EU Faces Fresh Call to Reform Capital Markets Ahead of Brexit

May 17, 2019

First Read

POP goes the speed bump!
Thom Thompson – John Lothian News

ICE Futures US tried to certify (that is, to fast-track) to the CFTC a change to the order execution rules in the central limit order books for its two-year old daily gold and silver futures contracts. The changes are designed to protect market makers in these low volume contracts. The exchange hopes that the change will help increase volume in the contract. The rule changes establish a delay in execution of an incoming order against a resting order – passive order protection or POP – giving the trader a chance to cancel and/or reprice the order before it is matched. It is a precedent-setting disruption to otherwise strictly observed orderbook priorities. ICE Futures US, one of a number of futures and equities exchanges belonging to the same company that owns the New York Stock Exchange, is not a major silver and gold trading exchange.

Right away, the change was controversial with some market participants, especially the FIA’s Principal Traders Group or PTG. ICE, which was required to report any opposing views in its new rule certification, noted the opposition in its certification to the CFTC. Instead of allowing the rules to go forward, the CFTC took the somewhat unusual step of publishing them for public comment until March 15. ICE’s POP is the first “speed bump” proposal to come before the CFTC.

To read the rest of this commentary, go here


Hits & Takes
JLN Staff

If you love seeing live music in a great, intimate setting, come check out Rock For Altso at The Cutting Room in New York City on May 22 at 6 p.m. Proceeds from tickets go to A Leg To Stand On, which helps kids in developing countries with prosthetic limbs and surgeries. Bands are made up of musicians from the financial markets who are pros by day and great musicians by night. For tickets go HERE. Great venue, great cause, great time.~JK

The Financial Times has moved from its Southwark Bridge headquarters. I visited the FT building several times, including the first one when Jeremy Grant gave my son Tim a tour of the facility when he was considering a career in journalism.~JJL

And here is a quote today from Jeremy Grant on Twitter: “Euronext’s European wrap-up is almost complete, by the look of it. Can Bolsa y Mercados Espanoles be next, even if it is indeed arguably perfectly able to stand alone? The Irish Stock Exchange was – like BME – in the orbit of local brokers and they sold out, eventually.”~JJL

After 29 years at Fidessa, Paul Nokes announced on LinkedIn that he is moving on.~JJL

Rahm Emanuel, who spoke at our 2015 Marketswiki Education Series, leaves office as mayor of Chicago on Monday. Recently elected Lori Lightfoot will be sworn in as the new mayor of Chicago on Monday and “will serve as the city’s first African-American woman mayor as well as its first openly gay leader.”~JJL

The Chicago production of “Hamilton” will close Jan. 5, 2020. Get your tickets while the show is still in town.~JJL

I am embarrassed to admit I didn’t realize Susquehanna had a blog dedicated to games and gambling called Raise Your Game. Posts include “How Do We Quantify the Value of a Defensive Basketball Player?,” “NHL Draft Pick Probability” and “Poker Tournament Tips for New Players.” I’m even more embarrassed because it was mentioned in a great story from Bloomberg’s Annie Massa in November 2018 that I read – The Poker Aces Playing a Key Hand in the $5 Trillion ETF Market. If you didn’t know, Annie Massa is the recipient of the STA’s first ever “Excellence in Journalism” award. More info on the STA Women in Finance Committee’s Evening of Recognition – held on May 21 in New York – can be found here. ~SD

The CFTC was at this year’s Consensus blockchain conference in New York. At their booth, they were telling attendees that if they reported crypto scams that led to at least $1 million in sanctions against such companies, they would be entitled to 10 to 30 percent of the resulting monetary penalty.~MR

Because crypto is unregulated but still may be subject to certain laws in the U.S., many companies prefer to base their operations in Caribbean island nations where trade laws are somewhat more relaxed. Perhaps due to the recent legal troubles of Tether, which is the customer of a Bahamian bank, the Bahamian government has proposed rules for token sales for the first time.~MR


Gender Diversity: The Need for Early Intervention – Diane Saucier, Hitachi Vantara

In order for gender diversity in financial services to really flourish, future generations of women need to have access to the resources to build the right skillset earlier than college or high school. In this video, Hitachi Vantara Senior Solutions Marketing Manager Diane Saucier, a founding board member of Women In Listed Derivatives (WILD), talks about the problems the industry faces when it comes to gender diversity as well as what WILD is doing to help.

Watch the video and see the stories referenced here »


The WSJ CEO Pay Ranking
The median S&P 500 CEO made $12.4 million in 2018, a post-recession record. See who made the most-and the least-in WSJ’s annual pay ranking.

