Voice of Blockchain 2019: Smaller, More Streamlined
Matt Raebel – John Lothian News
In 2018, “Disruption” Joe Hernandez’s Chicago-based blockchain conference, Voice of Blockchain, debuted at Navy Pier from August 24-25. When I asked Hernandez why he started VoB, he said he was “disappointed with the quality level of most blockchain events.” He said he wanted to connect the members of the cryptocurrency and blockchain ecosystem and provide them with the tools and connections they’d need to help foster wider adoption of the technology. “Personally,” he said, “I also like to ‘feed people their decentralized vegetables’ along the way.” When I asked him what he meant by that, Hernandez said that, like a kid who doesn’t want to eat vegetables, many people interested in blockchain technology don’t understand how or why it works, and don’t take the time to learn. Not everyone enjoys reading white papers or understands technical jargon. Hernandez said he wants to help these people learn by exposing them to this information so that they can fully understand the technology, rather than using the word “decentralization” as an empty buzzword.
To read the rest of this commentary, go here.
Hits & Takes
By JLN Staff
If you have not read my editorial “Statement on Justice for Jitesh Thakkar,” please do.~JJL
The Financial Times has a Special Report on Exchange Traded Funds.~JJL
The CFTC will host its second Fintech Conference on October 24 in Washington, DC.~JJL
We continue to conduct interviews for the Open Outcry Traders History Project. If you are interested in sitting for an interview, please contact me at email@example.com.~JJL
Coindesk reporter Rachel Rose O’Leary wrote a story about a currency backed by gold, silver, and copper created by ISIS to undermine sovereign currencies. No, it’s not a cryptocurrency – in fact, an ISIS member interviewed for the story claimed that the terrorist organization doesn’t typically use bitcoin or other cryptocurrencies.~MR
The Hong Kong Monetary Authority has issued a notice of disruption, saying that certain branches may have to close “due to vandalised facilities and traffic disruptions.” The organization suggested that customers use online or mobile banking until the “incidents of vandalism and arson attacks” subside.~MR
Former FT reporter Jeremy Grant has been at Pwc for a few years. His latest piece for their strategy-business.com site is “Growth strategies for an uncertain world; Internationalization can help businesses rethink their global footprint and governments attract trade and enterprise.”
It is written by David Wijeratne and Jeremy Grant.~JJL
Former Cboe executive Jay Caauwe is now co-founder and managing partner at Supercritical, LLC, “a canna consultancy solving your most critical issues and extracting maximum value for your business. Its founders bring decades of experience in capital raising, cultivation, distribution, finance, and operations to your organization.”~JJL
Jeff Carter has a post at his Points & Figures site titled “8 Reasons Why Chicago Will Dominate CryptoCurrency and 11 Reasons Why Chicago Won’t.”~JJL
R.J. O’Brien Announces Appointment/Promotions In Global Sales Organization
Chicago-based R.J. O’Brien & Associates (RJO) announced today a new appointment and promotions within its global sales organization. Joining the organization as Senior Managing Director and Global Head of Commercial Agriculture and OTC Markets, is Renée Laird, a more than 20-year veteran of the grain industry and commodity markets. RJO has also promoted Keith Riddoch to the new post of Head of Retail Futures, North America, and Wilson Tan to the new role of Head of Asia Sales.
Trump Won’t Stop His Abuses of Power; The president is violating his oath of office in plain sight. Congress can’t accept that.
Michael R. Bloomberg – Bloomberg
One could be forgiven for thinking that President Donald Trump wants to be impeached. On Thursday, on live television in front of the White House, Trump reiterated his call for Ukraine to investigate former Vice President Joe Biden, his leading rival in the 2020 election. He then invited China to do the same — “because what happened in China was just about as bad as what happened with Ukraine.”
*****Michael Bloomberg writes forcefully.~JJL
Supervision, Spoofing, Misappropriation, Reporting, Sunlight and an ICO
Gary DeWaal – Bridging the Week
Last week, the Commodity Futures Trading Commission publicized a cascade of settlements of enforcement actions alleging breaches of laws and rules related to supervision, spoofing, reporting, and misappropriation of proprietary information, as well as of the obligation to provide the CFTC truthful and complete information when asked. The CFTC also brought an enforcement action against one individual for providing misleading information to multiple futures commission merchants, and referenced the actions or inactions of compliance personnel in three settlements with registered entities. Separately, the federal court of appeals considering the CFTC’s request for a mandamus order following the settlement of a CFTC enforcement action against two food giants made public all relevant court papers after a federal district court had cloaked them in secrecy since mid-August.
Friday’s Top Three
Our top read story of the day on Friday was Thom Thompson‘s JLN piece Documents unsealed in CFTC v Kraft. Second was our latest video from the Open Outcry Traders History Project, an interview with Mike Fishbain. Third was ErisX’s post on market structure in What is the Optimal Market Structure for Digital Assets?
