First Read

Dodd-Frank in Crosshairs as Law’s Opponents Take Power; About 80% of rules mandated by 2010 law have been drafted or finalized. What happens next?
By RYAN TRACY – WSJ
The Dodd-Frank financial overhaul is one of the longest and most complex laws in U.S. history, spurring hundreds of new rules affecting every corner of the financial system. For six years, it has reshaped the market for everything from ATM cards to credit-default swaps.
/goo.gl/D37bzE

**JK: What will cost more, repeal or keep?

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Bankers in Davos See Trump’s Team Making Wall Street Great Again
by Michael J Moore and Yalman Onaran – Bloomberg
Dodd-Frank repeal not anticipated, seen as unnecessary; Loosening capital, liquidity rules among main banker goals
Wall Street’s high-flyers in Davos, basking in their firms’ strong fourth-quarter earnings, said they’re confident Donald Trump’s incoming administration will loosen regulatory constraints on financiers — even if it leaves Obama’s signature Dodd-Frank Act largely intact.
/goo.gl/vULZ2t

**JK: I wonder how hard it must be for Michael Moore at Bloomberg to cover Wall Street.

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HKEX lays out its 2017 work plan
HKEX
Improvements to the listing regime, an expansion of the Connect scheme, new products and enhanced platforms are the four themes of Hong Kong Exchanges and Clearing Limited’s (HKEX) key initiatives in 2017, according to a presentation today by Chief Executive Charles Li at the bourse operator’s annual media lunch.
/goo.gl/Qg4H0p

**JK: Charles Li making moves.

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How Space Could Trigger a Future Economic Crisis
By Mark Gilbert – Bloomberg
A report published in the journal Space Weather this week makes for sobering reading. In four scenarios envisaging the economic impact of a solar storm, the mildest triggers a daily loss to the U.S. economy of $6.2 billion, or 15 percent of daily output; the worst case sees a cost of $41.5 billion, wiping out every dollar the world’s largest economy generates each day.
/goo.gl/SVNgkK

**JB: I just read of a proposed NASA mission to a metal asteroid deemed to be worth $10 quintillion (not a typo) if the metal was sold at today’s market prices (it’s about the size of Massachusetts so we won’t be bringing it back anytime soon).

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London Banker Stakes Claim in Ancient Mining Area on Lithium Bet
by Thomas Biesheuvel and Jesse Riseborough – Bloomberg
Investec’s Wrathall secures exploration rights in Cornwall; Lithium demand has surged as electric-vehicle sales increase
A London banker has joined the rush for one of the world’s hottest metals by staking a claim in an ancient U.K. mining region.
/goo.gl/ObZeyL

**JK: The reality shows about gold are lousy. I’m not getting a great vibe about a lithium rush show, but our phones depend on it.

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StockTwits swallows finance app SparkFin in pursuit of millennials
Jennifer Van Grove – San Diego Union Tribune
StockTwits, an 8-year-old Twitter-like social network for trading enthusiasts, has acquired San Diego-based finance startup SparkFin.
/goo.gl/dKiCGd

**JK: StockFin? No. SparkTwits? No. TwitsFin? No. Let’s move on.

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An open letter to Trump from the US press corps
Kyle Pope – Columbia Journalism Review
In these final days before your inauguration, we thought it might be helpful to clarify how we see the relationship between your administration and the American press corps.
jlne.ws/2iCxMgW

**JK: We have a new space for you, Mr. Pope. It’s a bit off the White House campus but you’ll do just fine over there.

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Wednesday’s Top Three
Gotta love Bloomberg’s Matt Levine. He’s got an interesting take on Citadel in our top read piece from Tuesday, Fast Trader Pulled a Fast One on Some Customers. Second went to Fortune’s piece Departing SEC Chair Mary Jo White Blasts Congress on Way Out the Door. Third went to the Bloomberg essay A Warning to Trump From Friedrich Hayek

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MarketsWiki Stats
92,499,715 pages viewed; 22,311 pages; 203,271 edits
MarketsWiki Statistics

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Lead Stories

Deutsche Börse launches joint blockchain collateral project; Deutsche Börse will partner with members of the Liquidity Alliance on a blockchain offering targeting cross-border collateral management.
By Paul Walsh – The Trade
Deutsche Börse is launching a blockchain technology initiative targeting cross-border mobilisation of security collateral, having teamed up with four members of the Liquidity Alliance (LA), an international group of central securities depositories (CSDs).
/goo.gl/895dEs

