Hits & Takes
John Lothian & JLN Staff
The CME set new record volumes in the Ultra 10-Year Note and 30-Year Bond futures on February 23. Ultra 10-Year Note futures reached a record volume of 1.7 million contracts on February 23, surpassing the previous record of 1.5 million set on February 25, 2020. A record 1.8 million 30-Year Bond futures contracts were also traded on February 23, passing the prior record of 1.7 million set on February 25, 2020. What is it about late February for debt volume records?
Do investors know how to short bonds other than selling futures or buying futures puts? What are all those stock investors going to do?
The CME is cancelling the 2021 Annual Meeting of members of Commodity Exchange, Inc. because no petitions were received nominating new COMEX Governors. There must be 40 signatures to nominate a governor. The existing governors will continue to serve until such time as an election can be held at the 2022 Annual Meeting.
Milo Hamilton, the man I call Mr. Rice, is hosting an event called “Farm and Gin Show” today at 12:30 PM.
In surprising news, the site “Hypebeast.com” has a story titled “r/WallStreetBets Erupts as GameStop Stock Soars More Than 100%.”
The United Center in Chicago, the site of Michael Jordan’s triumphs as a Chicago Bull, will be a mass Covid-19 vaccination center, The Chicago Tribune reported.
Chuck Bohm of ED&F Man Capital Markets is the latest to give to the JLN MarketsWiki Education GoFundMe campaign. Chuck is a friend and longtime reader of JLN and former colleague at First American Discount. Thank you to Chuck and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
I am in the midst of changing all the smoke and CO2 detectors in my house. The company that makes them says they should be replaced every 7 to 10 years and mine were made in 2014.
I did not know that Mr. Potato Head had man parts other than a mustache. Mr. Potato Head has now gone gender neutral and dropped the Mister.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
In the first of a series of London Metal Exchange webinars, Jamie Turner, the LME’s head of market structure, on Thursday reviewed a discussion paper that includes a controversial proposal to permanently shift the exchange to electronic pricing from its 144-year-old tradition of Ring (open outcry) trading. Turner said electronic pricing has served the market well since the Ring was temporarily closed in March 2020 due to COVID-19 safety precautions, including for setting official prices for physical markets. In addition, he maintained that since its implementation, electronic pricing has led to “broader participation in the price discovery process and increased volumes directly contributing to those prices.” Given the overall industry move toward digitalization and transparency, “We think now is the right time to consider making the move permanently to that pricing structure,” he said, “and that likely includes closing the Ring.” Adding a caveat, Turner said, “It’s really important to know that this is a discussion paper. The LME’s recommendations are based on what we think is best for the market as a whole, but we want to get everyone’s opinion.” Read the discussion paper in its entirety here.~SC
Nasdaq Chief Economist Phil Mackintosh’s latest column is called “What is core data?” In the column, he answers the question (from a new IOSCO questionnaire), “What market data is necessary to facilitate trading in today’s markets?” by saying “Not much.”~SR
The Old New York Won’t Come Back; ‘The pandemic changed everything,’ we say. But we have yet to absorb fully everything that means.
Peggy Noonan – WSJ
You can know something yet not fully absorb it. I think that’s happened with the pandemic. It is a year now since it settled into America and brought such damage—half a million dead, a nation in lockdown, a catastrophe for public schools. We keep saying “the pandemic changed everything,” but I’m not sure we understand the words we’re saying.
*****The whole world has changed. Some places more than others.~MR
Bankers Are Finally Welcome at Soho House; The members club is reportedly considering a New York listing. A SPAC might be a better route to market.
Chris Bryant – Bloomberg
When Soho House Holdings Ltd. opened a members club, hotel and restaurant complex called The Ned in London’s financial district in 2017, it marked a striking break with tradition. The group had snubbed finance types, preferring to draw its members from the fun-loving creative classes — advertising, TV and film folk with large expense accounts and sartorial imagination.
Now it’ll have to be more even welcoming of besuited bankers and portfolio managers, at least for the next few weeks. The company has hired JPMorgan Chase & Co. and Morgan Stanley ahead of a possible stock market listing in New York, according to The Times newspaper.
*****I liked it before they let bankers in.~JJL
A Diamond the Size of a Ping-Pong Ball Is About to Sell for Millions
Yuliya Fedorinova and Thomas Biesheuvel – Bloomberg
Miner Alrosa to put 242-carat stone up for sale in March; The biggest gems have fared best as sector starts to recover
Russian diamond giant Alrosa PJSC is putting one of its biggest-ever gem-quality stones up for auction just as the industry’s recovery builds momentum. The 242-carat diamond, almost the size of ping pong ball, will be viewable at the company’s sales office in Dubai on March 14-21, with the auction result announced on March 22. The starting price will be a little above $2 million.
*****You know what they say: ping pong is forever.~MR
Historic blackouts push Texas to consider something new: Regulation
All the groceries spoiled and the water was out for days. Then Melissa Rogers, a believer in the Texas gospel that government should know its place, woke up to a $6,000 energy bill before the snow and ice even melted. “The roads were awful, but we were running around town trying to get money from every single bank we could possibly think of,” said Rogers, 36, whose Fort Worth family of four was left with $80 after the charges drained her accounts and took her husband’s paycheck. Now, the emerging response to a winter catastrophe that caused one of the worst power outages in U.S. history is not the usual one in Texas: demands for more regulation.
*****Something, something hell freezes over.~JB
Chicago tops list of most corrupt city in US, report says
A new report from the University of Illinois claims Chicago is the most corrupt city in the US.
*****On the upside the report notes that Illinois is only the third most corrupt state. So we have that going for us.~JB
*****File this story under the dog bites man category.~JJL
Thursday’s Top Three
Our top story Thursday was the New York Times’ This Is the Coat to Wear to Davos, about a topcoat made by Norwegian Wool. Second was Bloomberg’s Crop Trading Giants Start Blockchain Platform With Brazil Deals, about Covantis. Third was the Financial Times opinion piece, Let the market determine bitcoin’s value.
