Exchanges Face Higher Hurdles in Boosting Data Fees; Deutsche Bank Finds Money Transfer Software Flaw

May 22, 2019

First Read

Hits & Takes
JLN Staff

I fear I am losing my fundraising mojo as there was little response from JLN readers to the article from FIA Connect to help FIA’s Emma Davey raise money for Futures for Kids through the No-So-Kilt-Challenge.~JJL

Mercado a Termino de Buenos Aires and Rosario Futures Exchange were fully integrated this month after signing off on their merger in February. Mercado a Termino de Buenos Aires is now the sole futures exchange in Argentina.~JK

Pending CFTC review, the CME will list five fertilizer futures contracts at the CBOT on Sunday, June 9, for trade date Monday, June 10. There is currently a fertilizer swap offering at the CBOT.~SD

CME Group Chief Economist Blu Putnam gave the commencement address for the 2018-2019 Stuart School of Business at Illinois Tech. Blu’s speech starts at about the 14 minute mark. Weirdly, when I started playing this video in the office, people thought Blu Putnam sounded like President Donald Trump.~JJL

If you haven’t had a chance to check out our Industry Leader Series filmed at FIA Boca, check out the series here. Scroll down to see the full lineup of 25+ videos featuring executives from exchanges, fintech firms, FCMs and prop shops.~SD

Ahead of its IPO, Slack, the collaboration technology company, changed its ticker from SK to WORK.~SD

Intermarket Communications was recognized by O’Dwyer’s Public Relations News as a Top 10 player in Financial Services PR for the 17th year in a row. Congratulations to Martin Mosbacher and the team.~JJL

My daughter Katherine last semester changed her major from music education to music, with a minor in anthropology. She wants to get a masters degree in ethnomusicology, which is the study of music from the cultural and social aspects of the people who make it. She wants to get her masters degree in Ireland, where they have a good program for ethnomusicology. Her experiences traveling the world, including to the World Scout Jamboree in Japan in 2015, are making an impact on her future.~JJL

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Addressing Concentration and Liquidity Risk – Alex Lamb, The Technancial Company
JohnLothianNews.com
In this video, Technancial Head of Business Development Americas and Head of Marketing Alex Lamb talks about how market participants look to stay one step ahead of their clearing member.
Watch the video »

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Mizuho And Other Banks Victimized By Environmentalist Hoax
Mondovisione
On Monday morning, a press release announced a new edition of the Equator Principles, the industry guidelines for environment and human rights compliance. However, this press release was fake, made to look like it was sent from the real Equator Principles website.
bit.ly/2VQPu3U

****The hoax release prompted Mizuho to clarify that, and you can’t make this up, “Most managers of Mizuho Financial Group oppose climate change and firmly believe mass extinction to be undesirable.” Here, here. I also believe mass extinction to be undesirable.~SD

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Rockefeller Was Almost Three Times Richer Than Bezos; Carnegie, Vanderbilt, and William the Conquerer’s cousin were wealthier too, when you measure their fortunes relative to GDP.
Tom Metcalf – Bloomberg
Jeff Bezos, the world’s richest man, is worth $117 billion. L’OrÈal SA heiress FranÁoise Bettencourt Meyers, the richest woman, has $54 billion. But how do their fortunes compare with those of past plutocrats? There are those who could claim to be richer. John D. Rockefeller made about $1.5 billion in his career, according to his 1937 New York Times obitóabout $26 billion in today’s dollars. A better comparison, says Samuel Williamson, an economist who runs measuringworth.com, might be “relative output,” the ratio of wealth to gross domestic product. Rockefeller’s $1.5 billion was about 1.6% of the economy in 1937. Were he to own the same percentage today, his fortune would be almost triple Bezos’. Here’s what some of history’s richest people at the height of their wealth might be worth now using this approach.
/bloom.bg/2wf8gCY

***** How to truly measure how rich you are has nothing to do with money.~JJL

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Tuesday’s Top Three
So, how do you like your job? Our top read story of the day was from eFinancialCareers, “Every single one of my Goldman friends are looking for jobs right now”. Sounds like a fun place to work. Second was JLN’s interview Taking the Chinese Connectivity Plunge – Ryan Moroney and Pat Kenny, CQG. Third was third yesterday as well – CME’s announcement CME Group Appoints Trey Berre as Global Head of Data Services