Digital Asset’s New Challenger: DLT Disillusionment
Michael del Castillo – CoinDesk
Stakeholders at one of the first mainstream financial institutions to build with distributed ledger technology (DLT) are beginning to doubt its promise.
jlne.ws/2iCNFnt

The CEO of the world’s largest hedge fund says populism is now No. 1 market concern
Matt Clinch – CNBC
The rise of populism across developed nations is now more important than central banks for global market participants, Ray Dalio, the founder and co-chief investment officer at Bridgewater Associates, said Wednesday.
/goo.gl/ukDgs6

FINRA Reports on Potential Implications of Blockchain; Seeks Comment
FINRA
Financial Industry Regulatory Authority (FINRA) today issued a report that discusses the use and implications of DLT in the securities industry. The paper also seeks comments as part of an effort to obtain feedback on any challenges associated with the use and implementation of DLT.
/goo.gl/owCcRt

Enforcement Chief to Step Down at Financial Derivatives Regulator
By BEN PROTESS – NY Times
One of the Obama administration’s few remaining Wall Street enforcers is stepping down. Aitan Goelman, head of the Commodity Futures Trading Commission’s enforcement division, announced his departure on Wednesday during a broad exodus of prosecutors and regulators in the Obama administration’s final days.
/goo.gl/0mZrVk

SEC, DOJ fine State Street Corp $64 million for secret commission fraud
By Francine McKenna – MarketWatch
State Street Corporation, the Boston-based global financial services company, will pay a $32.3 million criminal penalty and an additional equal amount to the SEC to resolve the government’s investigation into a scheme to defraud at least six of the bank’s clients through secret commissions, according to the Department of Justice.
/goo.gl/9nWYD5

Dimon Says Euro Zone May Not Survive If Concerns Are Ignored
by Hugh Son and Sonali Basak – Bloomberg
‘What went wrong is going wrong for everybody,’ Dimon says; CEO says worries over Trump trade comments appear overblown
The euro region could break up if political leaders don’t get to grips with the discontent that’s spurring support for populist leaders across the continent, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said.
/goo.gl/WikANk

Wall Street Meets May in Davos as Banks Plan Own Brexit
by Stephen Morris, Michael J Moore , and Simon Kennedy – Bloomberg
U.K. leader to hold private CEO meeting after speech; International banks increasingly discuss plans to move staff
U.K. Prime Minister Theresa May may find a skeptical audience when she meets the leaders of the global finance industry on Thursday as they push ahead with their own plans for Brexit.
/goo.gl/6tQC2k

World temperatures hit new high in 2016 for third year in a row
Alister Doyle – Reuters
World temperatures hit a record high for the third year in a row in 2016, creeping closer to a ceiling set for global warming with extremes including unprecedented heat in India and ice melt in the Arctic, U.S. government agencies said on Wednesday.
jlne.ws/2iCuGK1

Bad Explanations for the Financial Crisis Won’t Die
Barry Ritholtz – Bloomberg
Sometimes, when you lose a debate, you have to just let it go. That seems to be a problem for those who are unwilling to accept the complex realities of what actually caused the financial crisis. I have been saying for a long time that many elements contributed to the global financial meltdown. From ultralow rates to misaligned incentives to radical deregulation to changes in the business models of the credit-rating companies to plain old bad decision-making by homebuyers — the list is long.
jlne.ws/2iCxs1y

Former Lehman CEO Fuld Emerges as Backer of Wealth-Advisory Firm
Miles Weiss – Bloomberg
Richard Fuld is backing a multifamily office that will help small-business owners manage their personal wealth, part of a comeback effort by the former head of failed investment bank Lehman Brothers Holdings Inc.
jlne.ws/2iCANxQ

How to beat a high frequency trader
The Reformed Broker
The madness around trading the tweeting of Trump has jumped the tracks and landed itself among ordinary investors across the country. The new game seems to be trying to anticipate which industry he’ll target next and somehow make money from the volatility in the related stocks. Or, perhaps worse, to trade the reaction after a tweet hits home. The naïveté here is adorable.
jlne.ws/2iCJmZE

CLSA chief slams regulators on research
By: Chris Wright – Euromoney
Jonathan Slone argues regulators are damaging the agency broking model and not helping the clients they intend to help.
/goo.gl/Cekmzo