164,673,585 pages viewed; 23,935 pages; 221,722 edits
ETFs Get All the Buzz, but Mutual Funds Still Dominate. There’s a Reason; With $19.87 trillion in assets under management as of June 30, mutual funds are expected to remain a force despite the surging popularity of ETFs
Nick Ravo – WSJ
Over the past decade, many experts have predicted that the open-end mutual-fund industry would crumble, an inevitable victim of exchange-traded funds. No less an authority than Morningstar Inc. MORN 1.49% two years ago dubbed mutual funds’ projected slide in assets under management as “flowmaggedon.”
CFTC: Commissioners Shouldn’t Be Forced to Testify; Agency asks appeals court to block contempt hearing, calling order for commissioners to appear in court unprecedented
Dylan Tokar – WSJ
The Commodity Futures Trading Commission has asked an appeals court to block an order requiring three of its commissioners to testify over statements the agency published following a market-manipulation settlement.
Credit Suisse scandal shakes Zurich’s elite; Rarefied world of Swiss banking left stunned by tale of corporate espionage at country’s ‘crown jewel’
Sam Jones – FT
At the opening gala of the Zurich Film Festival a week ago, over champagne served to the city’s social elite, the small talk centred not on the dramas of the big screen but a much more local affair: the corporate spying tale at Credit Suisse.
Airbus to launch derivatives exchange for airlines to hedge falling revenues; Regulatory approval for the exchange could come as soon as the end of the year
Samuel Agini – Financial News
Airbus, one of the world’s biggest manufacturers of planes, plans to launch an exchange so that airline companies can trade financial instruments to protect their multi-billion-pound revenues, Financial News can reveal.
HKEX races to win support as LSE bid deadline looms; Investors reluctant to back Hong Kong group’s bid until governance issues addressed
Philip Stafford and Owen Walker – FT
Hong Kong Exchanges and Clearing is racing against the clock to make a formal bid for the London Stock Exchange Group by Wednesday’s deadline after the LSE has indicated a substantial uplift to the preliminary £32bn proposal and its terms is needed to unlock further discussions.
The rise of the financial machines; Forget Gordon Gekko. Computers increasingly call the shots in financial markets
The job of capital markets is to process information so that savings flow to the best projects and firms. That makes high finance sound simple; in reality it is dynamic and intoxicating. It reflects a changing world. Today’s markets, for instance, are grappling with a trade war and low interest rates. But it also reflects changes within finance, which constantly reinvents itself in a perpetual struggle to gain a competitive edge. As our Briefing reports, the latest revolution is in full swing. Machines are taking control of investing—not just the humdrum buying and selling of securities, but also the commanding heights of monitoring the economy and allocating capital.
A Banker Reveals the Bonus Culture Behind a $220 Billion Scandal
Irina Reznik and Ott Ummelas – Bloomberg
Between 2009 and 2015, Mihhail Murnikov spent his days handling as many transactions as he could at the non-resident unit of Danske Bank A/S in Estonia. Roughly a year after Danske admitted that those transactions were part of a $220 billion money laundering scandal, prosecutors from Tallinn to Washington D.C. are still trying to get to the bottom of what really happened. The Danske case recently made headlines again after the man who used to run the bank’s Estonian operations committed suicide.
A $440 Billion Pension Market Sounds Alarm as Liabilities Swell
Frances Schwartzkopff – Bloomberg
Danish funds seek review of formula for liability calculation; Denmark is home to one of world’s top ranked pension markets
Back in 2012, the world’s best-managed pension market was thrown a lifeline by the Danish government to help contain liabilities. That was when interest rates were still positive.
London’s stock exchange receives another Kazakh boost; Controlling shareholder in country’s biggest lender has offloaded a chunk of shares
Nastassia Astrasheuskaya – FT
The backers of Kazakhstan’s biggest lender Halyk Bank have sold $278m of shares on the London Stock Exchange through global depositary receipts, providing a boost to a bourse that is struggling to attract issuers.
Ex-Credit Suisse CEO Calls Negative Interest Rates ‘Crazy’
Andy Hoffman – Bloomberg
Oswald Gruebel says policy means money is not worth anything; Gruebel says Swiss chief at Credit Suisse in future sensible
Oswald Gruebel, who led both of Switzerland’s two biggest banks during his career, criticized negative interest rates and argued they’d lead to a further decline of the country’s financial sector.
Sharp rise in watchdog scrutiny of UK cryptocurrency groups; The Financial Conduct Authority is increasingly taking a tough line
Caroline Binham – FT
The number of cryptocurrency businesses in the crosshairs of the UK’s financial watchdog leapt by 74 per cent in the past year, as the Financial Conduct Authority estimates that consumers have lost at least £27m in crypto and foreign-exchange scams.