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Lead Stories

Exchanges Face Higher Hurdles in Boosting Data Fees; New SEC guidelines will require detailed disclosures from NYSE, Nasdaq and Cboe
Alexander Osipovich – WSJ
The Securities and Exchange Commission dealt a fresh blow to stock exchanges’ lucrative business of selling data and high-speed connections. New guidelines from the regulator, released on Tuesday, will make it tougher for exchanges to boost fees for such services by requiring them to include detailed disclosures each time they seek to adjust a fee.
/on.wsj.com/2w9XVIq

Deutsche Bank Finds Flaw in Software Used to Assess Money Transfers
Steven Arons – Bloomberg
Deutsche Bank AG said it discovered an error in software used to analyze payments, as the bank seeks to step up controls after being tied to a series of money laundering scandals.
/bloom.bg/2wfLISl

CME’s BrokerTec to expand into European repo markets with RFQ platform; New Request-for-Quote platform to launch in Q2 this year for European market participants.
John Brazier – The Trade
Fixed income dealer-to-dealer trading platform, BrokerTec, is to expand into the European repo market through the launch of a new Request-for-Quote (RFQ) platform.
bit.ly/2we085C

U.S. to mirror EU moves in scrutinizing derivatives clearers
Huw Jones -Reuters
Foreign clearing houses for derivatives face tougher scrutiny for risks they would pose to the United States economy if they collapsed, a senior regulator said on Tuesday, mirroring recently-approved European Union reforms.
/reut.rs/2Wq986w

Jet Stream Detour Leaves Midwest Farmers Drenched, Canada Dry
Brian Sullivan and Ashley Robinson – Bloomberg
North American farmers are stuck between a flood and a dry spot, and there is little immediate help ahead.
Two high-pressure ridges have trapped the jet stream between them, forcing it into an unusually stagnant S-path in which it gathers warm, very moist air from the Pacific, carries it across the Rockies and dumps it in the Great Plains and U.S. Midwest. The resulting storms have drenched the region, putting U.S. seeding at the slowest pace on record for this time of year.
/bloom.bg/2VUkYpV

****Two related stories via CME: Corn and Soybeans Are Facing Flood, Trade Cross Currents and Ag Crosscurrents (VIDEO).~SD

Man Who Claims To Be Bitcoin’s Inventor Registers Copyright for Its Code
Olga Kharif and Christopher Yasiejko – Bloomberg
Craig Wright has set out to limit the use of Bitcoin name; Agency’s move may not settle controversy over coin’s creation
The U.S. Copyright Office awarded self-proclaimed Bitcoin inventor Craig Wright registrations for the whitepaper and early computer code underlying the original cryptocurrency.
/bloom.bg/2wdZ3e4

New US Treasury survey launched by The TRADE and Aite Group
The TRADE Team
A new survey launched by research and advisory firm Aite Group, in partnership with The TRADE, is set to explore one of the most vibrant and liquid fixed income markets in the world.
bit.ly/2wcIfUT

Russian Pipeline Shutdown Shifts Balance in Oil Market; Contamination in the Druzhba pipeline has resulted in a premium on Brent for immediate delivery
Dan Molinski – WSJ
The shutdown of a major Russian pipeline that sends crude to European refineries has fueled concerns of tightness in the global oil market, driving futures prices higher.
/on.wsj.com/2wfO9UZ

CME bitcoin futures trading clocks in a number of new records in May
The Block Crypto
CME Group, the exchange giant behind one of the markets for bitcoin futures, continues to clock in new records for its contract tied to the largest digital currency.
bit.ly/2wfWFTW

Twitter’s Jack Dorsey And Square Are Making Mass Bitcoin Adoption ‘Inevitable’
Billy Bambrough – Forbes
Jack Dorsey, the chief executive of micro-blogging social network Twitter, is taking further steps toward incorporating bitcoin and cryptocurrencies into his payments business, Square.
bit.ly/2wbYVeT