CryptoMarketsWiki Coin of the Week: XRP
The price of XRP crashed this week after MoneyGram announced Monday that the firm had “suspended trading on Ripple’s platform.” In its Q4 2020 business review, MoneyGram wrote a statement saying, “the Company is not planning for any benefit from Ripple market development fees in the first quarter. Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripple’s platform. In the first quarter of 2020, the Company realized a net expense benefit of $12.1 million from Ripple market development fees.”
201,105,212 pages viewed; 25,489 pages; 230,746 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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Dead Chickens, Frozen Oranges Confront Farmers in South After Severe Cold; The wintry blast in Texas and other southern U.S. states led to euthanized chicks, frostbitten cow udders and hundreds of millions of dollars in losses
Jacob Bunge – WSJ
Severe winter conditions across the U.S. south this month left hundreds of thousands of chickens dead and froze groves of fruit, pushing the episode’s estimated cost to farmers and agriculture companies into the hundreds of millions of dollars, industry officials said.
Another Remote-Work Year Looms as Office-Reopening Plans Are Delayed; Return dates get pushed to September or beyond, keeping firms and employees in ‘moment of limbo’
Chip Cutter – WSJ
One of the hardest questions for American corporations to answer: When should offices reopen? From Silicon Valley to Tennessee to Pennsylvania, high hopes that a rapid vaccine rollout in early 2021 would send millions of workers back into offices by spring have been scuttled. Many companies are pushing workplace return dates to September—and beyond—or refusing to commit to specific dates, telling employees it will be a wait-and-see remote-work year.
Fed Attributes Payment Systems Outage to ‘Human Error’; Mistake caused key financial services to shut down for about four hours Wednesday
Paul Kiernan – WSJ
The Federal Reserve said an outage of its key financial services on Wednesday was caused by a maintenance mistake and it is taking steps to prevent a recurrence.
‘I think he’s a rat and a liar’: Watch Dave Portnoy and Vlad Tenev’s heated Robinhood debate
Annabelle Williams – Business Insider
If you missed the livestreamed conversation between Barstool Sports’ Dave Portnoy and Robinhood CEO Vlad Tenev, here’s what you need to know and how to watch. It started on an awkward note. In his introduction, Portnoy made his opinions known: “We all know how I feel about him. I think he’s a rat and a liar.”
The Economic Reopening Trade Is Changing Everything in Markets
Bond markets are tumbling on bets for faster economic growth; Value stocks heading for best month versus growth since 2000
Plenty on Wall Street expected bets on a post-pandemic world to change markets in 2021. But few could have predicted the ferocity of this reopening trade sweeping across assets.
Zero-commission trading in Europe faces scrutiny by EU markets watchdog; Esma chairman also expresses concern over ‘gamification’ of investing
Martin Arnold – FT
The EU markets watchdog has said it will scrutinise the business models of platforms that have sprung up to offer commission-free trading after the GameStop debacle in the US. Companies such as Trade Republic in Germany, Bux in the Netherlands, eToro in Israel and Trading 212 in the UK have attracted hundreds of thousands of customers in the EU by offering them a cheaper way to invest in the stock market.
CME Group Announces Record Ultra 10-Year Note and 30-Year Bond Futures Volumes on February 23
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that Ultra 10-Year Note futures reached a record volume of 1.7 million contracts on February 23, surpassing the previous record of 1.5 million set on February 25, 2020. A record 1.8 million 30-Year Bond futures contracts were also traded on February 23, passing the prior record of 1.7 million set on February 25, 2020.
Buffett’s Letter to Break Months of Silence Amid Tumult in U.S.
Katherine Chiglinsky – Bloomberg
CEO’s statement Saturday is a chance to share his thoughts; ‘People are going to be disappointed’ if he keeps mum
While 2020 raged, Warren Buffett mostly held his tongue. He stayed quiet through a heated presidential election, a racial reckoning that sparked nationwide protests and an exuberance for stocks that’s gripped millions of Americans. Not to mention a global pandemic. Now, the billionaire chief executive officer of Berkshire Hathaway Inc. has a chance to break his silence with the release of his annual letter Saturday.
GameStop Resurgence Reinforces New Reality for Hedge Funds; U.S. stock-picking hedge funds have covered shorts and shifted shorting techniques
Julie Steinberg and Juliet Chung – FT
Investors have pared back their bearish bets a full month after the GameStop GME 18.56% frenzy took off, showing the lasting effects of the Reddit-fueled saga on funds that make money by shorting. Firms across the hedge-fund industry unloaded short positions that gain when stock prices fall, after a handful of stocks touted on Reddit and other social media platforms surged in January. They feared other stocks might experience the same meteoric rise.
Charlie Munger Renews Robinhood Criticism, Likens App to Racetrack Betting; Online brokerage calls Munger’s comments ‘disappointing and elitist’
Caitlin McCabe and Jason Zweig – WSJ
Legendary investor Charlie Munger continued a war of words Thursday with popular online brokerage Robinhood Markets Inc. over the way it and others have enabled and profited from the recent boom of individual investing. “I hate this luring of people into engaging in speculative orgies,” Mr. Munger told The Wall Street Journal from his Los Angeles home. Robinhood “may call it investing, but that’s all bullsh*t.”
France Aims to Exploit Brexit to Grab More British Finance Jobs; As Emmanuel Macron gears up for an election in just over a year, the president’s trusted aide is mounting attacks on his rivals.
Ania Nussbaum – Bloomberg
As the U.K. drifts further away from Europe, one of French President Emmanuel Macron’s closest aides wants to convince people in Britain and France that the European Union is always the best option. That involves championing cities like Frankfurt, Amsterdam and, most of all, Paris as they try to seize as many of the jobs leaving the U.K. as possible.
Enron corner-cutting spirit lives on in Texas; The history of the state’s energy business is one of vast fortunes won and lost
John Dizard – FT
I blame PowerPoint for the Great Texas Freeze and the days-long grid collapse. PowerPoint slide decks prepared for investors in huge Texas “unconventional” drilling programmes and giant Texas wind farms, were full of bold arrows, brief key selling points and project maps that did not mention anything about seasonality.
