Hits & Takes
By JLN Staff
Bloomberg has a story by Mark Gongloff titled “All Work and No Play Makes Jack an Unproductive Boy; America’s long hours aren’t helping anybody.” I would agree. Work smarter, not longer.~JJL
Also, the NY Post has an article by Jorge Fitz-Gibbon titled “‘Grit’ more important to success than brains and brawn, West Point study finds.” I believe grit, defined as “passion and perseverance for long-term goals of significance” is one reason I have experienced some professional and charitable endeavor success.~JJL
Did you know that the first electronic trading system from the Chicago Board of Trade, named Aurora, was based on Apple technology? It did not work because the networks at the time did not support the amount of data that was required to support the system. That led the CBOT to develop Project A, which was a local area network with local data pipes large enough to support its data. What would electronic trading look like today if we had bigger data pipes back in the 1980s?~JJL
An honorable mention for best swag at FIA EXPO goes to Barchart for giving away YETI coffee cups, and I say this not because Barchart sent me one, but because I love YETI products.~JJL
An honorable mention for the most environmentally conscious FIA EXPO swag goes to Eurex for their reusable plastic lunch boxes that can be used in a microwave. And again, I don’t say this because Eurex sent our team a box of swag, but because they are useful and nicely aimed at the younger environmentally conscious trader community.~JJL
JLN likes to collect good swag, not only for our own use (which happens sometimes), but also to give to the attendees of our MarketsWiki Education program. We hold a raffle with swag bags for the interns.~JJL
Miami International Holdings Acquires Controlling Interest in the Bermuda Stock Exchange; Electronic trading leader will leverage BSX’s well-established financial reputation and new digital asset focus to further diversify its electronic exchange offerings
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX®, MIAX PEARL® and MIAX Emerald™ options exchanges (the MIAX Exchange Group™), and the Bermuda Stock Exchange (BSX) today announced that MIH has acquired a controlling interest in the BSX. The controlling interest aligns directly with MIH’s corporate strategy and allows the company to expand its world-class technology, derivatives trading and regulatory expertise.
*****The owner of MIAX does not allow grass to grow under their feet. They are always busy.~JJL
Stocks Are Soaring Because Supplies Are Limited; In trying to explain the rally, many fail to mention that the number of publicly traded companies has dropped by about half in 20 years.
Jared Dillian – Bloomberg
It’s natural to question rallies in the stock market, but the animosity toward the latest leg up that has pushed the S&P 500 Index, Dow Jones Industrial Average and the Nasdaq Composite Index to new records seems truly exceptional in its cognitive dissonance.
*****Supply and demand. Supply is shrinking. With interest rates low, there is plenty of demand and plenty of cash looking for a home.~JJL
There is one way forward on climate change
Martin Wolf – Financial Times
Climate policy is dangling between the cynicism of Donald Trump and the radicalism of Greta Thunberg. The US president has just pulled the world’s second-largest emitter of greenhouse gases out of the Paris climate accord. Ms Thunberg demands significantly more than a 50 per cent cut in global net emissions by 2030. The former is certainly irresponsible. But the latter seems inconceivable.
*****Leadership on this does not constitute retreat. It means moving forward.~JJL
Lifestyle Farming Is the Latest Addictive Hobby for Banker Types; And as these men and women are learning, it can quickly become a full-time job.
Lydia Mulvany – Bloomberg
During the week, Chris Andersen runs his Manhattan investment banking firm, G.C. Andersen Partners LLC, from behind a desk that’s a replica of one owned by Lorenzo de’ Medici. On the weekends, he heads to his farm in New Jersey, where he shovels out corn cobs and bruised watermelons to feed his herd of Mangalitsa hogs, an especially tasty breed of pig from Hungary.
***** Gentleman or gentlewoman farmer is a noble pursuit. But then George Amberson of the Magnificent Ambersons said the only honorable thing for a man to be is a yachtsman.~JJL
Global Agriculture Conference cmdtyExchange is Back for 2020 in Chicago
Barchart, a leading provider of commodity data and agribusiness solutions, has announced the dates and topics for cmdtyExchange 2020 (www.cmdtyexchange.com), its annual event which highlights the hottest trends and latest innovation impacting the agricultural markets. The 2020 conference will take place May 4-6 and will feature experts in grain and energy markets, commodity data and technology; as well as in food and weather. Panelists and speakers will provide attendees with key insights on the latest news, technology and data that are driving change in the agricultural industry.