Exchanges, OTC and Clearing

Nasdaq is more than a stock exchange
Axios
When you think of Nasdaq, chances are you think of the U.S.-based stock exchange. However, the company has numerous other lines of business, none more interesting than their foray into sports betting.
bit.ly/2VVe6sg

****SD: This Axios story leaves out some pieces of the puzzle. The Longitude technology referenced in the story was acquired by Nasdaq as part of the ISE acquisition (it was a wholly owned subsidiary of the ISE). Its presence in the Hong Kong Jockey Club is not a new foray. The HKJC signed the deal to use Longitude’s pari-mutuel betting technology in 2013. Longitude pivoted to explore opportunities in the gambling space back in 2010.

BrokerTec Launches BrokerTec Quote RFQ Trading Solution for European Repo Markets
CME Group
BrokerTec, a leading provider of electronic trading platforms and technology services in fixed income markets, today announced it will launch BrokerTec Quote, a new dealer-to-client Request for Quote (RFQ) trading solution for the European Repo market.
bit.ly/2weX5dr

Eurex Roadmap 2019 (Powerpoint)
Eurex
Welcome to the Eurex Roadmap Workshop!
bit.ly/2VPSRIi

T7 Release 7.1: Important information regarding the T7 Java GUI launch mechanism
Eurex
As announced in Eurex circular 004/19, Eurex Deutschland will provide a seamless and automatic update mechanism called T7 GUI Launcher replacing the deprecated Java Web Start technology.
bit.ly/2wfNgvD

Stockbrokers and Financial Advisers Conference Speaking Notes
ASX
bit.ly/2wcSsAm

Stockbrokers and Financial Advisers Conference Presentation Slides
ASX
bit.ly/2wcIuiL

Candidates for Directors, etc. of Japan Securities Clearing Corporation
JPX
We hereby announce that Japan Securities Clearing Corporation has nominated candidates for
directors, etc., who will be put forth for approval at the general meeting of shareholders to be held on
June 17, 2019. The new candidates are as follows.
bit.ly/2wfNtPr

Moscow Exchange: The Additional Trading Session Starts Later For Derivatives Market On 6, 13, 17, 19, 20, 25 And 27 June 2019
Mondovisione
Please note that the Derivatives Market evening trading session will begin five minutes later, i.e. at 7:05 pm MSK, on 6, 13, 17, 19, 20, 25 and 27 June 2019, as these are the last trading days for options contracts (in accordance with clause 6.2 of the Rules of organized trading for the Moscow Exchange Derivatives Market).
bit.ly/2wgxlgw

Fintech

Itiviti expands SSEOMS migration capacity with appointment of Frederic Villain as Head of Agency Trading Sales Asia
Itiviti
Itiviti, a world-leading technology and service provider for the capital markets industry, today announced the appointment of Frederic Villain as Head of Agency Trading Sales Asia. Based in the Singapore office, he will manage regional client relations, define and execute Itiviti’s regional sales and account management strategies.
bit.ly/2VUK6g2

Big Tech’s Invasion of Banking
Dan Murphy – TABB Forum
What keeps bankers awake at night is not regulation by Washington, but competition from Silicon Valley. Unlike fintech startups, big tech firms such as Amazon, Google, Alibaba and Tencent have deeper pockets and better access to data than any bank. Most important, big tech firms have uniquely intimate relationships with their customers. These factors turn big tech’s lack of regulatory oversight into a competitive advantage and present bankers and policymakers with their own dilemmas.
bit.ly/2VQeMz8

CERESLabs and Sniffer Labs Partner to Combat Cannabis Testing Bottleneck
CERESLabs
CERESLabs and Sniffer Labs have joined forces to tackle the supply-chain bottleneck crisis in cannabis and industrial hemp testing industry. All cannabis products must meet strict testing requirements which has led to testing laboratories around the globe becoming backlogged with requests. This delay is costing cannabis companies millions of dollars.
bit.ly/2VTeR59

****SD: CERESLabs is led by a 20-year veteran of Wall Street, Sachin Barot. CERESLabs is one of those players in the cannabis space that addresses the need for ancillary services as the commodity becomes more regulated. See our video with Barot – Taking Wall Street Know-How to the Cannabis Industry. And, of course, it’s got a good name, because Ceres is the goddess of grain, manifested in statue form at the top of the Chicago Board of Trade Building, and the name of the building’s (in)famous bar.

