ECB scraps clearing powers request in EU tussle; Europe’s bourses say report refutes data profiteering claims

Mar 21, 2019

First Read

Hits & Takes
JLN Staff

The FIA is looking for a new VP of Global Industry Operations and Execution to oversee FIA’s Operations and market Technology Divisions. Here is a link for the job description. This position was previously held by Greg Wood.~JJL

CME Group continues to set copper options OI records. On March 19, total OI was 64,128 contracts.~SD

Yesterday we interviewed former CBOT General Counsel Scott Early for our history of financial futures documentary series. Scott was general counsel from 1984 to 1994 and saw some of the most dynamic growth in the industry as financial futures blossomed.~JJL

Indiana graduate Walt Lukken admitted he has Purdue making it into the Sweet 16 in the NCAA Basketball championship series. That is quite an admission for a Hoosier. I salute his home state loyalty.~JJL

Floods have been a recent problem in the U.S. – flooded regions account for a quarter of U.S. agricultural production.~SD

John McAfee, creator of the McAfee antivirus program, shared over Twitter that he is no longer promoting Skycoin, an ICO that aims to provide a “new Internet.” For more information, DM John McAfee. Or, you know. Don’t.~MR

The 10-year Treasury note and 3-month Treasury bill are nearing inversion.~SD


Go Small or Go Home: CME’s Micro Launch
Spencer Doar – JLN

There are anywhere from 50,000 to 200,000 active users of futures. Meanwhile, there are some 13 million retail accounts trading other parts of the market that do not trade futures.

CME Group wants to increase what the existing futures user base can trade while also addressing those 13 million other active retailers. The proposed solution? The launch of Micro E-Mini Equity Index Futures – contracts linked to the S&P 500, Nasdaq 100, Russell 2000 and Dow Jones Industrial Average that are 1/10 the size of the exchange’s flagship E-Mini products.

Read the rest here.


Cumberland’s business development head James Radecki set to depart firm
Frank Chaparro – The Block Crypto
James Radecki, the three-piece suit wearing Wall Street veteran, is leaving Cumberland, the cryptocurrency OTC shop run by Chicago-based DRW, the firm said in a statement to its counter-party clients this week.

***** This is two high profile people who have left DRW-related firms in recent months, following Blythe Masters leaving Digital Assets.~JJL


If Greenwich Associates Is Right, Most Allocators Won’t Read This Article
Amy Whyte – Institutional Investor
If you’re an allocator reading this, you may be in the minority – at least according to a new report from Greenwich Associates. Less than half of the 277 institutional investors surveyed by the consulting and research firm reported that they regularly consumed finance-focused trade publications. Instead, the senior investment professionals polled by Greenwich indicated that they increasingly get their industry and market insights from social media, with 63 percent declaring themselves regular social media users.

****What bested the behemoths of financial media? LinkedIn. I guess that’s just another reason why Microsoft paid $26 billion for it in 2016.~SD


This is How You Sell Pot to Rich People; At the Beverly Hills outpost of Barneys New York, you can order mild-dose marijuana for high-functioning adults, or buy a $1,100 bong.
Edvard Pettersson – Bloomberg
Barneys New York is opening its doors to cannabis loversóin Southern California.

*****It sells itself.~JJL


Wednesday’s Top Three
The top read items on Tuesday were all about crypto. The top read story of the day was The Trade’s Digital Asset promotes co-founder to CEO as it enters new era post-Blythe Masters. Second was Bloomberg’s Most Cryptocurrency Trading Volume Is Suspicious. And third was Jim Kharouf’s piece about Baton Systems for JLN, Saving Big Money: How a small fintech firm figured out how to save banks billions with DLT


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Lead Stories

ECB scraps clearing powers request in feud with European capitals
Jim Brunsden and Claire Jones – FT
The European Central Bank has scrapped a request for greater powers to tackle financial stability risks in the market for euro-denominated derivatives, warning that a political deal on the plans reached in Brussels earlier this month would do more harm than good.