Wednesday’s Top Three
Our top story of the day on Wednesday was Bloomberg’s piece Robinhood App Glitch Gave ‘Infinite Leverage’. Second was Bloomberg’s Ray Dalio Says the ‘World Has Gone Mad’ With So Much Free Money. Third was Renato Mariotti’s Politico column, Democrats, You’re About to Go to Trial. This Is How You Win
167,373,395 pages viewed; 23,970 pages; 222,311 edits
|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
1,292 pages; 11,466 edits
Europe’s traders call for shorter working day; Move could boost trading volumes while improving work-life balance
Philip Stafford – FT
Two of the largest industry bodies in European financial markets are lobbying the London Stock Exchange and other trading venues to open later and shorten their working day by 90 minutes, in a bid to boost liquidity and improve workers’ mental health.
Wall Street and the City of London Have Rattled Berlin; Olaf Scholz’s support for a European banking union is driven by German fears about having to rely on Anglo-Saxon capital markets.
Mark Gilbert – Bloomberg
Germany’s finance minister Olaf Scholz acknowledged this week that the European Union needs to make progress on cementing a banking union. The bloc’s growing reliance on American and British banks to underwrite the bulk of its capital markets activity, combined with the prospect of Brexit putting up barriers to European lenders accessing London-based capital, helps explain his new urgency.
Nasdaq Launches Artificial Intelligence for Surveillance Patterns on U.S. Stock Market; New technology will extend to market surveillance clients globally
Nasdaq, Inc. today announced the successful go-live of artificial intelligence for surveillance patterns on The Nasdaq Stock Market, the world’s largest stock exchange by volume traded.
Crypto exchanges experiencing a steady drop in traffic since June, suggesting declining retail interest
Yogita Khatri – The Block Crypto
Cryptocurrency exchanges around the world have been experiencing a steady drop in traffic since June, suggesting declining interest by retail investors.
New LSE-Powered Crypto Exchange Promises to Be Really Fast
Zheping Huang – Bloomberg
AAX, a Hong Kong-based startup, says its exchange is about to make Bitcoin trading at least 10 times faster than transactions taking place on some of the largest digital-asset exchanges.
UBS Survey Finds Bulk of Swiss Firms Critical of Negative Rates
Catherine Bosley – Bloomberg
The majority of Swiss companies believe the central bank’s negative interest rates are doing more harm than good, according to a UBS Group AG study.
Michael Spencer backs start-up aimed at smoothing bond markets; City veteran makes bet on increased ‘electronification’ of processes
Tommy Stubbington – FT
City veteran Michael Spencer is backing a start-up that promises to smooth the often-unwieldy processes behind the bond market, with a software platform enabling banks and investors to exchange vital data in real time.
EuroCCP to clear trades on Frankfurt Stock Exchange; As of 11 November, EuroCCP will offer clearing in cash equities at the Frankfurt Stock Exchange and Xetra.
Hayley McDowell – The Trade
Equities clearinghouse EuroCCP has said it will clear trades executed on the Frankfurt Stock Exchange as of 11 November this year.
China Reboots Plan to Attract Tech IPOs; Securities regulators and stock-exchange officials could unveil new rules in the coming days
Jing Yang and Chao Deng – FT
China is making a fresh attempt to attract technology listings, after previous plans to connect overseas-traded behemoths including Alibaba Group Holding Ltd. with mainland investors fizzled.
UBS and Banco do Brasil to launch new investment bank in South America
UBS Group AG (UBSG.S) and Brazilian state-controlled lender Banco do Brasil SA (BBAS3.SA) are set to launch an investment bank in South America, UBS said on Wednesday.
CFTC sued for failing to provide information on its “secret settlement” in Kraft case
Brad Rosen, J.D.
In yet another strange and bizarre development in connection with the CFTC’s ill-fated resolution of its market manipulation enforcement action against Kraft Foods Group and Mondelez Global, New York law firm Kobre & Kim has sued the agency in the Southern District of New York. The law firm alleges that the Commission refused to respond to its Freedom of Information Act (FOIA) request seeking information with regard to the attempted settlement of that case. Kobre & Kim asserts its request will shed light on the unusual and unprecedented terms the agency agreed to in its attempted settlement of the matter, which included a “gag” provision by which the parties agreed to make no public statements about the case, other than those already in the public record (Kobre & Kim LLP v. CFTC, October 31, 2019).
