Hits & Takes
By JLN Staff
Congratulations to Dr. Thomas Book on his promotion to being the new CEO of the Frankfurt Stock Exchange, which really means he is now also responsible for the cash markets and market data. Michael Peters is an excellent choice to become CEO of Eurex. Also, Randolf Roth becomes responsible for the equity & index derivatives and client services at Eurex. They have a good team and deep bench, as these moves show.
Former JLN team member Doug Ashburn, who writes for T3 Custom, penned a piece for TD Ameritrade’s website titled “Black Swan Boot Camp: Option Trading Strategies in a Bear Market.” His co-author is Jayanthi Gopalakrishnan.
Kevin McPartland of Greenwich Associates has a paper out titled “The Impact of COVID-19 and Government Intervention on Swaps Market Liquidity.”
The great comedian and television writer and producer Carl Reiner has passed away at 98. He was Alan Brady on the Dick Van Dyke Show, which I watched every night in reruns as a kid. He was just fun to watch.
The musical Hamilton with its original cast will make the internet come to a screeching halt on Friday when it is broadcast on the Disney+ network. Be prepared to do something else on Friday that does not require the net.
Canada-based Learn-to-Trade is hosting a webinar with guest speaker William Gallwas on July 29, 2020. Gallwas is the president of Striker Securities, Inc. and an Elmhurst resident, which is why his webinar got this plug. He is also going to tell a story about “time travel” to explain the futures markets, which means he will run into Leo Melamed in “Back to the Futures.” To RSVP for the webinar, click HERE
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The Global Association of Central Counterparties (CCP12) has published a paper this morning on CCP resilience during the recent crisis. It describes the performance of clearing houses such as OCC during the recent market events. You can download the paper here. ~SR
The FIA is presenting a webinar on “Cross border clearing and market access: EMIR 2.2 and Brexit” on Wednesday, July 8 from 9:15 a.m. – 10:30 a.m. BST. Speakers will share their views on the upcoming equivalence approach, the potential impact of market fragmentation on global markets, and implications for the continued growth of derivatives clearing in Europe. It will be moderated by Bruce Savage, Head of Europe at FIA, and the speakers will be Andrea Beltramello, Member of Cabinet, European Commission; Robbert Booij, Chief Executive Officer, Europe, ABN AMRO; Emma Dwyer, Partner, Allen & Overy; Farida El-Gammal, Global Clearing Product Development, JP Morgan; and Julien Jardelot, Head of Europe Government Relations and Regulatory Strategy, LSEG. You can go here to register. ~SR
To all of our Canadian readers, happy Canada Day! ~JB
“There are no limits to the majestic future which lies before the mighty expanse of Canada with its virile, aspiring, cultured, and generous-hearted people.” ~Winston Churchill
Goldman Sachs: Mask mandate could save the U.S. from a 5% GDP hit
Thomas Franck – CNBC
A federal face mask mandate would not only cut the daily growth rate of new confirmed cases of Covid-19, but could also save the U.S. economy from taking a 5% GDP hit in lieu of additional lockdowns, according to Goldman Sachs.
Jan Hatzius, Goldman’s chief economist, said his team investigated the link between face masks and Covid-19 health and economic outcomes and found that facial coverings are associated with sizable and statistically significant results.
****The best thing everyone can do for the global economy is wear a mask, always.~JJL
Microsoft Aims to Train 25 Million Workers Free in 2020; Classes on LinkedIn, GitHub online platforms will teach skills for 10 in-demand jobs from project manager to software developer
Lauren Weber – WSJ
Microsoft MSFT 2.55% Corp. will provide free online classes and job-hunting resources to 25 million people by the end of the year as the global economy reels from the coronavirus pandemic.
*****A great way to jump start a career and the economy.~JJL
Apple’s Virtual Event Gives Hope for Online-Only Conferences in Covid-19 Era; Developers said they missed bumping into each other at in-person event, but that presentations were more efficient online
Euirim Choi – WSJ
The reviews are in for Apple Inc.’s first-ever online-only software conference: Virtual tech conferences can work. Apple’s Worldwide Developer Conference last week became a bellwether for the potential of corporate gatherings that take place exclusively online as the coronavirus pandemic makes physical conferences impossible.
*****There is hope, Charlie!~JJL
Tuesday’s Top Three
Our top story Tuesday was Robinhood is making more money per trade than rival brokerages as millennials rush into day-trading, from Business Insider. Second was ASX confirms one-year delay to DLT post-trade system, from The Trade. Third was CFTC Orders Illinois Firm to Pay $250,000 for Supervision Violations, from the CFTC, in which “Failure to Supervise Put Seniors’ Retirement Savings at Risk.”
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Dr. Thomas Book becomes the new CEO of the Frankfurt Stock Exchange
Deutsche Börse Group
Dr. Thomas Book was appointed by the Exchange Council of the Frankfurt Stock Exchange (FWB) as a member of the executive board. He will take over the chair of the FWB management board and will succeed Hauke ??Stars, who will leave Deutsche Börse on June 30 and leave the management board. Dr. Book has been with Deutsche Börse for 25 years and is responsible for the Trading & Clearing division on the Board. These include the derivatives exchange Eurex, Eurex Clearing, the currency trading platform 360T and the energy and commodity business of the EEX Group. From July 1st, the cash market with the Frankfurt Stock Exchange will be added. This means that all trading and clearing platforms of Deutsche Börse are combined in one department.
Eileen Murray Is Named to Lead Finra, Wall Street’s Self-Regulatory Arm; Former co-CEO of Bridgewater, the world’s largest hedge fund, is to start her new job in August
Micah Maidenberg – WSJ
Eileen Murray, the former co-chief executive of the world’s largest hedge fund, will take over as chairperson of Finra, Wall Street’s self-regulatory arm. Ms. Murray, 62 years old, was one of the investment industry’s highest-ranking female executives as co-CEO of Bridgewater Associates LP. In December, Bridgewater said Ms. Murray would step down as co-chief executive in March. She had shared the top job at Bridgewater with David McCormick since 2017.
