ETF trading surges on European stock exchanges

Jan 25, 2021

First Read

$26,851/$300,000 (9.0%)
Denise Knabjian

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Hits & Takes
JLN Staff

The U.S. has surpassed the 25 million Covid-19 infections level, according to data reported Sunday by Johns Hopkins University.

JPX has signed a memorandum of understanding, or MOU, with the Shanghai Stock Exchange and the Shenzhen Stock Exchange to expand creation and trading in ETF securities.

The New York Times is reporting the IRS has moved back the date upon which it will start to receive tax returns by two weeks to February 12. However, the date by which the returns are due is still April 15, which is unchanged from the norm.

The CFA Society Chicago is putting on a Zoom event titled “Libor Cessation” that includes Dr. Richard Sandor among the speakers. The date of the event is February 1, 2021 from 4 PM to 5 PM.

Tradebot and BATS founder Dave Cummings posted to LInkedIn that his daughter, Nicole Cummings, is starting work at Blackstone.

The CFTC’s newly formed Division of Data is searching for an attorney to manage the team in charge of setting agency-wide data policies and implementing reporting regulations.

We have had a new donation for our JLN MarketsWiki Education GoFundMe campaign – Denise Knabjian of the OCC. Denise joined the OCC in 2001 and has worked her way up to the managing director level for investor education. She is also a member of Women in Listed Derivatives, where she is a member of the board of the Chicago chapter. Thank you to Denise and all who have given and all those who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

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

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On the “tense, unprecedented and highly militarized Inauguration Day” our friends at professional information provider Wolters Kluwer published a free special report titled “Biden inauguration heralds regulatory reset.” Their deep roster of reporters, analysts and lawyers cover the gamut of federal regulation, from taxes to government contracting. The report includes an outlook for securities regulation (starting on page 5) as well as commodities and derivatives (starting on page 37) under the incoming Biden administration. The report can be downloaded from the Wolters Kluwer site here. ~Thom Thompson

The World Economic Forum‘s annual meeting begins today, January 25. Traditionally held in Davos-Klosers, Switzerland, it’s usually attended only by A-list global movers and shakers, but this year COVID-19 has forced it to go virtual so it’s open to everyone. Chinese President Xi Jinping, German Chancellor Angela Merkel, ECB President Christine Lagarde and Dr. Anthony Fauci are among the expected speakers at the weeklong event. Listen to the livestreamed broadcast here. ~SC

One of the panels on the first day of the Davos Forum is on “Resetting Digital Currencies” and will feature Bank of England Governor Andrew Bailey and Western Union CEO Hikmet Ersek, according to Coindesk. A second “Resetting Digital Currencies” panel will be held on Thursday.~SR

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The Spread: New Beginnings
JohnLothianNews.com

This week on The Spread, Gary Gensler is nominated by President Joe Biden to be Chairman of the SEC, TT gets a new CEO, and more.

Watch the video »

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Sponsored Content
【Special Report】 First year anniversary workshop of TOCOM/JPX Electricity Futures

Asia’s Most Successful Electricity Futures at Tokyo Commodity Exchange (TOCOM)/Japan Exchange Group (JPX) celebrated its first year of listing in a co-hosted webinar with Quick Corp. on December 15, 2020. The event was attended by over 250 people from 152 companies.

At the workshop, Mr. Hatakeyama, Director-General for Commerce and Service Industry Policy of METI gave an opening remarks and Mr. Ishibashi of Astmax Trading, Inc. gave a keynote speech on Electricity trading and Risk management. In the panel discussion, traders from different power companies shared their experiences in using TOCOM Electricity Futures and their internal risk control systems. They pointed out that there is still a huge opportunity in Electricity Futures market in Japan and requested the exchange to list new products such as those covering the Hokkaido and Kyushu areas and change the product design to extend contract months.

For more details, please refer to the following link
https://www.tocom.or.jp/uploads/en_news/2021/report_E.pdf

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Ken Griffin’s Citadel Securities reaps record $6.7 billion on volatility; The surge came after some of its traders decamped from Chicago and New York to set up shop in a Palm Beach hotel in late March as the pandemic upended lives and markets across the globe.
Bloomberg
Citadel Securities went from strength to strength in 2020, as the pandemic spurred wild swings across finance. To cap the tumult, Ken Griffin’s firm, one of the world’s biggest market makers, just posted record revenue—some of it from a rapidly constructed Florida trading floor.
/bit.ly/3iH8zh2

*****But other than that, how did they do?~JJL

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Dropping WhatsApp? Nostalgia Drives Users to ICQ; Before social media was about algorithms and viral misinformation, kids in Hong Kong loved a clunky instant-messaging service used on dial-up PCs. Now they’re grown up, and back.
Newley Purnell and Joyu Wang – WSJ
WhatsApp users around the world who are worried about the company’s shifting policy on data privacy are flocking to rival messaging apps such as Signal and Telegram. In Hong Kong, some are choosing an alternative that reminds them of their childhood—before algorithms, Big Tech and viral misinformation. ICQ was a pioneering, mid-1990s internet messaging service then used on bulky PCs on dial-up. It was a precursor to AOL Instant Messenger, and was last in vogue when the TV show “Friends” was in its prime and PalmPilots were cutting edge.
/on.wsj.com/3c7H4vQ

*****The ICQ channel, #Futures, was co-founded by MarketsWiki co-founder Jon Matte.~JJL

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China pushes conspiracy theories on COVID origin, vaccines
Huizhong Wu – AP News
Chinese state media have stoked concerns about Pfizer’s COVID-19 vaccine, despite rigorous trials that showed it was safe. A government spokesperson has raised the unfounded theory that the coronavirus could have emerged from a U.S. military lab, giving it more credence in China. As the ruling Communist Party faces growing questioning about China’s vaccines and renewed criticism of its early COVID-19 response, it is hitting back by encouraging conspiracy theories that some experts say could cause harm.
/bit.ly/3a62neV

*****Fake news going global.~JB

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Friday’s Top Three
Our top story Friday was The Trade’s Brazil’s B3 overtakes CME Group in rankings for largest derivatives exchange. Second was the press release Nasdaq Appoints Jeremy Skule Chief Strategy Officer. Third was the FIA’s report, Global futures and options trading reaches record level in 2020.

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

ETF trading surges on European stock exchanges; LSE and Deutsche Börse’s reported rises in ETF turnover of 50% or more far outstrip broader market
Steve Johnson – FT
European stock exchanges have seen a sharp rise in ETF trading as higher turnover has been turbocharged by a partial shift towards on-exchange transactions. The London Stock Exchange reported a 50 per cent year-on-year rise in its order book volume for exchange traded funds, commodities and notes to £154.8bn in 2020, far outstripping a 5.9 per cent rise in total market turnover.
/on.ft.com/3qVOXcd

Untangling Millions of Trades Gets Easier With a New Libor Fix
William Shaw and Alex Harris – Bloomberg
New legal framework could prevent chaos when Libor is retired; ‘Important day’ for the derivatives market: Goldman Sachs
Untangling the vast global derivatives industry from Libor just got a bit easier. The London interbank offered rate is hardwired into swaps and other contracts worth hundreds of trillions of dollars, but it’s slated to disappear in the not-too-distant future. If the move to replacement rates doesn’t go smoothly, that could cause major discord in markets.
/bloom.bg/2YapT4T