Europe’s bourses say report refutes data profiteering claims
Huw Jones – Reuters
Stock exchanges in Europe are not harming markets or gouging customers with the fees they charge for data, an industry-commissioned report said on Thursday.

Asset managers slash expenses as ‘feemageddon’ bites; Average expense ratio of US equity mutual vehicles has almost halved since 2000
Robin Wigglesworth – FT
Fees on US equity funds fell to a new record low last year, as relentless pressure from cheaper index-tracking rivals forced asset managers to slash costs in a bid to staunch heavy outflows.

The shift away from Libor could threaten stability; Investors should not be too sanguine about transition from scandal-linked rate
Megan Greene – FT
Global regulators are cheering a transition from Libor, the now infamous London interbank offered rate that underpins $370tn in financial contracts, to a slew of new benchmark rates. The US part of the process reminds me of my hometown’s American football team, the New England Patriots. Its star quarterback, Tom Brady, has been a driving force for years. When he leaves, it will almost certainly be destabilising. Similarly, the shift from Libor to a new reference rate may seriously undermine financial stability.

Post-Brexit trade ruling sparks accusations of a ‘land grab’
Philip Stafford – Financial Times
European fund managers have called on regulators to reconsider plans that would prevent them from trading some of the UK’s biggest stocks in London in a no-deal Brexit, amid accusations that the EU is mounting a “land grab” of UK share trading.

Fed sees no rate hikes in 2019, plans to slow balance sheet reduction
Howard Schneider, Trevor Hunnicutt – Reuters
The Federal Reserve held interest rates steady on Wednesday and its policymakers abandoned projections for further rate hikes this year as the U.S. central bank flagged an expected slowdown in the economy.

The Old Daytime-Drinking, Sexual-Harassing Ways Are Thriving at Lloyd’s; The 330-year-old London insurance market is the most archaic corner left in global finance.
Gavin Finch – Bloomberg
Rising from the heart of London’s financial district along Lime Street is a tower so otherworldly that Marvel Studios cast it as an office building for a highly advanced civilization in the film Guardians of the Galaxy. The building’s gutsóair ducts, stainless steel staircases, even power cablesóare mostly on the outside, creating the futuristic-looking facade. The reality within, however, is years in the other direction.

IG Group revenue extends quarterly drop as stricter rules bite; Decline of almost a third highlights trading group’s previous reliance on riskier contracts
Cat Rutter Pooley – FT
Online trading platform IG Group’s decline in revenues extended in the third quarter, falling by almost 30 per cent from last year, as a regulatory crackdown was compounded by lacklustre market conditions.

Painstaking Progress for Funds That Aim to Do Good; A large fund launch signals increased investor interest in socially responsible ETFs
Asjylyn Loder – WSJ
DWS Group Inc., the asset-management business of Deutsche Bank AG , recently raised $843 million in a single day for a new fund that tries to invest in the best corporate citizens in the U.S.

Morgan Stanley takes top spot in ranking of commodities banks
Morgan Stanley brought in the most revenue from commodities of any of the major investment banks in 2018, data from analytics firm Coalition showed on Thursday.

Fund managers turn up heat on UK companies over diversity, pensions, audit
Simon Jessop, Sinead Cruise – Reuters
Britain’s big public companies will face a grilling by asset managers over their track record on diversity, excessive pension payouts to bosses and poor quality audits when they hold annual shareholder meetings over the coming weeks.

Exchanges, OTC and Clearing

Six weeks Eurex’s Repo Partnership Program – solid basis to accelerate further growth
On 1 February, Eurex officially launched its Partnership Program in Special Repo and General Collateral instruments to increase choice and efficiency for market participants. We talked to Frank Gast, Head of Funding and Financing Sales at Eurex, about how the program started and what he expects for 2019.

TMX Group CEO Lou Eccleston to Present at the 17th Annual National Bank Financial Services Conference
TMX Group CEO Lou Eccleston will present at the 17th annual National Bank Financial Services Conference in Montreal on March 27, 2019 at 2:30 p.m. EDT.