Supreme Court Denies Defendants’ Challenge to CFTC’s Enforcement Authority
On Monday, June 29, 2020 the U.S. Supreme Court denied a petition for a writ of certiorari by the defendants in the CFTC’s anti-fraud enforcement action against Monex Deposit Company and its affiliated companies and principals. The defendants’ petition challenged the CFTC’s authority to bring enforcement cases against alleged fraud, an argument rejected last year by the U.S. Court of Appeals for the Ninth Circuit. [See CFTC Press Release No. 7984-19] The CFTC enforcement action, filed in 2017, charged the defendants with defrauding thousands of retail customers out of hundreds of millions of dollars, while executing thousands of illegal, off-exchange leveraged commodity transactions. [See CFTC Press Release No. 7609-17]
Changes to the Executive Boards of Eurex and Eurex Clearing
Michael Peters appointed as new Chief Executive Officer of Eurex; Randolf Roth responsible for Equity & Index Derivatives and Client Services; Jonas Ullmann joins the Executive Board of Eurex
Jens Janka joins the Executive Board of Eurex Clearing; Eurex Frankfurt AG and Eurex Clearing AG are announcing changes to their Executive Boards.
Michael Peters will succeed Thomas Book as Chief Executive Officer of Eurex Frankfurt AG as of 1 July 2020. Peters has been Deputy CEO of the company since February 2016. Randolf Roth will take over responsibility for Equity & Index Derivatives. As part of the changes, Roth will also be responsible for Client Service Trading & Clearing. Jonas Ullmann will join the Executive Board as Chief Operating Officer, taking over Trading Design & Delivery. His responsibilities will include the further development of trading functionalities and ongoing trading operations.
OCC Names Jennifer Baum as New Chief Compliance Officer
OCC, the world’s largest equity derivatives clearing organization, today announced the promotion of Jennifer Baum, currently First Vice President, Regulatory Compliance, to Senior Vice President and Chief Compliance Officer. Baum will replace Joe Adamczyk, who has left OCC to pursue another opportunity. She will serve as a member of OCC’s Management Committee.
Cboe Global Markets Completes EuroCCP Acquisition, Plans to Launch Cboe Europe Derivatives in First Half of 2021
Cboe Global Markets
Acquisition brings together two pan – European organizations that have long championed competition, open access and clearing interoperability in Europe; Cboe plans to introduce a modern, vibrant pan – European derivatives market, launching futures and options on six key European equity indices in first half of 2021; Investor call scheduled for July 2 at 8:30 am ET to discuss Cboe’s pan – European derivatives strategy
Cboe Global Markets, Inc. (Cboe: CBOE), one of the world’s largest exchange holding companies, today announced it has completed its acquisition of EuroCCP, a leading pan-European equities clearing house. The acquisition paves the way for the planned launch of Cboe Europe Derivatives, a new Amsterdam-based futures and options market, in the first half of 2021, subject to regulatory approvals.
Deutsche Boerse Resolves Its Second Major Trading Outage of 2020
Lukas Strobl and John Ainger – Bloomberg
Stock exchanges from Frankfurt to Zagreb were down for hours; Bug-prone third-party software, now fixed, caused the halt
Deutsche Boerse AG’s electronic trading system was unavailable due to a technical glitch throughout Wednesday morning, the stock exchange’s second major outage this year, disrupting derivatives and stock markets in several central and eastern European countries and hampering bond sales in the region.
European exchanges reject calls for shorter trading day; Fund managers and banks say long hours are antisocial and unnecessary
Philip Stafford – FT
European stock exchanges have come out in opposition to a shortening of their opening hours, dealing a blow to fund managers and bankers pushing to curb some of the longest trading days in the world.
Chinese Oil Futures Draw More International Interest; Higher trading volumes and relative stability of Chinese oil prices this year have helped increase global appetite
Chong Koh Ping – WSJ
Foreign companies and investors are warming to Chinese oil futures, a boost to a project that Beijing hopes will boost the yuan’s appeal and loosen the dollar’s hold on global commodity pricing.
The great interruption continues; Leaders should now be asking how we create the strongest feasible recovery
Martin Wolf – FT
The IMF’s World Economic Outlook Update for June is not a cheerful document. Yet it does contain a cheerful point: the second quarter of 2020 should be the nadir of the Covid-19 economic crisis. If so, the challenge is to produce the best possible recovery.
New Survey on Derivatives Market Liquidity and COVID-19
ISDA has teamed up with Greenwich Associates to conduct a survey that explores the impact of the coronavirus pandemic on derivatives market liquidity. The survey investigates the causes of the liquidity disruption that occurred in March 2020, the scope and extent of the problem, and the impact of government intervention.
Fed Keeps Options Open on Yield Caps but Looks to Other Tools First; Officials aren’t in a hurry to announce plans on a possible strategy to cap yields with unlimited short-term securities purchases
Nick Timiraos – WSJ
The Federal Reserve is unlikely to cap short-term Treasury yields as part of its initial package of economic stimulus measures, instead reserving the option to cap yields later.
EU’s Barnier calls British financial market proposals ‘unacceptable’
Huw Jones – Reuters
British proposals to give the City of London access to the European Union are “unacceptable” because they seek to maintain the benefits of the single market without the obligations, the bloc’s chief Brexit negotiator Michel Barnier said on Tuesday.
Johnson warned by business on ‘hugely damaging’ no-deal Brexit; Letter signed by more than 100 company chiefs and entrepreneurs signals renewed concern over EU talks
Daniel Thomas – FT
More than 100 UK company chiefs, entrepreneurs and business groups have written to the prime minister warning that it would be “hugely damaging” to the economy if Britain leaves the EU without a deal at the end of this year.
How Everybody Learned to Love the Euro; The currency’s strength could be seen as a judgment on Europe’s handling of the coronavirus when compared with the U.S. and other parts of the world.