Advisers enjoy £280m fee bonanza on LSE-Refinitiv deal; Costs set to surge with financing as takeover navigates shareholder and antitrust hurdles
Philip Stafford and Arash Massoudi – FT
Bankers, lawyers and other advisers are set to take home a combined £281m for their work on the London Stock Exchange’s $27bn takeover of financial data provider Refinitiv, in a huge payday for some of London’s top dealmakers. The figure ranks as one of the biggest for pure advisory work on a UK deal, before factoring in the costs of financing the transaction.
Research suggests that randomly winning an H-1B visa makes US startups more successful
Youyou Zhou – Quartz
Hiring high-skilled immigrant workers can help US startups get funded, win patents and go public a recently published working paper shows.
Exchanges, OTC and Clearing
CME Group Declares Quarterly Dividend
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a fourth-quarter dividend of $0.75 per share, payable December 27, 2019, to shareholders of record as of December 10, 2019.
EuroCCP Goes Live With Frankfurt Stock Exchange
EuroCCP, Europe’s leading equities clearing house, today announced that it will clear trades executed on Frankfurter Wertpapierbörse (FWB), the Frankfurt Stock Exchange, starting November 11, 2019. EuroCCP’s clearing services are now available on a preferred CCP basis for trades in cash equities and ETFs executed on Xetra© (MIC: XETR) for the first time.
US firm acquires controlling interest in BSX
The Royal Gazette
Miami International Holdings has acquired a controlling interest in the Bermuda Stock Exchange. MIH is the parent holding company of the MIAX, MIAX Pearl and MIAX Emerald options exchanges. The US company said the stake in the BSX aligns directly with MIH’s corporate strategy and allows the company to expand its world-class technology, derivatives trading and regulatory expertise. “We are very pleased to welcome the BSX to the MIH family,” said Thomas Gallagher, chairman and chief executive officer of MIH.
ETF derivatives – Update on introduction and additional information
Eurex Circular 106/19 ETF derivatives – Update on introduction and additional information
LSEG plans shareholder vote on $27 billion Refinitiv acquisition; Shareholders will meet on 26 November to vote on the London Stock Exchange Group’s proposed acquisition of Refinitiv.
Hayley McDowell – The Trade
Shareholders of the London Stock Exchange Group (LSEG) will convene later this month to vote on the proposed $27 billion acquisition of Refinitiv, the exchange operator has confirmed.
DGCX Named ‘Exchange Of The Year’ At FOW Global Investor MENA Awards 2019
The Dubai Gold & Commodities Exchange (DGCX) has been recognized as ‘Exchange of the Year’ at the FOW Global Investor MENA Awards 2019 for its remarkable growth, in which it broke numerous records for trading volume, notional value and open interest.
NSE seeks cut in tax on capital market transactions to boost investment; Vikram Limaye said several taxes, including the securities transaction tax and the goods and services tax, are hurting investor participation
Samie Modak – Business Standard
The National Stock Exchange (NSE), the largest bourse in the country, has pitched for a reduction in taxes levied on capital market transactions, in a bid to increase the attractiveness of the domestic market.
Liquidnet Appoints New Chief Technology Officer
Liquidnet, the global institutional investment network, announced today the appointment of Patrick Strobel as Chief Technology Officer (CTO). As CTO, Strobel will oversee the company’s overall technology strategy, including product development for Liquidnet’s three business verticals, middle office solutions, data and analytics solutions, and overall systems architecture. Strobel will also be tasked with aligning the company’s technology offerings following the recent acquisitions of Prattle and RSRCHXchange earlier this year
Plato Partnership to launch BabelFish Analytics TCA platform in Europe; Plato Partnership will introduce a TCA system focused on providing order routing transparency in Europe from US-based BabelFish Analytics.
Hayley McDowell – The Trade
Not-for-profit Plato Partnership is set to introduce a transaction cost analysis (TCA) platform from US-based BabelFish Analytics to the European market next year.
Liquidnet promotes EMEA technology head to CTO; Patrick Strobel will oversee the alignment of technology following Liquidnet’s acquisitions of Prattle and RSRCHXchange.
Hayley McDowell – The Trade
Liquidnet has promoted its head of technology in Europe, the Middle East and Africa (EMEA) to chief technology officer.