SPAC Frenzy Emboldens Silicon Valley Startups to Forgo Venture Funding; Helicopter-taxi hopeful Archer is among those joining the public markets with billion-dollar valuations—years before any revenue
Heather Somerville and Eliot Brown – WSJ
California aerospace startup Archer Aviation Inc. has a multibillion-dollar vision of flying people around town in autonomous electric helicopters. It doesn’t have revenue or a vehicle ready for liftoff, but that hasn’t slowed the three-year-old company.
TIAA Names JPMorgan’s Thasunda Brown Duckett as CEO; Duckett is a leading voice among bankers in the need to close the wealth gap between white and Black Americans
Justin Baer – WSJ
Teachers Insurance and Annuity Association of America named JPMorgan Chase JPM -1.36% & Co.’s Thasunda Brown Duckett as president and chief executive, tapping a powerful consumer banker and one of Wall Street’s most-prominent Black executives.
Bank for International Settlements (BIS) to hold inaugural BIS Innovation Summit on 22-25 March
Bank for International Settlements; Inaugural BIS Innovation Summit to run 22 – 25 March with events in three time zones; Central bankers, policymakers, business leaders and academics to discuss: “How can central banks innovate in the digital age?”; Winners of the global ISO 20022 Hackathon to be announced
The Bank for International Settlements (BIS) will hold the inaugural BIS Innovation Summit from 22 to 25 March, where central bankers, policymakers, business leaders and academics will discuss: “How can central banks innovate in the digital age?”
EU Told to Back Vaccine Passports or Google May Do It Anyway
Ian Wishart, Viktoria Dendrinou, and Arne Delfs – Bloomberg
Google, Apple in passport talks with WHO, von der Leyen says; Merkel says leaders agree passports needed, details not clear
European Union leaders inched toward establishing bloc-wide vaccine certificates to enable countries to reopen to travel as Commission President Ursula von der Leyen warned that unless they hurry Apple Inc. and Google will step into the vacuum.
Israel Gives Half of Population at Least One Covid Shot
Yaacov Benmeleh – Bloomberg
Israel has now vaccinated half its population against Covid-19, another milestone on the way to subduing the pandemic. More than 4.6 million people have gotten at least one dose of the vaccine from Pfizer Inc. and BioNTech SE, according to Health Ministry data released Friday. With nearly 8% of the country having recovered from the disease and likely developing some resistance to reinfection, that could bring Israel closer to herd immunity.
Merkel Signals She’s Ready to Rethink German Lockdown Plan
Arne Delfs – Bloomberg
Chancellor is considering loosening her pandemic approach; Wider testing could create ‘buffer’ for contagion targets
Chancellor Angela Merkel opened the door to a looser approach to managing Germany’s coronavirus outbreak, as she faces pressure to ease curbs despite resurgent infections.
J&J Shot to Get EU Nod in Early March, Easing Supply Squeeze
Nikos Chrysoloras and Morten Buttler – Bloomberg
Bloc’s medicines regulator is said to plan March 11 opinion; Supply surge puts onus on governments to administer vaccines
The European Union’s medicines regulator is set to recommend Johnson & Johnson’s coronavirus vaccine early next month, bolstering supplies even as governments struggle to get shots into people’s arms.
The tiresome trend of vaccine one-upmanship; People who would once have bitten your arm off for a dose of Sputnik are now discussing the merits of various jabs with all the expertise of an oenophile
Robert Shrimsley – FT
You’ve had the vaccine already? Fantastic. Me too. [Pause] Which one did you get? Oh right, well look that’s great. Me? Actually, I got the Pfizer jab [almost imperceptible smile]. But, look, they are both great — 80 per cent, 90 per cent, what’s the difference? Well 10 per cent, obviously, but the key thing is we are basically protected. You a little more basically than me but both still ready to book a summer holiday, eh?
Why global Covid infections have plummeted; Sharp drop in infections brings hope, but masks signs of resurgence in parts of Europe
Anna Gross and John Burn-Murdoch – FT
A significant fall in global coronavirus cases since the turn of the year has bolstered hopes that countries will be able to contain the pandemic despite concern over the emergence of new variants. Global infection rates have dropped precipitously since the start of 2021, from more than 5m cases a week to 2.5m in mid-February. The sharpest declines have come in some of the countries that were worst affected in late 2020, including the US, UK, South Africa, Israel and Portugal. Case rates in each of these countries have dropped by more than 50 per cent over the past month.
J&J Single-Dose Covid-19 Vaccine Gets Review From FDA Advisory Panel; All-day meeting, which will offer perspective of outside experts, is last step before FDA decides whether to authorize the single-dose vaccine
Thomas M. Burton and Peter Loftus – WSJ
A committee of independent medical experts convenes Friday to review Johnson & Johnson’s JNJ 0.10% Covid-19 single-dose vaccine, the final step before U.S. health regulators decide whether to authorize use of a third shot.
History Drives Distrust in Covid-19 Vaccines for Black Americans in Tuskegee; Skepticism over healthcare persists in Alabama town that hosted notorious syphilis study
Julie Wernau – WSJ
Black residents of this Southern town say the pain and distrust fomented by a decadeslong syphilis study here are inseparable from their personal deliberations over whether to take a Covid-19 vaccine.
In Covid-19 Vaccine Surveys, the Wording Affects the Results; Polls asking Americans if they would get inoculated received positive replies ranging from 20% to 63%
Jo Craven McGinty – WSJ
Enough Covid-19 vaccine is expected to be available by summer to inoculate every American. But how many people will accept the shot? The answer might depend on how you ask the question.
Covid-19 Vaccine ‘Passports’ Raise Ethics Concerns, Logistical Hurdles; Israel issues passes for going to hotels and gyms; the U.K. may seek proof of a shot or test for bars and offices
Max Colchester and Felicia Schwartz – WSJ
As vaccine rollouts gain momentum, governments world-wide are looking at ways for people to prove they are inoculated against the coronavirus, raising logistical and ethical concerns about whether others will be excluded from daily life.
Single Pfizer Dose Strongly Protects Those Who’ve Had the Virus, Studies Find
Two new pieces of research support the case for giving just one dose of the Pfizer vaccine to people who have antibodies against the virus. The F.D.A. is meeting Friday to consider the Johnson & Johnson vaccine.
