Deutsche Börse acquires a majority in quantitative brokers

Sep 17, 2020

First Read

Fed’s Star Witness in Spoofing Trial Gets Tarnished Under Cross-Examination
Thom Thompson – John Lothian News

Another day of methodical testimony unfolded in Judge John Tharp’s federal courtroom on Wednesday, the second day of testimony in the case of the Department of Justice versus James Vorley and Cedric Chancu. The defendants in the criminal case, who worked together trading precious metals at Deutsche Bank, are charged with wire fraud. They allegedly spoofed the gold and silver futures markets on COMEX.

Vorley and Chanu were not charged with spoofing per se because some of the charges stem from activities before the Dodd-Frank Act came fully into force in 2011. Otherwise, the proceedings, which first got underway with jury selection on Monday, look and sound like a spoofing trial.

The trial is being held in the Dirksen Federal Building with COVID-19 precautions. The trial takes up the entire courtroom to accommodate social distancing, everyone wears masks, and the press and public in a nearby courtroom watch the proceedings on screens.

On Wednesday, David Liew, another Deutsche Bank alumnus and the most junior of the three DB traders who were charged with spoofing, spent the whole day in the witness stand. Liew, who worked for DB in Singapore, is a witness for the prosecution.

To read the rest of this commentary, go HERE.


Hits & Takes
JLN Staff

It is Deutsche Boerse’s turn to buy (a majority interest) in one of our sponsors, this time Quantitative Brokers. I think the lesson here is that if you want to sell your firm, become a sponsor of JLN. Hint hint. Ask for our special sell-your-firm sponsorship deal.

According to Tom Ascher, QB, as they are known for short, was having a town hall to explain the deal to their employees this morning. This is an opportunity for QB to accelerate its growth, leveraging assets from Deutsche Boerse Group while maintaining QB as a separate company. The founders of the company will continue to run it. Tom Ascher continues as executive chairman. QB is continuing to add new exchanges and venues and supporting more multi-EMS/OMS. They will continue to be an FCM broker neutral value proposition.

The NFA’s quarterly board update is out. This is the second time we have had no video of people, but rather words and images, with powerful music to tell the story.

Rosenblatt is holding its 13th Annual Global Exchange Leader Conference virtually this year, as is the way of the world. The event is “invitation only,” but you can register at this URL and ask for an invitation. The event includes no press, so the speakers are pretty relaxed about what they share. There was a time, though, when this journalist would attend the in person version of the conferences and even moderate a panel.

Former CFTC Chairman J. Christopher Giancarlo had a commentary published in the USA Today Network titled “New Jersey can’t justify financial transaction tax.”

You can now register to become a member of the Materials Exchange. Here is the link to register. With the lumber market hot, this would be a good time to look at the Materials Exchange.

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


Exchange behemoth CME Group offered few surprises but several highlights in a Wednesday presentation to Barclays Global Financial Services Conference. Notable points included a 12 percent increase in its metals complex’s year-over-year growth through September 11, 2020, a growth rate second only to CME equities products, which saw average daily volume rise 66 percent in the same period. Total exchange ADV was up 2 percent versus 2019 year to date, with agricultural commodities and interest rate products the lagging asset classes, down 10 percent and 19 percent, respectively. A flat interest rate environment continued to weigh on rate product volatility and volume, but Sean Tully, CME global head of financial and OTC products, said record Treasury issuance projected throughout 2020 (the result of high U.S. budget deficits) should increase demand for related hedging and risk management vehicles. ~SC

A status hearing in Southshore Restore v. Illinois Department of Financial and Professional Regulation; Brett Bender, deputy director, originally scheduled for today, September 17, has been moved to Tuesday, September 22. As JLN reported previously, the case is related to the state’s awarding of social equity licenses for 75 new cannabis dispensaries.~SC


Citigroup Employee Who Operated QAnon Website on Leave
William Turton and Jennifer Surane – Bloomberg
Popular aggregator site shut down after Jason Gelinas outed; QMap promoted the conspiracy, had millions of visitors
Jason Gelinas, an employee at Citigroup Inc., has been placed on paid leave pending an internal investigation after he was identified as the operator of the most prominent website dedicated to the QAnon conspiracy theory, according to three people familiar with the matter. Gelinas, who lives in New Jersey, was identified Sept. 10 as the operator of the website and its associated mobile apps by the fact-checking site Since then, the website has shut down and now simply provides links to alternative websites offering information on the QAnon conspiracy.

***** I get the feeling Mr. Gelinas is regretting some of his decisions.~JJL


U.S. Is No Longer Land of Opportunity for Foreign MBA Students; The pandemic and visa insecurity make U.S. programs less desirable.
Clare Roth – Bloomberg
A deadly virus and tight visa rules have foreign business students second-guessing their choice of the U.S., leery of paying full tuition only to miss out on the networking opportunities—and jobs—that have made America the ultimate destination for an MBA. Foreign students have been a boon to business schools. The vast majority pay full freight, which can be more than $80,000 annually for a two-year program. International students account for almost half of Columbia’s entering class this year.

*****If this is the case, then the opposite will come true, as there will be a shortage of such foreign MBA students.~JJL


Snowflake Stock: What You Need to Know About Tech’s Hottest IPO; Data-managing firm’s strong revenue growth and well-known backers have helped make it biggest tech IPO of the year
Aaron Tilley – WSJ
Snowflake Inc. SNOW 111.61% has become Silicon Valley’s hottest new public company. Here’s what you need to know about it. What is Snowflake? San Mateo, Calif.-based Snowflake was founded in 2012 to help companies manage data they store on the cloud—the remote servers and software services provided by the likes of Inc. and Microsoft Corp. that firms use to store and process vast amounts of information. Snowflake works with companies such as Capital One Financial Corp. and videogame maker Electronic Arts Inc. to help them manage and analyze their data. Snowflake, in its filing to go public, said it was vying for a market valued at north of $80 billion.

***** Hot snowflakes just does not seem to make sense.~JJL


Deutsche Bank Tells U.S. Staff They Can Wait Until Mid-2021 to Return to Office; Lender’s plans contrast with JPMorgan, which recently told many staff that they need to return to the office next week
Julia-Ambra Verlaine – WSJ
Deutsche Bank AG DB 2.09% told U.S. employees they don’t have to return to the office until July 2021. In a town hall Wednesday, Americas chief of staff Matthias Krause outlined the bank’s plans around bringing employees back to work. Many employees had asked for a clear policy as they deal with unknowns about school reopenings and the path of the coronavirus.

***** That is my expectation for the time being too.~JJL


Almost 60 percent of business closures are now permanent, new Yelp data shows
Anjali Sundaram – NBC News
Yelp on Wednesday released its latest Economic Average Report, revealing business closures across the U.S. are increasing as a result of the coronavirus pandemic’s economic toll.
As of Aug. 31, 163,735 businesses have indicated on Yelp that they have closed, a 23 percent increase since mid-July.
Yelp also measures businesses whose closures have become permanent. That number has steadily increased over the past six months, now reaching 97,966, representing 60 percent of closed businesses that won’t be reopening.