Alternative data provider raises $11.6 million in funding; Thinknum offers alternative data and digital footprints on more than 400,000 companies globally.
Hayley McDowell – The Trade
An alternative data specialist based in New York has raised more than $11 million in a funding round, as it looks to expand the use of its platform across the institutional investment community.

Why traders need to start learning Python, and what they will do with it
Saeed Amen – efinancialcareers
It’s nearly forty years since the launch of the first spreadsheet, VisiCalc, which was written for Apple II (June 4 1979 to be precise). Today, whilst VisiCalc has long since disappeared, spreadsheets are still here. Excel is now one of the most important tools used by traders and is pretty much indispensable for most.

Linear Investments partners with genesis for real-time portfolio margin management; Real-time portfolio margin tool was developed to helped Linear Investments onboard and assess the risk of clients and prospects.
Hayley McDowell – The Trade
London-based prime broker Linear Investments has implemented a real-time portfolio margin management tool delivered and designed in partnership with software provider genesis.


Cryptocurrency Liquidity Provider B2C2 Appoints Financial Market Veteran Rob Catalanello to Spearhead Expansion into U.S. Markets
B2C2, one of the largest cryptocurrency liquidity providers and the leader in electronic OTC trading, today announced the appointment of Rob Catalanello to lead the company’s U.S. operations as CEO of B2C2 USA. Rob will be based in Jersey City, New Jersey.

Cryptocurrency Diehards Turn to Interest Bearing Accounts
Vildana Hajric – Bloomberg
BlockFi offers up to 6.2% annualized interest-rate returns; Startup has discretion to change rates on month-to-month basis
Retail investors are lining up for the latest twist in the never-ending crypto craze.

Copper Introduces Military Grade Optical Air-Gapping To Further Secure Private Keys
Copper, the London-based custodian for digital assets, has further improved the security protocols of its custodial service by adding military grade optical air-gapping. This enhancement ensures the complete security of an offline repository of asset owners’ sharded keys during the transaction signing process.

Square Is Staffing up for a New Cryptocurrency Unit, Says Jack Dorsey
Alyssa Newcomb – Fortune
Square CEO Jack Dorsey said he wants to hire a few cryptocurrency engineers and a designer, to conduct work that will contribute to advancing an accessible, Internet-based financial system that benefits the greater community. The new employees be able to work from wherever they want, report directly to Dorsey, and can even be paid in Bitcoin, if they so choose. “I love this technology and community. I’ve found it to be deeply principled, purpose-driven, edgy, and…really weird. Just like the early internet! I’m excited to get to learn more directly,” Dorsey tweeted on Wednesday afternoon.

Cryptocurrency industry needs banks to survive – JP Morgan
Tanya Abrosimova – FX Street
Traditional financial institutions should be regarded as partners, not rivals to cryptocurrency market, according to the head of e-commerce department in JPMorgan Chase Ron Karpovich. Speaking in the interview with CNBC, he said that the two industries do not need to compete, but rather work together. These comments came just a month after the bank announced the launch of JPM Coin that will function as a stable coin to facilitate J.P. Morgan’s internal payment network for clients. Karpovich believes that cryptocurrency companies will have to use traditional banking services to move funds around – even if they don’t want to admit it.

Cybercriminals Turn Opportunistic with Cryptocurrency Mining; Continue to Exploit Vulnerabilities; Steal Data and Resources to Disrupt Businesses and Individuals in Asia Pacific
Media OutReach via Business Insider
Profit-oriented cybercriminals are turning their attention to stealthier tricks such as cryptocurrency mining; while ransomware encounters declined globally, the region was hit by 40 percent more ransomware attacks as compared to the rest of the world. Poor cyber hygiene and low security awareness led to 22 percent more Drive-by download attacks and 37 percent more malware encounters than the global average.

***I like the term, “cyber hygiene.” It’s important to bathe your computer at least three times a week so it doesn’t get smelly and/or viruses. (Don’t actually bathe your electronics, please.)~MR

Shenzhen gets on the blockchain train
Luke Thompson – Asia Times
Beijing’s strict stance on cryptocurrency has not hindered new and innovative blockchain systems being rolled out across China. The People’s Republic clearly wants nothing to do with digital money but remains very keen on its underlying distributed ledger technology. According to a report in local finance website Securities Daily, Shenzhen this week became the first city to launch a blockchain based rail transit invoicing system.