BIS accused of pushing staff to back ‘house view’ on low rates; ‘Central bankers’ bank’ pressed researchers to deliver certain findings, says report
by: Ralph Atkins in Zurich – FT
The Bank for International Settlements, which provides advice to the world’s central banks, has been accused of putting pressure on research staff to back its controversial warnings about the dangers of historically low interest rates.
/goo.gl/71Vp26

Brussels races to amend rules that sting pension industry; EU derivatives rules scheduled for 2018 set to strain occupational schemes
by: Jim Brunsden in Brussels and Philip Stafford in London – FT
Brussels is seeking to defuse a regulatory time-bomb facing Europe’s pensions as the retirement industry warns that EU derivatives reforms scheduled for 2018 could cost savers billions.
/goo.gl/CMmOR4

Stock exchange bosses seek to reassure German politicians over London legal HQ
William Turvill – City AM
London Stock Exchange and Deutsche Boerse bosses this week began a push to convince German politicians of the merits of their merger and soothe concerns around the legal headquarters being based in the UK.
/goo.gl/oCrt2I

Brexit

HSBC, UBS to shift 1,000 jobs each from UK in Brexit blow to London
Pamela Barbaglia – Reuters
Two of Europe’s biggest banks warned on Wednesday that they could each move about 1,000 jobs out of London as they prepare for expected disruption caused by Britain’s exit from the European Union.
jlne.ws/2iCmlWq

It’s complicated! Don’t view Brexit as hard or soft: S&P
Kirsten Donovan – Reuters
Brexit should not be viewed in terms of ‘hard’ or ‘soft’ but rather as a complicated process of redistributing sovereignty, S&P Global’s chief economist said on Wednesday.
jlne.ws/2iCrPAC

Brexit is only the beginning
Matt O’Brien – Washington Post
Damn the torpedoes, full Brexit ahead. That, more or less, was what British Prime Minister Theresa May had to say on Tuesday about her plan to take the country out of the European Union. There will be no compromises. Britain will not try to stay in Europe’s Single Market, and only on a limited basis in its Customs Union. It will instead try to negotiate new free trade deals with Europe, and the rest of the world for that matter.
jlne.ws/2iCvcr9

Goldman could move up to 1,000 London staff to Frankfurt -Handelsblatt
Reuters
Goldman Sachs is considering moving up to 1,000 staff from London to Frankfurt because of concerns over Britain’s vote to leave the European Union, Germany’s Handelsblatt newspaper reported on Thursday, citing financial sources.
jlne.ws/2iCPqRP

Equivalence offers the best hope for a UK-EU markets deal; An alternative to passporting will help avoid a ‘lose-lose’ outcome for both sides
Markets Insight
by: Anthony Belchambers – FT
In her much-trailed speech, Theresa May, the UK prime minister, confirmed that she would be negotiating for a clean Brexit.
/goo.gl/ob7gSX

Exchanges, OTC and Clearing

SGX reports 2Q FY2017 net profit of $88 million
SGX
2Q FY2017 Financial Summary – Revenue: $200 million, up 3% from a year earlier; Operating profit: $102 million, up 5%; Net profit: $88 million, up 5%; Earnings per share: 8.2 cents, up 6%
Interim dividend per share: 5 cents, unchanged
Singapore Exchange (SGX) today reported net profit of $88.3 million ($83.7 million) for 2Q FY2017, an increase of 5% from a year earlier, with revenue rising 3% to $199.6 million ($194.6 million) and expenses unchanged at $97.2 million ($97.1 million). Earnings per share was 8.2 cents (7.8 cents) and the Board of Directors has declared an interim dividend of 5 cents (5 cents) per share, payable on 6 February 2017.
/goo.gl/mt0G0s

MGEX Reports 3rd Best Daily Volume Record
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), continued its streak of high daily volume on Tuesday by reporting its 3rd-best daily volume of all time, with 24,457 contracts traded.
jlne.ws/2iCsqCs

Deutsche Bourse turns to fintech partners to build ‘Exchange 4.0’
Finextra
Deutsche Bourse is promising to cooperate with fintech firms and tap new technologies such as big data, AI and, above all, blockchain as it moves toward the creation of an ‘Exchange 4.0’, says CEO Carsten Kengeter.
jlne.ws/2iCENyb

EEX To Extend Power Offering To Floor Futures As Well As Swiss Day And Weekend Futures
Press Release
EEX will extend its product suite in European power derivatives with exchange trading and trade registration for German Intraday Floor Futures on 15 March 2017.
jlne.ws/2iCS7CE