*****Median CEOs get run over.~JJL


I.M. Pei, Architect Who Designed Louvre Pyramid, Dies at 102
James S. Russell – Bloomberg
‘The most pragmatic and the most visionary of architects’; His works include the Bank of China Tower, Jacob Javits Center
I.M. Pei, a dominant figure in American architecture for more than three decades who designed the Louvre’s crystal pyramid and the angular East Building of Washington’s National Gallery of Art, has died. He was 102.

***** Is he the last one to know where the Holy Grail is located?~JJL


An estimated 10.7 million Americans could miss work the Monday after the ‘Game of Thrones’ finale
Some 27.2 million workers will be late and distracted, costing $3.3 billion in lost productivity, management firm survey predicts
Nicole Lyn Pesce – MarketWatch
What do we say to our bosses the Monday after “Game of Thrones” ends?
Apparently, “Not today.”
An estimated 10.7 million Americans will skip work the morning after the feature-length series finale of the HBO juggernaut airs on Sunday night, according to The Workforce Institute at Kronos, either by calling in sick, taking a last-minute personal or vacation day, or making some other arrangement.

***** I am guessing Jeff Bergstrom put this story in JLN so he has a good cover story for missing work on Monday.~JJL


Thursday’s Top Three
It happens like this sometimes. You get a good story and it becomes the third most read piece of the day. And then people say, “Hmm, looks like a good idea or story.” So then it becomes the top story. Exhibit A is CNBC’s Judges mulling challenges to commodity spoofing trading cases, the top story of the day on Wednesday. Second was The Wall Street Journal’s First ‘Speed Bump’ Coming to U.S. Futures Markets. Third was John Lothian’s column How to Improve Gender Equality. It comes with pledges to reach 50:50 male/female ratios at MarketsWiki Education events, on panels and in stories. That’s something else that makes you say, “Hmm, sounds like a good idea.” If you have a recommendation for a woman to speak at the upcoming MarketsWiki Education events, email John at


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CryptoMarketsWiki Coin of the Week: Ether (ETH)
A study released by blockchain research firm Chainalysis this week revealed that one-third of all Ether in circulation is being held by 376 people worldwide. The report also said that the majority of these “Whales” rarely trade their digital assets, but that when they do, they tend to be large-volume trades that cause a statistically significant impact on the volatility of the crypto markets.

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.

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Recently updated pages include
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Lead Stories

EU Faces Fresh Call to Reform Capital Markets Ahead of Brexit
Alexander Weber – Bloomberg
Germany, France and Netherlands say more work is needed; Expert group could help shape future relations with London
Germany, France and the Netherlands are calling on the European Union to press ahead with capital market reforms because Brexit makes the topic an “urgent strategic issue.”

Euronext closes in on Olso Børs acquisition; Group’s shareholders unanimously approve acquisition of Oslo-based exchange after receiving clearance from Norwegian Ministry of Finance.
John Brazier – The Trade
Euronext has moved closer to completing its acquisition of Oslo Børs following a drawn-out bidding war with rivals Nasdaq.

Exclusive: Banks to invest around $50 million in digital cash settlement project – sources
Anna Irrera – Reuters
Several of the world’s largest banks are in the process of investing around $50 million to create a digital cash system using blockchain technology to settle financial transactions, according to people familiar with the plans.

Lack of Banking Options a Big Problem for Crypto Businesses; Bitfinex’s loss of access to $850 million in customer funds after using a Panama-based processing firm highlights a persistent issue for crypto companies
Paul Vigna – WSJ
Cryptocurrency companies shunned by banks often turn to shadowy middlemen for payment processing and other financial services. One of those companies is at the center of the mystery surrounding Bitfinex’s missing customer funds.

Secretary Perdue Is Open to Carbon Markets for Farmers, Pingree Says
Successful Farming
Agriculture Secretary Sonny Perdue expressed support for carbon markets for farmers during a meeting, Representative Chellie Pingree said on Monday. An upcoming agriculture appropriations bill will likely include language that urges USDA to research the possibility of such markets

LNG derivatives take off; Trading surges as the global liquefied natural gas industry shifts to market-based pricing
Ciaran Roe and Frank Konertz of S&P Global Platts – MarketVoice
The liquefied natural gas (LNG) industry’s emergence as a distinct hydrocarbon market has accelerated in 2019. Having historically been seen as a product that traded solely on long-term contracts indexed against oil and natural gas prices, LNG is maturing from its position as “junior partner” to become a mature commodity with its own dynamic spot market. The LNG spot market accounted for 25% of total trade in the product in 2018, versus 20% the year prior, according to the International Group of Liquefied Natural Gas Importers.