Chipmakers rally in Asia after Micron stokes turnround hopes
Edward White
Chipmakers in Asia gained ground on Thursday on hopes for a turnround after US group Micron signalled expectations for a rise in semiconductor demand in the second half of 2019. In South Korea, shares in SK Hynix, the world’s second-biggest memory chipmaker, surged 6.7 per cent and Samsung Electronics, the biggest, added 4.8 per cent. The moves helped the Kospi composite index in Seoul to outperform the region’s other major bourses, adding 0.9 per cent in morning trading.

Mt Gox Trustee Approves Creditor Claims Worth Billions
Yogita Khatri – Coindesk
The long-defunct bitcoin exchange Mt. Gox is finally moving toward settling creditors’ accounts in cryptocurrency or cash.

Facebook Seeks Counsel to Forge Blockchain Partnerships for New Products
Anna Baydakova – Coindesk
Facebook’s blockchain recruitment drive continues, as the social network looks to hire a lead commercial counsel for its initiatives with the technology.

“I love this technology and community:” Square launches a new bitcoin/crypto initiative
“Vires in numeris.”
The Block Crypto
In Latin, strength in numbers. That appears to be the motto of a new initiative at Square, the payments company run by Twitter CEO Jack Dorsey, as per its fresh Twitter account. Dorsey, who also leads Square, said the firm is hiring to build out the team for Square Crypto, per a string of tweets penned by the executive Wednesday evening. Square Crypto will work towards building out the nascent bitcoin ecosystem, separate from Square’s own business interests in the market.

Chicago Mayor Says Crypto Adoption Could Be Inevitable
Benjamin Pirus – Forbes
Chicago’s mayor, Rahm Emanuel, took the podium at a March 18 meeting in Chicago Illinois to discuss the city’s FinTech movement, mentioning points on cryptocurrency and blockchain.

BitGo brings on early IEX employee from CoinList to forge relationships with Wall Street
Frank Chaparro – The Block Crypto
Rob Salman, the trading veteran and early IEX employee, has found a new home in the cryptocurrency world.


The Democrats’ Complexity Problem
Tim Wu – The New York Times
One bright area in these dark days of American politics has been a blossoming of bold and interesting progressive policy ideas, such as wealth taxes, postal banking (offering basic financial services to customers who might not otherwise have access to them) and breaking up the giants of the tech industry. In the spirit of fresh starts, progressives should now confront an even more basic challenge: their complexity problem.

Trump Tests Republicans With Attacks on John McCain
Susan Milligan – U.S. News
Democratic candidates across the country and across the party’s political spectrum are lining up to run against President Donald Trump next year. Trump, however, is running against the late GOP Sen. John McCain – and testing the loyalties and patience of fellow Republicans. After the president slammed McCain on a weekend Twitter eruption and doubled down in a meeting with a foreign leader, telling reporters Tuesday that he was “never a fan of John McCain and never will be,” GOP Georgia Sen. Johnny Isakson – typically one of the more circumspect members of the Senate – decided he’d had enough of the attacks on one of the chamber’s most admired veterans.

Meet Former US Rep John Delaney, the first Democrat to announce a 2020 bid
Benjamin Siu and Mina Kaji – ABC News
Former Maryland Congressman and multimillionaire John Delaney was the first Democrat to announce an official 2020 White House bid. Delaney announced he was running in July 2017 in a Washington Post op-ed entitled “Why I’m running for president.” “The American people are far greater than the sum of our political parties,” Delaney wrote. “It is time for us to rise above our broken politics and renew the spirit that enabled us to achieve the seemingly impossible.”