NFA Board Update—August 2020 Meeting
News & Notices, NFA’s Diversity & Inclusion Webpage, Rule Submission Letter: Proposed Amendments to Code of Arbitration and Member Arbitration Rules, Rule Submission Letter: Proposed Amendments to NFA Interpretive Notice 9053: Forex Transactions, Notice to Members: Effective Date for Updated Interpretive Notice Regarding the Supervision of Branch Offices and Guaranteed IBs, COVID-19 Webpage

***** I know we produce this, but this update is a WOW!~JJL


Wednesday’s Top Three
Our top story Wednesday was Bloomberg’s My Trip Down the Crypto Rabbit Hole in Search of the DAO Hacker, an excerpt from a new book by Bloomberg reporter Matthew Leising. Second was What JPMorgan Has To Say About Young Employees Working From Home, from Yahoo Finance. (Turns out it’s “You whippersnappers! Get off my lawn!”) Third was a repeat from Tuesday’s top three, These 5 Habits Will Help You Stay Focused All Day. A Psychologist Explains Why, from


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Lead Stories

Deutsche Börse acquires a majority in quantitative brokers, thereby strengthening its strategic focus on the buy side
Deutsche Börse
Deutsche Börse secures a majority stake in Quantitative Brokers LLC, an independent provider of sophisticated trading algorithms and data-based analysis for global futures, options and interest markets; The leading fintech is well integrated into the buy-side value chain. The growing global customer base will give Deutsche Börse’s buy-side initiatives further impetus; the two founders of Quantitative Brokers, Christian Hauff and Robert Almgren, will continue to manage the company and hold significant shares
Deutsche Börse acquires a majority stake in Quantitative Brokers (QB), an independent provider of sophisticated execution algorithms and data-based analysis applications for the global futures, options and interest rate markets. The fintech, with offices in New York, London, Sydney and Chennai, is a thought leader in terms of market structure and innovation leader in the fast-growing market for intelligent electronic order execution.

The Wild Summer of 2020 Turned Small Investors Into Whales; Pros are wondering what the rally was really about
Michael P. Regan – Bloomberg
There are a few jokes going around Wall Street to explain the wild ride for the U.S. stock market this summer: Why did the huge rally suddenly stall out on Sept. 2? Because all the phone-app day traders had to go back to school. Or maybe because the NFL season (and football betting) was approaching.

This Isn’t Just JPMorgan’s Problem; Some workers are already going back home
NY Times
JPMorgan Chase sent some of its workers home this week after an employee in its trading unit in Midtown Manhattan tested positive for the coronavirus, a person familiar with the matter told DealBook. The timing isn’t great. The news broke days after President Trump brought attention to the investment bank’s plan to bring some of its senior workers back to the office, inaccurately tweeting, “Congratulations to JPMorgan Chase for ordering everyone BACK TO OFFICE on September 21st. Will always be better than working from home!” (The bank had, in fact, only asked some senior employees in its sales and trading division to return.) Mr. Trump’s tweet politicized a decision that JPMorgan, and other companies, would probably like to make without such fanfare.

Snowflake More Than Doubles in Debut as Wall Street Embraces Tech IPOs; The data storage company is among several prominent start-ups going public this year as the tech industry thrives in the pandemic.
Erin Griffith – NY Times
It’s bonanza time in Silicon Valley and on Wall Street. Snowflake, a data storage and analytics provider, kicked off a frenzied phase of technology initial public offerings on Wednesday when its stock opened at more than double its listing price and then soared in early trading, in a sign of Wall Street’s appetite for fast-growing companies.

Prosecutors in Chicago Trial Are at a Critical Juncture in Anti-Spoofing Effort; Having lost previous two trials, government lawyers are under pressure, starting with explaining market-manipulation tactic to jury
Dave Michaels – WSJ
A pair of former Deutsche Bank AG DB 2.09% traders charged with manipulating gold and silver prices went on trial this week in Chicago, where a group of 12 jurors without experience in the complex world of futures trading will decide if they committed fraud. The case, playing out in a federal courtroom despite worries about the coronavirus pandemic, forces prosecutors to confront the challenge of explaining a type of trading deception known as spoofing. The tactic involves quickly posting and canceling large orders, a disinformation game that can move prices in a direction desired by the spoofer. The government’s lawyers, having tried and lost two prior cases over spoofing, are at a key juncture in an effort that has charged 20 traders with spoofing-related crimes since 2014; eight have pleaded guilty. Prosecutors tried to boil down for the jury how the scheme works, using color-coded trading charts and the testimony of a third trader who said he spoofed and watched the defendants, James Vorley and Cedric Chanu, spoof.

SEC Bolsters Safeguards Against Penny-Stock Fraud; Rule change would make it harder for investors to trade OTC shares of companies that have stopped releasing financials
Alexander Osipovich – WSJ
The Securities and Exchange Commission is beefing up protections against fraud and manipulation in the lightly regulated market for over-the-counter stocks. The SEC on Wednesday approved a change to its rules that would largely prevent brokers from quoting prices for OTC stocks unless the companies issuing such shares released up-to-date financial information to the public.

America’s Offices Sit Half-Empty Six Months Into the Covid-19 Pandemic; U.S. stores and factories are getting back to normal occupancy, but offices are lagging
Katherine Riley – WSJ
Six months after coronavirus lockdown orders closed workplaces across the country, most offices in the U.S. are still quiet. Data from Brivo, a company that provides access-control systems for workplaces, shows that “unlocks” at offices—when someone uses their credentials to enter an office—in late August were down 51% from the end of February. By comparison, visits to manufacturing and warehouse locations, where fewer jobs can be done remotely, remained down by a third.

Facebook-backed Libra appoints former HSBC exec to head cryptocurrency
ZURICH (Reuters) – The Facebook-backed (FB.O) Libra project has appointed former HSBC European head James Emmett to lead Libra’s operational unit tasked with developing and operating the project’s cryptocurrency payments system, the Libra Association said on Thursday.

France urges financial firms to finalise plans for Brexit risks
French financial firms need to finalise preparations for the end of Britain’s Brexit transition arrangements and in particular find solutions for securities clearing, France’s financial stability council said on Thursday.

When to Stop Working From Home? How About Never, Workers Say
Suzanne Woolley – Bloomberg
U.S. workers who are being shepherded back to the office would rather continue doing their jobs from home, at least a few days a week. It’s not that they hate the idea of returning, but more that they’ve grown to really like the work-from-home life. It’s becoming the big topic of conversation across virtual workplaces, as companies try to get employees to leave their makeshift desks in bedrooms, kitchen counters, porches or backyards for the once-familiar surroundings of the good old office.

There Won’t Be a Clear End to the Pandemic; The collective sense of closure we’re all longing for may never arrive. Instead, brace for a slow fade into a new normal.
Joe Pinsker – The Atlantic
The pandemic has rendered many activities unsafe, but thankfully it can’t stop us from fantasizing about them. A common balm that people reach for is the sentence construction “When this is over, I’m going to ____.” It seems to help, if only in a fleeting way, for them to imagine all of the vacations they’ll go on, all of the concerts they’ll attend, and all of the hugs they’ll give, as soon as they’re able to.

Trump claims CDC director is ‘confused’ over 2021 vaccine timetable; Robert Redfield said it would take a year before Covid vaccine is generally available and masks were more important
Tom McCarthy , Lauren Aratani and agencies – The Guardian
The director of the Centers for Disease Control and Prevention (CDC) has told a Senate panel that he thinks it will take one year before a coronavirus vaccine will be “generally available to the American public”.

Green Spacs burst on to market; The latest sustainability news, including Philips’ green transformation, PwC cuts flights in net zero push, Amundi and AIIB target emerging markets
Gillian Tett, Billy Nauman, Patrick Temple-West, Andrew Edgecliffe-Johnson and Jude Webber – FT
Here come sustainable Spacs
Savvy financiers have gotten good at creating sustainable versions of standard investment products — from collateralised loan obligations to money market funds. Now, investment bankers are applying sustainability to the hottest financial product of 2020: special purpose acquisition companies. Spacs, also known as blank cheque companies, raise money on stock exchanges to acquire businesses in the future.