From Online Gambling to Pot, Crypto Commerce Takes Off This Year
Olga Kharif – Bloomberg
After being given up for dead, cryptocurrency-based commerce — albeit still tiny — has started growing again. The amount of digital money sent to 16 merchant service providers such as BitPay rose 65% between January and July, according to data researcher Chainalysis. The price of Bitcoin, which accounted for 89% of all such transactions, had more than doubled over the seven months, to about $10,000. Typically, steep run-ups in the cryptocurrency’s price push people to spend less, and instead to hold or to speculate.
Kim Dotcom’s Cryptocurrency Sale Canceled by Exchange
Olga Kharif – Bloomberg
Controversial entrepreneur says some fees to aid Assange; U.S. has been seeking extradition of Dotcom from New Zealand
It doesn’t look like the controversial internet entrepreneur Kim Dotcom will be issuing his eponymous cryptocurrency anytime soon.
The ‘Bitcoin Rich List’ Has Grown 30% in the Last Year, But Why?
Omkar Godbole – Coindesk
The Bitcoin Rich List, or the number of addresses holding more than 1,000 BTC, has grown in the past 12 months, possibly reflecting an influx of high-net-worth investors. The metric has registered growth of 30 percent since September 2018, according to Coin Metrics data. Even when adjusted to exclude addresses known to belong to exchanges, the figure shows a similar surge. At press time, 2,148 addresses contain more than 1,000 bitcoins, amounting to just 0.01 percent of all bitcoin addresses, as per BitInfoCharts’ Bitcoin Rich List.
AAX digital asset exchange goes live using LSEG Technology platform PLATFORM
London Stock Exchange Group
LSEG Technology, London Stock Exchange Group’s technology solutions provider, today announces that Millennium Exchange™ has successfully been deployed as part of the go-live of the AAX digital asset exchange. Millennium Exchange’s low latency, resilient, and scalable matching engine provides market-leading performance and reliability.
Coinbase expands staking service beyond Coinbase Custody to all US customers
John Dantoni – The Block Crypto
Coinbase, the cryptocurrency exchange, announced in a blog post that it is now offering staking services for all U.S. customers, starting with Tezos. Customers holding any Tezos held on the exchange will be eligible to collect staking rewards of approximately 5%. Customers would receive rewards roughly every three days, which is the time it takes for a Tezos cycle in which new rewards are collected.
Coinbase Will Now Reward Users for Holding This Cryptocurrency
William Foxley – Coindesk
Coinbase is for the first time allowing general users to earn rewards by simply holding cryptocurrency, starting with the Tezos (XTZ) token.
Bitmain’s ousted co-founder Micree Zhan says he will take legal action to return to the firm
Yogita Khatri – The Block Crypto
Micree Zhan, co-founder of cryptocurrency mining giant Bitmain, was abruptly ousted from the company last week. Zhan now says that he is going to take legal action to return to the firm. In an open letter posted on his WeChat account on Thursday, Zhan said that he was removed from the company without his consent while he was on a “business trip.” “I have never thought that as a person focusing on technology and product, I have to start thinking from legal perspectives. It was embarrassing that as a Bitmain co-founder, the biggest shareholder, and a registered legal representative, I got ousted without any knowledge in this coup while on a business trip,” Zhan said, adding: “I didn’t realize until then that those scenes in TV shows, where you get stabbed on your back by those partners you trusted and ‘brothers’ you fought together with, can really happen in real life.”
Zcash maker passes trademark ownership of the cryptocurrency to Zcash Foundation for free
Yogita Khatri – The Block Crypto
Electric Coin Company (ECC), the maker of privacy-oriented cryptocurrency zcash, has transferred the ownership of zcash trademark to the Zcash Foundation “at no cost.” Announcing the news on Thursday, ECC said the decision has been taken after “months of negotiations” and it will help with further decentralization of zcash. ECC and the Zcash Foundation executed the decision through an agreement signed on Wednesday. ECC launched zcash in 2016 and has been supporting the project through research and development, engineering and regulatory relations, among other work areas. The company said it will continue its work.
Blockchain Makes Inroads Into the Stock Market’s $1 Trillion Plumbing System
Alexander Osipovich – WSJ
Technology from the bitcoin world is coming to the trillion-dollar plumbing that underpins the U.S. stock market. Last week, the Securities and Exchange Commission gave the green light to a pilot project in which blockchain—the technology behind cryptocurrencies—will be used to settle trades in stocks like General Electric Co. and AT&T Inc.