Fed official cites banks’ taste for reserves in repo glitch; Eric Rosengren denies supervisory rules were behind breakdown in overnight lending
Brendan Greeley and Colby Smith and Joe Rennison – FT
The largest US banks are holding on to a disproportionate share of cash reserves at the Fed to satisfy “tastes or preferences” for liquidity, and not just as a response to bank supervisors’ demands, according to Eric Rosengren, president of the Federal Reserve Bank of Boston.
PayPal Drops Out of Facebook’s Libra Payments Network
Peter Rudegeair – The Wall Street Journal
PayPal Holdings Inc. is withdrawing from the group of companies Facebook Inc. assembled to launch a global cryptocurrrency-based payments network.
The San Jose-based payments company “made the decision to forgo further participation” in the group backing the libra cryptocurrency, a spokesman said in an email. PayPal PYPL 1.73% remains supportive of Libra’s mission and will continue to discuss how to work together in the future, the spokesman added.
Invesco cuts 1,300 jobs as it grapples with passive challenge; Asset manager has laid off 12% of combined workforce after Oppenheimer deal
Richard Henderson – FT
Invesco has cut 1,300 jobs after absorbing smaller rival OppenheimerFunds earlier this year in America’s biggest fund management deal in half a decade.
HSBC to axe up to 10,000 jobs in cost-cutting drive; Interim chief Noel Quinn seeks immediate savings from across banking group
David Crow – FT
HSBC has embarked on a cost-cutting drive that threatens up to 10,000 jobs, as its new interim chief executive Noel Quinn seeks to make his mark on the bank.
The World Federation Of Exchanges Asks The FCA Not To Ban The Sale Of Crypto Derivatives To Retail Investors
World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has asked the Financial Conduct Authority (“FCA”) not to ban the sale of crypto derivatives to retail consumers while supporting the regulator’s desire to better protect vulnerable consumers.
Wall Street Brokers Missed the Index-Funds Memo; Even as passive investments thrive, big brokers put just 29% of fund assets in them. What’s going on?
Randall Smith – WSJ
In recent years, investors have been flocking to low-cost index funds, driven by their long-term record of outperforming higher-cost actively managed funds. But the trend isn’t quite as strong for clients of Wall Street brokers.
Credit Suisse’s potential damages mount in RMBS cases; Swiss bank is one of last to fight lawsuits over crisis-era mortgage-backed securities
Lindsay Fortado and Robert Armstrong- FT
Credit Suisse’s decision to fight lawsuits over financial crisis-era residential mortgage-backed securities has seen its potential damages almost double, long after most of its main rivals settled their cases.
Judge threatened to sic U.S. Marshals on CFTC brass; A federal judge warned CFTC officials to appear amid $16 million settlement with Kraft Heinz and Mondelez.
Dalton Barker – Crain’s Chicago Business
A federal judge threatened to send U.S. Marshals after top Commodity Futures Trading Commission leadership amid a fight between the regulator, Kraft Heinz and Mondelez International over an August settlement agreement, according to Bloomberg Law, which cites newly unsealed documents.
UK must create a cap-and-trade pollution market; Even a 100 per cent shift to electric cars by 2040 will still require three new generations of internal combustion vehicles, writes Dan Lewis
London School of Economics and Political Science
PMQs on Wednesday opened with an attack on the Government’s air pollution strategy from the backbenches. It was by no means the first time in recent years the strategy has been challenged. It wasn’t even the first time that day. That morning, Government had – for the third time – lost a legal battle over its plan.
BNY Mellon, Euroclear and HSBC ditch bond liquidity project; Decision underlines the challenge of increasing liquidity in a market that is crucial for companies wanting to raise debt capital
Samuel Agini – Financial News
BNY Mellon, Euroclear, HSBC and Algomi have scrapped a project meant to improve corporate bond liquidity, according to people familiar with the matter.
Exchanges, OTC and Clearing
Intercontinental Exchange Announces First Block Trade of Bakkt Bitcoin Futures
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. today announced the execution of the first block trade of Bakkt Bitcoin Futures submitted to ICE Futures U.S.
Verallia lists on Euronext
Euronext today welcomed Verallia, one of the world’s leading producers of glass packaging for beverages and food, to the compartment A of its regulated market in Paris (ticker code : VRLA).
Aquis Exchange Adds Austrian blue chips; Expansion brings number of markets within subscription package to 14
Aquis Exchange PLC
Aquis Exchange PLC (AQX.L), the exchange services group, which operates a pan-European cash equities trading business, Aquis Exchange, has today commenced trading in 36 of the largest Irish blue-chip stocks, including the ISA20 and mid-caps in the ISAQ. The stocks have been added as a further market within the Aquis subscription service, meaning Members will not have to pay an increased fee to be able to trade Irish securities. The addition of Ireland completes Aquis’ coverage of Western European markets and brings the total number of markets offered to 14*.