Charles River partners with Neptune on fixed income data deal; Neptune to provide fixed income inventory data through the Charles River order and execution management system.
John Brazier – The Trade
Charles River has entered into a new partnership with Neptune Networks to gain access to fixed income inventory data.
bit.ly/2w9Yzpk

Derivatives Service Bureau Wins ‘Best Reference Data Newcomer’ At The WatersTechnology Inside Market And Reference Data Awards 2019
MondoVisione
The Derivatives Service Bureau, founded by the Association of National Numbering Agencies (ANNA) to facilitate the allocation and maintenance of International Securities Identification Numbers (ISINs), Classification of Financial Instrument codes (CFIs) and Financial Instrument Short Names (FISNs), for OTC derivatives, is delighted to announce today that it has been awarded ‘Best Reference Data Newcomer’ at the WatersTechnology Inside Market Data Awards and Inside Reference Data Awards 2019.
bit.ly/2wjILjD

Fintech Executive Laurent Paulhac Joins Say as CEO
SAY
Say, a technology platform for open communication between companies and their shareholders, announced today that Laurent Paulhac will serve as the company’s new Chief Executive Officer.
/yhoo.it/2QfxCd2

Cryptocurrencies

Bitcoin Enthusiasts Undeterred by SEC Delay of ETF Decision
Todd White – Bloomberg
Regulator seeks more comments on Cboe’s plans to list SolidX; VanEck to ‘continue work’ to make Bitcoin safer, more liquid
Bitcoin held most of Monday’s 13% surge as traders took in stride another delay by U.S. regulators to approve a Bitcoin exchange-traded fund.
/bloom.bg/2wa1fTO

$19 Million: Ethereum Foundation to Fund Work on 2.0 Upgrade, Plasma and More
Christine Kim – Coindesk
The Ethereum Foundation detailed Tuesday how an estimated $30 million will be spent by the organization on key projects within the ethereum ecosystem. The group said that $19 million has been earmarked over the next 12 months to be put towards “building the ethereum of tomorrow.” Namely, this includes an ambitious scaling upgrade dubbed ethereum 2.0, “layer 2” scaling projects such as Plasma, among other research and development projects.
bit.ly/2JwXUXF

$71 Million: Galaxy Digital Sells Stake in EOS Blockchain Maker Block.One
Wolfie Zhao – Coindesk
Galaxy Digital, the crypto merchant bank founded by former hedge fund manager Michael Novogratz, has received $71.2 million after selling its shares in Block.one, the maker of the EOS blockchain.
bit.ly/2wgybKc

Tether admits in court to investing some of its reserves in bitcoin
Larry Cermak – The Block Crypto
Count this as the latest revelation to emerge in Bitfinex’s battle with the New York Attorney General’s office.
bit.ly/2wfP3Rn

Bitfinex Argues Why Judge Should Dismiss NYAG Case in Latest Court Filings
Marc Hochstein – Coindesk
Bitfinex and Tether have asked a judge to dismiss the New York Attorney General’s (NYAG) case against the controversial cryptocurrency firms, claiming they have no customers in the state. In new court filings Tuesday, lawyers for the two companies, which have overlapping owners and managers, also asked Judge Joel M. Cohen of the New York Supreme Court to stay the NYAG’s “onerous” request for documents from Bitfinex and Tether while he considers the motion.
bit.ly/2VWWRH1

At Blockchain Week, Maturity Is the Motto as Ethereum Organizations Push Toward 2.0 Upgrade
Leigh Cuen – Coindesk
The ethereum movement, headed by flagship organizations like the Ethereum Foundation and the Brooklyn-based conglomerate ConsenSys, emerged from Blockchain Week 2019 with a common goal and a newfound sense of urgency. In short, building ethereum 2.0 ó the blockchain network’s ambitious reinvention plan ó will require maturity.
bit.ly/2QcI5WH