New trading participant at SIX Swiss Exchange
SIX
With Market Wizards B.V. the first new trading participant in 2017 enjoys the advantages of the most cutting-edge trading technology.
/goo.gl/6AUnLw

Nasdaq opts for SIX clearing services; Nasdaq Nordic signs up for SIX’s clearing service, x-clear, for its cash equities markets.
By Hayley McDowell – The Trade
Nasdaq Nordic has confirmed it will use SIX Securities Service’s x-clear for clearing its cash equities markets from February this year.
/goo.gl/ldym7O

Bank of Cyprus Holdings List on London Stock Exchange: Landmark for Country’s Biggest Bank
London Stock Exchange Group
Bank of Cyprus Holdings successfully lists EUR1.4 billion business in London; Listing secures access to a new and diverse investor base; Reinforces London’s status as a leading global financial centre
London Stock Exchange welcomes Bank of Cyprus Holdings (‘BOC Holdings’) to trading on the Main Market today as the banking group, with a EUR1.4 billion market capitalisation, successfully completed its London listing. The listing is expected to improve the liquidity of BOC Holdings’ shares and lead to a broader base of investors.
/goo.gl/TD0toL

A. Single Stock Futures: Introduction of four SSFs; B. Single Stock Dividend Futures: Introduction of one SSDF; C. Equity options: Introduction of one equity option due to corporate actions
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Zürich AG took the following decisions with effect from 23 January 2017:
/goo.gl/7xqMsT

Politics

Repeal of liquidation tool would be a major unnecessary error
Lawrence Summers – Financial Times
Inevitably, Congress has more attractive uses for new funds than it has sources of new funds, so there is always is a desperate search for “pay-fors” — measures that are scored by the Congressional Budget Office as raising revenue or reducing outlays and thus can be used to finance new initiatives.
jlne.ws/2iCAwe8

Tom Price’s Dubious Trades in Health Care Stocks
Editorial Board – NY Times
Even before Tom Price became President-elect Donald Trump’s nominee to head the Department of Health and Human Services, he played a big role in shaping health policy in the House. He also frequently traded health care stocks, raising questions about whether he used his position in Congress for personal profit.
jlne.ws/2iCDOyc

Tom Price Just Contradicted Trump Team’s Defense Of His Questionable Stock Trades; Trump’s pick for HHS secretary admitted he, not an independent financial adviser, chose to buy stock in a biotech firm.
Paul Blumenthal – The Huffington Post
Rep. Tom Price (R-Ga.), President-elect Donald Trump’s nominee to head the Department of Health and Human Services, admitted on Wednesday that he decided to buy stock in an Australian biotech firm after receiving information from Rep. Chris Collins (R-N.Y.), a board member of that company.
/goo.gl/1qsvWD

‘Clinton Cash’ Book Got Most of Its Funding From One Hedge Fund Star
by Zachary Mider – Bloomberg
Mercer Family Foundation gave $1.7 million to GAI in 2015; Group founded by Bannon paid author of anti-Clinton book
The nonprofit group behind the bestseller “Clinton Cash,” whose investigation of dealings by Hillary Clinton and her family furnished ammunition for Donald Trump in last year’s presidential campaign, got two-thirds of its funding from a single hedge-fund manager.
/goo.gl/4RbRkx

Trump’s government: the people who will matter for markets; The spotlight will be on the new president but other figures will also command investors’ attention
by: Joe Rennison and Robin Wigglesworth – FT
Donald Trump has had a significant effect on stock and bond markets before even taking office. The billionaire will once again capture the spotlight during his inauguration on Friday but he is not the only figure in the incoming administration who will matter to financial markets.
/goo.gl/LOrs81

Investing and Trading

The Illusions Driving Up US Asset Prices
Robert J. Shiller – Project Syndicate
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
jlne.ws/2iCKexd

‘Why Does the Stock Market Have Pre-Market and After-Hours Trading?’
By NEIL IRWIN – NY Times
Ask The Times, a Times Insider feature, draws on New York Times expertise to answer questions about current events, science, sports, culture and whatever else is making headlines.
/goo.gl/pK3zd3

A hot new hedge fund expects ‘hundreds of billions of dollars’ in tech deals
Rachael Levy – Business Insider
A hot new hedge fund says the tech industry is up for a wave of deals worth billions of dollars — and it is betting big on companies that could benefit.
/goo.gl/aBzrkB