Marcus Ashworth – Bloomberg
The euro is at its strongest level for nearly two years on the European Central bank’s own official trade-weighted index, which compares it with a basket of other leading currencies. In the past, this would have been a serious worry for the world’s largest trading bloc. The continent, with Germany at the forefront, is heavily dependent on exports.
Hong Kong’s Future Will Now Be Made in China; New security law spells demise of the global financial center into a vault for the mainland.
David Fickling and Nisha Gopalan – Bloomberg
Hong Kong will never be the same again. With the passing of a national security law in Beijing on Tuesday that will overrule its cherisberghed autonomy, a city often defined by its differences with China is starting to look increasingly like part of the mainland. New crimes will be introduced allowing life sentences for acts of secession, subversion, terrorism, and collusion with external forces, alongside a national security coordination office and special panels of judges.
Bank Fraud Allegations Test Marijuana Business; Prosecutors allege scheme to disguise $100 million in cannabis product sales in a case that could have implications for industry
Rebecca Davis O’Brien – WSJ
On March 9, a German businessman named Ruben Weigand was arrested at Los Angeles International Airport, during a layover on his way to Costa Rica. In an indictment unsealed later that week, federal prosecutors in Manhattan charged Mr. Weigand with a single count of conspiracy to commit bank fraud, stemming from an alleged scheme to trick banks into processing more than $100 million in marijuana sales.
The All-or-Nothing Approach to Social Distancing Isn’t Working; “Just say no” isn’t always a winning public-health message. History shows a more accepting approach can still keep people safe from coronavirus.
Catesby Holmes – Bloomberg
After months in lockdown, many Americans are craving human contact, crowding into bars and joining parties or other large gatherings. The standard rules to prevent Covid-19—wear a mask and stay at least six feet apart—are being flouted, even as cases spike across the U.S. and the World Health Organization warns the worst is yet to come.
Fauci: US ‘going in wrong direction’ in coronavirus outbreak
Laurean Neergaard – AP
The U.S. is “going in the wrong direction” with the coronavirus surging badly enough that Dr. Anthony Fauci told senators Tuesday some regions are putting the entire country at risk — just as schools and colleges are wrestling with how to safely reopen.
Companies Hit by Covid-19 Want Insurance Payouts. Insurers Say No; A battle looms over ‘business interruption’ coverage, which insurers say doesn’t apply unless there is physical damage, like from a fire.
Leslie Scism – WSJ
One of the biggest legal fights in the history of insurance has begun. A cavalcade of restaurateurs, retailers and others hurt by pandemic shutdowns have sued to force their insurers to cover billions in business losses. A video berating the industry ran for most of June on a giant screen in New York’s Times Square, four times each hour around the clock.
Conagra Says Grocery Demand Remains High Amid Pandemic; Owner of Birds Eye, Chef Boyardee and other food brands adds manufacturing capacity
Annie Gasparro – WSJ
Conagra Brands Inc. said it is investing in more manufacturing capacity as demand for its packaged foods remains strong this summer during the continuing coronavirus pandemic.
Fauci Says New Covid Cases Could Rise to 100,000 a Day If No Change
Dr. Anthony Fauci, White House coronavirus task force member and director of the National Institute of Allergy and Infectious Diseases, tells Senator Elizabeth Warren during a Senate panel testimony that he’s concerned the U.S. is “going in the wrong direction” when it comes to containing the spread of the Covid-19 pandemic.
Pence, Azar Urge Americans to Wear Masks
Vice President Mike Pence and Health and Human Services Secretary Alex Azar urge Americans to wear masks as the coronavirus spreads. They speak at a White House briefing. (
After record-breaking day of coronavirus cases, California surpasses 6,000 deaths
Colleen Shal – LA Times
Three months after Gov. Gavin Newsom issued an unprecedented statewide stay-at-home order designed to stem the spread of the coronavirus, California recorded a new grim milestone: passing the threshold of 6,000 coronavirus-related deaths.
German Cases Steady, Infection Rate Stays Below Key Threshold
Mariajose Vera – Bloomberg
Germany’s coronavirus infection rate remained below the key threshold of 1.0 for a seventh day, and the number of new cases held far below the level at the height of the outbreak.
Google Pushes Back U.S. Office Reopening Plan After Virus Surge
Gerrit De Vynck – Bloomberg
U.S. offices will stay closed until Sept. 7 at the earliest; Company had planned to begin returning employees in July
Google is pushing back a plan to reopen its U.S. offices after coronavirus cases surged in several western and southern states. All U.S. offices will remain closed until Sept. 7 at the earliest, according to a memo Google sent to employees. In May, Chief Executive Officer Sundar Pichai said the company would cautiously move some workers back in starting July 6.
Businesses Fire Rehired Workers Again After States Hit Pause
Michael Sasso, Kate Krader, and Leslie Patton – Bloomberg
Nightclubs, gyms lament sending employees home a second time; Restaurateur: ‘I don’t know why one brush paints everyone’
A Life Time fitness club sprawls like a small city, 130,000 square feet of treadmills, pools, yoga studios and smoothie cafes. Opening or closing a location requires byzantine scheduling changes for 250 employees and thousands of members.
National mask mandate could save 5 percent of GDP, economists say; The requirement could protect the public while avoiding some of the pain of an economic shutdown, Goldman Sachs research finds
After a late-spring lull, daily coronavirus cases in the United States have again hit record highs, driven by resurgent outbreaks in states such as Florida, Arizona and California. Hospitals in Houston are on the brink of being overwhelmed, and public health experts worry the pandemic’s death count will soon be climbing in tandem with the daily case load.
Exchanges, OTC and Clearing
OCC Names Jennifer Baum as New Chief Compliance Officer
Chicago – OCC, the world’s largest equity derivatives clearing organization, today announced the promotion of Jennifer Baum, currently First Vice President, Regulatory Compliance, to Senior Vice President and Chief Compliance Officer. Baum will replace Joe Adamczyk, who has left OCC to pursue another opportunity. She will serve as a member of OCC’s Management Committee.