The Coronavirus Is Plotting a Comeback. Here’s Our Chance to Stop It for Good; Many scientists are expecting another rise in infections. But this time the surge will be blunted by vaccines and, hopefully, widespread caution. By summer, Americans may be looking at a return to normal life.
Apoorva Mandavilli – NY Times
Across the United States, and the world, the coronavirus seems to be loosening its stranglehold. The deadly curve of cases, hospitalizations and deaths has yo-yoed before, but never has it plunged so steeply and so fast.
Yellen Urges G-20 Countries to Increase Support for Global Vaccination Efforts; ‘This is a moment made for action and for multilateralism’
Kate Davidson – WSJ
Treasury Secretary Janet Yellen issued an urgent call for global cooperation to defeat the coronavirus pandemic and bolster the global economic recovery, in a letter to her international counterparts Thursday.
Exchanges, OTC and Clearing
Deutsche Börse successfully completes takeover of ISS, thereby strengthening its focus on sustainable investing
Deutsche Börse AG
Acquisition of a majority stake of 81% in Institutional Shareholder Services (ISS) completed; Deutsche Börse is positioning itself as a leading global market infrastructure provider in the development of more sustainable investments; ISS ‘data and research business complements Deutsche Börse’s entire value chain; Editorial independence of the research business from ISS is preserved; ISS will not do any research or analysis on Deutsche Börse
Deutsche Börse AG has successfully completed the acquisition of an 81% majority stake in Institutional Shareholder Services Inc. (ISS), a provider of governance solutions, ESG data and analytics. The transaction , which was announced at the end of 2020, was completed after receiving the relevant regulatory approvals.
Deutsche Börse completes acquisition of ISS; The European exchange operator confirmed it would be acquiring the ESG data and research firm in November last year.
Annabel Smith – The Trade
Deutsche Börse has completed its acquisition of environmental, social, and corporate governance (ESG) data and research firm Institutional Shareholder Services (ISS). The European exchange operator has acquired a majority share of 81% in ISS, which was valued at EUR1.9 billion in November, while Genstar Capital and current management at ISS will continue to hold a 19% stake in the firm.
CME Group records sky-high treasury futures volumes as market looks to mitigate risk; The exchange reached a record volume of 1.7 million contracts for ultra 10-year note futures and 1.8 million 30-year bond futures on 23 February.
Annabel Smith – The Trade
US derivatives exchange CME Group reached new record volumes for ultra 10-year note futures and 30-year bond futures on 23 February as the market looked to mitigate risk. The exchanged recorded 1.7 million ultra 10-year note futures contracts on 23 February, up from the previous record of 1.5 million set on 25 February last year.
Choice NV lists on Euronext Access Brussels; THIRD BELGIAN PARTICIPANT OF TECHSHARE – EURONEXT’S PRE-IPO PROGRAMME – TO GO PUBLIC
Euronext today congratulates Choice NV (ticker code: MLTV), a holding company specialised in the development of a collaborative TV and video platform, on its listing on Euronext Access in Brussels. Choice NV shares are traded in the double-fixing mode, with trading at auction happening twice a day.
Rana Gruber lists on Euronext Growth Oslo
After a secondary sale of NOK 925 million Rana Gruber is now traded on Euronext Growth (ticker code: RANA). Rana Gruber is a Norwegian iron ore producer and supplier, refining products applicable to numerous use cases in multiple industries.
MSCI derivatives: New revenue sharing scheme
As of 1 March 2021, Eurex Clearing AG and Eurex Frankfurt AG (together “Eurex”) will offer a new revenue sharing scheme as outlined in this circular.
ICE publishes auction calendar for UK’s new Emissions Trading Scheme; ICE UK Allowance (UKA) Futures and Daily Futures launching
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced the publication of the auction calendar for the UK’s new Emissions Trading Scheme (“ETS”) with the first auction due to commence on May 19, 2021, subject to regulatory approval.
Performance Bond Requirements: Agriculture, Energy, Equity, Interest Rate and Metal Margins – Effective February 26, 2021
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
Performance Bond Requirements: Agriculture, Energy, and Interest Rate Margins – Effective February 26, 2021
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
2021 Annual Meeting of Members of Commodity Exchange, Inc.
In SER 8716R, issued on February 2, 2021, it was announced that the 2021 annual meeting of
members of Commodity Exchange, Inc. (“COMEX” or “Exchange”) was scheduled to be held on March 9, 2021 (the “2021 Annual Meeting”) for the purposes of electing three Governors for terms on the COMEX Governors Committee. It was also announced that if a member wished to stand for election to the COMEX Governors Committee you must be nominated by petition requiring the signature of at least 40 COMEX members. No petition meeting this requirement for any of the open positions was received. Given the fact that no election that can take place, the Exchange determined that it would best serve the COMEX membership to cancel the 2021 Annual Meeting.
Initial Listing of Three (3) LNG Freight (LNG Fuel) (Baltic) Futures Contracts
Effective Sunday, March 21, 2021, for trade date Monday, March 22, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will list three (3) LNG freight (LNG Fuel) (Baltic) futures contracts (the “Contracts”) for trading on the CME Globex electronic platform (“CME Globex”) and for submission for clearing via CME ClearPort, as more specifically described below.
EBS Market Integration onto CME Globex
In Q4 2021, subject to applicable regulatory approvals, EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.
Iberclear launches RENADE’s electronic office
Iberclear, BME’s central securities depository, has launched the Electronic Office of RENADE, the National Registry for Greenhouse Gas Emission Allowances. This implementation is part of BME’s digital transformation strategy to automate processes through the application of the most innovative technologies. Furthermore, it is another step forward by BME in favour of the planet’s sustainability, insofar as digitalisation contributes to the reduction of CO2 emissions into the atmosphere.
U.K.’s $10 Billion Fintech Sector Needs Brexit Lift, Review Says
Silla Brush – Bloomberg
Firms need easier access to stock market, according to report; Government asked Kalifa for ways to remove industry obstacles
The U.K. should overhaul its stock listing rules and visa requirements to help the country’s fast-growing fintech industry compete after Brexit, a government-backed review has found.