The Other Chinese Currency Manipulation Question; Last time the Taiwanese currency was climbing toward record highs, the island had a much smaller pile of foreign-currency assets
Mike Bird – WSJ
The accusations of currency manipulation against the People’s Republic of China are well-known. But risks surrounding the other Chinese currency—the New Taiwan dollar—are building up, too. With the U.S. dollar falling, Taiwan’s closely controlled currency is at its highest level in 2½ years, and a rally of 1.5% would push it to an all-time high. The Taiwanese government and its Central Bank of the Republic of China have tried to avoid significant appreciation in the past, intervening in foreign-exchange markets with the aim of preserving Taiwan’s export competitiveness.

A Million Mortgage Borrowers Fall Through Covid-19 Safety Net; Some homeowners don’t know they qualify for a relief program that allows them to delay payments
Andrew Ackerman – WSJ
About one million homeowners have fallen through the safety net Congress set up early in the coronavirus pandemic to protect borrowers from losing their homes, according to industry data, potentially leaving them vulnerable to foreclosure and eviction. Homeowners with federally guaranteed mortgages can skip monthly payments for up to a year without penalty and make them up later. They must call their mortgage company to ask for the relief, known as forbearance, though they aren’t required to prove hardship.

Mesirow CEO hands title back to chairman; Dominick Mondi, who became CEO of the Chicago financial services firm two years ago, will remain president as Richard Price takes the helm again.
Lynne Marek – Crain’s Chicago Business
Mesirow Financial CEO and President Dominick Mondi will hand the chief executive title back to Chairman Richard Price as of today, but will retain his president role and leadership of the capital markets unit, the Chicago financial services company said.

Gas Companies Are Abandoning Their Wells, Leaving Them to Leak Methane Forever; Just one orphaned site in California could have emitted more than 30 tons of methane. There are millions more like it
Mya Frazier – Bloomberg
The story of gas well No.?095-20708 begins on Nov. 10, 1984, when a drill bit broke the Earth’s surface 4 miles north of Rio Vista, Calif. Wells don’t have birthdays, so this was its “spud date.” The drill chewed through the dirt at a rate of 80 ½ feet per hour, reaching 846 feet below ground that first day. By Thanksgiving it had gotten a mile down, finally stopping 49 days later, having laid 2.2 miles of steel pipe and cement on its way to the “pay zone,” an underground field containing millions of dollars’ worth of natural gas.

Covid crisis has accelerated big trends in China’s favour; Recent renminbi rally underscores shift in the economic balance from west to east
Jim McCormick – FT
China and much of east Asia have had a good crisis, relatively speaking. The recent rally in the renminbi shows currency markets are starting to acknowledge this. But it is just the tip of the iceberg. A shift in the economic balance, away from the west and towards Asia, was well under way before Covid-19. The pandemic just accelerated it.


‘Warp Speed’ Officials Debut Plan for Distributing Free Vaccines; Despite the president’s statements about military involvement in the vaccine rollout, officials said that for most people, “there will be no federal official who touches any of this vaccine.”
Katie Thomas – NY Times
Federal officials outlined details Wednesday of their preparations to administer a future coronavirus vaccine to Americans, saying they would begin distribution within 24 hours of any approval or emergency authorization, and that their goal was that no American “has to pay a single dime” out of their own pocket.

Boris Johnson’s Testing Mistakes Are Adding Up; Preventing a second wave and a new lockdown depends on the U.K. fixing the problems that dog its testing system.
Therese Raphael – Bloomberg
The scary thing about the U.K.’s much-publicized problems with Covid-19 testing is not that the system is encountering difficulties — those were inevitable. It’s that the government failed to anticipate them, it has not been transparent about what went wrong or convincing on the question of when the problems will be resolved.

MBA Students Want More Digital Offerings Even After the Pandemic; Forced by the pandemic to study via Zoom, business school students want to keep some parts of the virtual classroom.
Caleb Solomon – Bloomberg
While MBA students were generally disappointed with the shift to online learning, there are some features of virtual classes they liked—and want to see continued even after in-person instruction resumes, a Bloomberg Businessweek survey of MBA students shows.

China’s Epic Dash for PPE Left the World Short on Masks; The humanitarian campaign saved lives but has made foreign governments wary of the long reach of the organizer, the Communist Party’s United Front.
Sheridan Prasso – Bloomberg
Just after the lockdown of Wuhan in January, the same week the U.S. confirmed its first case of the novel coronavirus, Chinese civic organizations in dozens of countries on five continents began buying masks and other personal protective equipment. It was the beginning of an unprecedented humanitarian mobilization, orchestrated by the Chinese Communist Party’s United Front Work Department, to send PPE supplies to a China struggling with an epic public health crisis.

What We Actually Know About How Americans Are Moving During Covid; Despite talk of an urban exodus, fewer people moved during the height of the pandemic. But in a few cities, the story is a little different.
Marie Patino – Bloomberg
Are people in the U.S. migrating during the coronavirus crisis in different ways than pre-pandemic? Are they leaving cities? Moving to the suburbs? These are popular questions without definitive answers — yet. But there is some data emerging that can paint a better picture of Americans’ geographic response to the pandemic.

Covid-19 is shaking up the citizenship by investment industry
Before Covid-19 connections and money could buy almost anyone the right to live pretty much anywhere they wanted. The industry known today as CRBI—citizenship and residence by investment—began in 1984 in the Caribbean island of St. Kitts and Nevis, which offered a passport to foreigners who “invested substantially” in their economy. Today, more than half of the world’s 193 countries will trade citizenship or residency for cash. The industry is worth up to $25 billion a year and has spawned a new class of self-styled global citizens. But it’s also attracted criticism from those who say passports-for-purchase turn democracies into havens for criminals and facilitate money laundering and tax evasion.

Only the US has more coronavirus cases than India. But unlike Trump, its leader seems immune from criticism
India is in crisis. Its economy has crashed, with the largest slump on record decimating millions of jobs. Its already fragile healthcare system is struggling. With more than five million cases, India ranks only behind the United States for confirmed infections.

Pandemic upshot: Seniors are having second thoughts about where to live
Judith Graham – CNN
Where do we want to live in the years ahead? Older adults are asking this question anew in light of the ongoing toll of the coronavirus pandemic — disrupted lives, social isolation, mounting deaths. Many are changing their minds.

Can a patient get reinfected with Covid-19 after making a full recovery?
Smitha Nair – Quartz
The first confirmed case of Covid-19 reinfection was reported by researchers at the University of Hong Kong in the last week of August. A few other anecdotal cases of reinfection have since emerged, including one from Bengaluru. How exactly is a case of reinfection confirmed? What are the chances of being infected again after making a full recovery from Covid-19? What does it mean for long term immune response to the SARS CoV2 virus which is at the centre of the current outbreak?

Yale president emeritus says there’s a ‘tremendous’ gap between students due to Covid-19
Weizhen Tan – CNBC
The pandemic has had a “massive impact” on students — and there’s a widening gap between those who can tap on online learning and those who can’t, says Yale University’s president emeritus. “It’s a massive impact … about 1.6 billion students were displaced from their schools, all the way from kindergarten to university. And so the impact’s been huge,” Richard Levin told CNBC as one of the attendees of the Singapore Summit, which is being held virtually this year. “There’s been quite a bit of resiliency — students are learning — although there’s a tremendous gap opening up between students who are most capable of taking advantage of online resources and those who can’t,” he added. He flagged crowded home environments which are “inhospitable” to learning digitally, as one problem.