Chicago’s Democratic socialists on brink of transforming city’s politics
Eric Lutz – The Guardian
Democratic socialist Rossana Rodriguez never thought she would run for office, let alone win. But the Chicago educator and community activist may be poised to do just that after forcing a runoff in her 33rd ward aldermanic race against incumbent Deb Mell last month, making her one of six democratic socialists who could potentially join city council this year. That shock number of openly declared socialists set to join Chicago politics comes at a time when socialism is increasingly visible in national US politics, led by the socialist senator Bernie Sanders running for president and socialist New York congresswoman Alexandria Ocasio-Cortez becoming one the most high-profile politicians in the House of Representatives.

(Video) How Trump plans to weaponize the Mueller report
Before departing the White House on Wednesday, the president told reporters he doesn’t understand why special counsel Robert Mueller is writing a report, but that he wants the general public to see it anyway. The panel discusses.

Mueller’s team just asked for an extension on their deadline, citing a large workload
Kate Riga – Business Insider
Special Counsel Robert Mueller’s team said in a recent filing that they “face the press of other work” in asking for an extension on unsealing documents in the Paul Manafort case. According to a Tuesday CNN report, it’s unclear if this is a sign that the probe is winding down or ramping up. The top lawyers on the team are reportedly still joining Mueller in working long hours, though some have returned to their Department of Justice posts, and FBI agents and prosecutors rotate in and out of the office on a daily basis.


Boss of London Capital & Finance arrested after firm’s collapse
Caroline Binham and Barney Thompson – Financial Times
The chief executive of collapsed London Capital & Finance and the chairman of an oil company it lent to are among four men arrested as part of a criminal investigation into the £236m scandal.
Simon Hume-Kendall, who chairs London Oil & Gas, and Andy Thomson, the CEO of LCF, were arrested by the Serious Fraud Office earlier this month, according to people familiar with the investigation.

Lithuanian Man Pleads Guilty to $100 Million Fraud Against Google, Facebook; The two tech giants fell victim to an elaborate scheme orchestrated by the defendant, prosecutors say
Kristin Broughton – WSJ
A Lithuanian man pleaded guilty to his role in a complex wire fraud scheme that resulted in the theft of over $100 million from Alphabet Inc.’s Google and Facebook Inc., prosecutors said Wednesday.

A Start-Up Within The Government: Introducing The SEC’s Office Of The Advocate For Small Business Capital Formation, Martha Miller, SEC Advocate For Small Business Capital Formation
Today I look forward to introducing you to the newest office within the SECóthe Office of the Advocate for Small Business Capital Formationóand to let you know how this Office can champion capital formation for smaller companies like the ones you represent. I’ll start with an overview of why this Office was created, what Congress charged this Office with doing, and how we will approach our mission and the Commission’s mission.

ASIC obtains interim injunctions against Forex Capital Trading
ASIC has appeared before the Federal Court in Melbourne as part of its action to protect investor funds in OTC derivatives issuer, Forex Capital Trading Pty Ltd, while an ASIC investigation is underway.

ASIC permanently bans former Financial Wisdom advisor
ASIC has permanently banned Ms Anneliese Ada Willmott, a former financial advisor from Victoria, from providing financial services.

ESMA Agrees to Position LImits Under MIFID II
The European Securities and Markets Authority (ESMA) has published today seven opinions on position limits regarding commodity derivatives under the Markets in Financial Instruments Directive and Regulation (MiFID II/MIFIR).

FINRA Reminds Firms of Their Obligations Under SEC Rule 15c2-11(a)(4)
In consultation with the staff of the Securities and Exchange Commission (SEC staff), FINRA is issuing this Notice to remind firms of their obligations under Securities Exchange Act (SEA) Rule 15c2-11 and FINRA Rule 6432 (Compliance with the Information Requirements of Rule 15c2-11) regarding quotations in the securities of foreign private issuers that rely on SEA Rule 12g3-2(b). Specifically, we are reminding firms that Rule 15c2-11(a)(4) requires that they make paragraph (a)(4) information reasonably available upon request to any person expressing an interest in a transaction involving the security, such as by providing the requesting person with appropriate instructions regarding how to obtain the information electronically. Firms cannot comply with this requirement by directing customers to an issuer’s website if, by its terms, the website restricts access by U.S. persons to the paragraph (a)(4) information.