Threat from rivals has grown since the UK left the EU in January amid growing global; competition to attract and retain the fastest growing tech start-ups
Daniel Thomas and Nicholas Megaw – FT
Sweeping policy changes and reform of London’s company listing regime will spark a “digital big bang” for the City and turbocharge the UK’s fintech industry, according to a government-commissioned review.
Reform listings rules to boost UK fintech post-Brexit: Kalifa review
Ryan Browne – CNBC
The U.K. should reform listings rules and visa applications to help its £11 billion ($15.3 billion) fintech sector thrive after Brexit, a government-commissioned review said Friday.
Britain is one of the leading players in fintech globally, attracting $4.1 billion in venture capital investment last year, according to industry body Innovate Finance. It’s home to several fintech unicorns — private firms worth over $1 billion — including Checkout.com, Revolut and Monzo.
SteelEye Named Best Trade Reconstruction Solution
SteelEye, the compliance technology and data analytics firm, has been recognised as providing the best trade reconstruction solution at the European TradingTech Insight Awards 2021.
Crypto Firm Kraken Seeks Over $10 Billion Valuation
Gillian Tan and Olga Kharif – Bloomberg
The exchange is poised to more than double its valuation; Valuation could even surpass $20 billion depending on demand
Kraken is in talks to raise new funding in a move that would more than double the cryptocurrency exchange’s valuation to more than $10 billion, according to a person familiar with the matter.
Coinbase: DeFi Could Hurt Us and US Regulations Make It Hard to Fight Back
Brady Dale – Coindesk
The top U.S.-based cryptocurrency exchange, Coinbase, is cautioning investors that U.S. regulators may inhibit its ability to compete with rivals in decentralized finance (DeFi).
Biggest Bitcoin Fund Sinks to a Discount as Traders Flee
Katie Greifeld -Bloomberg
The world’s biggest Bitcoin fund is selling off faster than the cryptocurrency itself. The $32 billion Grayscale Bitcoin Trust (ticker GBTC) has plunged 20% this week, outpacing a 13% decline in the world’s largest cryptocurrency. GBTC’s once-massive premium to its underlying holdings has evaporated as a result, with the price of GBTC closing 0.7% below its underlying holdings on Wednesday — the first discount since March 2017, according to data compiled by Bloomberg.
Coinbase says the entire crypto market could be destabilized if Bitcoin’s anonymous creator is ever revealed or sells their $30 billion stake
Grace Kay – Business Insider
Coinbase on Thursday released documents for its public debut on the Nasdaq stock exchange via a direct listing. In the filing, the digital trading platform cited as a risk factor Bitcoin’s creator, Satoshi Nakamoto – the pseudonym used by the person or group of people who created bitcoin.
Coinbase files to become first listed major US cryptocurrency exchange; Trading platform earns more than $300m in profits in 2020 on bitcoin surge
Miles Kruppa and Aziza Kasumov – FT
Coinbase, the largest US-based cryptocurrency exchange, revealed the scale of its business for the first time in paperwork for a long-awaited public listing that comes during a booming market for bitcoin and other digital coins.
Nigerian crypto investors defy crackdown to ride bitcoin frenzy; Central bank warnings of danger rebound amid sense of euphoria among wide pool of retail traders
Neil Munshi – FT
With savings of just under $80 and a salary of $50 a month, Promise Nwabueze, a social media manager in south-east Nigeria, decided to invest all he had into cryptocurrency. The gamble paid off. Within months, his savings had increased fivefold. They have continued to rise ever since.
Congress seeks answers on crypto anonymity in hearing on domestic terrorist financing
Aislinn Keely – The Block
The House Subcommittee on National Security, International Development and Monetary Policy questioned experts on terrorist financing methods and how they related to the Jan. 6 riot at the U.S. Capitol. Much of the hearing’s content centered on the use of cryptocurrencies, creating space for experts to explain the nuance of transaction anonymity. One expert pointed out that “unhosted” wallets remain a loophole in current regulation, and called on members to examine FinCEN’s wallet rule during the current comment period.
Crypto investment firm Arca files with SEC to create a bitcoin trust
MK Manoylov – The Block
Crypto investment firm Arca is moving ahead with plans to create a bitcoin trust, according to a Thursday filing published by the U.S. Securities and Exchange Commission (SEC). Arca’s trust would join similar products from BlockFi and Osprey Funds, which each advanced plans for bitcoin trust products this year. Bitwise has also filed to launch a bitcoin trust in 2021. The products allow investors to get exposure to bitcoin without buying the cryptocurrency outright. All of these products must compete with Grayscale’s Bitcoin Trust (GBTC), which has been trading since 2013 and is a dominant force in the market. The California-based Arca has already raised $100,000 for the trust, which will only accept outside investments of $25,000 and greater.
Coinbase Lists Unmasking of Bitcoin’s Creator Among Business Risks; DeFi, social media and data breaches are also acknowledged as “risk factors” for investors in the company’s hot-off-the-presses prospectus.
Zack Voell – Coindesk
Leading U.S. cryptocurrency exchange Coinbase identified some unique business risks in its prospectus released Thursday, including competition from decentralized finance (DeFi) and the potential discovery of the real identity of Bitcoin’s pseudonymous creator, Satoshi Nakamoto. Per its prospectus, Coinbase noted that “the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins” as a risk factor. The exchange did not elaborate on how unmasking Satoshi would affect its business. However, in May, for example, the cryptocurrency market was briefly rattled by on-chain data that coins possibly belonging to Nakamoto had moved, as CoinDesk reported at the time.
Robinhood adds six million new users to its crypto platform in first two months of 2021
Saniya More – The Block
Robinhood has added six million new customers to its crypto platform since the beginning of 2021, the mobile financial services company announced on Thursday. According to the announcement, Robinhood Crypto, which launched nearly three years ago, drew more than 2.9 million new traders in both January and February. The highest number of traders in any month in 2020 was 401,000. The average transaction size during these two months was $500, according to the post.
Argo Blockchain Installs 4,500 Crypto Mining Machines From Celsius Network
Tanzeel Akhtar – Coindesk
U.K.-listed Argo Blockchain (LON:ARB) said it has installed 4,500 cryptocurrency mining machines from Celsius Network.