Shanghai’s legislative advisers urge city’s financial exchanges to merge and list to open the world’s second-largest marketplace; Twenty delegates to the Shanghai People’s Political Consultative Conference (SPPCC) have called for the merger of the local stock and futures exchanges; The delegates proposed the establishment of a holding group, under which the Shanghai Stock Exchange (SSE), the China Financial Futures Exchange, various securities depository and clearing companies as well as an options exchange can be built
Daniel Ren – South China Morning Post
A score of Shanghai’s legislative advisors have called for the merger of the local stock and futures exchanges to attract global companies and investors raising funds, as the city marked 30 years of explosive growth to become the elder sibling of the world’s second-largest capital market. The merger was proposed by 20 delegates of the Shanghai People’s Political Consultative Conference (SPPCC), including the Shanghai Gold Exchange chairman Jiao Jinpu, the Shanghai chief of the Export-Import Bank of China (ExIm), and the Agricultural Bank of China’s city president Chen Qichang, according to a bill obtained by the South China Morning Post.
/bit.ly/3a5WBcW

Top hedge funds reap biggest gains in a decade during pandemic; Despite some big-name flops, many managers profited from extreme market volatility
Laurence Fletcher – FT
The 20 best-performing hedge fund managers of all time made $63.5bn for investors during the coronavirus-driven market turmoil in 2020, making it the industry’s best year of gains in a decade, despite a tough 12 months for US giants Bridgewater Associates and Renaissance Technologies.
/on.ft.com/3a66Uhr

Small-Investor Surge Shows No Sign of Slowing; Small-investor trading activity has stayed super hot in 2021, highlighting the opportunity for big banks to tap into a rare source of growth
Telis Demos – WSJ
The rising tide of small-investor activity is lifting some very big boats. The surge of everyday investor trading logged in 2020 is continuing into the new year. Analysts at Piper Sandler noted that off-exchange trading—which includes retail volume that goes through wholesale market makers—accounted for a record 48% of the market through the first 11 trading days of January. “We suspect retail trades are on a record pace in January to date,” the analysts wrote last Wednesday.
/on.wsj.com/3qPkrQX

When SPACs Attack! A New Force Is Invading Wall Street; ‘Blank check’ firms known as SPACs are in pursuit of America’s hottest startups. Is the invasion a sign of a market euphoria that can’t last?
Amrith Ramkumar and Maureen Farrell – WSJ
The hottest thing in finance is four letters long. Former NBA star Shaquille O’Neal has one. So does former House Speaker Paul Ryan. Same goes for silver-haired hedge-fund billionaire William Ackman.
/on.wsj.com/2YcurYc

European Banks Set to Trail Wall Street as Provisions Swell
Nicholas Comfort, Marion Halftermeyer, and Steven Arons – Bloomberg
Region’s lenders have been slower to prepare for bad loans; A shift toward equities trading also portends underperformance
European banks probably failed to live up to U.S. peers’ record fourth-quarter profits as they set aside more money for troubled loans and missed out on the rally in equities trading. Ten of Europe’s biggest lenders probably set aside $15 billion for doubtful credit in the fourth quarter, taking the year’s total to $61.5 billion, the highest since 2012, according to analyst estimates compiled by Bloomberg. Many of the top U.S. banks, by contrast, bolstered profit by releasing reserves made earlier in the year.
/bloom.bg/2M165OM

Thanks, Robinhood, but These Traders Now Want Professional Help
Kamaron Leach – Bloomberg
For some day traders, 2020 proved the value of expert advice; Wealth adviser Aspiriant saw a 32% increase in clients
The age of coronavirus lockdowns helped fuel a blistering rise in retail trading, and many rookies even beat the market. But day traders also found that the year’s market gyrations required constant attention and that their amateur trading tools were limited.
/bloom.bg/2Yd2mjw

Sweden to close border with Norway after Oslo locks down; Move follows deaths from new coronavirus variant near Norwegian capital
Richard Milne – FT
Sweden is closing its border with Norway after the government in Oslo introduced its strictest measures of the Covid-19 pandemic so far following several deaths close to the Norwegian capital from the more contagious variant first discovered in the UK.
/on.ft.com/3qFT0cq

Blackout 2020; Major markets globally have suffered outages in 2020. Hayley McDowell considers whether exchanges should be doing more to ensure markets operate efficiently and without disruption.
Hayley McDowell – The Trade
It has been a difficult year for stock exchanges globally, and not just due to the coronavirus pandemic that swept the world in 2020 and disrupted companies in all sectors. Several major trading venues suffered huge outages throughout the year, leaving investors unable to do business.
/bit.ly/2NAg2mM

TP ICAP no longer able to service all EU clients as pandemic delays Paris Brexit move; Services for some EU clients at TP ICAP have been disrupted following the loss of passporting rights post-Brexit and a delay to the launch of its Paris office.
Hayley McDowell – The Trade
Interdealer broker TP ICAP has said it can no longer service some clients in Europe after the coronavirus pandemic impacted the launch of its Paris-based Brexit hub. TP ICAP said in a statement that since losing its European passporting rights due to Brexit, its UK-based subsidiaries no longer have the full scope of regulatory permissions to continue servicing all clients in the EU.
/bit.ly/3a2uuLN

Further Covid curbs will ‘kill travel’ and hit confidence, warn executives; Airlines’ shares drop as fears grow that tighter immigration rules will be ‘catastrophic’ for industry
Philip Georgiadis, Alice Hancock and Jim Pickard – FT
The prospect of new restrictions on international travel sent a shudder through the travel industry on Monday, piling pressure on companies already reeling from almost a year of disruption. Shares in European airlines tumbled as the UK government prepared to introduce tighter immigration rules following concerns that new strains of Covid-19 could spread from international travellers.
/on.ft.com/39fPBv5

CEOs Confront Employees’ Doubts on Covid-19 Vaccine; From video campaigns to vaccine clinics with games and cake, companies deploy tactics to coax skeptical employees to get shots
Chip Cutter – WSJ
Corporate executives are playing a new role in the pandemic: vaccine cheerleader. Across industries, business leaders are turning to all-hands staff meetings, video memos and other workplace forums to address skepticism about the Covid-19 vaccine and encourage employees to get it when they can.
/on.wsj.com/3oh3Un6

One way to reform the Chapter 11 bankruptcy process; Hertz and AMC experiences highlight scope for change in US system
Sujeet Indap – FT
The Hertz Corporation must look at AMC Entertainment and wonder what might have been. Hertz, pummelled in the early weeks of pandemic, filed for Chapter 11 bankruptcy in May last year. However, in the weeks afterwards, its shares surprisingly rallied around 800 per cent amid a surge of buying by retail traders on the Robinhood app.
/on.ft.com/3c6XSmH

Wall Street Returns to Riyadh; Is there a statute of limitations on attending “Davos in the Desert”?
Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni – NY Times
It’s been more than two years since bankers kept their name badges obscured behind ties at a high-profile investment conference in Riyadh, the capital of Saudi Arabia, held weeks after the killing of the journalist Jamal Khashoggi by Saudi agents at the country’s consulate in Istanbul. After a wave of cancellations at the 2018 event, the next year’s Future Investment Initiative, often called “Davos in the Desert,” saw many business leaders attend as the immediate furor over the killing subsided.
/nyti.ms/2Np0NwL

Goldman Team Sees ‘Unsustainable Excess’ in Parts of U.S. Market
Joanna Ossinger – Bloomberg
Corners of the U.S. equity universe are showing signs of froth, but that shouldn’t put the broader market at risk, according to Goldman Sachs Group Inc. Very high-growth, high-multiple stocks “appear frothy” and the boom in special-purpose acquisition companies is one of a number of “signs of unsustainable excess” in the U.S. stock market, strategists including David Kostin wrote in a note Friday. The recent surge in trading volumes of stocks with negative earnings is also at a historical extreme, they said.
/bloom.bg/3ohabj1