Huobi Argentina plans to invest $100M for creating a blockchain data center
Yogita Khatri – The Block Crypto
Huobi Argentina, a subsidiary of cryptocurrency exchange Huobi Group, is planning to invest $100 million for creating a blockchain data center. The center would be the largest of its kind, Huobi Argentina announced Wednesday, as reported by Reuters. Huobi Argentina platform was first revealed in September as a fiat gateway to buy cryptocurrencies with Argentine pesos. The platform was supposed to go live by mid-October. According to the Reuters report, Huobi Argentina said it will go live by the end of November.
Shanghai Gov’t Partners With 6 Banks on Blockchain Alliance for Trade
Marie Huillet – Cointelegraph
The municipal Shanghai government has joined forces with financial institutions to create an alliance to foster the use of blockchain for global trade. The Global Times reported on Nov. 7 that during the China International Import Expo earlier today, the Shanghai Municipal Commission of Commerce, Shanghai Customs and representatives from six bank branches — including the People’s Bank of China and Bank of Communications — signed a Blockchain Alliance proposal for the city’s e-port area.
Leading Japanese Firms Partner on Security Token Research
Nathan DiCamillo – Coindesk
Mitsubishi UFJ Financial Group – Japan’s largest financial group and the fifth largest bank in the world by assets – is leading a 22-member research consortium to develop standards around security token management. The group – the Security Token Research Consortium – includes security issuers, broker dealers and technology companies, such as NTT Docomo Inc. and KDDI Corp., the two largest telecommunications companies in Japan.
China leaves bitcoin mining out of list of restricted activities
China, which is among the biggest manufacturers of bitcoin mining gear, has decided against eliminating the mining of the cryptocurrency, the state planner has indicated.
A Not-So-Special Relationship: Facing Voters, Johnson Backs Away From Trump; Unpopular and unpredictable, President Trump is emerging as a problem for the British prime minister, Boris Johnson, in his election campaign.
Mark Landler – NY Times
Prime Minister Boris Johnson of Britain spoke with President Trump by phone on Tuesday, and to judge by the dueling summaries of the call provided by the White House and 10 Downing Street, Mr. Johnson and Mr. Trump were involved in two completely different conversations.
Trump Meeting Was Clearest Quid Pro Quo in Push for Biden Probe
Nick Wadhams – Bloomberg
Volker said U.S. would ‘nail down’ meeting date if demands met; Zelenskiy-Trump meeting would send a signal to Russia’s Putin
Public debate surrounding the House impeachment inquiry has focused heavily on whether President Donald Trump’s aides withheld military aid to Ukraine as part of a “quid pro quo.”
For Germans, Losing the U.S. to Trump Is Like Losing a Father; The 30th-anniversary celebration of the Berlin Wall’s collapse comes with grief over the end of a special relationship.
Andreas Kluth – Bloomberg
Germans of a certain age will be writhing with conflicting emotions this week, 30 years after the Berlin Wall cracked open, as they listen to an emissary of U.S. President Donald Trump. Secretary of State Mike Pompeo will mark the anniversary with a speech in Berlin. Looking on will be Chancellor Angela Merkel, the opposite of everything Trump represents. Pompeo plans to exhort her to “defend free nations and free peoples.”
Taxing the Ultra-Wealthy Forces Democrats to Get Creative; Simply raising rates doesn’t address the many ways the rich can game the system.
Ben Steverman – Bloomberg
Democrats these days are throwing around plans for new and unprecedented taxes on wealth, financial transactions, capital gains, and inheritances. Tantalizing them are the trillions of dollars of wealth in the hands of the richest 0.1%, much of it escaping taxation.
China Says U.S. Agrees to Tariff Rollback If Deal Reached
Ministry of Commerce says negotiators had ‘constructive’ talks; Lifting tariffs depends on content of phased deal, Mofcom says
China and the U.S. have agreed to roll back tariffs on each other’s goods in phases as they work toward a deal between the two sides, a Ministry of Commerce spokesman said.
DOJ Plans ‘Expeditious’ Antitrust Probe Into Big Tech Practices
Chris Strohm and David McLaughlin – Bloomberg
Deputy attorney general says inquiry won’t drag on endlessly; Rosen says inquiry is fact-based and isn’t driven by politics
The U.S. Justice Department plans to move quickly in analyzing how giant technology companies operate and whether they’re engaging in anti-competitive behavior, the department’s deputy said.
