in the current quarter, at $3bn, would top Wall Street estimates, despite an expected $100m hit caused by the spread of the coronavirus.
Binance CEO comments on crypto exchange platform issues, says staff is ‘working on it’
Yilun Cheng – The Block
Cryptocurrency exchange Binance is experiencing platform hiccups amid high traffic volume. On Thursday morning, users took to social media to report problems with buying and selling on the exchange. In response, Binance CEO Changpeng Zhao acknowledged delays in its order book display and said that it was working to resolve the issue. “There is a slight delay in the order book display across some trading pairs. Team are working on it. Funds are #SAFU,” he tweeted at 4:58am ET.
B2C2 Teams With SFOX Exchange to Bring Transparency to OTC Trades
Daniel Cawrey – Coindesk
B2C2, a London-based over-the-counter (OTC) market maker, is sharing its data and allowing transactions on the Los Angeles-based exchange aggregator SFOX. The partnership began at 10 a.m. Eastern time (15:00 UTC) Wednesday. It offers traders more access to price discovery in a thinly traded cryptocurrency market that lacks transparency. It also allows traders to view comparative pricing with exchanges and over-the-counter markets. Price discovery is the process of determining the price of an asset in the marketplace through the interactions of buyers and sellers.
IOTA Foundation Suspends Network, Probes Fund Theft in Trinity Wallet
David Pan – Coindesk
IOTA Foundation, the nonprofit behind the IOTA distributed network, recommended users close their Trinity wallets Thursday after multiple reports of fund theft. IOTA said it started receiving the reports Wednesday and decided to shut off the Coordinator node in the network for further investigation. The foundation is evaluating an exploit on an earlier version of its wallet. It is also trying to analyze the hackers’ attack pattern and complete a manual verification, according to the foundation’s latest statement. “First (but not all) exchanges have responded, reporting that no monitored funds have been transferred or liquidated,” the foundation said.
DTCC Seeks Blockchain-Focused Security Framework for Financial Sector
The Depository Trust & Clearing Corporation (DTCC), a global financial market infrastructure giant, says traditional IT security frameworks must be updated to tackle the blockchain.
Trump’s Fed Nominee Judy Shelton Says US Should Be Proactive on Digital Dollar
David Pan – Coindesk
Judy Shelton, President Trump’s nominee to the Federal Reserve Board, told lawmakers that digitizing the U.S. dollar could help maintain the currency’s ascendancy in global commerce. At her Senate confirmation hearing Thursday, Shelton said the U.S. needs fintech innovation to keep ahead of other countries. “Yes, it is a dominant reserve currency but we can’t rest on our laurels in that regard,” Shelton said. “Rival nations are working very diligently to have an alternative to the dollar. I think it is very important that we get ahead of the curve to ensure that the dollar continues to offer the best currency in the world.”
Federal Judge Halts Pentagon Cloud Contract; Decision is a win for Amazon and a blow for Microsoft
John D. McKinnon – WSJ
In a win for Amazon.com Inc., a federal judge ordered the Pentagon on Thursday to halt work on the massive JEDI cloud-computing contract awarded to rival Microsoft Corp.
Could Scotland return to the EU fold? There is increased goodwill within the EU towards independence
Mure Dickie – FT
When Scottish first minister Nicola Sturgeon visited Brussels on Monday, just 10 days after the UK left the EU, her message was clear: Scotland wants to come back.
Billionaire boys’ spat: Trump and Bloomberg feud on Twitter; Rival New York moguls and presidential contenders in particularly nasty exchange
Two New York billionaires publicly denigrated each other on Thursday, with one disparaging his rival’s comparatively diminutive stature and the other claiming fellow moneymen laugh about his adversary’s failed real estate investments behind his back.
Key Republicans are ‘undecided’ on Trump nominee for Fed board; Judy Shelton faces questions on past support for gold standard and monetary policy shift
Brendan Greeley – FT
Two senior Republicans on the Senate banking committee said they were unsure whether they would vote for Donald Trump’s nomination of Judith Shelton to the Federal Reserve Board after a bruising confirmation hearing on Thursday. Senator Richard Shelby, a six-term Alabama Republican, “came out of the hearing undecided, and still has concerns”, according to a spokesperson. Pat Toomey, a Republican senator from Pennsylvania, is also “undecided”, a spokesperson said.