Institutions

Goldman Sachs Weighs Deep London Cuts amid Brexit Concerns; Goldman Sachs is weighing plans to halve its London staff to 3,000 and transfer key operations to New York and the European continent, particularly Frankfurt.
By Katharina Slodczyk – Handlesblatt
Goldman Sachs is weighing plans to halve its London staff to 3,000 and transfer key operations to New York and the European continent, particularly Frankfurt, according to Handelsblatt’s financial sources.
/goo.gl/nSoqHi

Goldman May Cut London Staff by 50% on Brexit, Handelsblatt Says
by Dakin Campbell – Bloomberg
Firm says no decision has been made, doesn’t recognize figures; As many as 1,000 employees may move to Frankfurt, paper says
Goldman Sachs Group Inc. may cut its London staff in half to 3,000 workers while transferring some to other locations as it prepares for the U.K.’s exit from the European Union, Handelsblatt reported, citing unidentified people in the financial industry.
/goo.gl/2yvVtM

Bankers at Davos discuss plans to move jobs out of UK; May’s Brexit speech seems to have bolstered need to relocate some operations
by: Martin Arnold in Davos and Ben McLannahan in New York – FT
If this week’s speech by Theresa May on her Brexit plans was designed to reassure the City of London and stop banks from shifting jobs out of the UK, early indications are that it appears to have failed.
/goo.gl/hu616n

Wall Street’s animal spirits make a comeback
Ben McLannahan and Alistair Gray – Financial Times
Demonstrators were camped outside Goldman Sachs’ headquarters in Lower Manhattan for a second day on Wednesday, as the investment bank unveiled its fourth-quarter earnings. Some were dressed in monster masks, protesting over the slew of appointments of senior Goldman people to the new government of Donald Trump — in spite of his campaign-trail pledge to “drain the swamp”.
jlne.ws/2iCraz7

Discount Brokerages to Donald Trump: Keep Tweeting
Michael Wursthorn – WSJ
Discount brokerages are hoping President-elect Donald Trump keeps things interesting with his tweets after he takes office. In the weeks since Mr. Trump’s election, discount brokerages have seen a jump in trading activity among their clients—day traders and mom-and-pop investors, among others—pushing commission revenue higher at time when brokerages have struggled to boost trading fees.
jlne.ws/2iCwUJg

Dimon Says Euro Zone May Not Survive If Concerns Are Ignored
Hugh Son and Sonali Basad – Bloomberg
The euro region could break up if political leaders don’t get to grips with the discontent that’s spurring support for populist leaders across the continent, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said.
jlne.ws/2iCtXIR

JPMorgan to Pay $55 Million to Settle Mortgage Discrimination Complaint
By MICHAEL CORKERY – NY Times
JPMorgan Chase has agreed to pay $55 million to settle an investigation into whether it charged thousands of African-American and Hispanic borrowers higher interest rates on mortgages than white customers.
/goo.gl/l5p46C

Fed officials prepare ground to cut bank’s $4.5tn balance sheet
Sam Fleming and Robin Wigglesworth – Financial Times
Having taken two tentative steps towards more normal levels of interest rates, Federal Reserve policymakers are preparing to debate an even more fraught undertaking: paring back the vast holdings of securities they amassed when battling the financial crisis.
jlne.ws/2iCxFSo

Robo-advisor Wealthfront diversifies with stock selling service
Anna Irrera – Reuters
Wealthfront, one of the earliest and largest online investment management startups known as “robo-advisors,” is launching a free automated service that will let employees of listed firms sell stocks in their companies.
jlne.ws/2iCq2eU

Minneapolis Fed unveils institute to aid fiscal policymakers
Jason Lange – Reuters
The Federal Reserve is launching a research institute to generate ideas elected officials might use to help more Americans benefit from a growing economy, Minneapolis Fed President Neel Kashkari said on Wednesday.
jlne.ws/2iCxgj8

How David Einhorn’s hedge fund is positioning for a Trump presidency
Mark DeCambre – MarketWatch
With a Trump presidency rapidly bearing down on Wall Street, market participants are scrambling to get in position for at least the next four years. David Einhorn is prepared for a few scenarios including the possibility of a recession.
jlne.ws/2iCwBy6