Nowcast and Tokyo Stock Exchange Start Proof of Concept Testing using Alternative Data – Limited Public Distribution of Mid/Small Cap Analyst Report in English –
Nowcast Inc. (“Nowcast”, CEO Masashi Tsujinaka), a subsidiary of Finatext Holdings Ltd. (CEO Ryota Hayashi) who handles analysis of big data, especially in the currently rising niche of alternative data, and Tokyo Stock Exchange, Inc. (“TSE”, President & CEO Koichiro Miyahara) will commence Proof of Concept (PoC) testing under the Proof of Concept Program for Utilizing Securities Data (*1) on limited public distribution of mid/small cap stock analyst reports in English by using alternative data (*2).
Fenics Market Data Expands FX Pricing Data Services
Fenics Market Data
Fenics Market Data, a division within BGC Partners, Inc., today announced the launch of its enhanced FX data package which will be one of the most comprehensive data packages commercially available for FX pricing.
Chinese FinTech Industry: An Update On Regulation And Market Movement
Aiden Wang – Seeking Alpha
In our previous article on Chinese FinTech sector earlier this year, we concluded that the outlook on the market was still not clear that time. Recent regulatory changes and Q2 earnings results from the companies lead us to believe that the industry is heading to a stabilized stage, which presents good opportunity for long-term investors. Companies that are delivering great growth numbers and are valued at discount should be on the radar of investors.
Kazakh fintech group Kaspi.kz postpones London IPO; Listing promised to be biggest by a central Asian group in more than a decade
Sarah Provan – FT
Kaspi.kz, a Kazakh fintech group, has postponed its London flotation, which would have been the biggest initial public offering by a central Asian company since the global financial crisis more than 10 years ago.
Vista Considers Sale of Stake in $10 Billion Fintech Giant
Dinesh Nair and Sarah Syed – Bloomberg
Vista Equity Partners is considering the potential sale of a stake in Finastra in a deal that could value the financial technology company at more than $10 billion including debt, people familiar with the matter said. Billionaire Robert F. Smith’s buyout firm is working with Goldman Sachs Group Inc. to gauge interest from potential buyers, according to the people, who asked not to be identified because the information is private. Vista is considering selling as much as a 50% stake in London-based Finastra, one of the people said.
Schwab’s Zero Commission Bombshell: So What’s Next For Fintech?
Tom Taulli – Forbes
In 1971, Charles Schwab launched a traditional brokerage firm. But the business did not take off until 1975, when the SEC ended fixed-rate commissions. Schwab knew that the future would be about the discount brokerage model. To pull this off, he needed to invest heavily in technology, such as with online brokerage systems. Over the years, as the platforms changed – such as from proprietary services like AOL to the Internet to mobile apps – Schwab somehow found ways to adapt.
Chicago fintech CEO killed in California car crash; Envestnet founder Judson Bergman, who revolutionized the financial services technology sector, and his wife died in an accident in San Francisco.
Lynne Markek Crain’s Chicago Business
Envestnet CEO Judson Bergman and his wife were killed in a San Francisco car crash early Thursday morning.
German finance minister Olaf Scholz wants to introduce digital euro
The Block Crypto
Germany’s finance minister and vice-chancellor, Olaf Scholz, is in favor of national digital currency. “Such a payment system would be good for financial center Europe and its integration into the world financial system,” Scholz said late last week in a report published by local business news magazine WiWo (WirtschaftsWoche). “We should not leave the field to China, Russia, the US or any private providers,” Scholz added, taking a dig at Libra, the Facebook-led proposed stablecoin.
Sharp rise in watchdog scrutiny of UK cryptocurrency groups
Caroline Binham – Financial Times
The number of cryptocurrency businesses in the crosshairs of the UK’s financial watchdog leapt by 74 per cent in the past year, as the Financial Conduct Authority estimates that consumers have lost at least £27m in crypto and foreign-exchange scams. The FCA now has 87 inquiries on its books into crypto companies, compared with 50 this time last year, according to recent data. The number includes early-stage scrutiny as well as full-blown enforcement investigations.
Abu Dhabi to put land records on blockchain
The Block Crypto
Abu Dhabi, the capital city of the United Arab Emirates (UAE), is set to put its land registry on a blockchain platform. The Department of Urban Planning and Municipalities, a government agency responsible for Abu Dhabi’s development strategy, has partnered with Indian IT firm Tech Mahindra for the initiative, according to a press release shared with The Block on Monday.
Crypto derivatives exchange CoinFLEX offering physically-settled Libra futures
The Block Crypto
Cryptocurrency derivatives exchange CoinFLEX is launching physically-settled futures contracts for Libra, the Facebook-led proposed stablecoin.