What to Know Before You Launch a Blockchain Company in New York
Mike Ben –
We have known for a few years now that there’s room for successful new blockchain companies in the state of New York. Back in 2018, New York City Wired highlighted some of the most successful blockchain companies to watch for in the New York City “area” (somewhat broadly defined). The piece included two new companies — ShelterZoom and Coverus — that were operating within New York City. At the time, the very notion of a blockchain company was new to most people, and the presence of a few notable startups was exciting.

An Experimental Drug Protects Covid-19 Patients, Eli Lilly Claims; A so-called monoclonal antibody lowered levels of the coronavirus and prevented hospitalizations. The research has not yet been vetted by independent experts.
Gina Kolata – NY Times
A single infusion of an experimental drug markedly reduced levels of the coronavirus in newly infected patients and lowered the chances that they would need hospitalization, the drug’s maker announced on Wednesday.

Bank of England warns coronavirus resurgence threatens UK economic recovery; Monetary Policy Committee also says renewed Brexit tensions pose risk as it holds interest rates at 0.1%
Chris Giles – FT
The resurgence of coronavirus across Europe is likely to slow the UK’s economic recovery which had been exceeding expectations, the Bank of England’s rate setting committee said after its September meeting.

Contact Tracing, the West’s Big Hope for Suppressing Covid-19, Is in Disarray; Investigators aren’t casting a wide enough net to catch Covid-19 cases before they spread
Matthew Dalton – WSJ
When countries across the West emerged from lockdown in the spring, governments trained legions of investigators to identify and isolate people potentially infected with the coronavirus. The goal was to prevent a resurgence of the pathogen.

Exchanges, OTC and Clearing

Nasdaq launches Canadian equities data feed with Refinitiv; Nasdaq Basic Canada will combine data from Nasdaq CXC, CX2, and CXD trading books for all TSX, TSX Venture, and CSE listed securities.
Annabel Smith – The Trade
US exchange group Nasdaq has launched a new data feed for Canadian listed equities, Nasdaq Basic Canada, on Refinitiv’s Eikon platform. The data feed will offer investors access to real-time quote and trade data, combining Nasdaq CXC, CX2, and CXD trading books for all TSX, TSX Venture, and CSE listed securities.

Deutsche Börse acquires majority stake in algo provider Quantitative Brokers; Quantitative Brokers will provide Deutsche Börse with closer ties to the buy-side upon closure of the acquisition.
Annabel Smith – The Trade
Deutsche Börse has increased its focus on the buy-side by acquiring a majority stake in execution algorithm provider Quantitative Brokers. The German exchange operator said the transaction is subject to regulatory approvals and is expected to close by the end of this year. The terms of the deal were not disclosed.

Moscow Exchange: More Than Half A Million Russian Residents Invest In ETFs
On 17 September 2020, MOEX celebrates the two-year anniversary of trading in Russian-law ETFs. Over this period, a large number of new collective investment instruments were rolled out, allowing retail and institutional clients to invest in a wide range of assets and diversify their portfolios.

CME Group to Launch First-Ever Water Futures Based on Nasdaq Veles California Water Index
PR Newswire (press release)
CME Group, the world’s leading and most diverse derivatives marketplace, and Nasdaq, a global technology company serving the capital markets and other industries, today announced plans for a new futures contract on the Nasdaq Veles California Water Index (NQH2O). CME Group will launch its new Nasdaq Veles California Water Index futures contract in late Q4, pending regulatory review. Nasdaq Veles California Water Index futures will be an innovative, first-of-its-kind tool to provide agricultural, commercial, and municipal water users with greater transparency, price discovery, and risk transfer – all of which can help to more efficiently align supply and demand of this vital resource.

Nadex Launches Silver And Natural Gas Touch Bracket Contracts And Currency Touch Bracket And Weekly Call Spread Contracts
Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and section §40.2(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 September 16, 2020 its intent to list new Silver and Natural Gas Touch Bracket Variable Payout Contracts to Nadex Rules 12.6 and 12.10, respectively. Additionally, Nadex plans to add Weekly Call Spread contracts to all of its Foreign Currency contracts, as well as Touch Bracket contracts to its AUD/USD, USD/CAD, EUR/JPY, GBP/JPY, EUR/GBP, and AUD/JPY Currency contracts.

Nadex Product Schedule For The Japan Holidays On September 21 And 22, 2020
Due to the Japan holiday on Monday, September 21, and Tuesday, September 22, 2020, the Japan 225 contracts will have a modified trading schedule.

CCP12 Welcomes Saudi Arabia’s Securities Clearing Center Company (Muqassa) As Primary Member
CCP12 – The Global Association of Central Counterparties – welcomes Securities Clearing Center Company (Muqassa) as Primary Member. The Executive Committee of CCP12 accepted in its latest Executive Committee meeting the Securities Clearing Center Company (Muqassa) as a Primary Members of CCP12. The decision is directly linked to the operations commencement of Muqassa on 30th of August 2020.

Vienna Stock Exchange: International Segment Global Market With Over 40 New European Blue Chips
As of today, the Vienna Stock Exchange’s international segment global market is expanding by 42 European shares. Fans of international stocks will find companies from a wide range of sectors such as the multi-country stock exchange Euronext (which operates the stock exchanges in Amsterdam, Brussels, Dublin, Lisbon, Oslo and Paris), the German biotech CureVac (currently developing a Covid-19 vaccine), the French luxury goods manufacturer Christian Dior as well as the global expert in the water and waste sector Suez. In total, the global market now offers a selection of 717 securities from 26 countries. Both private and institutional investors respond positively to the offer. Sales have increased by half over the course of 2020 (01-08 2020: EUR 2.12 bn; 01-08 2019: EUR 1.43 bn). The most actively traded stock on the global market at the end of August 2020 is the Austrian ams (primary listing in Switzerland) with EUR 101.7 m, followed by Tesla (EUR 76.3 m) and Arcelormittal (EUR 50.6 m).

IG Group feels benefit of volatility and influx of retail investors; Growing number of customers are trying to make money from large moves in the markets
Harry Dempsey – FT
Trading website IG Group has had another strong quarter thanks to growing numbers of customers attempting to make money from large moves in the markets. Revenues at the London-listed group jumped to £209m in the three months to August 31, up 62 per cent compared with a year earlier.

MarketAxess to expand municipal bond trading services with latest acquisition; MuniBrokers will be acquired by MarketAxess as the firm looks to build on its existing municipal bond trading offering.
Annabel Smith – The Trade
MarketAxess is looking to expand its municipal bond trading services as it confirms plans to acquire central electronic venue for interdealer brokers and dealers, MuniBrokers.

Qontigo & Eurex discuss ICB impact on STOXX indices
In a recent PULSE ONLINE article, Qontigo’s Giulio Castelli and Zubin Ramdarshan from Eurex discussed the possible impact on STOXX indices and related derivatives after the first major overhaul of the Industry Classification Benchmark (ICB) in years.

Nasdaq Basic Canada Launches on Refinitiv; Increases access to lower-cost market data alternative
Nasdaq (Nasdaq: NDAQ) today announced it has launched Nasdaq Basic Canada—a feed that provides investors around the globe with access to real-time quote and trade data for the full range of Canadian listed equities—on Refinitiv’s Eikon platform. Refinitiv is one of the world’s largest providers of market data and financial solutions, serving more than 40,000 institutions in 190 countries. Nasdaq Basic Canada combines data from Nasdaq CXC, CX2 and CXD trading books for all TSX, TSX Venture and CSE listed securities.