US cites reports Oleg Deripaska helped Vladimir Putin launder cash; Oligarch reportedly helped Russian president hide money, Treasury agency says to justify sanctions
Henry Foy – FT
The US Treasury has justified sanctions against Oleg Deripaska by citing reports that the Russian tycoon helped President Vladimir Putin launder money. In a letter sent to Mr Deripaska’s lawyers and seen by the Financial Times, the Office of Foreign Asset Control, the agency overseeing US sanctions policy, writes that Mr Deripaska was in 2016 “reportedly identified as one of the individuals holding assets and laundering funds on behalf of Russian President Vladimir Putin”.
Economic Policy in Disarray After Javid Quits: U.K. Reshuffle
Joe Mayes, Jess Shankleman, and Tim Ross – Bloomberg
Sajid Javid quit as Chancellor of the Exchequer following a row with Boris Johnson, sending the prime minister’s Cabinet reshuffle off course and raising questions over U.K. economic policy.
Swiss National Bank Is Stuck Between Appeasing Trump and Protecting Its Currency
Catherine Bosley and William Shaw – Bloomberg
Currency has appreciated to four-year high versus the euro; Threat of U.S. sanctions hangs over SNB’s interventions
The Swiss National Bank is in a bind about how to rein in the franc’s unwanted strength without being labeled a currency manipulator by the U.S.
Penalties, remediation, and our General Principles
Speech by Mark Steward, FCA Executive Director of Enforcement and Market Oversight, delivered at the City & Financial Global Ltd event, London.
CFTC Orders Florida Resident and His Company to Pay Over $1 Million for Fraud
The Commodity Futures Trading Commission today issued an order simultaneously filing and settling charges against Matthew R. White and M.W. Global Futures LLC (MWGF), both of Florida, for fraudulently soliciting approximately $1.2 million for a pooled investment vehicle trading commodity futures contracts, misappropriating over $280,000 in pool participants’ funds to pay for personal expenses, and operating without registration as required. The order requires White and MWGF to pay a $200,000 civil monetary penalty and $883,974 in restitution, of which $602,003 has already been paid. The order also requires White and MWGF to cease and desist from further violations of the Commodity Exchange Act, as charged.
CFTC to Hold an Open Commission Meeting on February 20
Commodity Futures Trading Commission Chairman Heath P. Tarbert today announced the CFTC will hold an open meeting on Thursday, February 20, 2020 at its headquarters in Washington, D.C. at 9:30 a.m. (EST) to consider the following:
FINRA OTCE and OTC Transparency Data Websites Availability
FINRA will be performing scheduled maintenance to the OTCE.FINRA.org and OTCTransparency.FINRA.org websites on Saturday, February 15, 2020, from approximately 7 a.m. to 2 p.m. ET. During this time, these websites will be unavailable to users.
ESMA responds to European Commission consultation on the Benchmark Regulation review
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published its response to the European Commission’s (EC) Consultation on the review of the Benchmark Regulation (BMR). ESMA’s responses focus on the cessation of critical benchmarks, parity between EU and third-country benchmarks and transparency.
ESMA seeks candidates for its stakeholder group
The European Securities and Markets Authority (ESMA) is seeking candidates to represent the interests of all types of financial markets stakeholders as members of its Securities and Markets Stakeholders Group (SMSG).
ASIC and APRA welcome law reform on superannuation regulator roles
The Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have jointly welcomed the proposed legislative reforms increasing the role of ASIC in superannuation.
Nowra man convicted for giving false or misleading information to ASIC about shareholding
Mr John Lindsay Merity, of North Nowra, New South Wales, has today been sentenced by the District Court of New South Wales to an overall term of two years imprisonment, with a minimum period of one year in custody, in relation to his conviction on two counts of contravening section 1308(2) of the Corporations Act 2001 (Cth) (the Act).
ASIC moves against SMSF auditor misconduct
ASIC has moved to disqualify, or suspend and/or add conditions to the registration of, a number of auditors of self-managed superannuation funds (SMSFs).