Bitcoin isn’t a security according to SEC staff
Stephen Palley – The Block Crypto
Bitcoin isn’t as security, according to an October 1, 2019 letter from the SEC’s Division of Investment Management staff. Cipher Technologies Bitcoin Fund (“Cipher”) filed a registration statement with the SEC to become a closed-end interval fund and an “investment company” under the Investment Company Act of 1940 (“The ’40 Act”). In written submissions to the Commission and in-person meeting, Cipher took the position that Bitcoin is a security.
Tether and Bitfinex decry expected “meritless and mercenary” cryptocurrency market manipulation lawsuit
The Block Crypto
Tether claimed in a company post today that the firm expects a self-described “meritless and mercenary lawsuit” based on a study that states, according to Tether, “that Tether issuances are responsible for manipulating the cryptocurrency market.” Bitfinex, Tether’s affiliated company, issued a similar company statement today, with the word “Bitfinex” replacing “Tether” through much of the post.
Coinbase in Talks to Acquire Rental Startup Omni’s Engineering Staff: Report
William Foxley – Coindesk
Cryptocurrency exchange Coinbase is said to be in talks to acquire the human assets of Omni, a Ripple-backed rental and storage firm. According to a report from TechCrunch this weekend, Coinbase may grab Omni’s engineering team to further develop its Coinbase Earn product. Coinbase told the tech news site no deal is on the table currently, however.
Ex-Federal Prosecutor: US Blocking Libra Has National Security Implications
Marie Huillet – Cointelegraph
Ex-federal prosecutor and now Andreessen Horowitz partner Katie Haun has argued that the United States blocking Facebook’s Libra digital currency will have national security implications. Haun’s comments were reported in a CNBC profile published on Oct. 6.
Liechtenstein’s Parliament Unanimously Approves New Blockchain Act
Joeri Cant – Cointelegraph
Liechtenstein’s Parliament has unanimously passed the Act on Tokens and Entities Providing Services Based on Trusted Technologies (TVTG), also known as the Blockchain Act. On Oct. 3, the Parliament of Liechtenstein approved the Blockchain Act, which aims to improve investor protection, combat money laundering and establish clarity. The new law will enter into force on Jan. 1, 2020. The parliament’s announcement claims that this act will make Liechtenstein the first country to have comprehensive regulation of the token economy.
Apple CEO Tim Cook Made A Serious Bitcoin Rival Warning
Billy Bambrough – Forbes
Bitcoin has soared this year as rumors swirl that some of the world’s biggest technology companies, including Apple, Samsung, Facebook, and Twitter, are taking an interest in cryptocurrencies. The bitcoin price leaped around 200% over the first six months of the year largely due to social media giant Facebook’s now crumbling plans to launch its own private bitcoin rival, libra.
Galaxy Digital, XBTO Just Made the First Block Trade of Bakkt Bitcoin Futures
William Foxley -Coindesk
Cryptocurrency investment fund Galaxy Digital and over-the-counter (OTC) trading firm XBTO have conducted the first-ever block trade of Bakkt’s bitcoin futures contract.
Acquisition Marks Broadridge Financial’s First Foray Into Crypto Services\
Nathan DiCamillo – Coindesk
Broadridge Financial Solutions can soon offer post-trade services for cryptocurrency after acquiring fintech company Shadow Financial Systems.
DTCC Pushes Back Blockchain Project to Avoid Brexit Complications
Ian Allison – Coindesk
The Depository Trust & Clearing Corporation (DTCC) has pushed back the release of its blockchain-based post-trade system for derivatives by several months, in part because of complications created by Brexit.
Trump moves to placate swing state farmers over biofuels; Fossil fuel industry loses out in policy switch
Gregory Meyer – FT
The Trump administration has changed course on US biofuels policy to placate angry farmers ahead of the 2020 election.
A Warren Presidency Might Not Be So Bad for Stocks, RBC Says
Joanna Ossinger – Bloomberg
Presidential candidate advocates “accountable capitalism”; RBC sees potential for market winners in a Warren White House
Concern on Wall Street has been rising along with 2020 Democratic presidential contender Elizabeth Warren’s poll numbers. But worries about her potential success may be overdone, according to RBC Capital Markets.
Second Whistle-Blower May Be Ready to Emerge in Trump Saga
Chris Strohm – Bloomberg
Law firm says it’s now representing ‘multiple’ people; Senator suggests whistle-blowers should testify in public
The lead attorney representing a U.S. intelligence official who came forward with a complaint against Donald Trump says his firm is now representing “multiple whistle-blowers” in connection with the matter, a new twist in the impeachment inquiry of the president.
Trump’s Motives Are Anybody’s Guess; When the president conducts foreign policy by phone call, it’s fair to ask who really benefits.
Jonathan Bernstein – Bloomberg
Late Sunday night, the White House announced that the U.S. would be, in effect, okaying a Turkish incursion into Syria, contrary to what had been long-standing policy. The decision came after President Donald Trump talked to Recep Tayyip Erdogan of Turkey. Other than noting that several experts on the issue were not at all happy with the reversal, I’ll leave it to others to assess the policy. What concerns me is having a president whose motives, at this point, just can’t be trusted.