SEC Proposes Offering Reforms for Business Development Companies and Registered Closed-End Funds
The Securities and Exchange Commission today voted to propose rule amendments to implement certain provisions of the Small Business Credit Availability Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act.

SEC Adopts Rules to Implement FAST Act Mandate to Modernize and Simplify Disclosure
The Securities and Exchange Commission today voted to adopt amendments to modernize and simplify disclosure requirements for public companies, investment advisers, and investment companies. These amendments are expected to benefit investors by eliminating outdated and unnecessary disclosure and making it easier for them to access and analyze material information.

Sell-Side Struggles with Rule 606
Rob Daly – Traders Magazine
With approximately eight weeks before the US Security and Exchange Commission’s update of Rule 606 goes into effect, sell-side firms still need much guidance to meet the 334-page mandate.
The new rules, which the regulator issued in November 2018, is the latest tool the SEC has deployed to investigate the relationship between exchange and trading venue rebates and routing decisions.

Brexit and beyond
Speech delivered by Nausicaa Delfas, Executive Director of International at the FCA, at City and Financial, 4th UK Financial Services Brexit Summit.

EU watchdog expects banks to have wind-up plan in any merger
The European Union watchdog in charge of disposing of failing banks said on Thursday that Deutsche Bank and Commerzbank should make sure any lender emerging from a possible merger could be wound down in case of a crisis.

Investing and Trading

Think Stocks Are Hot? This Car Metal Keeps Hitting New Records
Amrith Ramkumar – WSJ
A metal that is key to filtering car emissions is one of the best-performing investments this year, boosted by greater environmental scrutiny of automakers and signs of a supply crunch. The price of palladium, a critical component of the catalytic converters used in gasoline-powered cars, has surged 30% so far this year to a record $1,551.90 a troy ounce, extending a rally that started in August to a 67% gain. The price rose 0.8% Tuesday on the New York Mercantile Exchange, climbing for a seventh consecutive session.

Robots Won’t Kill the Fundamental Investor
Julie Segal – Institutional Investor
Traditional asset managers are increasingly applying data science and advanced analytics to investment decision-making ó but they aren’t firing portfolio managers.

Dynamic evolution in low carbon investing
Jaakko Kooroshy – FTSE Russell
As efforts to reduce greenhouse gas emissions gather pace, the industrial foundations of society are facing a transformation. From the light bulb to the car, from everyday materials like plastics to cement, even our diets will have to adapt in profound ways to make the low carbon economy a reality and to avoid the worst impacts of global climate change.

A Beginner’s Guide to MMT; An overview of a once-fringe school of economic thought that’s suddenly of the moment.
Peter Coy, Katia, Dmitrieva, Matthew Boesler – Bloomberg
There’s a lot of debate swirling around Modern Monetary Theoryósome strident. Its critics call it a hot mess. “MMT has constructed such a bizarre, illogical, convoluted way of thinking about macro that it’s almost impervious to attack,” Bentley University economist Scott Sumner claimed recently on his blog. MMT’s proponents say it’s the critics who are impervious to reasonó”part of a degenerative paradigm that has lost credibility,” says Australian MMTer William Mitchell.

Oil majors rush to dominate U.S. shale as independents scale back
Jennifer Hiller – Reuters
In New Mexico’s Chihuahuan Desert, Exxon Mobil Corp is building a massive shale oil project that its executives boast will allow it to ride out the industry’s notorious boom-and-bust cycles.

U.S. farmers face devastation following Midwest floods
Humeyra Pamuk, P.J. Huffstutter, Tom Polansek – Reuters
WINSLOW, Neb./CHICAGO (Reuters) – Midwestern farmers have been gambling they could ride out the U.S.-China trade war by storing their corn and soybeans anywhere they could – in bins, plastic tubes, in barns or even outside.