The Small Exchange Raises $10 Million from Citadel Securities and Jump Capital in New Strategic Financing Round
The Small Exchange, a new futures exchange backed by renowned innovators in the financial industry, is proud to announce the addition of two new strategic partners, Citadel Securities and Jump Capital. Both firms have each made a $5 million investment in the Small Exchange and plan to be key participants on the Small Exchange when it launches later this year.

ISDA Publishes Two Consultations on Benchmark Fallbacks
International Swaps and Derivatives Association
ISDA has launched two new consultations on benchmark fallbacks – one covering adjustments that would apply to fallback rates in the event certain interbank offered rates (IBORs) are permanently discontinued, and another relating to pre-cessation issues for LIBOR and certain other IBORs.

Additional opportunities in new markets? Our ESG futures get CTFC approval.
In February we have launched the first index futures on a number environmental, social and governance (ESG) versions of selected benchmark indices from STOXX®. These indexes utilize several methodologies to achieve the desired result, from exclusions to weighting considering the carbon and climate impact footprint of the companies that are part of the index constituents. The growth of ESG investing has created demand for sophisticated or diversified index concepts that move away from existing benchmarks and derivatives to versions that reflect these sustainability factors. But how is the trend in other markets, what opportunities exist in the U.S. for example? And how does the currently achieved CTFC approval support us?

tastytrade Launches tastyworks Australia, a New Brokerage Firm Providing Direct Access to U.S. Markets for Self-Directed Investors in the Region; tastyworks Australia Will Be Headed by John Ezzy as CEO and Glenn Hall as COO
tastytrade, Inc., the award-winning, innovative financial media company and parent to financial subsidiaries, announced opening tastyworks Australia, allowing self-directed investors to access the U.S. markets with high-speed executions and low and capped commissions through tastyworks in the U.S. Access to free engaging educational content, that empowers investors, will be provided through tastytrade. Currently tastytrade reaches over 165 countries.

EU trio tries to quicken drive to more integrated capital markets; Brexit gives bloc ‘urgent strategic’ problem, say France, Germany and Netherlands
Jim Brunsden – FT
France, Germany and the Netherlands have issued a joint call for more integrated capital markets in Europe, warning that Brexit had left the bloc facing “an urgent strategic issue”.

ISDA Publishes Two Consultations on Benchmark Fallbacks
ISDA has launched two new consultations on benchmark fallbacks – one covering adjustments that would apply to fallback rates in the event certain interbank offered rates (IBORs) are permanently discontinued, and another relating to pre-cessation issues for LIBOR and certain other IBORs.

Exchanges, OTC and Clearing

Euronext’s shareholders unanimously voted in favour of Euronext’s acquisition of up to 100% of Oslo Børs VPS
Euronext, the leading pan-European exchange, announced today that its shareholders unanimously voted in favour of Euronext’s acquisition of up to 100% of Oslo Børs VPS’s capital during the General Meeting of Shareholders held on 16 May 2019 in Amsterdam. Shareholders’ approval was the last major condition to complete the transaction, since most of the other condition precedents highlighted in Euronext’s offer document were already met, including the clearance received from the Norwegian Ministry of Finance. Euronext expects to meet the remaining customary conditions described in its offer document available on and close the transaction before the end of Q2 2019. Defined terms with capital letters herein have the meaning as in Euronext’s Offer Document published on 14 January 2019 and available on

Testing the waterfall: CME and LCH stand up to stress tests
Will Acworth – MarketVoice
On May 1, the Commodity Futures Trading Commission released a report on tests that it conducted on the financial resources held by two large clearinghouses to cover losses arising from a member default. The tests, which were based on data collected in 2018, were part of the agency’s ongoing program to ensure the resiliency of the clearing system and its ability to absorb extreme market movements.

Cboe Global Markets Announces 2019 Annual Meeting Results
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced the shareholder voting results from its 2019 Annual Meeting held today.

Euro Clearing in Frankfurt – an update
Matthias Graulich – Eurex Exchange
A lot has happened since my last post. To put the events in a nutshell: Clients have gained substantial confidence in the quality of euro clearing in Frankfurt. This is demonstrated by increasing volumes across all tenors, a market share of more than 14 percent in notional outstanding of EUR denominated OTC interest rate derivatives (IRD), and a growing demand on the buy side.

SGX named “Financial Metals Service Provider of the Year” in Platts Global Metals Awards
High-grade iron ore derivatives among innovations demonstrating depth of risk-management service offering; SGX bringing “virtual steel mill” closer to reality
Singapore Exchange (SGX) has been named “Financial Metals Service Provider of the Year” by S&P Global Platts in its Global Metals Awards.