Saudi Crown Prince Implicated in Khashoggi Murder, U.S. Finds
Chris Strohm and Nick Wadhams – Bloomberg
Intelligence report will be declassified as soon as Friday; Prince has denied involvement in the columnist’s killing
A U.S. intelligence report expected to be declassified as soon as Friday implicates Saudi Arabia’s Crown Prince Mohammed bin Salman in approving the killing of Washington Post columnist Jamal Khashoggi, according to a person familiar with the findings.
Blended finance, the spinach of investing, will make us stronger; If governments backstop private capital, it could kickstart infrastructure building
Gillian Tett – FT
The White House faces a conundrum: President Joe Biden has bold infrastructure plans but how the heck will he pay for them? Biden has repeatedly promised to spend $2tn or so to upgrade (and green) America’s crumbling infrastructure. This is likely to be popular with voters and business leaders: last week Dow’s Jim Fitterling called on Biden to use the electricity crisis in Texas as a catalyst for overhauling the national grid.
Catastrophic Texas power outages prompt finger pointing and blame shifting at legislative hearings; Lawmakers grilled public regulators and energy grid officials about how power outages happened and why Texans weren’t given more warnings about the danger.
Reese Oxner, Mitchel Ferman and Julian Aguilar – Texas Tribune
Texas lawmakers investigating this month’s devastating power outages during a massive winter storm grilled power-grid officials Thursday and questioned whether state regulators did enough. Most of what they got during simultaneous public hearings in the Texas Senate and House was finger pointing.
FCA chief executive appoints director of markets among swathes of leadership changes; Sarah Pritchard joins the FCA as director of markets after five years with the National Economic Crime Centre as part of leadership shake-up by new chief executive Nikhil Rathi.
Annabel Smith – The Trade
Financial Conduct Authority (FCA) chief executive, Nikhil Rathi, has appointed a new director of markets, Sarah Pritchard, among several other senior new hires.
ESMA NEWSLETTER – Nº21
Welcome to the 21st edition of ESMA’s newsletter. During February, key publications have been ESMA’s annual reports on waivers and deferrals for equity and non-equity instruments, the ESAs report on sustainability-related disclosures in the financial services sector (SFDR), ESMA’s consultation paper and first Q&A on crowdfunding and calls for candidates to join Consultative Working Groups (CWG) for the ESMA’s Post Trading Standing Committee (PTSC) and Investment Management Standing Committee (IMSC).
ESMA consults on regulating crowdfundingESMA
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, has today launched a consultation on draft technical standards on crowdfunding under the European crowdfunding service providers regulation (ECSPR).
SEC Issues Whistleblower Awards Totaling Over $1.7 Million
The Securities and Exchange Commission today announced awards totaling more than $1.7 million to two whistleblowers in separate proceedings. Both whistleblowers provided Forms TCR to the Commission within 30 days of their first learning of the Form TCR filing requirement as set forth in new Securities and Exchange Act Rule 21F-9(e).
IOSCO Statement on Enhancing Collaboration between the IASB and the FASB on
Accounting for Goodwill
The International Organization of Securities Commissions (IOSCO) is the international body
that brings together securities regulators and is recognised as the global standard-setter for
securities regulation. The organisation’s membership regulates more than 95% of the world’s
securities markets and is responsible for the oversight of capital markets and the application
and enforcement of accounting and audit standards in those markets, as well as promoting
sound disclosure principles. IOSCO’s objectives are protecting investors, maintaining fair,
efficient and transparent markets and seeking to address systemic risks. The application of
accounting standards results in issuers providing relevant and representationally faithful
information to allow investors to make informed investment decisions.
Themistocles and the Mathematicians: The Role of Stress Testing
Vice Chair for Supervision Randal K. Quarles – U.S. Federal Reserve
One of the principal themes of human history—and certainly of economic history—is that of a sudden technological breakthrough originally deployed for one purpose being gradually refined over time until new and better versions of it are eventually deployed for a much broader range of purposes. The breakthrough supplies the drama, but it’s the steady incremental improvement over time that makes the greatest difference. The Phoenicians dramatically improved the speed and cargo load of their commercial voyages with the invention of the trireme—massive boats, powered with three tiers of oarsmen, rather than the standard one or two—dispatched from Tyre and Sidon in the service of exploration, commerce, and colonization.
SIFMA Cautions Liability Provisions Under CAT NMS Plan Will Harm Investors
A new report analyzing the economic impact of the proposed NMS Plan governing the Consolidated Audit Trail (CAT) concludes the proposed plan amendment, if adopted, would reduce investor welfare in two ways:
Canadian Securities Regulators Publish Findings Of Covid-19 Disclosure Review
Canadian securities regulators publish findings of COVID-19 disclosure review
Toronto – The Canadian Securities Administrators (CSA) today published key findings of recently completed reviews of issuers’ COVID-19 disclosure. Guidance and disclosure examples have been provided to assist issuers with reporting on the impacts of COVID-19 to their business and operations.
SIFMA Welcomes Introduction of the LOCAL Infrastructure Act
SIFMA today issued the following statement from president and CEO Kenneth E. Bentsen, Jr. on the introduction of the LOCAL Infrastructure Act:
Securities Commission Malaysia Holds Inaugural Capital Market Green Financing Series – Widening Access To Sustainable Financing For MSMEs
The Securities Commission Malaysia (SC) today launched NaviGate: Capital Market Green Financing Series, a programme to create greater awareness and connectivity between green companies and the capital market.
Investing and Trading
Musk Says Nickel Is ‘Biggest Concern’ For Electric-Car Batteries
Yvonne Yue Li – Bloomberg
Elon Musk has had it with nickel. It’s scarce and expensive, so the chief executive officer of electric-carmaker Tesla tweeted on Thursday that the company’s shifting some cars to a type of battery that uses iron instead.
AT&T to Spin Off Long-Suffering DirecTV in Deal With TPG
Liana Baker, Scott Moritz, and Crystal Tse – Bloomberg
Transaction creates new joint venture with private equity firm; Move is latest step by AT&T to slim down its operations
AT&T Inc. will offload its DirecTV operations in a deal with private equity firm TPG that values the business at about $16 billion, a fraction of what the telecom giant paid for the satellite-TV company in 2015.