R.J. O’Brien Ranked Number One Broker for Oil Options and Structured Products in Europe in Energy Risk Commodities Rankings 2019
R.J. O’Brien
R.J. O’Brien was the top-ranked broker in Oil Options and Structured Products in Europe in the 2019 Energy Risk Commodities Rankings issued by Energy Risk

BNP Paribas Asset Management Takes A Step Further In Its Commitment To Sustainable Investment And Launches Ambitious, Firm-Wide Sustainability Strategy
BNP Paribas Asset Management (‘BNPP AM’) reinforces its commitment towards sustainable investment by launching its firm-wide Global Sustainability Strategy. This represents a step further in contributing to a sustainable future, in line with BNPP AM’s focus on delivering long-term sustainable investment returns for clients.

The Big Short’s Steve Eisman raises bets against Canadian banks; Sluggish housing market and weak economic growth lure growing band of short-sellers
Richard Henderson and Lindsay Fortado – FT
A fund manager made famous by the book The Big Short has turned his sights on Canada, betting that a tottering housing market and a sluggish economy will bring trouble for the country’s biggest banks.

Asian broker CLSA loses CEO Jonathan Slone amid culture clash; Exits underline shift since Chinese takeover of influential investment bank
Henny Sender and James Kynge – FT
The chief executive of CLSA has quit after three decades at the Hong Kong brokerage owned by China’s state-owned Citic Securities, adding to an exodus of senior executives. Jonathan Slone’s resignation at CLSA follows a similar move by Tang Zhenyi, the chairman. Nigel Beattie, its chief operating officer, is also leaving, according to several people with direct knowledge of the matter.

Market pressure blurs the line between US asset and wealth managers; Should regulators step in? Time will tell and no doubt there will be some bad actors
Gabriel Altbach – FT
American colleagues often say Europe is about proprietary distribution via bank networks, while the US is all rough-and-tumble, survival-of-the-fittest open architecture.


The unintended consequences of a regulation in a multimarket environment
Jason Mackie – IRESS
Michael Lewis’ Flash Boys seems to suggest that speed is all that matters in today’s markets and in the modern world of High Frequency Trading (HFT). As Haim Bodek’s The Problem of HFT illustrates, the order types provided by exchanges and how much transparency they give to their members about their rules and matching engine practices are at least as important as speed.
This theme – speed of execution and the types of specialised order types on offer – is becoming important in South Africa following the launch of A2X. From what we have seen unfold in markets such as Canada and Australia, the introduction of competitive stock exchanges brings significant change to the concept of ‘best execution’ in trade. The complexities increase exponentially with each new exchange that launches in a market.

****Thanks to Brian Peterson for drawing my attention to this on (where else?) LinkedIn.~SD

Brazil and Russia: Divergence and Convergence
CME Group
So far this decade, Brazil and Russia’s currencies have turned in nearly identical performances. Spot real (BRL) and spot ruble (RUB) values are down about 55% versus the U.S. dollar (USD) (Figure 1).

Citigroup to sell Venezuelan gold in setback to President Maduro: sources
Mayela Armas, Corina Pons – Reuters
Citigroup Inc plans to sell several tons of gold placed as collateral by Venezuela’s central bank on a $1.6 billion loan after the deadline for repurchasing them expired this month, sources said, a setback for President Nicolas Maduro’s efforts to hold onto the country’s fast-shrinking reserves.

***”Several tons,” while vague, is about enough to fill half a medium-sized truck bed.~SD

Russia’s Eurobond Catches a Wave Hours After Dovish Fed Turn
Olga Voitova – Bloomberg
Finance Ministry selling dollar, euro denominated bonds; Host of emerging-market issuers are selling amid yield hunt
Russia couldn’t have timed it better. After facing souring geopolitics at its last two Eurobond sales, the Finance Ministry is turning to the foreign debt market just hours after U.S. Federal Reserve Chairman Jerome Powell gave the emerging-market rally fresh impetus.

Hong Kong Chief Warns of Collateral Damage Risk From Trade War
David Tweed and Enda Curran – Bloomberg
Carrie Lam speaks at Bloomberg Invest Asia forum in Hong Kong; Sees deep-seated U.S.-China differences pesisting beyond talks
Hong Kong’s chief executive cautioned that the Asian financial hub continued to face the risk of collateral damage from the China-U.S. trade war, saying the tensions were one reason why she’s joined the ranks of those tracking President Donald Trump’s tweets.