What the 2019 Election Means for 2020
Lisa Lerer – The New York Times
There was at least one clear loser in last night’s elections: my dream of reaching Inbox Zero. My email (current unread count: 40,149!) is now flooded with hundreds more messages, all from overjoyed Democratic organizations, strategists and candidates eager to get their piece of the credit for the party’s strong showing in the Kentucky governor’s race, the Virginia legislative elections and local races in Pennsylvania. Of course, it wasn’t all good news for Democrats: Republicans won the governor’s race in Mississippi and were poised to pick up seats in the New Jersey state legislature.
Women Keep Up Wins in Trump-Era Political Surge
Associated Press via The New York Times
In its 400-year history, Virginia’s House of Delegates has never been led by a woman. There’s a good chance that might change soon. Two women are among the contenders for the powerful role of House speaker after Virginia Democrats continued their winning streak under President Donald Trump on Tuesday, seizing control of both the House and Senate from Republicans for the first time in more than two decades. “Long overdue,” said House Minority Leader Eileen Filler-Corn, a top candidate for the job.
Roger Stone lied to Congress because ‘truth looked bad’ for Trump, prosecutors say
Prosecutors in the trial of Roger Stone told jurors Wednesday that the longtime Donald Trump confidant repeatedly lied to Congress “because the truth looked bad” for the president.
Trump Tax Return Case Hinges on John Roberts; A narrow ruling would avoid the presidential immunity question but still compel Trump’s accountant to obey a subpoena.
Noah Feldman – Bloomberg
Fighting to keep his tax returns secret, President Donald Trump will soon ask the U.S. Supreme Court to grant him “temporary absolute immunity” from any criminal investigation while he’s in office. The case sets up yet another test for the court’s new swing voter, Chief Justice John Roberts, who is devoted to the principle of judicial restraint.
NFA orders Jersey City, N.J. commodity pool operator and commodity trading advisor Golden Meadow Investments LLC to both withdraw from and never again apply for NFA membership
NFA has ordered Golden Meadow Investments LLC (Golden Meadow), an NFA Member commodity pool operator and commodity trading advisor located in Jersey City, N.J., to both withdraw from and never again apply for NFA membership or principal status with any NFA Member.
SEC Charges Adviser for Running Ponzi Scheme Targeting Haitian Community
The Securities and Exchange Commission today filed charges against a New York investment adviser for operating a multimillion-dollar investment club that was actually a fraudulent Ponzi scheme targeting members of the local Haitian community as well as his family and friends.
SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2019
The Securities and Exchange Commission’s Division of Enforcement today issued its annual report for fiscal year 2019. The report details the division’s efforts and initiatives on behalf of investors, highlights several significant actions, and presents the activities of the division from both a qualitative and quantitative perspective.
FINRA Orders Merrill Lynch, Pierce, Fenner & Smith Inc., Raymond James & Associates, Inc., and Raymond James Financial Services, Inc. to Pay More Than $12 Million in Restitution to Customers for Supervisory Failures Involving 529 Plan Share Classes; Firms Failed to Reasonably Supervise 529 Plan Share-Class Recommendations Made to Customers; Matters Identified Prior to FINRA Initiative Launched in January
FINRA announced today that Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), Raymond James & Associates, Inc. (RJA), and Raymond James Financial Services, Inc. (RJFS) have agreed to pay a total of approximately $12 million in restitution to customers who incurred excess fees on their investments in 529 savings plans based on the firms’ failures to reasonably supervise 529 plan share-class recommendations. Merrill Lynch has agreed to pay restitution of at least $4 million relating to the sale of Class C shares to 529 plan accounts with young beneficiaries. RJA has agreed to pay more than $3.8 million in restitution and RJFS has agreed to pay $4.2 million in restitution.
ASIC bans West Australian finance broker and cancels Australian Credit Licence of Element Finance Group
ASIC has banned Mr Tim Zheng, the director of Element Finance Group Pty Ltd (EFG), a West Australian mortgage broking company, from engaging in credit activities for three years. ASIC has also cancelled the Australian Credit Licence of EFG.
FRC chairman calls for break-up of Big Four accountants; Simon Dingemans says separation of audit and consulting is ‘critical’
Tabby Kinder and Patrick Jenkins – FT
The new chairman of the UK’s audit watchdog has called on the government to break up the Big Four accounting firms.