TraderEvolution Is Now Officially Enabling Access To All Equities And Derivatives Traded On Borsa Istanbul
The company’s latest achievement underscores the multi-market capabilities of its software Multi-market online trading platform provider TraderEvolution, continues to make strides with its flagship product. The company is now offering connectivity to Borsa Istanbul, key exchange in one of the biggest emerging markets worldwide.
LME issues discussion paper on development of electronic options market
LME Press Release
The London Metal Exchange (LME) today issued a market-wide discussion paper regarding the proposed development of its electronic options market.
Following extensive engagement with its Traded Options Committee and in response to demand from market participants, the LME plans to develop its electronic options market while maintaining the flexibility of its current inter-office options trading structure.
Euronext Dublin launches ISEQ 20 Index Future
Euronext today announced the launch of a new futures contract based on the ISEQ 20 Index. The ISEQ 20 Index, which is operated by Euronext Dublin, comprises the 20 largest Irish listed companies as ranked by market capitalisation and trading turnover, and has long served as the national benchmark for the Irish economy.
DTCC Exception Manager Partners with Growing Global Custodian Community as Preparations for CSDR Continue; Majority of the world’s top Global Custodians are now providing settlement data directly into Exception Manager; Service now includes new proprietary data feed from the DTC Inventory Management System, sourcing exceptions directly from the US depository
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that its Exception Manager global custodian community has grown to a total of 11, including BNY Mellon, Brown Brothers Harriman and Co., Caceis, CIBC Mellon, Citi, HSBC, JP Morgan, Northern Trust, RBC Investor & Treasury Services and State Street. The global custodians directly submit exception data to Exception Manager ensuring the timeliness, completeness and accuracy of information critical for underlying clients to rapidly resolve settlement exceptions. The integrated platform of custodian, broker and depository data allows buy-side clients to manage exceptions in a single place versus multiple files, interfaces and portals.
CCP Austria Goes Live With CC&G’s Hosted Clearing Solution
CC&G is providing CCP Austria with a hosted service for Clearing and Risk Management; The agreement demonstrates CC&G increased international reach and its ability to provide innovative services to other CCPs
Cassa di Compensazione e Garanzia (CC&G), a leading provider of post trade services, and part of London Stock Exchange Group, today announces the go live of its hosted clearing service which has been deployed at CCP Austria (CCP.A).
FESE – Trading Hours for Equities
In November 2019, the Association of Financial Markets in Europe (AFME), and the Investment Association (IA) called for European equity trading venues to review market opening hours across Europe.
European exchange group FESE rejects bid to shorten market hours
Nasdaq has backed FESE’s claims that reducing market hours is the wrong move and would have no impact on the wellbeing of traders.
Hayley McDowell – The Trade
The Federation of European Securities Exchanges (FESE) has slammed the industry’s bid to shorten equity market hours as being detrimental to end investors.
Nigerian Stock Exchange Continues To Assist Corporates And Government To Raise Capital Amidst The Pandemic
The Nigerian Stock Exchange (NSE or The Exchange) continues to deliver on its commitment to provide a platform for issuers to raise capital even in the toughest of times. Since the activation of its Business Continuity Plan which saw the transition to remote trading and working from home on 24 March 2020, the NSE has attracted several new listings to the market, the most recent being LAPO Microfinance Bank’s N6.2 Billion Bond on Monday, 29 June 2020. This listing came closely on the heels of the listing of Dangote Cement’s N100 Billion Bond on Friday, 26 June 2020, which is the largest corporate bond issued in the Nigerian debt capital market.
Trading Overview in June 2020 & First Half of 2020 (January to June); Japan Exchange Group released Trading Overview in June 2020 & First Half of 2020 (January to June).
Cash Equity Market – In the first half of 2020, the daily average trading value for the TSE 1st Section was JPY 2.9427 trillion.
Derivatives Market – In the first half of 2020, total derivatives trading volume was 267,727,874 contracts, the highest number for the half year.
TSE Holds the Third meeting for the Study Group to review Minority Shareholder Protection and other Framework of Quasi-Controlled Listed Companies
On July 1st, 2020, Tokyo Stock Exchange, Inc. (“TSE”) held the third meeting for the “Study Group to review Minority Shareholder Protection of Quasi-Controlled Listed Companies.”
Cboe plans launch of new derivatives market as EuroCCP acquisition completes; Upon completing its acquisition of equities clearing house EuroCCP, Cboe confirms plans to launch Cboe Europe Derivatives in the first half of 2021.
Annabel Smith – The Trade
Exchange group Cboe Global Markets has completed its acquisition of equities clearing house EuroCCP and has confirmed plans to launch a European derivatives business in 2021.
Nasdaq Welcomed 69 IPOs and Five Exchange Transfers in the First Six Months of 2020;
Four of the five largest IPOs by capital raised listed on Nasdaq
Nasdaq (Nasdaq: NDAQ) announced today that in the first half of 2020 it welcomed 69 initial public offerings (IPOs), raising a total of $17.4 billion, extending its leadership to 26 consecutive quarters. A total of 55 operating companies listed during the first six months of 2020, representing an 85 percent win rate in the U.S. market. In addition to the IPOs, five companies switched from the NYSE to join Nasdaq.
Itiviti’s Tbricks Automated Trading Solution recognized as Best Trading Solution for Listed Securities (Equities/Derivatives)
Itiviti, a leading technology, and service provider to financial institutions worldwide, today announced the Tbricks automated trading solution has won ”Best Trading Solution for Listed Securities (Equities/Derivatives)” at the prestigious TradingTech Insight USA Awards.
Itiviti appoints Mireille Adebiyi as Head of Marketing & Communications
Itiviti, a leading technology and service provider to financial institutions worldwide, today announces the appointment of Mireille Adebiyi as Head of Marketing & Communications. Mireille has 17 years of experience within Fintech. Before joining Itiviti, she spent most of her career at Murex and joins from AI pioneer Yseop, where she held her most recent position as Chief Marketing Officer.