Davos ski resort eerily quiet without economic talkfest this year
Arnd Wiegmann -Reuters
Student protesters who urged world leaders at the 2020 World Economic Forum in Davos to “Stop (f)lying to us” must be pleased this year, at least as far as the flying is concerned.
/reut.rs/3iKNItd

Bridgewater’s Dalio sees U.S. divided, in ‘terrible financial state’
Reuters Staff
Bridgewater Associates founder Ray Dalio wrote on Twitter on Sunday that the United States is still in a “terrible financial state” and remains “terribly divided”, but added he liked what he heard from President Joe Biden at his inauguration.
/reut.rs/39kwaRX

Coronavirus

Germany Buys Covid Treatment Used by Donald Trump
Arne Delfs – Bloomberg
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. There’s probably not much German Chancellor Angela Merkel’s government would adopt from Donald Trump, but the treatment the former U.S. president received when diagnosed with Covid-19 last year appears to have caught her attention.
/bloom.bg/3sVJl3d

Russia’s Sputnik Vaccine Close to Approval for Use in Pakistan
Faseeh Mangi – Bloomberg
Sinopharm and Astra have been given approvals, Cansino pending; Nation to start vaccinations after Sinopharm supply Jan. 31
Pakistan is close to granting approval to Russia’s Sputnik V vaccine, as world’s fifth most-populous nation looks to start inoculations against the coronavirus. The country’s technical committee has cleared and recommended the vaccine to the drug registration board that is considering Sputnik’s application, said Akhtar Abbas Khan, spokesperson for Drug Regulatory Authority of Pakistan.
/bloom.bg/2MlVRrW

Swedish Prime Minister Admits Strategy to Stop Virus Fell Short
Frances Schwartzkopff – Bloomberg
Swedish Prime Minister Stefan Lofven said his government should have taken more aggressive steps and moved more quickly to stop the spread of the pandemic, and he takes full responsibility for the initial strategy that led the country to suffer a disproportionately high number of deaths. In an interview with Dagens Nyheter, Lofven said the government’s response to the spread of the virus among the elderly was inadequate, and that testing should have begun earlier.
/bloom.bg/3peilcZ

Vaccine delays in poorer nations threaten advanced economies; Developed nations’ recovery hit through trade links unless they help more, research finds
Jonathan Wheatley – FT
Advanced economies face a significant hit to their economic recovery from the coronavirus pandemic unless they help developing countries speed up their vaccination programmes, according to a report that will be published by the World Health Organization on Monday.
/on.ft.com/39YWLD9

U.S. Surpasses 25 Million Covid-19 Infections
Brian Wingfield – Bloomberg
The U.S. passed another milestone in the year-long struggle against Covid-19, as total infections exceeded 25 million, or about 8% of the population, according to data reported Sunday by Johns Hopkins University.
/bloom.bg/3phskhU

Oxygen Scarcity Swells Covid-19’s Death Toll; From Brazil to Zambia, hospitals call for emergency resupplies; in some cases, patients suffocate
Samantha Pearson, Joe Parkinson and Santiago Pérez – WSJ
Thalita Rocha Lima was visiting a crowded Covid-19 ward this month in Manaus, the biggest Brazilian city in the Amazon, when her mother-in-law Maria and other patients suddenly became agitated, breaking out in sweat and gasping for air as their fingertips turned purple.
/on.wsj.com/3odq9dL

Merck Scraps Covid-19 Vaccine Candidates; The two shots generated comparatively weak immune responses in early-stage studies
Jared S. Hopkins – WSJ
Merck MRK -0.25% & Co. said Monday that it is halting development of its two experimental Covid-19 vaccines, after early clinical-trial data showed the shots generated disappointing immune responses against the virus. Early-stage studies of the vaccines indicated they produced inferior immune responses in subjects given the shots compared with people who survived Covid-19 or took authorized Covid-19 vaccines, the company said.
/on.wsj.com/3sTKDvJ

Virus Variants Push Nations to Lock Down and Zip Up Borders; U.S. is considering barring some travelers. Britain may make hotel quarantines mandatory.
NY Times
Concerns on virus variants bolster the case for stricter rules. Salisbury Cathedral, which is being used as a vaccination site in Salisbury, England. Lockdowns across Britain are expected to be prolonged.
As scientists and government officials wrestle with variants of the coronavirus that were first detected in Britain and South Africa, Prime Minister Boris Johnson of Britain is expected to announce an extension and tightening of lockdown rules in England, while President Biden plans to bar travel by noncitizens into the United States from South Africa.
/nyti.ms/3sPudoh

How West Virginia Became a U.S. Leader in Vaccine Rollout; West Virginia has used 83 percent of its allotted vaccines, among the best in the nation. But even efficient operations face a major problem: There simply are not enough shots to go around.
Sarah Mervosh – NY Times
Carolyn Zain had heard horror stories about the nation’s coronavirus vaccine rollout: long waits, clunky websites, people being turned away. So when her health department announced it was expanding appointments, she armed herself with two phones — cellphone in one hand, landline in the other — and held her breath.
/nyti.ms/39d1vpw

California may have its own highly contagious homegrown COVID-19 strain
Joe Tacopino – NY Post
Scientists in California believe there is a homegrown coronavirus strain in the state that could be responsible for the dramatic rise in cases, a report said on Sunday.
/bit.ly/3piyzlo

Brazil’s vaccination hindered by bottlenecks and a sceptical leader; Country of 211m awaits inputs from overseas, while president ‘erodes confidence’ in Chinese jab
Michael Pooler, Bryan Harris and Carolina Pulice – FT
A territory of continental size, in the throes of a second wave of Covid-19 and with a leader sceptical of vaccines: Brazil is no easy candidate for a rollout of inoculations against coronavirus.
/on.ft.com/3qU3SDJ

Mexico’s President, Who Downplayed Covid-19, Contracts Virus
Max De Haldevang – Bloomberg
AMLO, age 67 and with hypertension, says symptoms are mild; Mexico posted record surge in deaths and cases in past week
Mexican President Andres Manuel Lopez Obrador said he tested positive for Covid-19, after a weekend trip that took him to two states amid a record climb in the nation’s cases and deaths over the past few days.
/bloom.bg/2KPRhlA

China Wanted to Show Off Its Vaccines. It’s Backfiring; Delays, inconsistent data, spotty disclosures and the country’s attacks on Western rivals have marred its ambitious effort to portray itself as a leader in global health.
Sui-Lee Wee – NY Times
China’s coronavirus vaccines were supposed to deliver a geopolitical win that showcased the country’s scientific prowess and generosity. Instead, in some places, they have set off a backlash.
/nyti.ms/3iHD5Ym

Japan likely to hit COVID-19 herd immunity in October, months after Olympics: researcher
Rocky Swift – Reuters
Japan is likely to achieve herd immunity to COVID-19 through mass inoculations only months after the planned Tokyo Olympics, even though it has locked in the biggest quantity of vaccines in Asia, according to a London-based forecaster.
/reut.rs/2MqYxob

Exchanges, OTC and Clearing

NSE named world’s largest derivatives exchange for 2020
DTNext.in
The National Stock Exchange of India Ltd (NSE) has emerged as the world’s largest derivatives exchange in 2020 in terms of the number of contracts traded, according to data maintained by Futures Industry Association (FIA), a derivatives trade body.
/bit.ly/36aLiPz

Cboe To Introduce New Choice Program for ETP Lead Market Makers, Beginning February 1
Cboe Press Release
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced plans to introduce a new incentive program that aims to help further enhance market quality for primarily listed exchange-traded products (ETPs) on Cboe BZX Exchange, beginning Monday, February 1, subject to regulatory review.
/prn.to/3iJQRtq