Spend Some Time With the Winklevii; A True Story of Genius, Betrayal, and Redemption
Ben Mezrich – NYT
At the end of 2017, Bitcoin mania was in full swing. Prices of the digital currency had reached a record high of about $20,000 a pop. Wall Street banks were rushing to get in on the frenzy. Egged on by hyperbolic cheerleaders, small-time investors socked their savings in the so-called cryptocurrency.
/nyti.ms/2wmwGup

Dutch Man Arrested Over $2.2 Million Bitcoin Mining Fraud
Yogita Khatri – Coindesk
A 33-year-old man in the Netherlands has been arrested for bitcoin mining fraud worth over EUR2 million ($2.2 million). Dutch tax authority’s investigative department, FIOD, announced the news Monday, saying that the man was a director of two private limited companies where he convinced around 100 people to buy computers for mining bitcoins that he probably never purchased. The man is accused of fraud, forgery, and money laundering, the department said, adding that he allegedly spent investor money on luxury items such as cars, motorbikes, travel, and gambling.
bit.ly/2K1aVIe

Sources: Circle slashes reported $250 million fundraising goal by $100 million
Celia Wan and Frank Chaparro – The Block Crypto
Crypto startup Circle’s revised fundraising goal is 40% lower than the $250 million it was reportedly set to raise in March, according to sources familiar with the matter.
bit.ly/2wmxmQt

****More on Circle: Crypto Startup Circle Lays Off 30 Employees Citing Market, Regulatory Conditions.

Study: Bitcoin Derivatives Exchanges Register Record Trading Volumes
Ana Alexandre – Cointelegraph
Cryptocurrency research firm Diar has indicated that institutional traders recently registered record high volumes on bitcoin (BTC) derivatives exchanges in a report published on May 21. Per the report, bitcoin derivatives trading on the Chicago Mercantile Exchange (CME) hit an all-time-high for two months in a row.
bit.ly/2HvkCwX

What Will Save Crypto?
Sulaiman al-Fahim – Tech Crunch
Cryptocurrency technology has been on a tumultuous journey since its creation in 2009. According to a recent New York Times article, bitcoin enthusiasts in the U.S. wrongly predicted the involvement of Wall Street institutions and investors in cryptocurrency, which would have given it legitimacy. Instead, the opposite effect has taken place: big investors have avoided crypto because of its volatility, as shown by bitcoin’s devastating drop in price last year.
/tcrn.ch/30zfiAa

The cryptocurrency startups trying to save Argentina from itself
Kristin Majcher – MIT Technology Review
A 1988 hit by the Argentine rock band Soda Stereo gave Buenos Aires a nickname that still sticks today: “La Ciudad de la Furia,” or the City of Fury. The “fury” of Buenos Aires is evident in the uneven quality of everyday life here. It’s not uncommon for strikes and demonstrations to cause street closures, or for the power to fail on hot summer afternoons. Prices for food and goods varyósometimes substantiallyóby neighborhood and locale.
bit.ly/2VGnDOO

Thiel-Backed Crypto Startup Pays Out 6,567% Return; After raising $4 billion in a record token sale, Block.one gives some back to shareholders.
Alastair Marsh – Bloomberg
Billionaire moneymen Peter Thiel, Alan Howard and Louis Bacon have seen plenty of big paydaysóbut probably none as unusual as this one.
/bloom.bg/2wdXuNm

Traders Accused of Illegally Collecting $56 Million in Bitcoin for Loan Scheme
Wolfie Zhao – Coindesk
Two over-the-counter (OTC) market makers in China have been accused of illegally collecting bitcoin now worth $56 million from more than 100 OTC traders as part of a loan scheme.
bit.ly/2weVEvq

Politics

Trump Held Off Punishing Huawei Until China Trade Talks Stalled
Jenny Leonard, Nick Wadhams and Margaret Talex – Bloomberg
The Trump administration held off on blacklisting Huawei Technologies Co. out of concern the move could disrupt trade negotiations with China and only took action after the last round of talks hit an impasse, according to people familiar with the matter.
/bloom.bg/2VWxVj5