FCA probes into crypto businesses surge 74%; Spike in investigations is part of a coordinated campaign of action by the regulator
Ryan Weeks – Financial News
The Financial Conduct Authority has accelerated its crackdown on cryptocurrency ventures significantly, data obtained by the law firm Pinsent Masons shows.
Dynamic Reporting Is Here
In response to user feedback, we have launched a new Dynamic Reporting capability in new CRD. A product of our Digital Experience Transformation (DXT) and Registration System Transformation (RST) initiatives, this initial release of Dynamic Reporting makes it easier for firm registration and compliance staff to answer common questions and make informed decisions using the most current individual registration data available.
ESMA Newsletter – Nº8
Our eighth edition of ESMA’s newsletter is here. In this issue, we have a look at our third video tutorial on ESEF regulation which has recently been published, we catch up on publications from September and we highlight where ESMA staff will be speaking this month. Also, don’t forget that last week the Board of Supervisors met, so stay with us for more updates as we look ahead to a busy October?.
EU antitrust chief signals further clampdown on US tech; Vestager’s interim order against Broadcom seen as useful tool in fast-moving markets
Javier Espinoza – FT
EU antitrust enforcer Margrethe Vestager will signal a further clampdown on US technology giants this month by imposing an interim order to force chipmaker Broadcom to cease alleged anti-competitive practices even before a full probe into its conduct ends.
Former Barclays bankers face Qatar fraud retrial at Old Bailey; Three one-time top executives face charges over lender’s 2008 refinancing
Caroline Binham and Jane Croft – FT
Three former top bankers at Barclays will enter London’s Old Bailey on Monday for the start of their second jury trial over the bank’s arrangements with Qatar at the height of the financial crisis.
Ninth Circuit Denies Metals Trader’s Appeal of CFTC Authorities
The U.S. Court of Appeals for the Ninth Circuit denied Monex’s petition for a full en banc hearing to reconsider the scope of the CFTC’s authorities to bring an anti-fraud enforcement action against the precious metal dealer.
CFTC Chairman Tarbert to Participate in a Q&A at the Yahoo Finance All Markets Summit
Chairman Heath P. Tarbert will participate in a Q&A on “Currencies, Bitcoin, and Beyond” with Yahoo Finance’s Scott Gamm at the Yahoo Finance All Markets Summit: Generational Opportunities
CFTC Commissioner Stump to Participate in a Fireside Chat at The World Federation of Exchange’s 59th General Assembly & Annual Meeting
Commissioner Dawn D. Stump will participate in the fireside chat “The Changing World: The Americas” with Edward Tilly, President, Chairman, and CEO of Cboe Global Markets at The World Federation of Exchange’s 59th General Assembly & Annual Meeting
Seniors Need Network Of People They Trust As Checks On Each Other To Prevent Fraud Say Experts
Ted Knutson – Forbes
Seniors need a network of trusted family members, friends and financial professionals as checks on each other to prevent becoming the victims of elder financial fraud, the Securities and Exchange Commission was told Thursday.
Investing and Trading
OSTC Launches Asia’s First Employer-Led Accredited Trading Programme
OSTC, a leading global derivatives trading and education business, announces an education initiative to provide a new financial trading programme in Singapore with the support of Singapore Exchange (SGX) Academy.
Companies struggle to digest ‘alphabet soup’ of ESG arbiters; Awareness builds that a standardised reporting approach is needed in the battle to fight climate change
Patrick Temple-West – FT
The future of financial reporting for environmental, social and governance investing arrived with a bang at the chicken farms of Mississippi last month.
Shareholders always come first and that’s a good thing; The economy would suffer if chief executives could unilaterally disempower investors
Jesse Fried – FT
In August, 181 chief executives, including Apple’s Tim Cook and JPMorgan’s Jamie Dimon, officially demoted their shareholders.
Bond investors weigh merits of ETFs; Vehicles can be used to complement active products or reweight portfolios
Billy Nauman – FT
Fixed income exchange traded funds have been having a bumper year with sky high inflows, but still face questions as some investors try to determine if passive bond strategies can perform well enough to merit a spot in their portfolios.
China and Japan link up with ‘feeder’ ETFs; Scheme intended to make cross-border equities investment cheap and efficient
Chris Flood – FT
Exchange traded funds might sound like an unlikely way to improve harmony between rival nations but China and Japan have agreed to co-operate on a new ETF scheme designed to strengthen the links between both countries’ capital markets.
SEC green light prompts rush into marijuana ETFs; Small issuers grab early mover advantage while others worry over legal risks
David Tuckwell – FT
Marijuana ETFs are rushing to list on US exchanges after getting a green light from the Securities and Exchange Commission.