CME STP Notices: September 17, 2020
CME Group
New Originating Event Enumeration in CME STP Interest Rate Swap (IRS) Messages – This Week
BrokerTec Stream on CME STP – December 7
CME STP Support of BrokerTec Markets – Q4 2020

CME Globex Notices: September 14, 2020
CME Group
Critical System Updates
iLink 3 MSGW Session Migration
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
Harmonization of Enable/Disable Implied Behavior for ICS – This Week
CME Group Risk Management Tools Enhancement – This Week
iLink Enhancements for Location ID and Displayed Quantity – November 15

SGX welcomes the world’s largest Chinese pure government bond ETF issued by CSOP Asset Management
ICBC CSOP FTSE Chinese Government Bond Index ETF will start trading on 21 September, 9:00 am; CSOP Asset Management’s inaugural ETF on SGX will kick off with US$676 million (RMB 4.6 billion) in assets under management
Singapore Exchange (SGX) today announced the listing of the world’s largest Chinese pure government bond exchange-traded fund (ETF) that will meet the growing demand from investors to access opportunities in China’s onshore bond markets, in an easy and efficient manner.


Elon Musk’s Next Big Thing Is 40,000 Satellites Beaming Broadband; He hopes low-Earth orbits will help him succeed where so many others have failed.
Thomas Pfeiffer, Thomas Seal – Bloomberg
Every few years, someone comes along promising to disrupt the satellite industry. They burn through billions in cash before ambition crashes back down to Earth. Since the late 1990s, Globalstar, Iridium, Leosat, Skybridge, Teledesic, and other companies have attempted to rewrite space communications, only to collapse or shrink into a niche that poses little threat to the incumbents.

Snowflake’s CEO on Having Year’s Biggest IPO: ‘So Far, So Good’
Nico Grant – Bloomberg
Cloud database company competes with giants Oracle, Amazon; CEO Slootman looking for investors to stay for the long haul
Snowflake Inc. Chief Executive Officer Frank Slootman took his company’s record $3.36 billion initial public offering in stride, describing it as just another step in the software maker’s plan to disrupt the database market. “So far, so good,” Slootman said Wednesday in an interview. “We needed to do this for a number of reasons, especially to raise the stature of the company in the marketplace. We sell to the largest companies in the world and we also compete with the largest companies in the world, so it’s really important.”

After the Wirecard scandal, fintech sector faces scrutiny and questions of trust
Arthur Sullivan –
The downfall of Wirecard has badly exposed the lax regulation by financial services authorities in Germany. It has also raised questions about the wider fintech sector, which continues to grow rapidly.

Amazon’s fintech push is a play to dig further into India
Ananya Bhattacharya – Quartz
Having established itself as one of the leading e-commerce players in India, Amazon is now casting a wider net in the country.
The Seattle-based company has been gradually expanding its fintech offering in India, organically as well as through acquisitions. The move is a “natural extension” that will help Amazon shift from “mind space to wallet space,” said Krishna Kumar, an independent fintech and digital services consultant. “Payments complete shopping from viewing to sale,” Kumar added.

Refinitiv Announces The 2020 D&I Index Top 100 Most Diverse & Inclusive Organizations Globally
Refinitiv today announced the 2020 Top 100 most diverse and inclusive organizations globally as ranked by the Diversity & Inclusion (D&I) Index. The index ratings are informed by Refinitiv’s Environmental, Social, and Governance (ESG) data, designed to transparently and objectively measure the relative performance of close to 10,000 companies representing 80%+ of global market cap across 450+ ESG data points, and provide clients with critical and differentiated insight.

Major Financial Institutions Increase Trading Technology Performance – Deploying Latest Low-Latency FIX Engine From Chronicle Software
Two tier-one capital markets organisations have upgraded their trading platform performance, choosing the latest trading software provided by Chronicle Software (Chronicle), a specialist provider of low-latency technology solutions for the financial services industry.

BidFX Releases Flagship FX Desktop Trading Application On OpenFin
BidFX, the leading cloud-based provider of electronic foreign exchange trading solutions, today announced a significant addition to its product range delivered via OpenFin, the operating system (OS) of finance. BidFX now offers a desktop-installed web application supporting the layout of window-based components that interoperate securely and seamlessly across a trader’s multi-screen workstation.

BlackRock takes top spot on global diversity index from Refinitiv;Refinitiv’s diversity and inclusion index found that banking and investment services were the most diverse industries, with BlackRock leading the way.
Hayley McDowell – The Trade
Asset management heavyweight BlackRock has topped an index from Refinitiv that ranks the top 100 most diverse and inclusive organisations globally.


Kraken Becomes First Crypto Exchange to Become a US Bank
Nathan DiCamillo – Coindesk
Kraken is the first cryptocurrency firm to become a bank. On Wednesday, the Wyoming Banking Board voted to approve the San Francisco-based crypto exchange’s application for a special purpose depository institution (SPDI) charter. Kraken is now the first SPDI bank in Wyoming. According to the Wyoming Division of Banking’s general counsel, Chris Land, Kraken will also be the first newly chartered (de novo) bank in the state since 2006.

Proposed Bermuda Bank Taps Anchorage as Digital Asset Custody Partner
Jaspreet Kalra – Coindesk
Jewel, which is awaiting regulatory approval to open a bank in Bermuda, is partnering with digital asset custody firm Anchorage.

Alibaba on Track to Be the Largest Blockchain Patent Holder by End of 2020: Study
Paddy Baker – Coindesk
Alibaba is on track to supersede U.S. computer giant IBM by becoming the single-largest holder of blockchain-related patents, according to a new study. A report from intellectual property consultancy KISSPatent Thursday found the Chinese tech conglomerate was “definitely running the show,” having already published ten times more blockchain patents than IBM, its nearest rival. Should Alibaba continue at its current pace, the study predicted it would become the biggest patent holder in blockchain by the end of 2020.

Blockchain Bites: The SEC’s Chilling Effect on Crypto Development
Daniel Kuhn – Coindesk
A slew of regulatory happenings are in the works: a Bahamian CBDC, a potential ban on crypto trading in India and a plan to unify state banking compliance standards across the U.S.

U.S. Charges Two Russian Nationals Who Allegedly Stole Cryptocurrencies
Dylan Tokar – WSJ
The U.S. Justice Department charged two Russian nationals who prosecutors say defrauded three cryptocurrency exchanges and their customers, resulting in losses of at least $16.8 million. Danil Potekhin and Dmitrii Karasavidi were charged in the U.S. District Court in San Francisco with aggravated identity theft, conspiracy to commit computer fraud and conspiracy to commit money laundering, among other charges, for their alleged roles in a sophisticated hacking and market-manipulation scheme, prosecutors said Wednesday.

Uniswap Launches Governance Token in Bid to Keep Up With Rival AMM SushiSwap
Nikhilesh De – Coindesk
Decentralized trading platform Uniswap has launched a governance token, UNI, minting 1 billion coins to be released to the public over the next four years. Announced Wednesday night, the new token will be allocated to Uniswap community members (60% of all tokens), team members/future employees (21.51%), investors (17.8%) and advisors (0.69%). “UNI officially enshrines Uniswap as publicly-owned and self-sustainable infrastructure while continuing to carefully protect its indestructible and autonomous qualities,” the firm wrote.

U.S. indictments against Chinese hackers include allegations of ‘crypto-jacking’ attacks
Michael McSweeney – The Block
U.S. prosecutors have indicted five Chinese nationals for their involvement in a wide-ranging cybercrime campaign that includes cryptocurrency mining malware attacks. The indictments, unveiled Wednesday, centers around “computer intrusions affecting over 100 victim companies in the United States and abroad.” Victims include government institutions, software companies, computing and telecom companies and “pro-democracy politicians and activists in Hong Kong” among many others. Two additional individuals were charged, per the Department of Justice statement.