Corporates raise record $763,888 at SGX Bull Charge Charity Golf
Record proceeds include support from Premium Partner Sasseur Asset Management; First of three sports events that anchor annual Bull Charge programme
The SGX Bull Charge Charity Golf tournament brought together corporates to raise $763,888 for a good cause today, the highest amount since the event started in 2013.

Clearstream enters the Australian market with the acquisition of Ausmaq Limited
Deutsche Börse
Clearstream, the post-trade service provider of Deutsche Börse Group, is further expanding its investment fund offering and entering the Australian market. The Company has entered into an agreement with National Australia Bank Limited (NAB) to acquire the Sydney-based specialist fund service provider Ausmaq Limited. The transaction, which is subject to common conditions (including regulatory approvals), is expected to close in the second half of 2019.

Susan Meiselas was awarded the “Deutsche Börse Photography Foundation Prize 2019”
Deutsche Börse
The Deutsche Börse Photography Foundation Prize 2019 was presented to the artist Susan Meiselas at the Photographers’ Gallery in London on Thursday evening, May 16, 2019. The prestigious prize, worth £ 30,000, was awarded to Meiselas for her first European retrospective, Mediations, which was presented in 2018 at the Jeu de Paume in Paris.

AIX appointed Timur Abushkin as Head of Markets
The Astana International Exchange (AIX) is pleased to announce the appointment of Timur Abushkin as Head of Markets. Timur has had more than 15 years of experience working with investment banks, exchanges and fintech startups. Before joining the AIX, Timur held key management positions in a number of fintech startups, such as Tokenomica, a platform offering digital assets in Singapore and Xena Exchange, an innovative digital asset exchange in London. Prior to that he worked with JP Morgan in equity sales and as Head of Sales of the RTS Stock Exchange (later the Moscow Exchange after a merger with the MICEX),

First Leveraged Products Launched on STOXX ESG Benchmarks
Goldman Sachs is the first issuer to launch ESG warrants and so-called turbos on the STOXX® Europe 600 ESG-X Index, EURO STOXX® 50 Low Carbon Index and STOXX® Europe Climate Impact Ex Global Compact Controversial Weapons & Tobacco Index. The three liquid ESG benchmarks underlie since February Europe’s first environmental, social and governance (ESG) futures.


OpenFin Raises $17 Million Series C From Wells Fargo And Barclays
OpenFin, the operating system (OS) of finance, has raised $17 million in Series C funding from major banks and leading Fintech investors. The funding round was led by Wells Fargo with participation from Barclays and existing investors including Bain Capital Ventures, J.P. Morgan and Pivot Investment Partners. The Series C round brings OpenFin’s total amount of venture funding to $40 million. Proceeds from the financing will be used to make OpenFin OS ubiquitous on financial desktops and to fund further product innovation. This includes OpenFin’s new Cloud Services offering, which enables banks, asset managers, wealth managers and hedge funds to provide their own private app stores for employees and customers out of the box.

UP Fintech Holding Limited Reports Unaudited First Quarter 2019 Financial Results
GlobeNewswire via Yahoo Finance
BEIJING, May 17, 2019 (GLOBE NEWSWIRE) — UP Fintech Holding Limited (TIGR) (“UP Fintech” or the “Company”), a leading online brokerage firm focusing on global Chinese investors, today announced its unaudited financial results for the first quarter ended March 31, 2019. “We are pleased to report encouraging growth in the first quarter of 2019. Apart from business growth, we have obtained broker/dealer In-Principle Approval (“AIP”) from Monetary Authority of Singapore, which is a great milestone to our growth strategy,” stated Mr. Tianhua Wu, CEO of UP Fintech.

Fintech lender Prospa launches $110 million IPO after botched first attempt
Aleks Vickovich – Business Insider Australia
Everyone deserves a second chance. And now Australian fintech-enabled small business lender Prospa will get one, as it confirms its intentions to list on the ASX. Again. In a a prospectus lodged with the exchange on Thursday, Prospa announced it is seeking to raise $109.6 billion with an initial public offer (IPO) of new shares at a price of $3.78 per share.

Patrick Buhannic Voluntarily Withdraws from All Suits Against TradingScreen
TradingScreen, Inc.
TradingScreen Inc. (TS), the global, multi-asset class order and execution management system (OEMS), today announced that Patrick Buhannic has voluntarily agreed to be dismissed with prejudice from all the lawsuits brought by his brother Philippe Buhannic against TradingScreen and other defendants in New York State Court and U.S. District Court for the Southern District of New York. As a result, Philippe Buhannic is the only remaining plaintiff (representing himself pro se) in those actions.