How Does Your Fund Value Illiquid Assets?
Jeff Brown, US News & World Report via Yahoo
In December, Pacific Investment Management Co., best known as Pimco, agreed to pay nearly $20 million to settle claims by the Securities and Exchange Commission that the firm misled investors in its Pimco Total Return Active ETF bond fund (ticker: BOND).
jlne.ws/2iCLuk2

Mizuho Bank integrates Thomson Reuters’ FX trading; Japanese bank adopts Thomson Reuters FX Trading platform due to diverse order methods.
By Hayley McDowell – The Trade
Mizuho Bank in Japan has adopted Thomson Reuters’ next generation FX trading desktop into its trading business.
/goo.gl/MTCkVg

Post-Trump Bump Fades for Discount Brokers; Shares of Charles Schwab and TD Ameritrade have flattened recently.
By Avi Salzman – Barron’s
Reality has dampened some of the enthusiasm around discount online brokers like Charles Schwab and TD Ameritrade, stalling the momentum from the Trump Bump they received after the election.
/goo.gl/eOjvHF

Deutsche Bank Says Job Cuts Will Continue
by Stephen Morris , Ambereen Choudhury , and William Canny – Bloomberg
Global markets said to make reductions as soon as this week; In parts of IB, as many as 20% of staff may be affected
Deutsche Bank AG told some employees on Wednesday that job cuts will continue even after Germany’s largest lender slashed bonuses for senior staff, according to a person with knowledge of the discussions.
/goo.gl/XNLWM6

UBS Said to Mull Moving London Investment Bankers to Madrid
by Jan-Henrik Foerster and Maria Tadeo – Bloomberg
Spain said to be among several Brexit options explored by UBS; ‘We will definitely have to move’ some people, Orcel said
UBS Group AG is considering moving investment bankers from London to Madrid as the U.K. prepares for a clean break with the European Union, according to a person with knowledge of the matter.
/goo.gl/LyTSfP

Barclays ‘Done With Massive Layoffs’ Once Non-Core Unit Closed
by Nicholas Comfort – Bloomberg
U.K. bank is winding down and selling capital-intensive assets; Core bank did a ‘good job in 2016,’ CEO Jes Staley says
Barclays Plc’s will have completed large-scale job cuts after closing a unit housing unwanted assets this year, according to Chief Executive Officer Jes Staley.
/goo.gl/Gf1fQ2

Fintech

‘Liquidity Alliance’ builds blockchain solution for cross-border collateral transfer
TMX
Four international CSDs develop a Blockchain prototype in cooperation with Deutsche Börse; Targeted ‘LA Ledger’ solution to provide fast and efficient mobilisation of collateral
Four members of the ‘Liquidity Alliance’ (LA), an international group of central securities depositories (CSDs), are cooperating with Deutsche Börse to launch an initiative leveraging blockchain technology to ease cross-border mobilisation of security collateral. With the planned solution, The Canadian Depository for Securities Limited (CDS), Clearstream (Luxembourg), Strate (South Africa) and VPS (Norway) want to overcome existing hurdles when moving collateral across various jurisdictions, making the transfer faster and more efficient.
/goo.gl/lvBcnm

SEC Panelists on “Astonishing” But “Not Very Sexy” Blockchain: Achieving Network Effect Will Produce Winners
Milt Capps – Bitcoin Magazine
Distributed Ledger Technology (DLT) is recognized as amazing to some and potentially valuable to many others in the financial services sector, according to various panelists in the Fintech Forum of the U.S. Securities and Exchange Commission (SEC), held November 14.
jlne.ws/2iCLyAo

Report on Distributed Ledger Technology: Implications of Blockchain for the Securities Industry
FINRA
Comment Period Expires: March 31, 2017
This paper provides an overview of distributed ledger technology, highlights some key applications being explored in the securities industry and potential impact of the technology, and discusses key implementation and regulatory considerations for broker-dealers.
/goo.gl/saBX8Z

Ineffective governance of blockchain could see increased vulnerability; FINRA has published report on the implications of blockchain and claims mismanagement could have severe consequences.
By Hayley McDowell – The Trade
Despite the distributed ledger technology (DLT) system being designed to establish a ‘trustless’ environment, unsuccessful governance could increase vulnerability in markets.
/goo.gl/jw39hd

FX swaps start-up LMRKTS in first fundraising; Fintech company is used by some of Wall Street’s biggest banks to tackle risk
by: Hannah Murphy – FT
A US financial technology start-up used by some of Wall Street’s biggest banks to remove risk in their currency derivatives portfolios is running a first fundraising to take its business to the rest of the swaps market.
/goo.gl/1SKaGf