Chairman Tarbert to Participate in a Fireside Chat at the Third Annual Invest: NYC
Investing and Trading
J.P. Morgan Releases 2020 Long-Term Capital Market Assumptions, Analysis Reveals Need For New Portfolio Construction Tactics in Low-Rate World
J.P. Morgan Asset Management today released its 2020 Long-Term Capital Market Assumptions (LTCMAs), this year exploring the complexities of late-cycle investing in an environment of ultra-low bond yields. The research forecasts modest global growth over the next 10-15 years, as investors must re-think “safe-havens” in their portfolio now that bonds simply can’t offer the same combination of portfolio protection and positive income that they have in the past.
Traders Call For Shorter EU Market Hours To Improve Diversity & Market Efficiency
Traders in the investment management and banking industries are calling on the London Stock Exchange (LSE) and other European trading venues to review trading hours across Europe in a bid to improve culture, diversity and wellbeing on trading floors, and create more efficient markets.
Traders call on stock exchanges to shorten market hours in Europe; AFME and the Investment Association are requesting shorter market open hours to improve culture and diversity in the industry.
Hayley McDowell – The Trade
Buy- and sell-side traders are calling on the London Stock Exchange (LSE) and other venues in Europe to shorten market hours to improve culture and diversity on trading floors.
Exxon’s climate change fraud trial to wrap up in New York
Brendan Pierson – Reuters
Lawyers for New York state and Exxon Mobil Corp will make closing arguments on Friday in the closely watched trial in the state’s lawsuit charging that the oil major hid from its investors the true costs of regulations aimed at curbing climate change.
Exxon’s Expert Witness Knocks N.Y.’s ‘Circular’ Trial Claims
Erik Larson – Bloomberg
Harvard professor likely the last witness in three-week trial; New York claims investors lost money due to Exxon deception
Exxon Mobil Corp.’s expert witness — a Harvard Law School professor — challenged New York’s claim in a securities-fraud trial that investors lost as much as $1.6 billion after authorities accused the company of hiding the financial risks of climate change, calling the argument “a tad circular.”
Foreign Money Supports U.S. Stocks’ Rally Back to Record Highs; Many foreign investors feel they have no choice but to pile in
Steven Russolillo – WSJ
Even with U.S. stocks rallying back to all-time highs, adding to the longest bull market on record, many foreign investors feel they have no choice but to pile in.
Quant Trade Betting on Past Winners Suffers Record Exodus
Sarah Ponczek – Bloomberg
Exchange-traded fund investors just threw in the towel on a strategy that bets this year’s winners will keep on winning. Almost $1.6 billion was withdrawn from momentum-focused ETFs in October, the most for any month on record, according to Bloomberg Intelligence data going back to 2012. The outflows were the biggest of any smart-beta segment last month, and marked a change of pace after two quarters of net inflows, the data showed.
Wells Fargo op risk charge jumps $3.6bn in Q3
Alessandro Aimone @aimoneale – Risk.net
Operational risk-weighted assets (RWA) surged 13% in the third quarter of this year at Wells Fargo, to reach $382.1 billion.
Banks Don’t Know What to Do With Their Branches; Lenders are trying to maintain a human touch with warmer, friendlier locations
Allison Prang – WSJ
It is happy hour at the Capital One near Rittenhouse Square, and drinks are on the house at the Peet’s Coffee on the branch’s second floor. Staff tell customers to make themselves comfortable.
Goldman’s journey: from high finance to the Mittelstand; Fighting to fix weak profits, the Wall Street bank is turning to smaller European companies
Laura Noonan and Olaf Storbeck – FT
As Deutsche Bank and Commerzbank discussed a historic merger earlier this year, Goldman Sachs was drawing up a plan to poach their clients.
Billionaire Alan Howard’s Star Traders Put Hedge Fund Back on Track
Nishant Kumar – Bloomberg
As comeback takes hold, Brevan Howard stems slump in assets; At least four Brevan hedge funds are beating peers this year
In his investment firm’s darkest days, with performance sagging and billions of assets fleeing, Alan Howard was running out of options. So he turned to his top money managers for the fix.