Biggest Malaysia State Fund Weighs Debut Exchangeable Bond Sale
Crystal Tse and Elffie Chew – Bloomberg
Battersea Station owner seeks capital for foreign investments; $69 billion fund asks for proposals from investment banks
Malaysia’s biggest state-owned fund manager, which owns more than 10 percent of the local stock market, is considering its first sale of exchangeable bonds as it seeks to raise funds for overseas investments.

Landmark for Saudi stocks as index providers become kingmakers; Admission of kingdom’s stocks comes just months after journalist’s murder caused outcry
Steve Johnson and Simeon Kerr – FT
A landmark year for Saudi Arabia’s stock market will have little to do with Saudi Aramco, the country’s oil giant whose IPO plan has been put on hold.


Brexit will cost 7,000 City jobs and £600m tax ó nothing, right?; Financial services groups are set to to move £1tn of assets and 7,000 jobs out of UK
Matthew Vincent – FT
Good news, Brexiters! There are now even fewer members of the “metropolitan liberal elite” to frustrate your dream of a sovereign nation of unemployed van drivers spending £350m a week in Wetherspoons. Because those London-based citizens of nowhere ó who shamelessly exploit their business connections to, er, stay in business ó are fleeing the UK for the EU. Good riddance, eh?

Brexit: EU poised to insist on withdrawal no later than 22 May; Theresa May has requested extension to 30 June but EU wants earlier deadline
Daniel Boffey – The Guardian
The European Union is poised to take control of Britain’s exit by rejecting Theresa May’s request for a three-month delay and setting a new withdrawal date of no later than 22 May.

Sovereign wealth funds cut UK investment ahead of Brexit; State-backed funds invested only $1.8bn in the country last year, down from $21bn in 2017
Javier Espinoza – FT
Dealmaking in the UK by some of the largest sovereign wealth funds has plummeted because of the growing uncertainty around Brexit, a report from IE Business School in Madrid has revealed.

Financial sector remains exposed to no-deal Brexit, warns FCA; Watchdog says risks remain despite enactment of contingency plans
Caroline Binham – FT
A no-deal Brexit still presents risks to the financial sector and its customers, despite worst-case contingency plans enacted over the past two years, a senior watchdog has warned.

Theresa May at her worst during Brexit speech – Mark Drakeford
BBC News
Wales’ first minister has said Theresa May was “at her worst” during her speech blaming the Brexit delay on MPs. The prime minister told the nation on Wednesday she was “on their side” and said people were “tired of infighting and political games”. Mrs May will now try to persuade the other 27 countries of the EU to delay the UK’s departure beyond 29 March. Mark Drakeford said the UK’s approach to Brexit had “fallen apart” in her hands.

Brexit: Revoke Article 50 petition crashes Parliament website
BBC News
A petition calling on Theresa May to cancel Brexit by revoking Article 50 has attracted more than half a million signatures. Parliament’s petitions website crashed on Thursday morning because of the high volume of traffic. It comes as the prime minister heads to Brussels to ask the EU for a delay to next Friday’s Brexit date. Foreign Secretary Jeremy Hunt told BBC Radio 4’s Today revoking Article 50 was possible but “highly unlikely”.


Fortnite Billionaire Pledges $100 Million for Game Developers
Edward Ludlow – Bloomberg
Epic’s Sweeney offers no-strings funding for creative projects; Move follows last year’s launch of similar esports prize pool
Tim Sweeney, the billionaire founder of Epic Games Inc., is offering $100 million in grants to game developers, with no strings attached, to help promote the industry.

Michael Steinhardt, a Leading Jewish Philanthropist, Is Accused of a Pattern of Sexual Harassment
Sharon Otterman and Hannah Dreyfus – NY Times
Sheila Katz was a young executive at Hillel International, the Jewish college outreach organization, when she was sent to visit the philanthropist Michael H. Steinhardt, a New York billionaire. He had once been a major donor, and her goal was to persuade him to increase his support. But in their first encounter, he asked her repeatedly if she wanted to have sex with him, she said.

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