The Problem With Capitalism? We Don’t Have Enough of It.
Chris Schelling – Institutional Investor
Lately, an unusual series of pundits have been discussing problems in the U.S. economy, and how capitalism is failing a majority of market participants.
Even staunch supporters of capitalism ó people who have profited enormously from our economy, like Bridgewater Associates founder Ray Dalio ó have, quite vocally, argued that the current system isn’t working.
In many ways I agree.
bit.ly/2HOybqy

Trump Team Vets Fed Critic for Board Seat
Jeanna Smialek – NY Times
The Trump administration is vetting Judy Shelton, a conservative economist and former Trump campaign adviser, for a seat on the Federal Reserve Board, according to people familiar with the matter, putting the longtime Fed critic one step closer to a leadership role at an institution she would like to drastically change.
/nyti.ms/2VTENxI

Trump, House Democrats square off in U.S. court over Deutsche Bank documents
Brendan Pierson – Reuters
Lawyers for U.S. President Donald Trump, three of his children and the Trump Organization will demand in court on Wednesday that a judge stop Deutsche Bank AG and Capital One Financial Corp from providing financial records to Democratic lawmakers investigating Trump’s businesses.
/reut.rs/2Qieawf

GOP Senator Says Trump’s Trade War Has Farmers On ‘Verge Of Financial Collapse’; Jerry Moran of Kansas urged Agriculture Secretary Sonny Perdue to find a better response than unreliable government aid.
Amy Russo – Huffington Post
Republican Sen. Jerry Moran of Kansas raised dire concerns over the Trump administration’s intensifying tariff war with China, warning Department of Agriculture Secretary Sonny Perdue on Monday that the impact on American farmers could prove devastating.
bit.ly/2QdaUlE

Regulation

ISDA CDM Deployed to Help Deliver UK Digital Regulatory Reporting Pilot
International Swaps and Derivatives Association
ISDA has today announced the deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK Financial Conduct Authority, the Bank of England and participating financial institutions in testing phase two of the digital regulatory reporting (DRR) pilot for derivatives.
bit.ly/2HLExXn

SEC Obtains Emergency Order Halting Alleged Diamond-Related ICO Scheme Targeting Hundreds of Investors
SEC
The Securities and Exchange Commission today announced it has obtained a court order halting an ongoing $30 million Ponzi scheme targeting more than 300 investors in the U.S. and Canada. The SEC complaint unsealed Monday charges South Florida-based Argyle Coin, LLC, a purported cryptocurrency business, and its principal Jose Angel Aman with using investor funds to run a Ponzi scheme.
bit.ly/2VRq9qx

Regulator calls on US exchanges to justify increases in data fees; SEC requires fees to be ‘reasonable’ and not harmful to competition
Richard Henderson – FT
The US securities regulator has urged stock exchanges to provide more justification for the fees they charge for market data, in the latest salvo in a battle over the rising cost of basic trading information.
/on.ft.com/2wgtpfK

ESAs launch consultation on technical standards on the reporting of intra-group transactions and risk concentration for Financial Conglomerates
ESMA
The three European Supervisory Authorities, the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities Markets Supervisory Authority (ESMA) launched today a consultation on draft Implementing Technical Standards (ITSs) on the reporting of intra-group transactions and risk concentration for Financial Conglomerates.
bit.ly/2wcscpR

FINRA Reminds Firms to Register for CAT Reporting by June 27, 2019
FINRA
FINRA is issuing this Notice to remind firms they must register with FINRA CAT, LLC (FINRA CAT) for reporting to the Consolidated Audit Trail (CAT). CAT registration commenced on March 18, 2019, and will run through June 27, 2019. All Industry Members, as defined under the CAT NMS Plan, that will have a CAT reporting obligation must register during this window.
bit.ly/2wfa5Qk