Non-transparent ETFs lure asset managers; Known for passively tracking indices, ETFs are about to get active
Emile Hallez – FT
When asset manager American Century Investments received the government’s blessing to register a new kind of ETF this summer, other companies started queueing up to use the same design.
Louis Dreyfus profits fall 20% as pig flu knocks soyabean demand; Agricultural commodities giant also hit by trade tensions and erratic weather in first half
Neil Hume – FT
Louis Dreyfus Company reported a 20 per cent drop in first-half profits, underscoring the tough conditions facing grain and crop traders as they battle global trade tensions, the spread of deadly pig flu in China and increasingly erratic weather conditions.
Faangs lose their bite as investors opt for safer stocks; Markets are looking more sceptically at the likes of Facebook, Apple and Netflix
Richard Henderson – FT
The group of technology stocks that helped propel the US stock market to record highs in recent years — Facebook, Apple, Amazon, Netflix and Google — has become a drag.
October Is the Stock Market’s Most-Volatile Month. But Why?; There are plenty of theories, most of which don’t really hold up
Mark Hulbert – WSJ
There appears to be no fundamental reason why October should be the most volatile month of the stock-market calendar. Yet it often is.
Wall Street Brokers Missed the Index-Funds Memo; Even as passive investments thrive, big brokers put just 29% of fund assets in them. What’s going on?
Randall Smith – WSJ
In recent years, investors have been flocking to low-cost index funds, driven by their long-term record of outperforming higher-cost actively managed funds.
Deutsche Bank in strategy shift to address tech woes
Deutsche Bank (DBKGn.DE) is creating a new technology division in a strategy shift designed to reduce complexity and lower costs while transforming systems that have held back the bank for years.
Matt McLoughlin: Staying ahead of the game; One of The TRADE’s previous Rising Stars and head of trading at Liontrust Asset Management, Matt McLoughlin talks to John Brazier about the firm’s move to multi-asset trading, the importance of ‘softer’ trading skills and how change creates opportunities for those ready to take advantage.
John Brazier – The Trade
“I want people to be constantly pushing the boundaries. To be asking how we can improve and how we can break the paradigm. Looking at what’s new out there and doing something different. To be constantly trying to improve. If you don’t have people that want to do that, I probably don’t want them in my firm, quite frankly.”
HSBC Plans Job Cuts as Interim CEO Seeks to Make his Mark; Interim CEO Noel Quinn tries to cut costs while vying to take top job on a permanent basis
Margot Patrick – WSJ
HSBC Holdings HSBC -0.37% PLC is planning further job cuts to its 238,000 workforce, a person familiar with the matter said Monday, as interim Chief Executive Noel Quinn looks to make his mark on the bank as he competes for the top job.
HSBC Sees Headcount Shrinking by Thousands on Cuts, French Sale
Harry Wilson – Bloomberg
Natural attrition and streamlining could also cut workforce; Interim CEO Quinn’s plan could reduce headcount by 10,000
HSBC Holdings Plc is set to reduce its headcount by thousands as Europe’s largest bank looks to sell its French retail business and clamp down on replacing exiting staff.
Online wealth manager Nutmeg reveals widening losses; Group attracts strong financial backing despite never having made a profit
Emma Agyemang – FT
UK online wealth manager Nutmeg has revealed widening losses in 2018 as it increased its spending on staff and technology to attract new customers.
Barclays launches first zero-fee gold investment product; Price war escalates in precious metals markets
Chris Flood – FT
UK bank Barclays has muscled into the price war in the gold investment market with the launch of the world’s first zero-fee precious metals exchange traded products, which is due to launch in New York on Tuesday.
Tepper to Keep His Hedge Fund Alive for Handful of Key Investors
Hema Parmar – Bloomberg
Will retain 15 clients, give money back to others in 2020; Changes are part of planned transition to family office
Billionaire David Tepper will keep managing money for 15 investors and return the rest of the firm’s outside capital as he moves toward starting a family office.
Hedge-Fund Performance Goes From Bad to Less Bad; Hedge-fund returns were much improved over the first half of 2018 compared to the same period last year, but still woefully trail the market
Eric Uhlfelder – WSJK
The hedge-fund industry continues to do this year what it has been doing for more than a decade—trailing the stock market big time.
A Silver Medal…for Stock Picking This Time; Olympic medalist Joe Hudepohl of Eaton Vance shines in manager contest; Akre Focus Fund rides a 20% gain over 12 months to win first
Suzanne McGee – WSJ
Being a multiple—and repeat—winner isn’t a new experience for Joe Hudepohl. As the youngest member of the U.S. swimming team at the 1992 Olympics in Barcelona, Mr. Hudepohl earned gold and bronze medals in the 100- and 200-meter freestyle relays. Four years later, he won another gold in Atlanta.