Walled gardens versus open markets in payments
Izabella Kaminska – FT
Digital payments are not new. They’ve been around in one shape or another since the 60s when the direct debit was invented. So why then the sudden influx of commentary and research by central banks into CBDCs? The BIS’ latest on Central banks and the new world of payments by Hyun Song Shin gives a good hint as to why.
Cloud9 Chooses OpenFin To Empower “Virtual Trading Desks”
Cloud9 Technologies (“Cloud9”), a leader in cloud-based communications, has partnered with OpenFin, the operating system (OS) of finance, to streamline the deployment of Cloud9’s voice trading APIs for institutional traders. With a heightened focus on mobility and universal access to the virtual trading floor, Cloud9 and OpenFin are empowering the optionality and flexibility that firms are seeking in their daily workflows.
Wirecard Raided by Prosecutors Over Missing $2.1 Billion
Karin Matussek and Alexander Kell – Bloomberg
Prosecutors and police also search two premises in Austria; Raid part of probe that led to arrest of ex-CEO Markus Braun
Wirecard AG’s offices in Germany and two locations in Austria were raided by Munich prosecutors looking into the 1.9 billion euros ($2.1 billion) that went missing from the fintech company’s accounts. Twelve prosecutors and 33 police officers are conducting the searches, a spokeswoman for the Munich authority said Wednesday. The action is part of the probe that led to the arrest of former Chief Executive Officer Markus Braun last week.
Has Crypto Survived the First Minsky Moment?
A Minsky Moment is defined as a market collapse brought on by reckless or excessive speculative activity. Investor sentiment is considered one-sided for a longer period leading to myopic markets where bullish sentiment becomes unsustainable. Volatility usually ensues. Cross market asset correlations trend towards 1. Many over levered entities holding such inflated assets fail. It is during these times when market infrastructures such as financial exchanges are tested, and new asset classes undergo additional scrutiny. Cryptocurrencies may have swooned along with equities and other risk assets in March but the strength of the financial plumbing in digital assets has since only strengthened.
Bitcoin’s mining difficulty just posted the smallest percentage change in 10 years.
Wolfie Zhao – Coindesk
The bitcoin network adjusted its difficulty level at 01:18 UTC on July 1 to 15.7842 trillion – down a mere 0.0033% from the previous level of 15.7847 trillion set June 17. The percentage change is small enough that it is rounded up to a zero, data from BTC.com shows.
Washington D.C. lawyers can accept crypto as payment for services
Yogita Khatri – The Block
Lawyers in Washington D.C. can now accept cryptocurrencies as a form of payment for their services, the D.C. Bar has said.
How Terrorists Use Cryptocurrency in Southeast Asia
V. Arianti and Kenneth Yeo Yaoren – The Diplomat
In May 2020, the Philippine Institute for Peace, Violence and Terrorism Research (PIPVTR) reported that Islamic State (IS)-linked terror groups had conducted their first transactions in cryptocurrencies. According to the report, a terrorist-linked money laundering operation involving cryptocurrencies generated funds, which were then allegedly used to finance the activities of terror networks operating in the conflict-ridden Mindanao region in the southern Philippines.
Elliptic adds support for privacy coins Zcash and Horizen to its blockchain monitoring platform
Yogita Khatri – The Block
Blockchain analytics firm Elliptic has added support for privacy coins Zcash (ZEC) and Horizen (ZEN). The move will allow Elliptic’s clients to monitor “unshielded” transactions in the two privacy coins in order to detect and prevent any illicit activity, and therefore, meet their anti-money laundering and compliance obligations.
Ethereum Developers Delay Berlin Hard Fork to Stem Client Centralization Concerns
William Foxley – Coindesk
So many users are dependent on Ethereum client Geth that a bug could temporarily freeze the network – something blockchains aren’t supposed to do, ever. In light of this, Ethereum Core developers decided Friday to postpone work on the Berlin hard fork until at least August in an effort to give other clients a chance to increase their share of the network.
An estimated 1.9 million U.K. residents hold digital assets, according to FCA study
Michael McSweeney – The Block
A market research note published Tuesday by the Financial Conduct Authority (FCA) estimates that 3.86% of the U.K. population owns cryptocurrencies. “We estimate 3.86% of the general population currently own cryptocurrencies. This amounts to approximately 1.9 million adults with the U.K. population (over 18) taken to be approximately 50 million,” the report’s authors wrote. Other findings include the assessment that “[t]echnical knowledge appears high among most cryptocurrencies owners” and that “75% of consumers who own cryptocurrencies hold under £1,000.”
Unbound & CipherTrace Partner to Advance Anti-Money Laundering Compliance
Unbound Tech — the global leader for institution-grade digital asset protection, management, and governance — today announced a joint partnership with CipherTrace, the cryptocurrency intelligence leader. Unbound Tech’s Crypto Asset Security Platform (CASP) already provides tier-1 financial services and global banks with the governance tools to enact cryptographically-defined workflows for all digital asset transactions – including workflows to ensure segregation of authority, anti-money laundering (AML) and fraud regulations are being kept. Now, CipherTrace’s integration will allow top-tier financial institutions not only with the governance tools to manage digital assets, but also with real-time AML and risk tracking for all cryptocurrency and digital asset holdings under their supervision.
Bitcoin ETP Listed on Europe’s Third-Largest Exchange
Paddy Baker – Coindesk
Deutsche Boerse has listed an exchange-traded product (ETP) that tracks the value of bitcoin. 21Shares, a Swiss-based product provider formerly known as Amun, said its bitcoin ETP had been officially accepted Wednesday to list on Xetra, Deutsche Boerse’s electronic trading venue. “The listing on Xetra not only strengthens our current position in Germany but also opens up institutional-grade crypto products to the wider European and international markets,” said Laurent Kssis, 21Shares’ managing director, in a statement.