Death of Investor Behind $20 Billion Fortune Puts Heirs in Focus
Benjamin Stupples -Bloomberg
Germany’s Heinz Hermann Thiele died Tuesday at age 79; Bulk of his wealth came from majority stake in Knorr-Bremse
Heinz Hermann Thiele built an empire spanning real estate, industrials and agriculture after starting his career in 1969 at Knorr-Bremse AG, the brake-system maker he turned into a global leader.
When Does a Commodities Boom Turn Into a Supercycle?
Mark Burton, Thomas Biesheuvel, and Alex Longley – Bloomberg
A surge in commodity prices has Wall Street banks gearing up for the arrival of what may be a new supercycle — an extended period during which demand drives prices well above their long-run trend. A major impetus is the massive stimulus spending by governments as they juice up their economies following pandemic lockdowns. The evidence includes surging copper and agricultural prices and oil back at pre-Covid-19 levels. One theory is that this could be just the start of a yearslong rally in appetite for raw materials across the board, but the reality is more complicated.
BOE’s Haldane Sees Risk of Central Bank Complacency on Inflation
Lucy Meakin – Bloomberg
Chief economist strikes more hawkish tone than others on MPC; Bonds and pound fall after the remarks, adding fuel to a rout
Bank of England Chief Economist Andy Haldane said he sees a risk of U.K. inflation accelerating more than expected, warning fellow central bankers against being too relaxed about taming the rise in consumer prices.
Markets set for a bumpy ride back to inflation; Expectations of rising prices are no cause for macroeconomic worries
FT Editorial Board
This was the week financial markets faced up to the realisation that low interest rates and subdued inflation may not be a permanent state of affairs. Around the world, bond investors have taken fright. The 10-year yield on US public debt — perhaps the most fundamental market price in the world — has climbed steeply. Market “break-even” expectations of US inflation over the same horizon rose to 2.2 per cent.
Spacs target UK tech companies for US listings; Flurry of interest spurs lobbyists to push for rule changes to make London more Spac-friendly
Nikou Asgari, Tim Bradshaw and Arash Massoudi – FT
Some of Britain’s most promising tech businesses are considering stock market listings in the US, amplifying the pressure on the UK to change listing rules at a time when ministers are keen to show an ambitious strategy for the City after Brexit. UK tech businesses, including used car site Cazoo and health app Babylon, are discussing potential mergers with US special purpose acquisition companies, according to people familiar with the talks.
Red flags raised over cannabis ETF ‘hype’; Analysis shows 43 out of 59 companies in major marijuana funds were lossmaking
Steve Johnson – FT
Interested in ETFs?
Visit our ETF Hub for investor news and education, market updates and analysis and easy-to-use tools to help you select the right ETFs. Cannabis stocks have been on a roll this year, with rising expectations for full federal legalisation in the US pushing many marijuana-related equities to unprecedented highs.
Mortgage Companies Want In on the IPO Boom. Investors Aren’t Convinced; Initial public offerings for mortgage lenders haven’t worked out the way all the companies were hoping
Orla McCaffrey – WSJ
The mortgage market just had a record year. The mortgage IPO boom, though, is petering out. Last year was a banner season for the IPO market in general and public offerings for mortgage companies in particular. Between July and December, eight of the 30 largest U.S. mortgage lenders announced plans to go public.
Environmental, Social and Corporate Governance
Denmark Slammed by Watchdog for Falling Short on Carbon Goal
Morten Buttler – Bloomberg
Denmark is far from reaching its ambitious target for carbon emission reductions by 2030, underscoring the need for new measures soon to get back on track, the country’s climate watchdog said in its annual review of climate policies.
Gulf Stream system at weakest in a millennium due to climate change; Studies detect major changes in ocean current that carries warm water to Europe and influences storms
Leslie Hook – FT
The Gulf Stream system has weakened to its slowest pace in more than a thousand years, according to scientists, as global warming makes the powerful ocean current that controls much of the Atlantic Ocean slow down.
Breaking the last barrier to ESG investing; Strong results in 2020 may kill the fear that sustainability sacrifices returns
James Langton – Advisor’s Edge
In the face of a global pandemic, environmental, social and governance (ESG) investments generally outperformed in 2020, which may finally break down the last line of resistance among investors and asset managers, suggested Moody’s Investors Service in a new report. The rating agency said ESG products have been one of the best performing investment categories in recent years, setting the stage for continued growth. In particular, Moody’s said the category’s strong performance in 2020 “could remove what has been a significant barrier to widespread ESG adoption among retail investors – namely, the concern that these investments require investors to sacrifice potential investment returns…”
How to take the long-term view in a short-term world
Sarah Murray – FT
Until recently, the chief claim to fame of the small French town of Florange was as the seat of Lothair II, the Saxon king of Lorraine who fell out with the Pope after he tried to leave his wife for his mistress. But in 2014 its name entered the capital markets lexicon when it appeared in legislation that requires French companies to give double voting rights to investors who hold their shares for two years or more. The Florange law was named after the industrial community that was at the centre of a bitter row several years after the hostile EUR26.9bn takeover of Arcelor by Mittal Steel. The company tried to shut down the town’s two blast furnaces — until a French minister accused it of “blackmail” and “lies” and threatened nationalisation.
How green is your pension?
Josephine Cumbo – FT
From recycling our rubbish or going vegan, to using the car less often, many of us are making small changes to our daily lives to reduce harm to the planet. But choosing to go green on our pension investments could have a far greater impact, as the institutions managing our money may include both heavy investors in fossil fuels and those seeking environment-friendly alternatives. “Our research indicates that moving a £100,000 pension pot with a traditional portfolio with oil and gas companies to a positive impact portfolio is the equivalent of taking five or six cars off the road a year,” says David Macdonald, founder of The Path, a firm of advisers that specialises in positive impact investing.
Ex-Credit Suisse CEO Thiam Raises $300 Million for Upsized SPAC
Jan-Henrik Foerster – Bloomberg
Freedom Acquisition to seek deals in financial services sector; Blank-check company raises more than $250 million target
Former Credit Suisse Group AG Chief Executive Officer Tidjane Thiam raised $300 million for his blank-check company after boosting the size of the deal.