Nasdaq appoints new strategy chief; Jeremy Skule will oversee global strategy in an expanded role after working at Nasdaq for the past eight years.
Annabel Smith – The Trade
US exchange Nasdaq has appointed Jeremy Skule as chief strategy officer in a newly expanded role in the global strategy division. In his new role, Skule will oversee Nasdaq’s global strategy organisation, driving strategic planning across mergers and acquisitions, venture investments, and data and analytics.
/bit.ly/3sTGp7c

Procedures for 2021 Annual Meeting of Members of Commodity Exchange, Inc.
CME Group
The Annual Meeting of Members of Commodity Exchange, Inc. (“COMEX”) will be
held on Tuesday, March 9, 2021. At that time, the Membership will elect members to fill the following positions on the COMEX Governors Committee:
/bit.ly/2YeeEYU

SGX accelerates sustainability drive with launch of ESG derivatives
SGX
Suite of four new derivatives a key thrust of SGX FIRST initiative;Launch further broadens multi-asset partnership with FTSE Russell
Singapore Exchange (SGX) is accelerating its SGX FIRST sustainability agenda with the launch of its pioneering suite of ESG derivatives today. SGX developed the new contracts in partnership with FTSE Russell to offer investors more choice in promoting the integration of Environment, Social and Governance (ESG) factors into institutional investment portfolios on an award-winning market infrastructure. The SGX FIRST (Future in Reshaping Sustainability Together) initiative, announced in December, is a multi-pronged expansion of the exchange’s sustainability capabilities and supports the introduction of new ESG-focused products, services and platforms.
/bit.ly/3ogkOT4

Conclusion of memorandum with Shanghai Stock Exchange to further develop Japan-China ETF Connectivity
JPX
Japan Exchange Group, Inc. (JPX) and Shanghai Stock Exchange (SSE) today concluded a memorandum of understanding on further developing Japan-China ETF Connectivity.* Following the conclusion of an agreement between JPX and SSE on April 22, 2019 to establish Japan-China ETF Connectivity, ETFs under the scheme were listed simultaneously on both exchange markets on June 25, 2019.
/bit.ly/3qOOdp1

Conclusion of memorandum with Shenzhen Stock Exchange to establish Japan-China ETF Connectivity
Japan Exchange Group, Inc.
Japan Exchange Group, Inc. (JPX) and Shenzhen Stock Exchange (SZSE) today concluded a memorandum of understanding on establishing Japan-China ETF Connectivity* among other matters. Henceforth, JPX and SZSE will actively collaborate to encourage ETF creation and investment under this scheme and promote the Japanese and Chinese securities markets to investors. The exchanges will also collaborate on promotion activities to support SMEs in both countries.
/bit.ly/39dtLbm

Proof of Concept Project to Provide a Learning Environment for Trading Utilizing IT and Data Analysis
JPX
Japan Exchange Group, Inc. (hereinafter referred to as “JPX”) announced today that it will launch a Proof of Concept (PoC) Project by providing an environment to promote trading utilizing IT and data analysis for individuals interested in data science. AlpacaJapan Co., Ltd. will be the IT support vendor.
/bit.ly/3iKuB2r

Launch of TSE API Services
JPX
On February 1, 2021, Tokyo Stock Exchange, Inc. (President & CEO: Kiyota Akira, hereinafter referred to as “TSE”) will launch a new service to distribute timely disclosure information and Stock Price* in Web-API format in order to further improve the convenience of market data distributed by TSE.
/bit.ly/3o8fqBo

FEAS Exchanges Factsheet Q4 2020
Mondovisione
/bit.ly/3oh1bKL

DGCX Launches Daily Gold Futures Contract
Mondovisione
The Dubai Gold & Commodities Exchange (DGCX) today announced that it has launched a 12.5kg physically delivered Daily Gold Futures Contract, available for trading today. As the first-of-its-kind in the region, the contract builds on DGCX’s growing suite of precious metal products. The Daily Gold Futures Contract was introduced in response to increased market demand and will be cleared by the Dubai Commodities Clearing Corporation (DCCC).
/bit.ly/3ojRxH0

Toshiba regains Tokyo exchange’s top category amid calls for better governance
Reuters Staff
The Tokyo Stock Exchange approved on Friday Toshiba Corp’s return to the bourse’s first section amid calls from some shareholders for better governance at the Japanese industrial conglomerate.
/reut.rs/2KPSadU

Fintech

Financial advisers’ embrace of digitalisation tested by pandemic; More firms are finding the value of tech to upgrade operations and improve customer experience
Jeff Salway – FT
The financial advice sector is sometimes perceived as a laggard when it comes to digitalisation, with an attachment to traditional ways of working. When these methods were disrupted by the pandemic, the industry’s technological capabilities were put to the test.
/on.ft.com/3qQ0R7j

BaFin boss ‘believed’ Wirecard was victim until near the end; Felix Hufeld thought short sellers might have faked the disappearance of EUR1.9bn, three people and document say
Olaf Storbeck – FT
The head of Germany’s financial watchdog suggested Wirecard might be the victim of an elaborate plot by short sellers even after the company discovered that EUR1.9bn of its stated cash was missing, according to three people briefed on the matter and a document seen by the Financial Times.
/on.ft.com/2M6327T

China’s c.bank to examine fintech firms for illegal credit scoring business
Rong Ma and Ryan Woo – Nasdaq
China’s central bank will look into and punish illegal personal credit scoring businesses, a central bank official said on Monday, as the government tightens regulation on fintech firms who collect and use personal data in financial services.
/bit.ly/36curvL

BIS Innovation Hub Sets Out Annual Work Programme And Launches Innovation Network
Mondovisione
The Bank for International Settlements’ Innovation Hub (BISIH) today set out its work programme, demonstrating its focus on six key areas as it fosters international collaboration among central banks on innovative financial technology.
/bit.ly/3iKXprV

How fintech and serial founders drove African pre-seed investing to new heights in 2020
Tage Kene-Okafor – Tech Crunch
When Stripe-subsidiary Paystack raised its seed round of $1.3 million in 2016, it was one of the largest disclosed rounds at that stage in Nigeria. At the time, seven-figure seed investments in African startups were a rarity. But over the years, those same seed-stage rounds have become more common, with some very early-stage startups even raising eight-figure sums. Nigerian fintech startup, Kuda, which bagged $10 million last year, comes to mind, for example. Also notable amidst the growth in seven and eight-figure African seed deals have been gains in pre-seed fundraising. Typically, pre-seed rounds are raised when the startup is still in the product development phase, yet to make revenue or discover product-market fit. These investments are usually made by third-party investors (friends and family), and range between $25,000-$150,000.
tcrn.ch/3sU55MS

Victory Park launches fintech SPAC with $225 million IPO
Victor Chatenay – Business Insider
Victory Park’s latest shell company seeks a $225 million IPO to acquire high-growth fintechs outside of the US. And European fintech unicorns—starting with eToro—are the most likely candidates.
bit.ly/3qQIsHk

Fintech valuations are soaring at the late stage, and one Silicon Valley VC is warning of a bubble
Callum Burroughs – Business Insider
Fintech valuations in the US and Europe are soaring as investors pile into digital finance opportunities. Late-stage fintech startups saw a record year of funding in 2020. Some sub-sectors of fintech may get left behind and it’s a bubble waiting to pop, according to Thomvest Ventures managing director Don Butler.
bit.ly/3ca4b9i