Facebook-backed Libra appoints former HSBC exec to head cryptocurrency
Brenna Hughes Neghaiwi – Reuters
The Facebook-backed Libra project has appointed former HSBC European head James Emmett to lead Libra’s operational unit tasked with developing and operating the project’s cryptocurrency payments system, the Libra Association said on Thursday. The project has brought in a number of high-level hires since announcing a revamp and formally applying for a Swiss payments license in April, many of them specialised in financial compliance and with ties to U.S. government and authorities.

New Bitcoin Options App Raises $4.7M in Round Led by Pantera Capital
Sebastian Sinclair – Coindesk
A mobile bitcoin options trading platform set to launch this year has secured funding from some of the industry’s top-tier investors. PowerTrade raised $4.7 million via token sales in a round led by Pantera Capital and joined by Framework Ventures, CMS Holdings and QCP Capital among others. Prominent founders Kain Warwick of Synthetix, Loi Luu of Kyber Network and Bobby Ong of CoinGecko also participated. PowerTrade said in a press release it will offer low minimum deposits allowing traders access to crypto options for as little as $1.

Gibraltar Updates Distributed Ledger Guidance to Match FATF Crypto Rules
Sandali Handagama – Coindesk
The Gibraltar Financial Services Commission (GFSC) has updated its guidance notes for distributed ledger technology (DLT) providers, the regulator announced Thursday. The amended guidance now includes clarity on token issuances and recommendations for risk management. The GFSC has made considerable updates to seven out of the nine guiding principles on which the regulatory framework, launched in 2018, was set up.

Fresh reports of Indian crypto ban are ‘clickbait,’ says local source
Mohammad Musharraf – Cointelgraph
Local sources speculate on the possibilities of a cryptocurrency ban in India. The draconian bill introduced by the country’s former finance secretary Subhash Chandra Garg in 2019 to ban cryptocurrencies in India haunts the country’s crypto enthusiasts and entrepreneurs to this day. Reports from Bloomberg and the local news outlet Economic Times about the further development of the bill and the possible introduction of it as law has only caused more panic and anxiety within the crypto community.

China’s BSN to ‘Localize’ 24 Public Blockchains by Making Them Permissioned
David Pan – Coindesk
China’s state-sanctioned blockchain infrastructure project is finally bringing public chains to its Chinese users – but with a significant twist. The Blockchain-Based Service Network (BSN), a standardized internet services provider for decentralized applications (dapp) developers, plans to make 24 public chains available in its network for Chinese users starting from the second half of November, according to an internal memo obtained by CoinDesk.

Ethereum’s Pending Transactions Jump 30% After Uniswap’s Token Claim Begins
Wolfe Zhao – Coindesk
The number of pending transactions on Ethereum per minute has jumped 30% after the claim for Uniswap’s UNI token begins.
The decentralized trading platform announced around 00:30 UTC time Thursday that it has launched its governance token dubbed UNI with 1 billion coins that will be released over the next four years.


Trump Rebuts Doctors, Says Vaccine to Be Given Widely in October
Josh Wingrove, Riley Griffin, and Michelle Fay Cortez – Bloomberg
Fauci, CDC chief earlier said distribution would be in 2021; President says Redfield made a mistake in Senate testimony
A coronavirus vaccine could be distributed widely to the public as early as October, President Donald Trump said on Wednesday, contradicting statements by some of his top health officials that ranged from the end of March to the end of 2021. “What we’ve done with the streamlining” has “been incredible,” Trump said during a news conference.

Facebook Needs Trump Even More Than Trump Needs Facebook; Employees fear Zuckerberg’s commitment to free speech is more about protecting the president than the company’s ideals.
Sarah Frier, Kurt Wagner – Bloomberg
In late 2019, during one of Mark Zuckerberg’s many trips to Washington to defend Facebook in front of Congress, he stopped for a private dinner with Donald Trump and offered the president a titillating statistic. “I’d like to congratulate you,” Zuckerberg said. “You’re No.?1 on Facebook.”

Trump’s Promise to Revive Coal Thwarted by Falling Demand, Cheaper Alternatives; Production is declining at a faster rate than under Obama; still, many in the industry fear things would be even worse under Biden
Rebecca Elliott and Jonathan Randles – WSJ
John Hickman was filling out a coal production report about 2½ miles deep in a mountain when his foreman’s voice came over the intercom. “Stop mining,” the foreman instructed. “Bring the men out.”

Republican Lawmakers Raise Concerns About TikTok-Oracle Deal; Senators worry about continued involvement of video-sharing app’s Chinese owner
Katy Stech Ferek and Alex Leary – WSJ
op Republican lawmakers led by Sen. Marco Rubio of Florida are calling on the Trump administration to reject a deal for TikTok if it leaves strong ties between the video-sharing app’s Chinese owner and proposed partner Oracle Corp., ORCL -0.84% citing national-security interests.

China to Make Decision on WHO Vaccine Program Snubbed by Trump
Bloomberg News
Governments face Friday deadline to join global vaccine push; Distrust of China’s intentions could undermine its efforts
China faces a major test in its vaccine diplomacy, with a deadline fast approaching on whether it will officially join a World Health Organization-backed effort to ensure everyone across the globe is inoculated against Covid-19.

U.S. Sanctions Two Russians in $17 Million Cyber Currency Theft
Ari Natter – Bloomberg
The Trump administration announced it was sanctioning two Russian men for a phishing campaign that resulted in nearly $17 million in cyber currency theft. The pair — identified by the U.S. Treasury Department and the Department of Homeland Security as Danil Potekhin and Dmitrii Karasavidi — allegedly operated a phishing campaign in 2017 and 2018 that targeted two U.S.-based and one foreign virtual asset service provider and stole money from customers accounts, the agencies said in a press release.

Trump team vs the scientists: the battle over Covid ahead of election; Political operatives and public health officials spar over how to portray severity of pandemic
Kiran Stacey – FT
When a close ally of Donald Trump stepped down from his role at the US health department this week, it blew the lid open on simmering tensions between the president’s political operatives and public health officials in charge of the country’s coronavirus response.

Flutter hires anti-gambling campaigner Tom Watson as adviser; Owner of Paddy Power appoints Labour’s former deputy leader to improve handling of problem betting
Alice Hancock – FT
Flutter Entertainment, the betting group behind Paddy Power and Sky Bet, has appointed former Labour party deputy leader Tom Watson as an adviser to its board as the company seeks to improve its treatment of problem gambling.

What’s at Stake in This Election? The American Democratic Experiment; Congress should establish a bipartisan commission to monitor voting and ensure that laws and regulations are followed.
Dan Coats – NY Times
We hear often that the November election is the most consequential in our lifetime. But the importance of the election is not just which candidate or which party wins. Voters also face the question of whether the American democratic experiment, one of the boldest political innovations in human history, will survive. Our democracy’s enemies, foreign and domestic, want us to concede in advance that our voting systems are faulty or fraudulent; that sinister conspiracies have distorted the political will of the people; that our public discourse has been perverted by the news media and social networks riddled with prejudice, lies and ill will; that judicial institutions, law enforcement and even national security have been twisted, misused and misdirected to create anxiety and conflict, not justice and social peace.


CFTC Charges 4 Florida Men, 1 New Jersey Man, and Their Companies in $4.75 Million Forex Ponzi Scheme
CFTC Secures Federal Court Ruling Freezing Assets
The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the United States District Court for the Middle District of Florida against 10 defendants in a multi-level $4.75 million off-exchange foreign currency (forex) Ponzi scheme.