FCA starts suitability crackdown with letters to advisers
Imogen Tew – FT Adviser
The City-watchdog is probing advisers on their retirement income advice records by sending a number of information requests to randomly selected advice firms, FTAdviser has learned.
SEC Probes Raytheon Over Potentially Improper Payments; The regulator is looking into payments in the Middle East by Raytheon and a joint venture
Dylan Tokar – WSJ
The U.S. Securities and Exchange Commission has opened an inquiry into whether defense contractor Raytheon Co. or its partners made improper payments in the Middle East.
Investing and Trading
Investors reluctant to break up with their wealth manager; You probably won’t dump your manager this Valentine’s Day — but maybe you should
Madison Darbyshire – FT
New research suggests that, for richer or poorer, in good times and bad, British investors are unlikely to break up with their wealth managers. More than half of investors surveyed by challenger wealth manager Netwealth said they had never considered switching from their current investment provider. A further 7 per cent of respondents said nothing would ever make them consider switching.
Fed to Withdraw More Liquidity Than Expected Amid Funding Calm
Alex Harris – Bloomberg
New York Fed releases new repo op. schedule through March 12; Overnight offerings and term operations are both set to shrink
The Federal Reserve Bank of New York will shrink its repurchase-agreement operations more than analysts expected, starting with Friday’s overnight offering, a sign officials are comfortable removing liquidity without upending funding markets.
Citi creates new markets head role for post-Brexit Europe; Fabio Lisanti takes on new role as western Europe markets head as Citi adjusts to the UK’s departure from the European Union.
Hayley McDowell – The Trade
US investment bank Citi has created a new role within its markets and securities services division as the business adapts to Brexit, according to an internal memo seen by The TRADE.
Fund manager T Rowe Price calls its WeWork investment a ‘debacle’; Investor was hit after property company’s botched stock market listing slammed valuation
Daniel Shane – FT
One of the world’s largest asset managers has taken a public swipe at WeWork, describing its investment in the shared-office space provider as a “debacle”. T Rowe Price said in a report filed to the US Securities and Exchange Commission on Thursday that its “terrible investment” in the start-up had caused it “outsized headaches and disappointments”.
The People’s Mutual Fund Manager Dips a Toe Into Private Equity; Low-cost index fund specialist Vanguard turns to the world of complex, expensive investments.
Annie Massa, Sabina Willmer, John Gittelsohn – Bloomberg
Vanguard Group, which manages $6.2 trillion in assets, unveiled plans on Feb. 5 to offer a private equity fund. The move represents a surprising convergence of two very different investing worlds. The Malvern, Pa., company showed millions of investors that they could beat many Wall Street pros by keeping things simple using low-cost index funds and exchange-traded funds. PE funds are the opposite of simple: They charge high fees for opaque portfolios and can lock up cash for years—which is why the U.S. Securities and Exchange Commission has long kept smaller investors out of them.
RBS Plans to Cut Fossil Fuel Loans, Be Climate Positive by 2025
Alastair Marsh – Bloomberg
Royal Bank of Scotland Group Plc said it will cut the net greenhouse-gas emissions of its operations to zero this year and will be “climate positive” by 2025 when the company will capture more carbon than it emits.
An ex-Credit Suisse, ex-BlueCrest, trader started his own quant fund
Sarah Butcher – Financial News
An ex-Credit Suisse, ex-BlueCrest, trader started his own quant fund
Working for BlueCrest Capital Management, the hedge fund-turned family office of Michael Platt (the self-described “highest-earning person in the world of finance”) can be pretty lucrative. Platt himself is worth around $8bn and earned around $2bn last year, and his 78 London partners earned an average of £733k per head in the year to March 2019. Even so, money isn’t always enough to buy fealty: one of Platt’s London lieutenants just broke out on his own.
Turkish Stocks Benefit From Liquidity Shield in Troubled Times
Tugce Ozsoy – Bloomberg
Foreign investors may have dumped Turkish stocks this year, but they have probably been spared from a deeper sell-off by high liquidity levels that offer some comfort to traders, according to developing market specialists Tellimer.