Cryptocurrencies

‘Frothy Squared’: Crypto Firms Are Lining Up to Tap Market Mania
Vildana Hajric, Olga Kharif, and Olivia Raimonde – Bloomberg
Wave of crypto-centric companies announce plans to go public; Renaissance sees at least eight crypto/blockchain candidates
The IPO fever whipping up animal spirits in the stock market has spilled over into the crypto-sphere. After watching investors pour millions into blank-check companies and seeing the likes of JFrog and Snowflake surge after market debuts, at least eight crypto firms are eyeing initial public offerings. Coinbase has filed. Other exchanges are laying out plans or looking to be acquired through special-acquisition vehicles. And two Bitcoin mining equipment firms in China are on IPO watch lists, according to Renaissance Capital.
/bloom.bg/39deQxQ

Biggest Crypto Fund’s 40% Premium Evaporates During Meltdown
Katherine Greifeld and Vildana Hajric – Bloomberg
GBTC falls 15% for the week while Bitcoin notches 11% decline; New entrants could crimp GBTC demand, says ETF Store’s Geraci
The biggest Bitcoin fund’s hefty markup is collapsing amid concern investors are racing for the exit amid the cryptocurrency’s plunge this week. The $22 billion Grayscale Bitcoin Trust (ticker GBTC) dropped over 15% this week, outpacing Bitcoin’s weekly losses of 11%. As a result, GBTC’s premium to its underlying holdings — which swelled to 40% in December as the cryptocurrency surged — has dropped to just 2.8%, the lowest since March 2017, according to data compiled by Bloomberg.
/bloom.bg/2M0HUjt

Cryptocurrency Startup Ripple’s Future Hinges on SEC Case; San Francisco company says its signature product, known as XRP, is a currency that shouldn’t be subject to securities laws
Paul Vigna – WSJ
Chief Executive Brad Garlinghouse, who appeared at a Singapore event in 2018, had been considering an IPO for Ripple. Brad Garlinghouse, the chief executive of Ripple, was last year publicly contemplating at the World Economic Forum in Davos, Switzerland, an initial public offering for the San Francisco startup.
/on.wsj.com/3oa42EZ

Bitcoin heads for worst week since September as scrutiny builds; Regulators tighten focus as institutions flirt with exposure to cryptocurrency
Alice Kantor – FT
Bitcoin has lost a tenth of its value this week, putting it on course for its worst run since a steep sell-off in September, as global regulators turn their gaze towards the controversial cryptocurrency. Despite a mini-rally on Friday, bitcoin was trading around $32,000 by late afternoon in London — on track for a second consecutive weekly drop after a dramatic rally through the turn of the year. The move lower had been stoked by industry reports that the same token had been used in two distinct transactions, an event that would have broken a key rule of the market. This was later dismissed by the bitcoin community and analysts, who said that there was no “double spend”, and what was being seen was the normal process whereby the blockchain — the digital ledger that underlies bitcoin — resolves transactions.
on.ft.com/2KKIzVA

Bitcoin Developers Weigh the Costs of Defying White Paper Copyright Claim; Should anyone in an open source community have to bear the legal brunt of a seemingly senseless lawsuit?
Colin Harper – Coindesk
The Bitcoin community is debating the extent to which Bitcoin Core developers and maintainers should shoulder the symbolic burden of hosting its white paper, particularly when doing so could unnecessarily sap their time and finances. The question arose after the Bitcoin white paper was taken down from Bitcoincore.org, a canonical repository for the Bitcoin software and educational resources like Satoshi’s 10-page thesis, following legal threats of copyright infringement from nChain Chief Scientist Craig Wright. Wright, who has made a career of his claim that he is Satoshi Nakamoto, also helped to spawn the Bitcoin fork Bitcoin Satoshi’s Vision (BSV).
bit.ly/3qQGSpa

Coinbase to offer secondary market for private shares ahead of public stock listing
Frank Chaparro – The Block
Coinbase — the largest cryptocurrency exchange in the U.S. — alerted shareholders that the firm would launch a secondary market for its private stock on Nasdaq Private Market. The move comes ahead of the firm’s much-anticipated public market debut. Coinbase, which filed a confidential S-1 in mid-December, said that it would provide further details to shareholders on Monday about the secondary market launch. “On Monday, January 25 at noon PT you will receive an email from the Nasdaq Private Market with details, including how you can access the market, what shares are eligible for trading, and how the market will function,” the message explained.
bit.ly/3sOaLIi

Grayscale has incorporated six more trusts, including ones for Chainlink and Tezos
Yogita Khatri – The Block
Crypto asset manager Grayscale has incorporated six more trusts, including those tied to Chainlink (LINK) and Tezos (XTZ) tokens. The trusts were formed by Delaware Trust Company, Grayscale’s “statutory trustee,” in recent months. Besides LINK and XTZ, the other four trusts include Basic Attention Token (BAT), Decentraland (MANA), Livepeer (LPT), and Filecoin (FIL). All the six trusts were formed in December, except the FIL trust, which was incorporated in October. The trust formations do not mean Grayscale will launch these products, Michael Sonnenshein, CEO of Grayscale Investments, told The Block.
bit.ly/3c6Y31l

Virginia’s Technology Firm to Offer Salaries in Bitcoin; Sequoia Holdings allowed its employees to receive a part of their salary in Bitcoin, Ethereum and Bitcoin Cash.
Bilal Jafar – Finance Magnates
Sequoia Holdings, a Virginia-based software development services provider, announced that its employees will be able to receive their salary in cryptocurrency assets like Bitcoin, BCH and ETH. According to the official announcement, many of Sequoia’s employees are enthusiastic supporters of cryptocurrencies. The technology company is collaborating with a third-party payroll processing firm to deduct relevant taxes and then covert the remaining amount in cryptocurrencies.
/bit.ly/3sU3YNl

Chainalysis: Criminals moved $34 million in crypto through DeFi in 2020
MK Manoylov – The Block
Roughly $144.3 billion passed through decentralized exchanges (DEXs) in 2020, but not all transactions involved legally-obtained crypto. Blockchain analysis firm Chainalysis estimates that about $34 million of decentralized finance (DeFi) transactions were conducted by criminal actors. The $34 million figure might not sound like a lot — it’s only 0.02% of the estimated DEX volume, after all. But that number remains significant because the frequency of such activity is expected to rise in 2021, wrote Chainalysis chief scientist Jacob Illum in a draft shared with The Block.
bit.ly/2Yc0aca

Beijing, Shanghai to Join Wider Testing of Digital Yuan in 2021; The wider effort to promote the digital currency precedes a launch in the “near future,” per a state media report.
Daniel Palmer – Coindesk
China’s biggest cities are planning to hold pilots to promote the use of the country’s central bank digital currency (CBDC) this year. According to a report form Chinese state media outlet Global Times on Sunday, Beijing’s mayor said the capital will hasten development of “demonstration zones” for fintech and professional services over 2021. That effort will include promoting a pilot application for the CBDC, officially called Digital Currency Electronic Payment (DCEP). Shanghai’s mayor made a similar pledge to promote the digital currency, per the report.
bit.ly/2NBGkFd

Regulate Cryptocurrencies? Not Yet; Janet Yellen should give digital currencies the time they need to innovate and evolve.
Tyler Cowen – Bloomberg
At her confirmation hearing last week, Treasury Secretary Janet Yellen said many cryptocurrencies are used “mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use.” Although her written testimony says the government also needs to “look closely at how to encourage their use for legitimate activities,” it seems clear: More regulation of cryptocurrencies is on the way.
/bloom.bg/3ogcQJF

Politics

ESG and the Biden Presidency
Suzanne Smetana via Nasdaq
In a dramatic change from the previous administration, we expect the administration of President Joseph Biden to implement a broad range of policy changes meant to mitigate climate risk and bring the US back into the global sustainability conversation. We will be monitoring several themes that we believe could arise under the Biden presidency:
/bit.ly/3a04Rv9