Left for Dead, Bitcoin Goes on a Tear and Sparks a New Mania
Vildana Hajric – Bloomberg
Bitcoin’s surge doubles price in the wake of 2018 collapse; Advocates don’t seem to mind the price jump is hard to explain
The Bitcoin bulls came back. Literally. Little Dude, a real-life bovine housed in a make-shift pen in a Manhattan ballroom, greeted crypto enthusiasts at the Magical Crypto Conference last weekend. He was brought by the anonymous Bitcoin Sign Guy, who offered 21 “Buy Bitcoin” replicas — pen on yellow legal-pad paper — for roughly $8,000 a pop. Only six were left at the end of the week.

Study Finds Most Ransomware Solutions Just Pay Out Crypto
John Biggs – Coindesk
A study by ProPublica found that most ransomware solutions providers have one weird trick for getting rid of hackers – paying them off. Ransomware activity is growing weekly according to experts at Coveware. The result? Companies who just want to pay the ransom and move on.

Stellar was down for 2 hours “caused by being too decentralized too fast”
The Block
Stellar network went down at 4:15 p.m. ET for nearly two hours Wednesday as enough nodes “stopped for various reasons” and the network halted. The network couldn’t reach consensus and no transactions were validated in that time period.

Bitcoin Tumbles as Stellar Run for Digital Tokens Loses Footing
Adam Haigh and Todd White – Bloomberg
Bloomberg cryptocurrency index slumps as much as 14% on Friday; Bitcoin remains above $7,000 after starting year below $3,700
Bitcoin slumped Friday bringing this month’s spirited surge to a halt and taking rival coins down with it.

Capital Outflows From Major Crypto Exchanges Exceeded Inflows by ~$622 Mln in Recent Days
Blockchain data provider TokenAnalyst estimates that capital outflows from major crypto exchanges have exceeded inflows by ~$622 million over the past five days, Bloomberg reported on May 15.

Opera Will Soon Add Tron Support to Its In-Browser Crypto Wallet
Yogita Khatri – Coindesk
Opera is working to integrate support for Tron’s TRX and TRC-standard tokens in its browser-based crypto wallet. After the integration of the TRON blockchain is complete, the browser’s over 300 million users worldwide will be able to use the tokens within the browser, Opera said Wednesday. The integration will also allow users to play Tron games and access Tron decentralized applications (dapps) within the browser, without requiring third-party extensions or applications. There are currently over 400 dapps built on the Tron blockchain, the Norwegian browser maker said, citing data from DAppReview.

Bitcoin Cash’s Scheduled Hard Fork Tripped Up By Software Bug
Christine Kim – Coindesk
A system-wide upgrade otherwise known as a hard fork appears to have split the bitcoin cash network in two. Bitcoin Cash is the fourth largest cryptocurrency in the world and possesses a market capitalization of over $6 billion. The chain split occurred after the bitcoin cash network tried to upgrade to new software at block number 582,679, according to data from BitMEX Research’s Forkmonitor tool.

World’s Fifth-Largest Electrical Company Is Using an Ethereum Dapp
Alyssa Hertig – Coindesk
One of the world’s largest electrical companies is teaming up with ethereum app iExec on a new test. EDF, the fifth largest electrical utility company with a $33 billion market cap, has launched its visual simulator software GPUSPH on iExec, a decentralized application that operates on ethereum mainnet. With this, EDF can test how the program operates on a blockchain rather than a more normal computing environment.

Crypto Exchange BitMEX Reveals Most of Its Users Don’t Use Maximum Leverage
Adrian Zmudzinski – Cointelegraph
Hong Kong cryptocurrency derivatives trading platform BitMEX claims that on average, its users don’t use the maximum 100x leverage that the platform offers. BitMEX reported on the data in a post published on its official blog on May 15. According to the post, the company’s co-founder and CEO Arthur Hayes had the data science team of the exchange pull up historical data on the average leverage usage for the bitcoin (BTC)/United States dollar perpetual swap.

Tether Ordered to Freeze Transfers to Bitfinex by New York Supreme Court
Nikhilesh De – Coindesk
A New York judge ordered crypto exchange Bitfinex and its affiliated stablecoin issuer Tether to turn over documentation about a loan and a line of credit Tether provided to Bitfinex.

Poloniex to disable nine cryptocurrencies in the US due to regulatory uncertainty
The Block Crypto
Nine coins are no longer going to be available to Poloniex’s U.S. customers due to “regulatory uncertainty,” the cryptocurrency exchange announced in a blog post. ARDR, BCN, DCR, GAME, GAS, LSK, NXT, OMNI, and REP will be disabled on May 29; U.S. customers have until then to “finalize all trades and close any positions in these assets” before they become geofenced. After that, customers will still be able to withdraw these assets as long as the exchange still offers them globally.