Regulation

Lone Republican commissioner looks to head CFTC
Joe Rennison and Gregory Meyer – Financial Times
The sole Republican commissioner at the main US derivatives regulator has thrown his hat in the ring to be appointed the next chairman, even as he embraced aspects of financial reforms that Donald Trump’s team wants dismantled.
jlne.ws/2iCsxhv

Billion dollar banking fines hurt, and that’s good, but they won’t solve the problem of bankers’ bad behaviour
James Moore – The Independent
What are the implications for Royal Bank of Scotland, and perhaps Barclays, now that Deutsche Bank has finalised its $7.2bn (£5.8bn) penalty to settle US charges of mis-selling mortgage backed securities that played such an important role in the financial crisis of 2007/2008.
jlne.ws/2iCyH0M

New York Banking Regulator Attacks Federal Fintech Charter Plan
Donna Borak – WSJ
New York’s top banking regulator on Wednesday joined a growing chorus of critics attacking a federal government plan to help financial-technology companies expand by granting them national banking charters.
jlne.ws/2iCru12

U.S. regulator can sue banks over mortgage bond sales: appeals court
Nate Raymond – Reuters
A U.S. appeals court on Wednesday revived a lawsuit by the Federal Deposit Insurance Corp against five banks including Credit Suisse Group AG (CSGN.S) stemming from the sales of mortgage-backed securities ahead of the 2008 financial crisis.
jlne.ws/2iCNV69

U.S. Department of Labor says JPMorgan Chase paid women less than men
Reuters
The U.S. Department of Labor on Wednesday filed a lawsuit against JPMorgan Chase & Co claiming the bank engaged in pay discrimination against women.
jlne.ws/2iCHJuG

Sebi considers NSE, BSE plea on self-trading
Business Standard News
The Securities and Exchange Board of India (Sebi) is considering a plea by the stock exchanges to allow trading of their own shares under the ‘permitted-to-trade’ category. If allowed, shares of BSE will trade on the BSE
jlne.ws/2iCK0WU

Keynote Remarks of Chairman Timothy Massad at SEFCON VII
CFTC
What a difference elections can make. Eight years ago on this day I was taking the train to Washington to attend the inauguration of President Obama.
jlne.ws/2iCqslH

Keynote Address Of CFTC Commissioner J. Christopher Giancarlo Before SEFCON VII
Mondovisione
If you have followed my work as a CFTC commissioner for the past two and a half years – and even before that – you know that I publicly support the core reforms of Title VII of Dodd-Frank, namely swap data reporting and central counterparty clearing and registration of swaps dealers.
jlne.ws/2iCywTa

SEC, DOJ fine State Street Corp $64 million for secret commission fraud
Francine McKenna – MarketWatch
State Street Corporation STT, -0.06% the Boston-based global financial services company, will pay a $32.3 million criminal penalty and an additional equal amount to the SEC to resolve the government’s investigation into a scheme to defraud at least six of the bank’s clients through secret commissions, according to the Department of Justice.
jlne.ws/2iCEGCO

JPMorgan agrees to $55 million settle of mortgage discrimination complaint: source
Dena Aubin – Reuters
JPMorgan Chase & Co has agreed to pay $55 million to settle a U.S. Justice Department lawsuit accusing it of discriminating against minority borrowers by allowing mortgage brokers to charge them more for home loans, a person familiar with the matter said on Wednesday.
/goo.gl/dobt2X

SEC Deputy Chief of Staff Nathaniel Stankard to Leave Agency
SEC
The Securities and Exchange Commission today announced that Nathaniel Stankard, deputy chief of staff for policy, will be leaving the agency.
jlne.ws/2iCOyN7

General Counsel Anne K. Small to Leave SEC
SEC
The Securities and Exchange Commission today announced that General Counsel Anne K. Small will leave the agency later this month.
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Questions remain after EC publishes position limits rules; Market participants raise concerns about extraterritoriality and hedge exemptions, while regulators are tipped to struggle
Roberto Barros – Risk.net
The European Union’s contentious position limits rule contained in the second Markets in Financial Instrument Directive (Mifid II), moved a step closer to becoming law at the end of last year, when the European Commission (EC) published its final set of technical details. But energy firms remain frustrated by the lack of clarity around the rules, which were set out in a regulatory technical standard (RTS) on December 1, 2016. RTS 21 was broadly what market participants had been expecting, but industry…
/goo.gl/rJgGtz