World’s Richest Shake Off Crisis in Record Setback for Equality
Catherine Bosley – Bloomberg
1,000 wealthiest people already recouped losses, Oxfam says; Charity says governments should make tax policy more equitable
The world is witnessing the greatest rise in inequality on record, with the poorest likely to feel the effects of the Covid-19 pandemic for years to come while the “mega rich” have already bounced back, according to Oxfam. That’s the conclusion from a report by the charity, which charts the wealth effects of the deepest slump since the Global Financial Crisis as widespread shutdowns of businesses lead to rising unemployment.
/bloom.bg/2YeE2xT

Birx Says Trump Presented Covid Charts She Never Made
Yueqi Yang – Bloomberg
Someone was creating parallel data and graphics, she says; Doctor was White House coronavirus task force coordinator
Deborah Birx, who recently ended her stint with Donald Trump’s coronavirus task force, said misinformation abounded in his White House and that the former president had presented “parallel” information about the pandemic. “I saw the president presenting graphs that I never made. So I know that someone — someone out there or someone inside — was creating a parallel set of data and graphics that were shown to the president,” Birx said in a lengthy interview on CBS’s “Face the Nation” that aired on Sunday.
/bloom.bg/2YbH59X

Putin Thrusts Global Food Markets Into Russian Politics; Russia’s government is squeezing wheat exports to push down prices in a country with a long history of public anger over food costs.
Megan Durisin and Yuliya Fedorinova – Bloomberg
Dmitry Bravkov is the kind of farmer that makes Vladimir Putin proud. The Russian president regularly touts his country’s rise to the top of the world’s agricultural exporters as another sign of its global power. But after 14 years of running a dairy and grain farm 300 miles southwest of Moscow, Bravkov has suddenly found himself on the wrong end of Kremlin policy. In three weeks, he’ll get less for his wheat because of new tariffs and quotas designed to curb exports and drive domestic prices lower.
/bloom.bg/3iVfpzX

Progressives Are Seething Over Biden’s Likely Pick for Banking Regulator; A former Obama administration official is the front-runner to be comptroller of the currency. The prospect has angered groups hoping for more dramatic reform.
Emily Flitter – NY Times
The internal fight among Democrats about how far left the party should lean has spilled over into the arcane world of financial regulation. President Biden is leaning toward nominating Michael S. Barr, a law professor and a former Obama administration official, to the position of comptroller of the currency, according to two people familiar with the process. The post is a relatively obscure but highly influential regulator of banks.
/nyti.ms/3qUR6Vv

Organizers of Trump Rally Had Been on Campaign’s Payroll
Bill Allison – Bloomberg
Former President Donald Trump’s campaign paid more than $2.7 million over two years to individuals and firms that organized the Jan. 6 rally that led to rioters storming the U.S. Capitol, according to the Center for Responsive Politics.
/bloom.bg/3iKJG48

Regulation

Beny Steinmetz found guilty of bribery; Swiss court sentences Israeli businessman to 5 years in prison over Guinea natural resources case
Neil Hume – FT
Mining tycoon Beny Steinmetz has been sentenced to five years in jail and fined $56.5m after being found guilty of bribery, in a case that will reverberate across the natural resources industry.
/on.ft.com/3sS0JG2

Accellion cyber incident
ASIC
On 15 January 2021, the Australian Securities and Investments Commission (ASIC) became aware of a cyber security incident affecting a server used by ASIC.
/bit.ly/2YbB2ST

ESMA call experts on commodity derivatives to join consultative industry group
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a call for candidates to renew a Consultative Working Group (CWG) for the ESMA’s Commodity Derivatives Task Force (CDTF). Interested experts are asked to send their application to ESMA by 7 March 2021.
/bit.ly/3ph7Vti

Updated Guidance on OATS Exchange Route Matching – Members Equity Exchange
FINRA
FINRA has updated its Guidance on OATS Exchange Route Matching to reflect changes necessary for firms to successfully match OATS routes to the related order on the Members Equity Exchange. Specifically, the update applies to Binary Users accessing the Members Equity Exchange and how to populate the Connection ID in OATS to ensure proper matching. If you have any concerns regarding this matter, please contact the OATS Help Desk at 800-321-6273.
/bit.ly/3oaEPdG

Paul Munter Named the SEC’s Acting Chief Accountant
SEC
The Securities and Exchange Commission today announced that Paul Munter will serve as the Acting Chief Accountant upon the departure of Sagar Teotia in February. Since 2019, Mr. Munter has served as Deputy Chief Accountant leading the international work in the agency’s Office of the Chief Accountant. As Acting Chief Accountant, Mr. Munter will serve as the principal advisor to the Commission on accounting and auditing matters. He also will be responsible for assisting the Commission in discharging its oversight of the Financial Accounting Standards Board and the Public Company Accounting Oversight Board.
/bit.ly/3iJRlj7

Small Business Capital Formation Advisory Committee Jan. 29 Meeting to Focus on Smaller Public Company Markets
SEC
The Securities and Exchange Commission today released the agenda for the Friday, Jan. 29 meeting of its Small Business Capital Formation Advisory Committee, which will focus on the experiences of smaller public companies and the Commission’s recent Securities Act Rule 701 and Form S-8 proposals.
/bit.ly/3qQQ9gU

Insider dealer Walid Choucair ordered to pay £3.9 million in confiscation
UK FCA
In a case brought by the Financial Conduct Authority (FCA) and heard at Southwark Crown Court, Her Honour Judge Korner, CMG, QC made a consent confiscation order totalling £3,893,964.82 to be paid by Choucair.
/bit.ly/3iKt7W0

Statement on Federal Reserve Board’s Proposed Collection of U.S. Treasury Transaction Data
Commissioner Elad L. Roisman – SEC
I commend the Federal Reserve Board on their proposal to collect data on daily transactions in U.S. Treasury securities from certain banking institutions through FINRA’s TRACE system.[1] Since July 2017, SEC-registered broker-dealers that are FINRA members have reported their Treasury transactions to TRACE. The TRACE data is a key tool in facilitating assessments of market dynamics, effective market oversight, and improved market transparency. As I have previously stated, given the importance of the Treasury market, it is vital that TRACE include a complete set of Treasury transaction information.[2] I look forward to continued collaborative efforts among regulators to pursue initiatives to enhance the Treasury market’s transparency, integrity, and resiliency.
/bit.ly/2NrpJnm

Investing and Trading

Hedge fund Element warns of deep economic blow from new virus strain; Europe’s investors and policymakers should cut forecasts, says fund’s head of markets
Eric Platt – Ft
Investors and policymakers are failing to grasp how deeply the new variant of coronavirus will damage the European economy, Element Capital, one of the world’s largest macro hedge funds, has warned.
/on.ft.com/3qKXhv6

Bullish Stock Bets Explode as Major Indexes Repeatedly Set Records; Wagers tied to Tesla, Amazon, Apple and Nvidia were among the most popular wagers recently
Gunjan Banerji – Bloomberg
Investors are piling into bets that will profit if stocks continue their record run. Options activity is continuing at a breakneck pace in January, building on 2020’s record volumes. It is the latest sign of optimism cresting through markets as individual and institutional investors pick up bullish options to profit from stock gains and abandon bearish wagers.
/on.wsj.com/3pdwoQ4