A Cornell University Crypto Professor Is Launching His Own Coin
Olga Kharif – Bloomberg
Ava will compete with Ethereum and other older blockchains; Andreessen Horowitz, Polychain, MetaStable provided funding
Emin Gun Sirer, one of the higher-profile academic experts on blockchain technologies, is launching his own cryptocurrency coin and network with funding from some of the biggest venture capitalists in the field.

Lack of Banking Options a Big Problem for Crypto Businesses
Paul Vigna – Wall Street Journal
Cryptocurrency companies shunned by banks often turn to shadowy middlemen for payment processing and other financial services. One of those companies is at the center of the mystery surrounding Bitfinex’s missing customer funds. Bitfinex, a cryptocurrency exchange that controls the popular digital currency known as tether, lost access to $850 million in customer funds after handing it over to Panama-based Crypto Capital Corp. to process customer withdrawals, the New York attorney general said last month.

Caspian partners with OKEx exchange for institutional crypto trading
Neil Mathew – Coingeek
Caspian, a full-stack cryptocurrency trading and risk management platform, will be partnering with the OKEx exchange as part of its effort to improve the infrastructure for the institutional adoption of cryptocurrency trading. Caspian is a joint venture between Hong Kong-based blockchain firm Kenetic and Tora, a supplier of asset management technology.

John McAfee to ‘Go Dark’ on Twitter, Setting Off Speculation
Olga Kharif and Todd White – Bloomberg
John McAfee, the eccentric antivirus pioneer known for publicity stunts and brushes with the law, announced he must “go dark” on Twitter, where he frequently comments on cryptocurrencies and has recently said government forces are out to get him.

The Race for Adoption: When Stablecoins Compete, Users Win
Rachel McIntosh – Finance Magnates
The “mass adoption” of cryptocurrency and blockchain technology seems as though it may actually be underway – but it may not look like what most crypto enthusiasts and analysts may have thought that it would. The largest cryptocurrency networks have not been adopted for use on any kind of widespread scale.

Coin Metrics Report Highlights Discrepancies in Ripple’s Escrow System Reporting
William Suberg – Cointelegraph
Blockchain analysis company Coin Metrics has found discrepancies in blockchain payments network Ripple’s escrow system reporting, according to a May 16 report. Coin Metrics, which conducts analysis of various aspects of cryptocurrency tokens, investigated Ripple and discovered what it said were contradictions that required an explanation. “Coin Metrics found several important discrepancies between what was publicly reported by Ripple and what was visible on the XRP ledger,” the report summarized.

Top Banks ‘Investing $50 Million’ to Build Blockchain Settlement System
Yogita Khatri – Coindesk
Some of the world’s biggest banks are said to be investing around $50 million to build a blockchain-based digital cash settlement system. A Reuters report on Friday, citing “people familiar with the plans,” said possibly a dozen unspecified banks are involved in the project. The participating banks will reportedly be setting up a new entity called Fnality for the project, which could launch next year.

Amazon Wins Patent for Proof-of-Work Cryptographic System
Yogita Khatri – Coindesk
Tech giant Amazon has been granted a patent for various techniques to build a proof-of-work (PoW) cryptographic system similar to those used by blockchains such as bitcoin.


Chipmakers under pressure after US places Huawei on export blacklist
Peter Wells – The Financial Times
The chips are down for the semiconductor sector on Thursday after the Trump administration cracked down on Huawei and placed restrictions on the Chinese telecoms company’s access to US technology.

U.S. Farmers, Wanting a Trade Deal, Brace for Aid Package They Fear Will Fall Short; The failure of Beijing and Washington to settle differences further clouds the outlook for farmers already hit by floods and bad weather
Josh Zumbrun in Washington and Jesse Newman in Chicago – WSJ
Stalled trade talks between Beijing and Washington are exacerbating a slump in the U.S. Farm Belt and few farmers believe an aid package being assembled by the Trump administration will be enough to compensate for the economic damage.

Where $17 Billion in Shifted Tariffs Might Land; Any transfer of farm levies to other export sectors would leave valuable parts of America’s economy in jeopardy. Alternatives aren’t clear cut.
David Fickling – Bloomberg
Here’s some good news for America’s flood-hit farmers: China is looking at shifting agricultural tariffs, imposed as part of its tit-for-tat trade war with President Donald Trump, to other products instead.

The dangers of Trump fatigue; The time now is far more worrying than before the Mueller report was published
Edward Luce – FT
Since US attorney-general William Barr guilefully summarised Robert Mueller’s report, much of the oxygen has left the anti-Trump balloon. To be clear, special counsel Mueller did not “exonerate” Donald Trump. Nor was Barr’s summary an accurate one. No one who read the report, as I did, page for page, could be left in any doubt that the US president had serially obstructed justice and should be held to account (my preference would be at the ballot box but I appreciate the arguments for impeachment).