European Bank Deals to Stay Local as Mega-Merger Prospects Dim
Jan-Henrik Foerster – Bloomberg
Top JPMorgan, Citi bankers skeptical of big cross-border deals; Banking deals in Europe hit $61 billion over six months
An expected wave of European bank consolidation will be driven by local mergers rather than the kind of headline-grabbing, cross-border deals many see as necessary to creating regional champions.
Barclays Wins Staveley Lawsuit Even as Judge Finds ‘Deceit’
Ellen Milligan and Jonathan Browning – Bloomberg
Staveley’s PCP had sought $918 million in London lawsuit; Judge says bank ‘guilty of serious deceit’ as he rejects claim
Barclays Plc won a bitter fight with deal-maker Amanda Staveley over a rescue package she helped engineer at the height of the financial crisis more than a decade ago.
ETF That Lost 80% of Assets in GameStop Drama Faces New Turmoil
Katie Greifeld- Bloomberg
State Street’s $786 million exchange-traded fund investing in retailers was only just recovering from its last brush with GameStop Corp. Now it’s all happening again.
Merian acquisition helps Jupiter cope with pandemic disruption; Asset management group to pay special dividend as pre-tax profits rise to £179m in 2020
Chris Flood – FT
The acquisition of smaller rival Merian helped asset management group Jupiter to cope with the turbulence created by the coronavirus pandemic in 2020, but it still suffered outflows as investors pulled money from its funds.
Petrobras row heaps pressure on Brazil’s free-market finance chief; Bolsonaro’s move to replace head of state-run oil company viewed as snub to Paulo Guedes
Michael Pooler and Bryan Harris – FT
After Brazil was rocked by market turmoil this week, President Jair Bolsonaro sought to soothe tensions not with international investors or political opponents, but with his own finance minister.
Retail traders’ hold on China’s stock market slips as institutions rise; Increasing influence of professional investors comes as fee-free trading booms in US
Hudson Lockett – FT
Retail investors’ influence in China’s stock market is fading as institutional dominance grows, standing in contrast to a global surge in amateur trading that has grabbed headlines from New York to Seoul.
Britain sets out blueprint to keep fintech ‘crown’ after Brexit
Huw Jones – Reuters
Brexit, COVID-19 and overseas competition are challenging fintech’s future in Britain and the country should act to stay competitive, a government-backed review said on Friday.
EU and U.K. Nearing First, Small Step for Post-Brexit Finance
Alberto Nardelli and Silla Brush – Bloomberg
Britain and the European Union are nearing agreement on how to cooperate on financial market rules — a first, limited step toward working together after Brexit. The two sides are proposing a joint forum for discussing regulations and sharing information, though this accord won’t require them to open markets through so-called equivalence decisions, according to a draft memorandum of understanding seen by Bloomberg News. The forum would lead to “informal consultations concerning decisions to adopt, suspend or withdraw equivalence,” according to the draft. Each side will keep the power to make and change its own rules.
Brexit: Welsh exports to Irish Republic ‘hindered by wrong ink’
Brian Meechan – BBC
Welsh exports to Ireland are being blocked by extra paperwork and costs at customs, says CBI Wales. Director Ian Price said the authorities in the Republic of Ireland were “zealous” when checking goods which was “causing some delays.” He said documents had been rejected for being written in blue not black ink. Ireland’s consul general in Wales insisted the Irish Government was “focused” on facilitating trade between the two countries. Mr Price called for “consistency of approach” when exporting to the EU.
France Aims to Exploit Brexit to Grab More British Finance Jobs
Ania Nussbaum – Bloomberg
As the U.K. drifts further away from Europe, one of French President Emmanuel Macron’s closest aides wants to convince people in Britain and France that the European Union is always the best option. That involves championing cities like Frankfurt, Amsterdam and, most of all, Paris as they try to seize as many of the jobs leaving the U.K. as possible. So far, the predicted flood of financial jobs hasn’t materialized, although some banks have made a move. “We can do better,” Clement Beaune, junior minister for EU affairs, said in an interview on Wednesday. “It’s not over.”
Stellantis Seeks U.K. Aid for Factory Overhaul to Make EVs
Christoph Rauwald and Tara Patel – Bloomberg
Stellantis NV is reviewing options for its Ellesmere Port car factory in England including closing the plant if it can’t reach a deal with the U.K. government on new investments. The automaker is considering revamping the factory that employs about 1,000 people for production of fully electric cars, according to a person familiar with the matter. The move would reflect the U.K.’s planned combustion-engine ban and its push to build up green industries. For the overhaul to go through, Stellantis is seeking financial incentives and commitments on post-Brexit trade of auto parts, including batteries, said the person, who asked not to be named because the talks are private.
French Minister Says EU May Grant U.K. Limited Equivalence
Ania Nussbaum – Bloomberg
A French minister close to President Emmanuel Macron says he thinks the European Union may grant some form of equivalence rulings that could allow the U.K.’s financial sector to do business across the continent — but he warns they’ll be limited. “There will probably be partial equivalence, probably by the end of the semester,” Clement Beaune, junior minister for EU affairs, said in an interview on Wednesday. That would be mid-2021.
The California Home Bryan Cranston Built During ‘Breaking Bad’ Lists for $4.995 Million; The actor completed the eco-friendly property in Ventura County during the show’s final season in 2013
Katherine Clarke – WSJ
As he was portraying Walter White, celebrated as one of the most greedy and unrepentant bad guys ever created, actor Bryan Cranston was building a beach house inspired by his longtime instincts for environmental preservation. “I believe in that Boy Scout credo of ‘Leave a campsite better than how you found it,’ ” said the actor, 64. “It started even as a boy when I saw trash being thrown out. It just irked me. I would pick up trash and I remember my mother saying, ‘Don’t do that, you never know what germs could be on there.’
Twitter to Launch Subscription Service Super Follows, Aims to Double Revenue by 2023; Social-media company detailed its goals at an event for analysts, its first in several years
Sarah E. Needleman – WSJ
Twitter Inc. TWTR 3.71% plans to introduce a subscription service for content creators and said it would explore tipping, as it looks to double its annual revenue and accelerate user growth over the next few years.