CFTC Charges Texas Man with Misappropriating Over $8.3 Million In Customer Funds;Defendant Agrees to Liability, Federal Judge Issues Permanent Injunction and Orders Registration, Trading Bans
The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the United States District Court for the Western District of Texas charging David Seibert, a Lakeway, Texas resident, with fraudulently soliciting and misappropriating more than $8.3 million of participant funds that he lost in undisclosed trading of commodity interests.

FCA publishes Decision Notice against Corrado Abbattista for market manipulation
The FCA has published a Decision Notice in respect of Corrado Abbattista, an experienced trader and a portfolio manager, partner and Chief Investment Officer at Fenician Capital Management LLP, for market abuse, imposing a financial penalty of £100,000 and prohibiting him from performing any functions in relation to regulated activity.

ASIC notes reporting changes;ASIC notes the decisions by the following companies:
As outlined in ASIC media release 20-157MR Focuses for financial reporting under COVID-19 conditions, asset values and lease accounting are focus areas for financial reporting at 30 June 2020. Where asset impairment or reduced performance is attributable in whole or part to significant factors not related to the COVID-19 pandemic, these factors should be disclosed and given appropriate prominence in addition to any significant COVID-19 factors. The focus areas also include liabilities and the current/non-current classification of liabilities.

Deloitte ordered to pay record £21m for Autonomy audit misconduct; Tribunal finds firm and two partners failed to act with integrity, objectivity or professional scepticism
Tabby Kinder – FT
Deloitte has been ordered to pay a record fine of £15m plus legal costs of £5.6m for committing serious misconduct when it audited Autonomy, a former FTSE 100 technology group at the centre of one of the UK’s biggest accounting scandals.

ESMA renews its Decision requiring net short position holders to report positions of 0.1% and above
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has renewed its decision to temporarily require the holders of net short positions in shares traded on a European Union (EU) regulated market to notify the relevant national competent authority (NCA) if the position reaches or exceeds 0.1% of the issued share capital. The measure applies from 18 September 2020 for a period of three months.

SEC Adopts Amendments to Enhance Retail Investor Protections and Modernize the Rule Governing Quotations for Over-the-Counter Securities
The Securities and Exchange Commission today adopted amendments to Exchange Act Rule 15c2-11, an important component of the over-the-counter (OTC) market regulatory structure. The amendments are designed to modernize the rule, which was last substantively amended nearly thirty years ago, including to recognize advances in communications technologies. The amended rule enhances disclosure and investor protection in the OTC market by ensuring that broker-dealers, in their role as professional gatekeepers to this market, do not publish quotations for an issuer’s security when current issuer information is not publicly available, subject to certain exceptions.

Investing and Trading

Bruised Branson Seeking $400 Million to Fund Next Business Foray
Crystal Tse and Christopher Jasper – Bloomberg
Entrepreneur founds blank-check firm to search out takeover; Move will test billionaire’s reputation after airline agonies
Richard Branson is on the hunt for his next big business opportunity after staving off a crisis in his empire of travel and leisure-focused companies hit hard by the coronavirus pandemic. Branson is inviting investors to buy shares of a listed shell firm, known as a special purpose acquisition company or SPAC, with the aim of later buying an existing business using proceeds from an initial public offering.

Brooklyn Museum to Sell 12 Works as Pandemic Changes the Rules; Museums selling their art has long been frowned upon, but recent financial pressures have sent works to the auction block at Christie’s. The proceeds would pay for the care of the collection.
Robin Pogrebin – NY Times
It is the kind of sale that once would have engendered criticism, perhaps even sanctions: The Brooklyn Museum is putting 12 works up for auction at Christie’s next month — including paintings by Cranach, Courbet and Corot — to raise funds for the care of its collection. But it is now completely within the parameters of loosened regulations, which are themselves a measure of just how financially damaging the coronavirus pandemic has been for cultural institutions.

Is the Fed Just Seeing Shadows—Or Should We Really Be Worried? Economic projections have improved considerably since the Fed last met, but its policy stance would suggest otherwise
Justin Lahart – WSJ
The economy is in better shape than the Federal Reserve thought it would be. Its policy makers aren’t celebrating. At the conclusion of their two-day meeting on Wednesday, they left rates near zero and indicated that they expect them to remain there through 2023. New economic projections showed how much the outlook has improved since rate-setters last offered up a forecast in June. Their median estimate now calls for gross domestic product to be 3.7% below its year-earlier level in the fourth quarter as opposed to 6.5% lower. And they now see the unemployment rate averaging 7.6% in the fourth quarter, rather than 9.3%.

Naturgy Is Said to Consider Liquefied Natural Gas Unit Sale
Rodrigo Orihuela, Dinesh Nair, and Jeannette Neumann – Bloomberg
Firm has approached potential suitors including Repsol; Interest has so far been lukewarm amid slumping gas prices
Naturgy Energy Group SA is weighing a sale of its liquefied natural gas unit, according to people familiar with the matter. The Spanish energy company has been approaching potential suitors, including industry peer Repsol SA, about a deal for the LNG assets since the first half of the year, the people said.

How Traders Use Google Searches to See the Economic Recovery in Real Time
Tracy Alloway and Joe Weisenthal – Bloomberg
The use of so-called “alternative data” has been gathering attention for some time. Investors have been looking at things like credit cards or satellite photos of Walmart parking lots for insights into businesses before earnings or official government numbers come out. But during this crisis, alternative data has really come into its own. The speed of the crash and recovery happened so fast, it was clear that traditional numbers weren’t timely enough to get a read on what was going on. On this episode, we speak with Ben Breitholtz of Arbor Data Science, who explains how he’s been able to monitor thousands of different categories of Google Search queries to know instantly when the recovery started to happen and what sectors of the economy were leading the way.

Market volatility brings vintage hedge fund strategy back to the fore; Managers see convertible arbitrage trades prospering in strong year for issuance
Laurence Fletcher – FT
One of the hedge fund industry’s oldest — and often least loved — strategies is making a comeback, helped by this year’s market turmoil.

Environmental, Social and Corporate Governance

Green Bonds Should Have Green Strings Attached; It’s cheap for governments and firms to raise cash via so-called green bonds. We need a framework that hurts in the wallet if green promises are broken.
Marcus Ashworth – Bloomberg
The bond market is finally finding its conscience. Egged on by investors, companies and countries are rushing to sell debt billed as helping to combat climate change or advance social goals. The impending arrival of the European Union in this area is an opportunity to address some of its early flaws.

After Oil: Throwing Money at Green Energy Isn’t Enough; Lots of stimulus funds are being directed to renewable technologies, but government policies will be more important.
Meghan L. O’Sullivan – Bloomberg
This is the last of three columns on the impact of Covid-19 on the energy transition. You can read the first and second parts here and here. The geopolitical and geo-economic forces wrought by the coronavirus pandemic, as examined previously in this series, are likely to slow the transition to a more sustainable global energy mix. Fortunately, the pandemic has also resulted in governments gaining vastly greater influence over whether this shift stalls or accelerates.

China Considers Stronger Clean Energy Goals For Next Five Years
Bloomberg News
Nation may bring forward goal of 20% from non-fossil fuels; Coal’s share of China’s energy mix could shrink again
China is mulling proposals to accelerate its adoption of clean energy as part of its next five-year plan that begins in 2021, as the world’s biggest polluter takes steps to reduce its emissions of greenhouse gasses.