Commerzbank Steps Up Plan to Pass on Negative Interest Rates
Steven Arons and Matthew Miller – Bloomberg
Bank again cuts targets because of negative rates, taxation; Lender examining second core division with smaller clients
Commerzbank AG is intensifying efforts to charge clients for keeping deposits at the lender to ease the pain of negative interest rates.
Woodford Protege Mark Barnett Hit With Morningstar Downgrade
Suzy Waite – Bloomberg
Funds cut to ‘neutral’ on liquidity concerns, analysts say
Neil Woodford’s protege Mark Barnett, who followed his mentor’s lead to load up on less liquid securities, has been hit with rating downgrades on two of his funds at Invesco Ltd.
As U.S. crude oil goes global, hedging goes local
Julia Payne, Devika Krishna Kumar – Reuters
The booming U.S. oil sector is seeing a surge in hedging by producers against drops in regional crude prices to protect revenues from oil sold out of Midland, Texas, or delivered to terminals in Houston after relying for decades on global benchmarks.
Morgan Stanley Returns to a Tough Trading Niche in Hong Kong
Cathy Chan – Bloomberg
Firm offers retail contracts in Hong Kong again as rivals exit; ‘We anticipate synergies’ with growing wealth-management unit
Morgan Stanley is wading back into a difficult niche of the Hong Kong stock market, betting it’s found a way to complement its business serving wealthy clients.
Indonesia Revokes Temporary Suspension of Nickel Ore Exports
Eko Listiyorini and Arys Aditya – Bloomberg
Exporters meeting all rules eligible to export: Pandjaitan; Indonesia halted nickel exports after sudden surge before ban
Indonesia lifted a suspension on exports of nickel ore announced last week following a surge in shipments ahead of a ban on overseas sales starting next year.
Greece Weighs New Flat Tax in Bid to Attract Wealthy Foreigners
Sotiris Nikas – Bloomberg
100,000-euro flat tax could entice wealthy to shift domiciles; Investment of 500,000 euros over three years would be required
Greece is seeking to attract wealthy investors by introducing a flat tax rate of 100,000 euros ($111,000) for qualified individuals willing to shift their residence to the country.
China Embraces Bankruptcy, U.S.-Style, to Cushion a Slowing Economy; Beijing rapidly grows a court system to tackle corporate debt that was once—in the interest of stability—swallowed by banks
Wall Street Journal
In the trenches of China’s debt-addled economy, the government has made a startling decision: Let companies fail.
Friends and enemies: France is a big loser from Brexit; When Britain leaves, the power imbalance between Berlin and Paris will be laid bare
Philip Stephens – Bloomberg
He had never forgiven Britain for winning the war. So Harold Macmillan concluded after Charles de Gaulle vetoed the UK’s attempt to join the then common market. Right or wrong, the British prime minister’s estimate of the French president’s motives itself reflected the enduring rivalry between the two nations. Perhaps they are forever doomed to be at once friends and enemies.
Brexit Impasse Takes Its Toll on British Business Investment
Reuters via The New York Times
As uncertainty over Brexit spills into its fourth year, Swiftool Precision Engineering has taken a tough investment decision: it will press ahead with a plan to spend £250,000 on a 3D printer but a new workshop roof will have to wait. Like many British companies, the small, family-owned firm which makes parts for aircraft engines and offshore oil wells wants more clarity on what leaving the European Union might mean for its business before carrying out all its investment plans.
Students more likely to vote tactically on Brexit
Sean Coughlan – BBC
More than half of students are ready to vote tactically in the general election, with Brexit the key factor, according to research. The analysis from the Higher Education Policy Institute (Hepi) says 53% will vote in a way to maximise the chances of their side of the Brexit divide. The poll of more than 1,000 undergraduates shows 74% oppose Brexit. Hepi director Nick Hillman says for many students it would be “full-on tactical voting because of Brexit”.
Bank of England cuts forecast due to Brexit and global slowdown
Delphine Strauss – Financial Times
The Bank of England has cut its forecasts for the UK economy, saying that growth will be limited by a weaker global environment and by the new trade barriers that would take effect immediately after implementation of Boris Johnson’s Brexit deal. The central bank said underlying UK growth had “slowed materially” in 2019, with a quarterly growth rate of only half the previous three-year average — due to Brexit uncertainties and global trade wars.
Job Market Is Tougher for Recent College Grads Than All Workers
Alexandre Tanzi – Bloomberg
The hot U.S. job market is tougher than it seems for one slice of the labor force.