Iraq to Lower Oil Production to Compensate for OPEC Breach
Khalid Al Ansary – Bloomberg
Nation to pump 3.6 million barrels daily in January, February; SOMO says cuts depend on Kurdish government being in agreement
Iraq plans to cut oil output in January and February to make up for breaching its OPEC+ quota last year, according to the state company that markets the nation’s crude. OPEC’s second-biggest producer will pump around 3.6 million barrels daily for the two months, according to Ali Nizar, the deputy head of SOMO. That would be the lowest level since early 2015 and compares with around 3.85 million in December, according to data compiled by Bloomberg.
/bloom.bg/3ch1YbU

Warren Buffett’s Investments in Japan Struggle to Keep Up With the Market; Holdings in fossil-fuel businesses pressure companies that Berkshire Hathaway took 5% stake in
Suryatapa Bhattacharya and Megumi Fujikawa – WSJ
The chief executive of Japan’s Sumitomo Corp. SSUMY -0.40% was scrolling through emails on his iPhone late one night when he noticed one from Warren Buffett’s company. Masayuki Hyodo thought it looked like an ad, but he opened it just in case, then tapped on the PDF attachment.
/on.wsj.com/3caJavc

Cannabis Companies Are Ready to Roll; Strong sales during the pandemic and the Senate flip are easing some of the sector’s old challenges
Carol Ryan – WSJ
The haze is finally clearing for U.S. pot companies. Since Democrats won control of the Senate earlier this month, many in the cannabis industry are betting on a more rapid path to full federal legalization and a pickup in deal making as companies rush to scale up. The Global Cannabis Stock Index, which tracks U.S.-listed marijuana stocks, has climbed 35% since the start of this year.
/on.wsj.com/3sUkjBB

Environmental, Social and Corporate Governance

China’s Sweeping Climate Goals Meet Resistance On the Ground; Local governments and industry executives are finding ways around President Xi Jinping’s pledge to be net zero by 2060.
Bloomberg News
In the four months since China’s President Xi Jinping pledged that the country would be carbon neutral by 2060, its climate researchers have been busy making road maps. A long-awaited carbon market is finally about to kick off, and companies have begun announcing plans to zero out their emissions of planet-warming greenhouse gases.
/bloom.bg/2Mn7bnW

Total Gets Fastest Start on Clean Energy Among Europe Oil Majors
Laura Hurst and Francois De Beaupuy – Bloomberg
BP, Shell and Total all set net-zero emissions goals last year; French company has done biggest renewables deals since then
Total SE has had the fastest start in the race between oil supermajors to achieve net-zero carbon emissions. Europe’s three largest oil and gas companies — Total, BP Plc and Royal Dutch Shell Plc — all announced plans last year to eliminate most greenhouse gas emissions from their operations and the fuels they sell in the coming decades. It marked a turning point for the petroleum industry in the region, and heightened its divergence from U.S. majors that have yet to make such pledges.
/bloom.bg/2KK1hfZ

Credit Suisse, BNP to Exit Amazon Oil Finance After Criticism
Marion Halftermeyer and Laura Hurst – Bloomberg
Activist groups had called out companies for double standards; Banks face increasing pressure from such groups on climate
Credit Suisse Group AG, ING Groep NV and BNP Paribas SA will stop providing trade financing for oil exports from the Ecuadorian Amazon, after pressure from climate activists. The three banks were collectively responsible for $5.5 billion of such financing in the past 11 years, according to research by Amazon Watch and Stand.earth. The two activist groups called out the companies for double standards, saying they promoted corporate sustainability while also financing the Amazon oil trade that contributes to climate change.
/bloom.bg/2KJT3o8

Bank of America to give bulk of its employees US$750 in cash or stock as bonuses; Bonuses are on top of regular annual incentive pay, according to internal memo; Payments come as banks are navigating how to balance compensation with difficult operating environment
Chad Bray – South China Morning Post
Bank of America employees in Hong Kong and globally will see a little bit extra in their pay cheques after the American bank posted better-than-expected results in the fourth quarter despite the economic fallout from the coronavirus pandemic.
/bit.ly/2LU8Xx2

BP’s oil exploration team swept aside in climate revolution
Ron Bousso – Reuters
Nothing escapes the winds of change now sweeping through BP, not even the exploration team that for more than a century powered its profits by discovering billions of barrels of oil.
/reut.rs/3iLpHCu

Earth is losing ice faster today than in the mid-1990s, study suggests
Yereth Rosen – Reuters
Earth’s ice is melting faster today than in the mid-1990s, new research suggests, as climate change nudges global temperatures ever higher.
/reut.rs/2KPSFoi

Institutions

Deutsche probes alleged mis-selling of investment banking products; Investigation at German lender was triggered by client complaints last year
Stephen Morris and Olaf Storbeck – FT
Deutsche Bank is investigating whether its staff mis-sold sophisticated investment banking products to clients in breach of EU rules and then colluded with individuals within these companies to share the profits.
/on.ft.com/2LZzUPK

Picking hedge fund winners turns harder for investors; Market turmoil over past year makes it tougher than usual to determine a manager’s skill or luck
Laurence Fletcher – FT
Investors are returning to hedge funds after the sector posted its biggest gains in a decade in a topsy-turvy 2020. But picking which managers will do well this year will not be straightforward.
/on.ft.com/2LZiqTD

BlackRock, Aegon and Columbia Threadneedle fail ‘fee disclosure’ test; ClearGlass finds 242 asset managers met its minimum quality standards for provision of cost and performance data
Josephine Cumbo – FT
BlackRock has appeared on a list of investment companies failing to disclose fees adequately to some pension clients, more than three years after the fund manager worked with the UK regulator to improve fee transparency for the sector.
/on.ft.com/3c1Xgim

BlackRock’s sustainability ‘report card’ one year from Fink’s annual letter; Pledged shake-up delivers improved grades but asset manager could do better
Attracta Mooney – FT
When BlackRock chief Larry Fink issued his annual corporate missive to chief executives last January, he promised a huge shake-up at the world’s largest asset manager.
/on.ft.com/3c9aRoa

These Are the World’s Top-Performing Hedge Funds of 2020
Nishant Kumar – Bloomberg
Chase Coleman’s firm reaped $10.4 billion for clients in 2020; LCH’s annual ranking focuses on larger, older fund managers
Tiger Global Management placed first in a world hedge-fund ranking and quant powerhouse Renaissance Technologies was ousted, another sign that trading conditions favored human stock-pickers over algorithms.
/bloom.bg/39ffPhl

Deutsche Bank Probing Sales of Investment Banking Products
Dominic Lau, Lizette Chapman, and Steven Arons -Bloomberg
Bank may have missold products to clients in Spain, Portugal; Probe centered around a former employee, Financial Times says
Deutsche Bank AG is conducting an internal probe after receiving complaints that some bank employees sold risky investments to clients who didn’t properly understand them. “We initiated an investigation in relation to our engagement with a limited number of clients,” a bank spokesman said in a statement on Sunday, following a Financial Times report on the investigation. Deutsche Bank won’t comment further until it completes the review, he said.
/bloom.bg/3qRRZOG

Brevan Howard demands fee increase on BH Macro – but has it shot itself in the foot? Wants to return to 2/20 fee structure
David Brenchley – Investment Week
Brevan Howard Capital Management risks “shooting itself in the foot” and “effectively serving itself notice” by demanding too high a rise in the management fees paid by BH Macro investment trust investors, alongside the “egregious” imposition of a fee on share redemptions and capital returns. BH Macro, alongside its sister fund BH Global, published a letter from investment manager Brevan Howard, who said they wanted the fee structure reset to 2%/20%, reversing concessions previously agreed in 2016 and 2017.
/bit.ly/3caZAnc