Crypto asset manager NYDIG raises $190 million for bitcoin fund
Yogita Khatri – The Block
The New York Digital Investment Group (NYDIG) has raised $190 million for one of its bitcoin funds, according to a Form D document submitted to the U.S. Securities and Exchange Commission (SEC) on Wednesday. The fund, called NYDIG Institutional Bitcoin Fund LP, has grabbed the amount from 24 unnamed investors, per the form. The fund initially registered with the SEC in 2018. At the time, it raised $31 million from 3 investors. Later, in 2019, it raised $54 million from 6 investors. Wednesday’s amount is a fresh investment from two dozen investors.
Japanese investing giant SBI takes $30 million stake in crypto trader B2C2
Frank Chaparro – The Block
Count this as the latest sign that the market for crypto prime brokers is overheating. On the heels of a new partnership with Japanese investing giant SBI Holdings, crypto market-making firm B2C2 has announced plans to expand its business to cover a range of services that it says would bring it closer to becoming a crypto prime broker. The move follows a flurry of prime broker-related news from firms like BitGo, Coinbase and Genesis Global Trading.
The Novel Legal Strategy Bringing This ICO-Backed ‘Micro-Mobility’ Startup to Court
Daniel Kuhn – Coindesk
Salvatore Palella is often credited as the man who brought electric scooters to Italy. Less known is his attempt to bring ride-sharing to the blockchain.
Biden Leads Trump in Poll Showing 87% Unhappy at U.S. Direction
Emma Kinery – Bloomberg
Only 17% of Americans say they are proud of their country; Biden has 10-point advantage over incumbent president
Almost 90% of Americans say they are dissatisfied with the state of the country, and their unhappiness is affecting their political decisions four months before the presidential election, a new study from Pew Research Center shows.
Labor Department Proposes Fiduciary Exemption for Retirement Plans; Consumer advocates say proposed regulation would weaken standards under law that governs retirement accounts
Anne Tergesen – WSJ
The Labor Department proposed a new rule Monday for retirement accounts that allow brokers and other types of financial advisers to provide fiduciary advice and still receive commissions in some cases.
Trump defense on Russian bounty story falls flat, even with Republicans
David Knowled – Yahoo News
White House press secretary Kayleigh McEnany continued to defend President Trump on Tuesday in the wake of reporting by the New York Times and confirmation by other news outlets that intelligence officials had concluded in 2019 that Russia’s government offered bounties to Taliban fighters for killing American troops in Afghanistan.
Suspicions of Russian Bounties Were Bolstered by Data on Financial Transfers; Analysts have used other evidence to conclude that the transfers were most likely part of an effort to offer payments to Taliban-linked militants to kill American and coalition troops in Afghanistan.
Charlie Savage, Mujib Mashal, Rukmini Callimachi, Eric Schmitt and Adam Goldman – NY Times
American officials intercepted electronic data showing large financial transfers from a bank account controlled by Russia’s military intelligence agency to a Taliban-linked account, evidence that supported their conclusion that Russia covertly offered bounties for killing U.S. and coalition troops in Afghanistan, according to three officials familiar with the intelligence.
Eileen Murray Elected Chairperson of FINRA Board of Governors; Maureen Jensen and Eric Noll Appointed as New Public Governors
The FINRA Board of Governors has unanimously elected Eileen Murray, former Co-CEO of Bridgewater Associates, LP, as Chairperson effective at FINRA’s Annual Meeting in August. In addition, Maureen Jensen, former Chair and CEO of the Ontario Securities Commission (OSC), and Eric Noll, CEO of Context Capital Partners, have been appointed to the FINRA Board as public governors, also effective at the August Annual Meeting.
EMIR 2.2: EACH Publishes Its Proposals For A Robust And Efficient Process For CCP Risk Model Changes And Validations Under EMIR Article 49
Cognisant of their relevance for financial stability, CCPs continuously work to ensure their risk management frameworks are robust and up-to-date. In particular, CCPs implement and maintain dedicated model risk frameworks to govern the life-cycle of the models and methodologies used to assess risk. The EMIR 2.2 legislation includes important alterations to the way CCPs manage their models and parameters are introduced under EMIR Article 49. These changes will be defined in regulatory technical standards for which we suggest that:
FCA research reveals 1.1million spike in cryptoasset buyers; An estimated 2.6 million UK consumers have bought cryptoassets at some point, new FCA research reveals.
The number marks a 1.1 million increase since the FCA completed a face-to-face survey on the same topic last year. Of the 1.9 million that still hold their cryptoassets – such as Bitcoin, Ripple or Ether – half have more than £260.
FCA confirms further support for consumer credit customers
The FCA has today confirmed the support users of certain consumer credit products will receive if they are still experiencing temporary payment difficulties due to coronavirus (Covid-19).
FCA gives update on banks’ overdraft pricing decisions and plans to support consumers
Our work on overdrafts found that fees paid for unarranged overdrafts were regularly 10 times as high as fees for payday loans. Our view was that new rules were needed. These rules address both how much the most vulnerable were being charged for unarranged overdrafts, and the level of fees and charges that many arranged overdraft customers were paying on top of interest rates. Some firms were charging some of the most vulnerable customers an effective interest rate of more than 80% a year on their arranged overdraft.
SEC Regulation Best Interest and Form CRS: What You Need to Know
On June 30, 2020, new rules take effect that are designed to help retail investors better understand and navigate their relationships with investment professionals and make informed choices about the type of relationship for their needs and circumstances. The new Securities and Exchange Commission (SEC) rules, among other things, enhance the standard of conduct broker-dealers must provide to their retail customers and require broker-dealers and SEC-registered investment advisers (RIAs) to provide a new relationship summary — Form CRS — to retail investors. Here is what you need to know.
Investing and Trading
Black Swan Boot Camp: Option Trading Strategies in a Bear Market
Doug Ashburn & Jayanthi Gopalakrishnan – TD Ameritrade
“I didn’t train to land a plane in the Hudson. I trained to be prepared for moments like this.”—Captain Chelsey B. “Sully” Sullenberger III, pilot of “The Miracle on the Hudson.”