Jacob Rees-Mogg planned to sell Somerset Capital to US group; Colleagues at the fund manager baulked at prospect of deal during run-up to Brexit
Jim Pickard and Owen Walker – FT
Cabinet minister Jacob Rees-Mogg and his business partner were negotiating to sell their fund management company to an American group for up to £100m during the summer before talks collapsed after objections from colleagues.
China’s Breeding Giant Pigs That Are as Heavy as Polar Bears
In a farm deep in the southern region of China lives a very big pig that’s as heavy as a polar bear.
China’s Gold-Buying Spree Tops 100 Tons During Trade War
Ranjeetha Pakiam – Bloomberg
Central bank adds bullion for 10th straight month in September; Beijing ‘needs a hedge’ against its dollar holdings, OCBC says
China has added more than 100 tons of gold to its reserves since it resumed buying in December, reinforcing its standing as one of the major official accumulators as central banks stock up on the precious metal.
The euro’s guardians face a roar of the dinosaurs; The true risk to the eurozone economy is overly tight, not loose, monetary policy
The editorial board – FT
The attack on the European Central Bank’s renewed stimulus by six former central bankers is extraordinary. Already, the ECB had been publicly criticised in unusually sharp terms by dissenters on its own governing council and leading German financial executives. But the new critics, in a memo published on Friday, include some of the grandest names in central banking, such as Helmut Schlesinger, the 95-year-old former Bundesbank head, and Otmar Issing, an ECB board member when the euro came into being.
JPMorgan Says Euro Area to Be Key Equities Winner in Brexit Deal
Namitha Jagadeesh – Bloomberg
Euro-area stocks would stand to gain more from a Brexit deal by the end of this month than U.K. shares, JPMorgan Cazenove strategists said.
When This $2 Trillion Market Turns, Start Worrying About Brexit
Anooja Debnath and John Ainger – Bloomberg
So far gilts have rallied on Brexit risks as pound slumps; But some fund managers starting to trim exposure to U.K. bonds
For post-Brexit Britain, the kindness of strangers and their money will be more vital than ever. Prime Minister Boris Johnson has amped up his rhetoric that the U.K. will leave the European Union at the end of this month — even if the two sides can’t agree on the terms of its departure or their future trading relationship. In the worst-case scenario, a chaotic exit followed by ratings downgrades, a plunge in the pound, a government boosting spending and a central bank struggling to support markets could see capital flee from the country’s bonds.
No-deal Brexit poses unknown risks of disruption, warns financial watchdog
Holly Williams, PA Deputy City Editor
The Financial Conduct Authority’s Brexit chief has warned there are still unknown risks of disruption to the financial sector should the UK crash out of the EU without a deal.
Johnson to Challenge the Queen to Fire Him, Sunday Times Reports
Dominic Lau – Bloomberg
U.K. Prime Minister Boris Johnson is prepared to challenge Queen Elizabeth II to dismiss him rather than resign as he attempts to push through Brexit by the Oct. 31 deadline, the Sunday Times reported, citing senior aides.
Scant evidence that hedge funds are betting on no-deal Brexit; Hickam’s dictum applies — a market can have as many diseases as it damn well pleases
Bryce Elder – FT
You probably know Occam’s razor, a line of reasoning that says the simplest explanation tends to be the correct one. You might not know its less famous counterpoint, Hickam’s dictum, which advises against oversimplification.
The Rich Really Do Pay Lower Taxes Than You
David Leonhardt – NY Times
Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.
His claim sparked a debate about the fairness of the tax system. In the end, the expert consensus was that, whatever Buffett’s specific situation, most wealthy Americans did not actually pay a lower tax rate than the middle class. “Is it the norm?” the fact-checking outfit Politifact asked. “No.”
Time for an update: It’s the norm now.
A Good Man Is Getting Even Harder to Find; The future of mating looks grim as more educated women compete for fewer eligible males.
Gerard Baker – WSJ
When my daughters were small they had a favorite bit of doggerel that prefigured some early feminist leanings. “Girls go to college to get more knowledge/Boys go to Jupiter to get more stupider,” they would chant at me, and, with more evident passion, at any young males in their vicinity. I’d try to take issue with the grammatical betise in the second line that, I would point out, slightly undermined the premise of the jibe, but it was no good. Girls were smarter than boys and immeasurably superior in just about every other respect.
How to Succeed in Business? Major in Liberal Arts; Resist the skills-gap panic; there are plenty of science grads. Forward-looking executives are investing in creativity and adaptability.
Andrea Gabor – Bloomberg
The combatants in the U.S. education wars don’t agree on much, but there’s at least one concern that most reformers and educators across the political spectrum seem to share: fear that universities aren’t producing enough science, technology, engineering and math majors. But just as states and school districts add new technology requirements and open STEM-oriented schools, leading technology companies are heading in the opposite direction, forming partnerships with liberal-arts colleges and seeking to hire their graduates.