HSBC, Shell Send Staff Home in H.K., Singapore on Virus Threats
Alfred Liu, Stephen Stapczynski, and Alfred Cang – Bloomberg
HSBC employee under quarantine, Shell sends traders home; Hong Kong, Singapore have had more than 50 cases each
HSBC Holdings Plc and Royal Dutch Shell Plc are sending staff home in Hong Kong and Singapore after contact with people infected by the coronavirus, adding to concerns the disease will spread more broadly across the two Asian financial hubs.
A Bootleg Trader From Communist Era May Decide Who Runs Slovakia
Radoslav Tomek – Bloomberg
EU nation facing unpredictable general election on Feb. 29; Party of populist lawmaker Kollar well placed to be kingmaker
A former black-market trader from communist times is gearing up to play the role of kingmaker in elections in Slovakia this month.
Hong Kong International Schools Say They May Not Survive Health Crisis
Denise Wee – WSJ
Hong Kong’s international schools are bracing for an exodus of families from the city, with some warning they may have to shut for good after the government suspended classes to prevent the spread of coronavirus.
City groups set out vision for post-Brexit market access; UK and EU urged to adopt new system for assessing regulatory ‘equivalence’
Matthew Vincent – FT
City of London institutions are urging the UK and EU to adopt a new system for assessing regulatory “equivalence” post-Brexit that could prevent either side withdrawing access to the other’s financial markets with just 30 days notice.
Business investment expected to pick up as Brexit uncertainty ebbs; Survey shows decisive election result helps ease 3-year fall in capital expenditure
Valentina Romei – FT
UK businesses’ investment expectations improved as Brexit uncertainty declined after the decisive general election result, according to a Bank of England-backed survey that points to an easing of the three-year slump in capital expenditure.
U.K. Markets Escape Brexit Deadline to Face New Fiscal Risks
Greg Ritchie – Bloomberg
Just as British politics looked to be quietening down for market traders, the finance minister’s surprise departure is leading to predictions of a spending bonanza. That has investors preparing for U.K. government bonds to weaken relative to their peers, taking the shine off this year’s rally. Greater infrastructure investment aimed at boosting the economy may give the pound a temporary lift, yet longer-term sentiment is still shaky given tough talks over a trading relationship with the European Union still lie ahead.
Will Brexit Kill Britain?
Clem Chambers – Forbes
After a titanic Brexit battle the U.K. government finally delivered on the promise of the referendum and Britain is now outside of the EU, or rather will increasingly be as it disengages. This disentanglement from EU rules and regulations may be minor or may be major, that is yet to be settled, but the question is, will Brexit be a success? The answer is that the success or otherwise of post-Brexit Britain lies almost entirely in the hands of the British government.
The ‘Stakeholders’ vs. the People
Vivek Ramaswamy – The Wall Street Journal (opinion)
Liberals claim they’re troubled by corporate power. So why are they working to expand it? ‘Stakeholder capitalism” is officially here. That’s the fashionable notion that companies should serve not only their shareholders, but also other interests and society at large. Last month Airbnb’s leaders announced a new mandate that the company “benefit all our stakeholders over the long term,” including through tying executive compensation to the company’s social goals. The same week, BlackRock chief Larry Fink issued an open letter to CEOs explaining that companies his massive firm invests with will soon have to abide by the rules of a Sustainability Accounting Standards Board regarding climate change, labor practices and other issues. CEOs at the World Economic Forum in Davos touted similar ideas, as have presidential candidates.
Finance on Instagram: what’s not to like? Money matters are a surprise hit on the photo-sharing app
Katharine Gemmell – FT
The young couple beaming in the square-shaped image of their big day could be just another post on Instagram — but the snap was also a personal finance lesson in disguise. “I wore a second-hand dress that was £70, Steph wore a free dress that her mum had worn to get married two years earlier, we DIY’ed and made the best of what we had,” posted Lisa Garwood-Cross, the 28-year-old behind the @living_thrifty account.
No One Wants to Be Stuck on the Next Virus-Hit Cruise Ship
Christopher Palmeri and K Oanh Ha – Bloomberg
Royal Caribbean cancels 18 sailings in Southeast Asia; Passenger capacity more than doubled over the past six years
Edgar Chan, a 28-year-old software engineer from Hong Kong, was among the thousands quarantined on the World Dream cruise ship off the city this month after passengers on an earlier cruise tested positive for the lethal new coronavirus.