No End in Sight for Big Oil’s Write-Downs; Stocks like Shell and BP are cheap because investors have to shoulder more risk for lower returns
Rochelle Toplensky – WSJ
Asset write-downs keep coming from the world’s largest oil-and-gas companies. They are not cash expenses, but they do underline how the risks and rewards of investing in the supermajors have deteriorated.
Hog Futures Sink as Supply Overhang Lingers; Even with coronavirus stifling demand for pork, hog supplies remain at record high
Kirk Maltais – WSJ
Hog prices have fallen for nearly two months, a decline that accelerated in recent sessions after a government report confirmed that U.S. swine production has bounced back from Covid-19 faster than anticipated.
Stocks’ Huge Rally Is Pushing Investors Back Into Hedge Funds
Hema Parmar, Melissa Karsh, and Katherine Burton – Bloomberg
Newly opened funds have attracted $15 billion in investments; Soros, Texas pension fund have added to hedge funds this year
After years of losing both clients and clout in financial markets, signs are emerging that hedge funds are back in favor in the U.S. In the past few months, investors such as George Soros’s family office and the Texas pension fund have been plowing cash into hedge funds in an effort to diversify their assets after stock markets rebounded much more sharply from the coronavirus-stoked sell-off than anticipated.
Would You Buy a Bond Linked to Your Country’s GDP?
John Ainger- Bloomberg
Imagine a sovereign bond that pays investors more when a country’s economy is doing nicely and less when gross domestic product is lagging. That’s the idea behind the GDP-linked bond, a seldom used debt instrument that is attracting increasing interest as authorities grapple with the extraordinary cost of the coronavirus pandemic.
Environmental, Social and Corporate Governance
The Toxic Legacy of 60 Years of Abundant Oil; It’s one of the most polluted spots on Earth, and prospects of a turnaround only get worse as Covid-19 guts a global industry.
Dulue Mbachu – Bloomberg
Bank supervisor Johnson Banigo avoids wearing light-colored shirts to his job because they’re ruined by the dark soot that falls from the heavens. Banigo, 34, lives and works in Port Harcourt, the center of Nigeria’s petroleum industry where the evening sky literally glows with gas flares. Half a century of oil spills has left a 27,000 square-mile region of swamps, creeks and mangrove forests in southeastern Nigeria one of the most polluted places on earth. Life expectancy is just 41 years.
CityLab Daily: A Case for Turning Empty Malls Into Housing
Linda Poon – Bloomberg
Second life: In the Lynnwood suburb of Seattle, developers are turning a big part of the 41-year-old Alderwood Mall into a 300-unit apartment complex, a grand experiment in transforming struggling malls into much-needed affordable housing.
The Dying Mall’s New Lease on Life: Apartments; As the pandemic hastens the retail apocalypse, some developers are betting that empty malls can mix housing with stores and community space.
Patrick Sisson – Bloomberg
It’s definitely, finally, without a doubt, the end of malls, right? The multiple crises impacting the U.S. economy — the botched response to the coronavirus and the resulting economic fallout, and lack of spending power — have delivered a new gut punch to brick-and-mortar retail, a sector that was already reeling. More than half of all U.S. department stores in malls will be gone by 2021, one real estate research firm predicts, and surviving retailers may not be far behind; once-mighty brands such as Cheesecake Factory and the Gap are skipping rent payments, Starbucks is closing physical locations, and developers see a future for big box stores as office complexes. Banks fear “a stampede” of landlords looking to restructure loans after commercial tenants miss their rents. Last week, the Trump administration floated the idea of turning the glut of empty retail space into affordable housing.
Spain Targets Power Market in Next Big Step for Green Transition
Laura Millan Lombrana – Bloomberg
Government looking at different price-setting methods; Teresa Ribera comments on law reform, aid for the car sector
Spain aims to introduce legislation by the end of the year to help the European Union’s fourth biggest economy make a green transition.
A $2.7 Billion Fund Starts Helping Australia Cope With Drought
Ainslie Chandler – Bloomberg
Australia revealed the first projects to be financially backed by its A$3.9 billion ($2.7 billion) investment fund to help farmers cope with crippling drought that’s ravaged the giant agricultural producer.
China’s Worsening Floods Highlight More Extreme Weather Threats
More than 12 million people affected by torrential rains; This year’s precipitation double-to-triple usual levels
Weeks of torrential rain in southern China have left millions of people without homes and caused billions of yuan in economic losses, with environmental groups warning the extreme floods are likely to become more common.
BGC Partners Updates its Outlook for the Second Quarter of 2020BGC
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners” or “BGC” or the “Company”), a leading global brokerage and financial technology company, today announced that it has updated its outlook for the quarter ending June 30, 2020.
Goldman Nears 1MDB Resolution With Effort to Avoid Guilty Plea
Greg Farrell – Bloomberg
Top lawyer Seymour was outside counsel during Abacus probe; Prosecutors seek unit’s plea, penalty as high as $2 billion
Goldman Sachs Group Inc. is in the final stages of resolving its biggest legal threat in a decade after tussling with the government on one critical issue: a potential guilty plea for the first time in Goldman’s history.
BIS Innovation Hub To Expand To New Locations In Europe And North America https://jlne.ws/2Al0hdd
BIS Innovation Hub to extend global reach with four new centres over next two years in collaboration with central banks; New locations in Toronto, London, Frankfurt & Paris and Stockholm; strategic partnership in New York.
Expansion will allow Innovation Hub to spur central bank work across multiple fintech pillars.
The Board of the Bank for International Settlements (BIS) today announced the expansion of the BIS Innovation Hub with the establishment of new Hub centres across Europe and in North America in cooperation with member central banks.
Former head of diversity sues Morgan Stanley for racial discrimination, retaliation and unequal pay
A new lawsuit accuses one of the country’s top financial services firms of discrimination against black employees. Marilyn Booker spent more than a quarter century at Morgan Stanley, much of it leading the company’s diversity and inclusion program. But now, she alleges her former employer treats black financial managers differently. Jericka Duncan reports.