An Oil Giant’s Case for Peak Demand, Even Without Climate Heroics; BP’s annual energy outlook sees consumption topping out in the next decade even in its most likely scenarios.
Nathaniel Bullard – Bloomberg
One of the biggest international oil companies has concluded that oil consumption will peak this decade. That’s the main takeaway from BP Plc’s annual energy outlook published this week outlining a handful of scenarios for the future of global fuel and electricity demand, and it’s a big admission in its own right. Even bigger is the way BP concludes it will happen: not because of aggressive policies aimed at reaching net-zero global greenhouse gas emissions by 2050, nor as a result of carbon prices or other interventions aimed at limiting global temperature rise to 2° Celsius over pre-industrial levels. No, BP says that even if energy policy keeps evolving at pretty much the pace it is today, oil demand will still start declining.


Blackstone Backs Algorithm-Led Insuring in $500 Million Deal
Lucca De Paoli – Bloomberg
Fully-digital Ki business to be launched in fourth quarter; It will perform work traditionally done by underwriters
Blackstone Group Inc. and billionaire Prem Watsa’s Fairfax Financial Holdings Ltd. are investing $500 million in an algorithm that could help transform the world’s oldest insurance exchange. The investment giants have thrown their backing behind an algorithm-driven insurance syndicate at Lloyd’s of London, according to a statement Thursday. The deal will fund the expansion of the business, called Ki, to be launched before the end of this year by Fairfax-owned Brit Insurance Holdings.

Deutsche Bank NYC-Area Employees Can Stay Home Until Mid-2021
Daniel Taub and Sonali Basak – Bloomberg
Deutsche Bank AG told its New York City employees that they can continue working from home until mid-2021, in contrast to rival banks that are seeking to return staffers to offices. Workers in New York, New Jersey and Connecticut “face the continuing balancing of your work and your children’s sporadic school schedule” as well as concerns about public transportation, cleanliness and quality-of-life issues amid the Covid-19 pandemic, the German bank said in a memo to staff. Employees can keep working at home until July, when the company plans to leave its 60 Wall St. offices for new headquarters on Manhattan’s Columbus Circle.

The incredibly shrinking banking sector is heading for near-record job losses this year
Nicholas Comfort – Bloomberg
Job losses at banks this year are on course to be the deepest for half a decade. After a pause during lockdown, lenders from Citigroup to HSBC Holdings have restarted cuts, taking gross losses announced this year to a combined 63,785 jobs, according to a Bloomberg analysis of filings. That puts the industry on track to exceed the almost 80,000 disclosed last year, the biggest retrenchment since 2015.

Goldman CEO Shops His Sprawling Aspen Estate as Rich Flee Cities
Sridhar Natarajan – Bloomberg
The Colorado property has estimated value of about $25 million; Wealthy buyers seek homes far from urban areas amid pandemic
David Solomon is taking another shot at unloading his expansive estate in the ski town of Aspen, Colorado, as wealthy Americans seek property away from urban areas. The Goldman Sachs Group Inc. chief executive officer is seeking to sell the 83-acre spread, with an estimated value of about $25 million, and has been speaking with potential buyers over the summer, according to people familiar with the matter. The property boasts a 13,000-square-foot (1,200-square-meter) wood-and-stone mansion and panoramic views of the Aspen upper valley.

H20 Asset Management writes down Windhorst bonds by 60%; Illiquid securities had caused the Natixis subsidiary’s funds to be suspended last month
Cynthia O’Murchu – FT
Embattled fund manager H2O Asset Management has taken a 60 per cent writedown on the value of illiquid securities that recently caused its funds to be suspended.

BlackRock to jump on Hang Seng Tech Index bandwagon with new ETF; The iShares product is set to launch on Thursday and follows CSOP’s record-setting debut
Ysrael Dumasig – FT
BlackRock is set to launch a Hong Kong-listed exchange traded fund on Thursday that focuses on the new Hang Seng Tech Index, becoming the fourth fund provider to do so in the past few weeks.


Dubai, Tel Aviv to Boost Diamond Trade as UAE-Israel Links Grow
Verity Ratcliffe – Bloomberg
Diamond bourses to open reciprocal offices, promote sales; Deal adds to UAE, Israel business ties after diplomatic pact
Dubai and Tel Aviv, two of the world’s biggest diamond-trading hubs, agreed to share expertise, open reciprocal offices and promote regional trade in the precious stones. The United Arab Emirates’ Dubai Diamond Exchange will cooperate with the Israel Diamond Exchange in Tel Aviv, the Dubai government’s commodities authority DMCC said in a statement. The deal follows an agreement between the UAE and Israel to work toward establishing normal relations, which the countries signed in Washington D.C. on Sept. 15.

How China’s Interest Rate Toolbox Is Evolving and Why
Bloomberg News
The approaching demise of the discredited London Interbank Offered Rate (Libor) is prompting major central banks globally to create new benchmarks. The People’s Bank of China wants to elevate another key rate in the interbank market — the Depository-Institutions Repo Rate (DR) — to benchmark status, partly to align itself with the shift in international practices. While details are still limited, the idea has attracted financial market interest.

India Top Court Refuses to Resume Insolvency Case Against Ambani
Upmanyu Trivedi. – Bloomberg
India’s Supreme Court rejected a petition by State Bank of India, the nation’s largest lender, to allow a personal bankruptcy case against tycoon Anil Ambani to resume. A three-judge panel headed by Justice L. Nageswara Rao ruled that the bankruptcy case against the former billionaire will remain suspended and directed the Delhi High Court to decide on Ambani’s challenge to provisions of India’s insolvency law.

How to Keep the Lights On in California; Better power-market coordination could help cut electricity shortages
Jinjoo Lee – WSJ
As California keeps facing electricity shortages, the discussion around its grid often veers to extremes. On the one hand, some see it as a sign that the state has moved away too quickly from natural gas and nuclear power, which can run on command. Others see the heat waves and the tragic wildfires as further evidence that the state should move even faster toward a carbon-neutral future based on intermittent renewables. That misses some nuances.

Canary Wharf has a flood of new homes but only a trickle of returning workers; Prices and sales have fallen in the London financial district and bankers and lawyers are staying away
George Hammond – FT
In normal times, the queue for trains at the cavernous Canary Wharf Tube station can wind all the way out into the open air. Not so now. “Since the middle of March, Canary Wharf has been a ghost town,” says Andrew Griffith, managing director of estate agent MyLondonHome, and one of 120,000 people who work in Canary Wharf.


EU shouldn’t ‘fall into trap’ by ending Brexit talks now, France says
The EU is right to continue talking to Britain for now, and should not overreact to British tactics that could be aimed at pushing Brussels to break off negotiations over a Brexit trade deal, France’s European affairs minister said on Thursday.

Biden says US trade deal hinges on UK ‘respect’ for Good Friday Agreement
The Democratic candidate said any UK-US trade deal had to be “contingent” on respect for the Good Friday Agreement.
Foreign Secretary Dominic Raab has been trying to reassure US politicians about the latest Brexit developments during a trip to Washington.
US Secretary of State Mike Pompeo said he trusted the UK to “get this right”.

Brexit: A compromise maybe but No 10 is not backing down
Laura Kuenssberg – BBC
The lesser-spotted prime minister has been seen doing the rounds with backbenchers in the House of Commons in the last few days. During his time in office that hasn’t happened that often, even excusing the restrictions on our lives that saw Parliament’s normally buzzing corridors fall silent. But recently Boris Johnson has been talking avidly to some of the occupants of his backbenches to try to avoid a rebellion next week.

Brexit freight system ‘won’t be ready on time’
A new freight management system will not be ready when the EU transition period ends, an industry body has warned. The Smart Freight system, which is seen as vital for preventing delays after the Brexit transition on 1 January, will only be in a beta – or test – version. But the government insists it will be a fully operational digital service. It has reassured industry that the system will be operational by December. The Smart Freight system ensures that trucks are carrying the correct documentation before they travel to ports.

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