FCA wins case against unauthorised forex firm
UK FCA
Following an application by the FCA, the High Court, on 14 May 2019, declared that Xcore Capital Limited (Xcore) and Jonathan Chitty had carried on an unauthorised investment scheme. The scheme took in at least £1 million from investors but only a small amount of the investors’ money was ever used for trading.
bit.ly/2wctHEv

Statement on the launch of the finalised CTI templates
UK FCA
The FCA welcomes the announcement by the Cost Transparency Initiative (CTI) officially launching finalised and industry-ready templates for the disclosure of costs and charges to institutional investors. The new templates can now be used by institutional investors to access and assess critical information on costs. This gives investors clear expectations for standardised disclosure and should allow comparison of charges between providers.
bit.ly/2wcpgJV

SEC Settles Charges Against Blockchain Investor; Canada’s NextBlock allegedly misled investors as to who was advising the company.
ai.cio.com
The SEC has settled charges against NextBlock Global Ltd., a Canadian investor in blockchain companies, and Alex Tapscott, its co-founder and former CEO, for making material misrepresentations in connection with a 2017 securities offering that raised $16 million from more than 100 investors.
bit.ly/2wcpL6L

Investing and Trading

Angst Over Credit-Market Risks Spreads
Julie Segal – Institutional Investor
Credit products will unleash volatility during the next market downturn, Fitch has warned, and pension funds and insurance companies better brace themselves to ride it out.
Since the financial crisis, asset managers have replaced banks as corporate lenders, launching funds for both institutional and retail investors. But the effect of these new-fangled products on market stability has yet to be tested.
bit.ly/2HHlIop

‘Father of the 401(k)’ Says Successful Saving Habits Start Early
Julia Carpenter – WSJ
Forty years ago, Ted Benna invented the 401(k). But back then, he said, the retirement savings landscape didn’t look anything like it does now. His invention is now much more common than he had originally imagined.
/on.wsj.com/2wf9jmo

Trading a Trade War: ‘Markets Don’t Appear Ready for That’; Some investors are shunning stocks with significant exposure to China
Steven Russolillo and Michael Wursthorn – WSJ
How do you trade a trade war? A previously abstract question is becoming more pressing for investors as U.S.-China trade relations fray.
/on.wsj.com/2wjGp4h

Financial advice gap has widened since 2015, says report; Millions are priced out of the market and unaware of free help available
Kate Beioley – FT
The gulf between those with and without access to affordable financial advice has widened in the past four years, according to a new study revealing that digital innovations have not been enough to help customers priced out of the market.
/on.ft.com/2wcQNL8

Financial groups in the front of fight against climate change; ‘Policymakers essentially leverage the sector to help push for action’
Vanessa Havard-Williams – FT
Climate change may be the only policy area capable of snatching Britons’ attention from Brexit. This month the UK Committee on Climate Change recommended a net-zero emissions target by 2050 and parliament declared a climate emergency. In April, the protest group Extinction Rebellion caused widespread disruption in London and 16-year-old Swedish activist Greta Thunberg met British politicians.
/on.ft.com/2wcQ4JU

Institutions

JPMorgan Shareholders Approve Jamie Dimon’s Pay Despite ISS Objections
David Benoit – WSJ
JPMorgan Chase & Co. investors voted to approve Chief Executive James Dimon’s pay at the bank’s annual meeting over the objections of a shareholder-advisory firm.
/on.wsj.com/2wdQzDD

Former currencies star fights to revive hedge fund after loss; Anil Prasad’s Silver Ridge looks at a variety of trading ideas after a tough 2018
Laurence Fletcher – FT
The former head of currencies at Citigroup, once dubbed the “world’s most powerful FX banker”, is trying to turn round his hedge fund after a tough 2018 put a dent in his record.
/on.ft.com/2w9DCuH

First Rule of Geneva Private Banking: Don’t Live in France
Dylan Griffiths, Patrick Winters and Hugo Miller – Bloomberg
Bankers urged to live in Switzerland to avoid crossing border; Code has gained attention after UBS’s record fine in France
Geneva’s private banks have a little known rule that’s rarely discussed with outsiders.
/bloom.bg/2wmugvP