Tribune Publishing in Talks to Give Hedge Fund Alden Global Another Board Seat; Pact would extend Alden’s standstill agreement with Tribune
Cara Lombardo and Lukas I. Alpert – Chicago Tribune
Tribune Publishing Co. TPCO 0.20% is in talks to add the co-founder of Alden Global Capital LLC to its board as part of an agreement that would prevent the hedge fund from making a hostile bid to buy the rest of the newspaper company in the near future, according to people familiar with the matter.
Virgin Atlantic Favors U.S. Hedge Fund for Rescue Cash
Christopher Jasper, David Hellier, and Katherine Burton – Bloomberg
U.S. firm would lead $620 million funding of Branson’s carrier; Elliott-Greybull alliance still in race; others could emerge
Virgin Atlantic Airways Ltd. is edging toward a 500 million-pound ($620 million) emergency financing package led by Davidson Kempner Capital Management as the U.K. airline firms up survival plans, people familiar with the matter said.
New Security Law Gives China Sweeping Powers Over Hong Kong; The law, approved in Beijing with speed and secrecy and signed off by Xi Jinping, will tighten the Communist Party’s grip on Hong Kong after last year’s protests.
Chris Buckley, Keith Bradsher and Tiffany May – NY Times
China unveiled a contentious new law for Hong Kong late Tuesday that grants the authorities sweeping powers to crack down on opposition to Beijing at home and abroad with heavy prison sentences for vaguely defined political crimes.
What Americans Need to Know About Europe’s Travel Ban; The E.U. and other European countries will begin welcoming some nonessential travelers on July 1, but Americans will not be on the list, at least at first. Here, answers to travelers’ questions.
Paige McClanahan – NY Times
On July 1, after months of lockdown, European nations will begin to open their borders to nonessential travelers coming from a select list of countries in which the Covid-19 pandemic has been deemed sufficiently under control. The United States is not on the list. Moreover, the U.S. State Department continues to advise U.S. citizens to avoid all international travel.
China Adds AP, NPR to U.S. Media Ordered to Disclose Finances
China ordered more American news outlets to declare their finances and staff, in the latest tit-for-tat exchange with the U.S. over media access to each other’s countries. Foreign Ministry spokesman Zhao Lijian said Wednesday that China was asking four organizations including the Associated Press and National Public Radio to disclose staffing, finances and real estate holdings within seven days. The move, which also affected CBS and United Press International, follows similar action in March against Voice of America and Time Magazine.
Danske Bans Economists From Tweeting as Law Causes Confusion
Morten Buttler – Bloomberg
Danske Bank A/S has told its economists to stay off Twitter and other social media platforms until Denmark’s largest lender fully understands the legal consequences of new legislation.
India’s TikTok Ban Closes Off Path to Stardom; Young men and women from the countryside discovered the joys of creativity, individuality and even celebrity on the Chinese app.
Mihir Sharma – Bloomberg
I was not one of the more than 200 million Indians on TikTok. I did download the app once but it was, even by the standards of social media, overwhelming: a sort of cascade of practically unsorted, apparently random short videos — the motivation for most of which was clearly beyond my poor and perhaps superannuated understanding.
Government plans new Brexit bureaucracy for British businesses to avoid chaos at ports; Lorries will need permission from new HMRC computer system before heading for Dover
Jon StonePolicy – The Independent
British businesses exporting to the EU will have to wait for permission from HMRC before moving their goods, under bureaucratic new government Brexit plans designed to stave off chaos at ports.
Johnson warned by business on ‘hugely damaging’ no-deal Brexit
Daniel Thomas – FT
More than 100 UK company chiefs, entrepreneurs and business groups have written to the prime minister warning that it would be “hugely damaging” to the economy if Britain leaves the EU without a deal at the end of this year. The letter — written on the deadline by which the UK could have requested an extension to the transition period with the EU — says that a no-deal outcome would result “in more people out of work and lower living standards”. Businesses “simply do not have time or capacity to prepare for big changes in trading rules by the end of the year — especially given that we are already grappling with the upheaval caused by coronavirus”, it added.
State aid question remains stumbling block in Brexit talks
Peter Foster, Jim Pickard, and Jim Brunsden – FT
How the UK will run its state-aid regime after the end of the Brexit transition period remains one of the hardest issues to settle in the continuing UK-EU negotiations. With less than six months to go to the end of the transition, EU negotiators are growing increasingly impatient at Boris Johnson’s failure to set out his plans for a domestic subsidy regime and provide concrete reassurance that the UK does not intend to unfairly undercut EU economies.
EU’s Barnier Rejects U.K. Plans for Banking After Brexit
Silla Brush and Ian Wishart – Bloomberg
The European Union’s chief Brexit negotiator rejected the U.K.’s latest proposals for financial firms to do business with the 27-nation bloc after Brexit, accusing Britain of trying to keep as many of the benefits of the single market as it can. Michel Barnier dismissed Britain’s desires, which he said would let firms keep operating from the City of London, with employees flying in and out of the EU for short business trips. The proposals could even “create a significant risk” of avoiding regulation altogether.
Cornell Says Bringing Students Back to Campus Reduces Virus Risk
Janet Lorin – Bloomberg
Researchers determined more may be infected in online semester; Ivy League school in Ithaca, New York, starts classes Sept. 2
Cornell University plans to resume classes in September with a mix of in-person and online instruction, as researchers found that being on campus would reduce the risk of contracting Covid-19.
Working From Home Isn’t as Cheap as You Think It Is
Giulia Pines – Money
When the shelter-in-place order was first announced, hordes of people went on panic-buying trips for coffee, toilet paper, and everything in between. Consciously or not, they tapped into a crucial aspect of life in quarantine: When you’re spending every waking hour at home, you need to stock up on all the essential items your office usually provides. So while those of us who have been lucky enough to bring our work home during the Coronavirus pandemic have been saving on commuting costs and lunch money, we’ve also seen other bills balloon.