How To Win A Trade War, Trump says it’s easy. Try it for yourself.
Rachael Dottle, Oliver Roeder and Julia Wolfe – FiveThirtyEight
But how easy? And how exactly do you win them? (Also, what’s a trade war?)
Let’s find out. You (Yes, you!) have just been elected president of your very own country. Congratulations! Now it’s time to get to work. There is another country out there that has goods you can buy, and you have goods it may want to buy. Your job is to choose your foreign economic policy — which you’ll do in the little game we’ve prepared for you below.

A Pianist in Sneakers Is the New Rising Force in European Politics
Helene Fouquet and John Hermse – Bloomberg
Mark Rutte closed his eyes as tales of suffering and patience swirled around the church. The Dutch prime minister was in the front pew of the 16th century Nieuwe Kerk in Delft, near The Hague, last month to hear St. Matthew’s Passion. The Good Friday performance of Bach’s three-hour oratorio is an annual ritual for politicians in the Netherlands and this year it fell between two crucial elections.


Keynote Speech by Verena Ross at the ICMA Conference 2019
Today, ESMA Executive Director, Verena Ross delivered a keynote speech at the ICMA Annual General Meeting and Conference in Stockholm, Sweden.

Mifid II critics are not seeing the big picture; Early data on its effects show market opening and integration are continuing apace
Karel Lannoo – FT
The Mifid II rules are leading to broader participation in capital markets by Europe’s savers. This will far outweigh the costs, such as the more reduced investment research on small stocks. Recent criticism appears to overlook the broader picture, where the advantages of this revision are starting to become visible.

FCA steps up inquiries into alleged rape of UBS trainee; Financial watchdog weighs formal probe into accused senior bank official
Caroline Binham – FT
The UK’s financial watchdog has stepped up its inquiries into the alleged rape of a former UBS graduate trainee by a senior colleague.

FCA boss attacked for not probing whistleblower case; Andrew Bailey took interest in complaint against Lloyds Bank but did not investigate
Jonathan Ford – FT
A whistleblower has heavily criticised the head of the Financial Conduct Authority for failing to investigate her complaints against Lloyds Banking Group, despite his assurances about the seriousness of the case.

CFTC Commissioner Quintenz to Speak at City Week 2019: International Financial Services Forum

Investing and Trading

Who can you trust with your money?; Better regulation — not more regulation — is needed to protect consumers
Claer Barrett – FT
Who can we trust with our money? It’s a simple question that’s increasingly difficult to answer.

Yale Investing Chief David Swensen Tops University Pay at $4.7 Million
Michael McDonald – Bloomberg
School has third-largest college endowment at $29.4 billion; Yale’s senior director of investments got $3.9 million in 2017
David Swensen, the longtime investing chief at Yale University, got $4.7 million in compensation in 2017, making him the highest paid at the Ivy League school.

Bonds Calling the Shots for Stocks as Rate Cuts Outweigh Trade
Sarah Ponczek – Bloomberg
Markets are pounding the table for a Federal Reserve rate cut; Lower interest rates are a base for the stock bull case
For investors who see this year’s stock rally balanced on the twin pillars of easy money and peace in the U.S.-China tariff war, well, at least one’s still standing. For the last three days, that’s been enough.

Thomas Cook Shares Are Worth Nothing, Citigroup Analysts Say
Sam Unsted and Luca Casiraghi – Bloomberg
Thomas Cook Group Plc’s shares are effectively worth nothing right now, according to analysts at Citigroup Inc, who cut their price target to zero pence from 28 pence.


Fidelity, Wellington, and Vanguard: Mega-Manager Comparative Analysis
Paul Rowady – Alphacution Research Conservatory
If you think we are only interested in the machinations of those mythological creatures that lurk in the mysterious and complex depths of market microstructure, then you may be missing the plot here. While we do tend to wallow in the weeds from time to time in an unprecedented way, you may have noticed the steady drumbeat of the DaVinci quote that “everything connects to everything else.”

Goldman Sachs to buy wealth manager United Capital for $750 mln
Goldman Sachs Group Inc on Thursday agreed to buy boutique wealth management firm United Capital Financial Partners Inc for $750 million in its biggest deal since the financial crisis.
Goldman has been ramping up efforts to grow its retail client base and deposits in a bid to diversify its revenue streams, and the deal will add United Capital’s 22,000 clients and $25 billion of assets under management to its portfolio.