Commerzbank open to M&A after Deutsche Bank talks collapse
Reuters
Commerzbank may refine its strategy and is still open to mergers following the collapse of talks with its larger rival Deutsche Bank, the lender’s chief executive said on Wednesday.
/reut.rs/2wbFenD

China regulator reprimands CICC bankers on IPO document violations
Reuters
China’s securities regulator said it has reprimanded two China International Capital Corporation Ltd bankers for improperly altering documents for a company they were advising for a listing on China’s new technology board.
/reut.rs/2we3AgA

Regions

Europe’s bond markets are underpricing the threat of populism; Politicians in northern Europe need to get to grips with a flawed monetary union
John Plender – FT
For the markets it is a given. In this week’s European Parliament elections, radical populist and Eurosceptic politicians will do serious damage to the main centre-right and centre-left political parties, perhaps even denying them a combined majority in the parliament. The more pressing question is whether the current pattern of eurozone sovereign bond yields adequately reflects the longer-term threat posed by populism to the integrity of the monetary union.
/on.ft.com/2wdPhbL

Can Ramaphosa Do It?
Andrew Donaldson – Project Syndicate
South African President Cyril Ramaphosa led his ruling African National Congress (ANC) party to a comfortable victory in the country’s parliamentary election earlier this month. But engineering the economic recovery that South Africa needs is likely to be much harder.
bit.ly/2VUxNAC

Canada’s Barrick Gold makes buyout offer for Acacia Mining; Proposal values Africa-focused gold producer at $787m
Neil Hume and Henry Sanderson – FT
Canada’s Barrick Gold has offered to buy the remaining 35 per cent of Acacia Mining, an Africa-focused gold producer, it does not already own through an all-stock offer pitched at a discount to the prevailing share price.
/on.ft.com/2wbCjvb

Draghi Says Euro Zone Must Overcome Impasse on Risk Sharing
Carolynn Look and Piotr Skolimowski – Bloomberg
ECB chief says ‘false’ concerns hampering policy transmission; Politicians making little progress completing economic union
Mario Draghi warned against exaggerating the tradeoffs between risk sharing and risk reduction in the euro zone, arguing it has hampered monetary policy transmission.
/bloom.bg/2wbC4QN

Swedes Become World Champions With 100% Stashing Cash in Funds
Hanna Hoikkala – Bloomberg
Swedes are the world champions in mutual fund saving. In fact, when including the privatized part of the government pension fund system, 100% of working Swedes have some part of their savings in a mutual fund. But even excluding that, the proportion tops out at about 80%, almost double the share among U.S. households.
/bloom.bg/2wgt0Kg

Brexit

Theresa May under pressure to pull revamped Brexit deal vote; Conservative MPs call for PM’s resignation a day after revamped plan announced
Sebastian Payne and Naomi Rovnick – FT
Theresa May is under increasing pressure to pull the parliamentary vote on her revamped Brexit deal just a day after it was announced, with a growing number of MPs from her Conservative party calling on her to resign.
/on.ft.com/2wfSCXK

May Faces Pressure to Abandon Vote on Brexit Law and Resign
Tim Ross – Bloomberg
U.K. prime minister warned her EU withdrawal deal won’t fly; Tories braced for disaster in European Parliament elections
Theresa May is facing pressure to abandon her Brexit deal and quit as British prime minister within days, according to people familiar with the matter.
/bloom.bg/2wcmJPV

John le CarrÈ and Neil Gaiman join writers warning Brexit is ‘choosing to lose’
Alison Flood – The Guardian
Some of the UK’s most garlanded novelists, including Robert Harris, John le CarrÈ and Philip Pullman, have lambasted the promises made by Brexiters as being too unbelievable for fiction, writing: “We are the people who spend our lives making things that are not true seem believable, and we don’t think Brexit is even a good effort.”
bit.ly/2wbEK0V

BOE Regulator Says Freedom From EU Could Improve Bank Oversight
Silla Brush and Lucy Meakin – Bloomberg
Leaving the European Union could help Britain ward off emerging threats to the financial system, according to the top U.K. bank regulator at the Bank of England.
/bloom.bg/2wctUHN

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