Regions

Seven Banks Escape With Minor Fines in Mexico Antitrust Case
Michael O’Boyle – Bloomberg
Banks were fined only 4% of maximum amount: document; Probe cites evidence in electronic chats between 2010 and 2013
Mexico’s antitrust watchdog has fined seven banks a total of $1.5 million, only 4% of potential penalties, after finding evidence of price-rigging in the peso bond market early last decade, according to documents seen by Bloomberg News.
/bloom.bg/367DC0H

China’s Growing Power Is Scaring Ordinary Savers Out of Hong Kong; Bank of America estimates outflows could reach $36 billion this year as anxious Hong Kong residents reassess their options
Denise Wee and Katharine Gemmell – Bloomberg
It was the freezing of bank accounts that changed Dan’s mind. The Hongkonger, a finance worker in his early 50s, watched China tighten its grip on the city over the past few years with growing nervousness. Yet as a self-described apolitical person — he hadn’t attended any of the protests that hit the city in 2019, for example — he wasn’t really worried about being personally affected.
/bloom.bg/3iRialK

China’s Love of TikTok-Style Apps Powers $5 Billion IPO; Kuaishou Technology targets world’s largest IPO since late 2019
Joanne Chiu – WSJ
Kuaishou Technology has its eyes on the world’s biggest initial public offering in more than a year, seeking to raise about $5 billion from a Hong Kong share sale as short-video and live-streaming apps surge in popularity in China.
/on.wsj.com/3qTNX8r

Saudi Sovereign Fund Targets $1.1 Trillion in Assets by 2025
Abeer Abu Omar and Vivian Nereim – Bloomberg
Saudi Arabia’s sovereign wealth fund will more than double in size to exceed 4 trillion riyals ($1.1 trillion) in assets under management by 2025, Crown Prince Mohammed bin Salman said. The fund’s assets reached 1.5 trillion riyals by the end of 2020, he said in remarks broadcast on Saudi state television on Sunday.
/bloom.bg/3c9oG63

Brexit

Survey Finds 40% of Londoners Would Consider Move to Europe
Viren Vaghela – Bloomberg
More than one in three Londoners would consider leaving the U.K. capital, just as its financial district starts a push to boost its appeal in the wake of the pandemic and Brexit. About 40% of Londoners said they would be open to leaving the U.K. to work in another European country, according to a September survey of more than 1,000 people working in the U.K. by recruiter Adecco and YouGov. That compares to 16% of respondents who said they expected to leave the capital in a 2018 Grant Thornton poll.
/bloom.bg/3ooswuB

The Brexit Transition Is Over: Time To Update Your Global Mobility Policies And Practices
Edmund Novak – Forbes
After four and a half years and seemingly endless negotiations, the Brexit transition period is over. Citizens of the U.K. can no longer freely move across EU borders, and the U.K. has its own immigration requirements for EU citizens and other foreign nationals. These changes affect thousands of foreign workers stationed in the U.K., as well as U.K. nationals posted in the EU.
bit.ly/3qTdezg

Scotland is heading towards independence from the UK thanks to Boris Johnson and Brexit
Adam Bienkov – Business Insider
Scotland is heading towards independence from the UK after Scottish First Minister Nicola Sturgeon promised to push ahead with a referendum on leaving the Union. The pledge comes amid polls showing majority support among Scots for leaving the UK. Johnson has so far refused to give legal permission for another referendum, but Scotland could push ahead with a vote regardless.
bit.ly/2KLElgp

After Brexit, Ireland and France cut out the middleman – Britain
Richard Lough, Padraic Halpin – Reuters
From his office overlooking Cherbourg docks, general manager Yannick Millet points to trailers destined for Ireland that belong to Amazon and FedEx, new customers and a signal of a potential big shift in post-Brexit trade. Confronted by red tape and delays after Britain’s messy exit from the European Union, Irish traders are shipping goods directly to and from European ports, shunning the once-speedier route through Britain. “You see the shift in supply chains right here,” he said.
reut.rs/3piRCMm

Post-Brexit UK will need all its growth engines firing
Martin Wolf – FT
The hinterland is in revolt. This has been a theme of much of the political commentary on the election of Donald Trump and the vote for Brexit in 2016. In the UK, the idea has been further cemented by the success of the Tories in winning seats long loyal to Labour in the 2019 general election — turning the “red wall” blue. Quite suddenly, what economic geographer Andrés Rodríguez-Pose calls the “places that don’t matter” do: they have been at the forefront of these populist rebellions.
on.ft.com/2NqHljc

Fishermen feel waves of betrayal over Boris Johnson’s Brexit deal
Mure Dickie in Peterhead, Peter Foster in Brighton and Jim Brunsden – FT
When a flotilla of fishing boats sailed out of the south-west English port of Newlyn in 2016 to campaign for the UK to leave the EU, Gavin Addison was one of the fishermen aboard hoping Brexit would herald a new age of plenty for the sector. Nearly five years and one EU trade deal later, Mr Addison, now working out of Peterhead in north-east Scotland, the UK’s largest fishing port, said Britain’s leaders had failed to deliver on their Brexit promises. “We thought it was going to help the industry, that it was going to put the fishing back into the control of British fishermen,” Mr Addison said. “We were shafted.”
on.ft.com/3a0UHdR

Will Brexit Lead to Higher Funding Costs? Companies Aren’t Sure; More than $1.6 trillion in financial assets were shifted out of the U.K. since the 2016 referendum
Nina Trentmann – WSJ
Chief financial officers will have to wait and see if the U.K.’s exit from the European Union leads to higher funding costs and other charges, as many British and European companies loaded up on liquidity before the Dec. 31 deadline for a trade agreement, potentially masking any immediate effects of the split.
/on.wsj.com/3c9ZCMc

Miscellaneous

Third of Staff May Work From Home Permanently Post-Virus
Zoe Schneeweiss – Bloomberg
The pandemic has probably boosted remote working permanently, according to Deloitte’s annual Readiness Report, which suggests a third of employees will work from home even after restrictions end. The survey of more than 2,000 managers and public-sector business leaders worldwide highlights how investments that allow home-working will be increasingly important. Just 22% of respondents said their organizations had the technologies they needed before the pandemic, 42% said they developed them out of necessity during the crisis.
/bloom.bg/325dC2S

How to Keep Internet Trolls Out of Remote Workplaces; When companies move all employee communications online, they face the same problems as the rest of the internet. But they don’t have to let bad behavior seep in.
Nellie Bowles – NY Times
Gustavo Razzetti, who gets hired by companies to improve their work cultures, has noticed a change since the pandemic began last year: more political brawls, more managers losing control of their employees, a curious mix of hyper-engagement and lack of empathy.
/nyti.ms/2NCVOZL

How to Know When to Quit Your Job; Many baby boomers—especially those at the top of their game—struggle with the decision to step down. And when they leave, the transition is often ‘painful and messy,’ says one career coach.
Betsy Morris – WSJ
Older workers have a problem. They don’t know when to quit. As baby boom-era CEOs, professors, lawyers, engineers and others get older and keep their jobs longer, it is raising uncomfortable questions. Is there an art to stepping down gracefully? “I’m not sure there’s an art. I think it requires will,” says Anne Mulcahy, who was 56 when she voluntarily gave up the CEO job at Xerox to make way for her successor, Ursula Burns. She is now 68. “It’s hard. It’s not something that happens naturally if you like what you do and you’re good at it. You have to set time limits for yourself.” You also have to know what your purpose is after you retire or “you go into this void that’s really very tough,” she adds. Leaving the C-suite was one of the hardest things she’s ever done, says Ms. Mulcahy, who lives in Connecticut and is now actively involved with nonprofit organizations.
/on.wsj.com/39hgA9s

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Rick Lane

CEO, Trading Technologies

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