Hedge Fund With Harvard Ties Shutting Down
Dawn Lim and Juliet Chung – WSJ
A hedge fund with ties to Harvard University’s endowment is closing down after roughly two years, said people familiar with the matter.
Boston-based Cambridge Square Capital LP has delivered roughly flat performance since it started, the people said. Harvard invested more than $200 million with the firm, they said.

Goldman Fund Makes Record Retreat From Muni Junk Bonds Over Risk
Amanda Albright – Bloomberg
High-yield fund boosts investment-grade holdings to record; Flood of cash chasing yields has pushed up junk-bond prices
Goldman Sachs Group Inc. has shifted money to the sidelines of the municipal junk-bond market, waiting for it to crack.

Goldman Sachs makes biggest acquisition in nearly 20 years
Goldman Sachs just made its first M&A splash of the David Solomon era, scooping up United Capital in a bid to beef up its wealth-management business.


HNA to Sell Stake in Asset Manager C-Quadrat; Chinese conglomerate has reached agreement to sell its roughly 74% stake to C-Quadrat executives, pending regulatory approval
Julie Steinberg and Jenny Strasburg – WSJ
Chinese conglomerate HNA Group Co. is selling its stake in Austrian asset manager C-Quadrat Investment AG, according to people familiar with the situation.

Canadian Soybeans Come Under Heavier Chinese Scrutiny; Lobbying group memo raises possibility that soybeans could be the next export targeted by China
Paul Vieira – WSJ
Chinese customs authorities have escalated their inspections of Canadian soybean imports, with at least two shipments rejected this week, according to a memo from the lobbying group representing growers of the seed.

Hong Kong corruption probe targets ‘enigma network’; Local doctor charged with conspiracy to defraud investors and the stock exchange
Don Weinland and Nicolle Liu – FT
A Hong Kong doctor at the centre of an incident that wiped $6bn from the city’s bourse in a single day has been charged with conspiracy to defraud investors and the stock exchange.

Chinese boom for hedge funds at risk from US trade dispute; Managers concerned that strong performances will be spoiled by tensions with Washington
Laurence Fletcher and Nikou Asgari – FT
Hedge funds betting on a China rebound have been delivering the kind of double-digit returns this year that most investors can only dream of.


UK Treasury prepared currency war chest for Brexit, says BofA; Investment bank argues British government could stockpile again ahead of new EU departure date
Eva Szalay – FT
The UK Treasury built up a foreign-currency war chest to defend the pound in the run-up to the original March deadline for Brexit, according to a top US investment bank, suggesting that the government could start stockpiling again as the new EU departure date looms.

End to Labour Talks is Final Nail in Coffin for May’s Brexit Deal
Emma Ross-Thomas – Bloomberg
Labour leader says talks have gone as far as they can; Corbyn leaves door open but only if “significant changes”
Labour leader Jeremy Corbyn said talks with the government aimed at finding a Brexit compromise had gone “as far as they can,” all but killing off any chance U.K. Prime Minister Theresa May had of getting her Brexit deal through Parliament.

Timeline: Brexit – What is due to happen in British politics before Oct. 31?
Kylie MacLellan – Reuters
LONDON (Reuters) – When the European Union agreed in April to extend the date of Britain’s exit from the bloc for a second time, European Council President Donald Tusk pleaded: “Don’t waste this time.” More than a month has passed and little progress has been made to break the Brexit impasse. Talks between the government and the opposition Labour Party failed, parliament remains deadlocked and Prime Minister Theresa May, who is likely to have only weeks left in power, plans a fourth attempt to get her Brexit deal approved.

Labour-Tory Brexit talks end without deal
Talks between Labour and the government aimed at breaking the Brexit impasse have ended without an agreement. Jeremy Corbyn said the discussions had “gone as far as they can”, blaming what he called the government’s “increasing weakness and instability”. Theresa May said the lack of a “common position” within Labour over a further referendum had made talks “difficult”. The prime minister said she would now consider putting options to MPs on Brexit that may “command a majority”.

Pound slides to four-month low after Brexit talks end
The pound has sunk to a four-month low against the dollar after cross-party Brexit talks between the Conservatives and Labour collapsed. By midday, the pound was 0.33% lower against the dollar at $1.2756 and on track for its worst week in a year. The pound is 1.85% lower this week, its steepest decline since February last year when it fell by more than 2%. Its fall reflects investors pricing a higher chance of the UK leaving the EU without a deal, analysts said.


Trump’s Business Earnings Decline as Revenue at Mar-a-Lago Falls
Shahien Nasiripour and Bill Allison – Bloomberg
Government ethics office releases president’s disclosures; Business was slightly up at namesake Washington hotel
President Donald Trump appears to have earned less from his vast financial empire last year as licensing royalties, rents and golf revenues fell at some properties, his financial disclosure shows.

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Past Newsletters

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