Thomson Reuters Report On Regulatory Reform Heralds An ‘Uncertain Era Of Dismantling’ – Regulated Firms Should Make Full Use Of Regulatory Technology – Regtech – To Prepare For Rule Overhauls In The Uk, Us And Beyond
MondoVisione
Facing uncertain times, financial firms preparing for significant regulatory reforms this year are focusing on regulatory technology to help them respond quickly to the opportunities offered by change, according to Thomson Reuters annual report on the State of Regulatory Reform.
/goo.gl/DM4my5

Credit Suisse Resolves U.S. Mortgage Probe for $5.3 Billion
by Jeffrey Voegeli and Jan-Henrik Foerster – Bloomberg
Bank to pay $2.5 billion fine, $2.8 billion in consumer relief; Credit Suisse Group AG and the Justice Department completed a $5.3 billion agreement to settle a U.S. investigation into the bank’s sales of toxic mortgage debt before the financial crisis.
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SIFMA Comment on CAT Processor Selection
SIFMA
SIFMA today released the following statement from Randy Snook, executive vice president, business policies and practices, after the self-regulatory organizations (SROs) selected Thesys Technologies LLC to operate the Consolidated Audit Trail (CAT) system pursuant to the National Market System Plan mandated by the Securities and Exchange Commission:
/goo.gl/m48srJ

Regions

Oil and Trump: Russians full of optimism in Davos
Dmitry Zhdannikov and Sujata Rao – Reuters
What a difference a year makes. Twelve months ago, the mood of the Russian delegation at the World Economic Forum in Davos was distinctly gloomy, with oil prices near 12-year lows below $30 per barrel and Western sanctions depressing their economy and financial markets. Since then, however, Russian stock and bond markets have risen about 50 percent, boosted by rebounding oil and – more recently – expectations the new U.S. presidency of Donald Trump will ease the sanctions imposed over Moscow’s actions in Ukraine.
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Kenyan Stocks, World’s Worst This Year, Set to Fall Further
Adelaide Changole – Bloomberg
Kenyan stock prices at more than three-year lows may have further to fall with domestic investors favoring bonds and foreign buyers waiting for lower valuations, the head of the bourse said.
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US-China tensions rise, adding further pressure to the offshore yuan
Laura He – South China Morning Post
As US President-elect Donald Trump enters the Oval Office this week, tensions between China and the US have flared once again, adding further pressure to the offshore yuan and bringing a chill to Sino-US relations, analysts are warning.
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Asian Fixed Income: 2016 Pan Asia Report Card
Michele Leung – S&P Dow Jones Indices Indexology Blog
The S&P Pan Asia Bond Index, which seeks to track local currency bonds in 10 countries and is calculated in USD, continued to be weighed down by the weakness of local currencies in 2016, dropping 1.86% for the year.
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Canada central bank says interest rate cuts still on the table
Andrea Hopkins and Leah Schnurr – Reuters
An interest rate cut remains on the table if the risks facing the country are realized, the Bank of Canada said on Wednesday, warning there would be “material consequences” if U.S. President-elect Donald Trump enacts protectionist policies.
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Miscellaneous

U.S. begins patent probe of graphics processors, DDR memory controllers
Reuters
The U.S. International Trade Commission began a patent infringement probe on Wednesday after ZiiLabs Inc charged that several firms were importing products to the United States in violation of its patents on graphics processors and DDR memory controllers.
jlne.ws/2iCOxbJ

Gates charity to sell 60 million Berkshire shares, as Buffett urged
Jonathan Stempel – Reuters
The foundation created by billionaire Bill Gates and his wife Melinda plans to sell 60 million Class B shares of Berkshire Hathaway Inc (BRKa.N) donated by Warren Buffett, reflecting the fellow billionaire’ s desire that proceeds be spent on charitable works.
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Pearson CEO Stuck in ‘Last Chance Saloon’ Faces Investor Wrath
by Rebecca Penty and John Ainger – Bloomberg
Fallon to visit investors who now question his credibility; Shares drop most on record on U.S. education business slump
Pearson Plc Chief Executive Officer John Fallon faces the daunting task of securing support from skeptical shareholders after the company lost more than a quarter of its value in its worst-ever day of trading.
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