Facebook Plans Global Financial System Based on Cryptocurrency

Jun 18, 2019

First Read

Hits & Takes
JLN Staff

The FT has an entire series of articles on “Libra: Facebook’s digital currency.”~JJL

I will not be heading to Asia this fall after all. I declined the invitation to moderate a conference panel due to logistical disagreements, which is a nice way of saying I was not interested in flying coach for 21 hours.~JJL

The month of June wasn’t even half over by the time Eris Swap Futures had set a new monthly volume record of 181,442 contracts at the CME (through the first nine trading days), beating March’s previous record of 173,330.~SD

CME Group Disciplinary Notice Updates: Howard Stark was fined $90,000 and banned from CME platforms for an array of open outcry infractions while trading S&P 500 options. Link Futures was fined $2,000 for violating block trade reporting rules. Markus Groebner was fined $50,000 for entering non bona fide bids and offers in wheat futures and banned from CME platforms for a span of three years starting on the date the fine is fully paid. ~SD

Michael Spencer’s thoughts on Brexit: “If you tell me that between now and October 31, whoever is leader of the Conservative party and the new prime minister will get a deal done, I would buy the s*** out of sterling now. But in likelihood, whoever comes in the poker game is going to run to the last minute,” via a piece in Financial News.~SD


Electronic Derivatives Trading in South Africa Gears Up

A half decade’s worth of work at the Johannesburg Stock Exchange (JSE) to update its trading technology is bearing fruit. The exchange now has its equities, equities derivatives and foreign exchange derivatives trading on LSEG Technology’s Millennium Exchange platform, with interest rate derivatives and commodities the next asset classes to transition. In this video, JSE head of Bonds, Currencies and Interest Rate Derivatives Udesh Moodley talks about the historic makeup of South Africa’s trading community, new participants who have been lured by electronification, developing the local bond futures market, and more.

Watch the video »


CME Group Named to IDG’s Computerworld List of Best Places to Work in Information Technology
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that is has been selected by IDG’s Computerworld as a 2019 Best Places to Work in Information Technology (IT), one of 100 top organizations that challenge their IT employees while providing great benefits and compensation. The recognition is part of the publication’s annual Best Places to Work in IT survey, which is available online at computerworld.com.

***** Of all the companies, CME Group had the highest foosball table per technologies of any of the companies.~JJL


Facebook Wants Its Cryptocurrency to One Day Rival the Greenback; Social-media giant says Libra will be better than Bitcoin. But the company is late to the party and other payment initiatives have stumbled.
Kurt Wagner, Olga Kharif and Julie Verhage – Bloomberg
Facebook Inc. unveiled plans for a new cryptocurrency that the social-media giant hopes will one day trade on a global scale much like the U.S. dollar.

***** One would hope their ambitions were higher than “Better than Bitcoin.”~JJL


Monday’s Top Three
Our top story of the day on Monday was a climate story. Reuters’ piece, Illinois farmers give up on planting after floods, throw party instead details how millions of acres of farmland are not going to be planted this season due to flooding. Second was Bloomberg’s 10 EU Countries OK Financial Transaction Tax Revenue-Sharing Plan. Third was Bloomberg’s Wall Street Learns Hard Lesson on Why Not to Say ‘Pig’ in China


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Lead Stories

Facebook Plans Global Financial System Based on Cryptocurrency
Mike Isaac and Nathaniel Popper – NY Times
Facebook unveiled an ambitious plan on Tuesday to create an alternative financial system that relies on a cryptocurrency that the company has been secretly working on for more than a year.

****More on the news in our Crypto section.

UBS was riding high in China — until Swinegate; Swiss bank capitalised on Washington-Beijing tension before analyst’s note on pigs
Don Weinland, Patrick Jenkins and David Crow – FT
Before “Swinegate”, UBS was riding high in China. The Swiss bank had recently gained approval to take majority control over its onshore securities joint venture UBS Securities, the most comprehensive of all the foreign-backed securities houses in the country.

Swiss Stock Exchange Access to Key EU Market Hangs by Thread
Alexander Weber – Bloomberg
EU officials not yet ready to decide on extension of access; More progress needed on bilateral accord within next days
Swiss diplomats will have to mount a last-ditch effort to secure market access for the nation’s stock exchanges within the European Union beyond the end of the month.

Facebook Unveils Libra Cryptocurrency, Targeting 1.7 Billion Unbanked
Nikhilesh De, Zack Seward – Coindesk
You don’t have to have a Facebook account to use Libra. That’s the hands-off approach the social media giant is working toward as it announces its new blockchain and the token of the same name that will run on top of it.

The 10 most important things you need to know about Facebook’s new cryptocurrency, Libra
Yogita Khatri – The BlockCrypto
After months of anticipation, Facebook has just unveiled its cryptocurrency, dubbed Libra. There is a lot of information to unpack, and The Block has distilled the announcement into most important points to save our readers time.

Implementation of Margin Requirements and Market Fragmentation
Jurisdictions across the globe have implemented margin requirements for non-cleared derivatives, largely in line with the standards agreed by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO). Since implementation of the first phase of the requirements in 2016, the US, European Union (EU), Japan and others have extended the requirements in line with the phase-in schedule agreed by BCBS/IOSCO.

Leaving LIBOR Behind As SONIA Transitions To Risk Free Rates
Stephen Pope – Forbes
The Bank of England (BOE) and Financial Conduct Authority (FCA) jointly hosted a panel-based event on June 5, 2019 titled “Last Orders: Calling Time on LIBOR”.

INTL FCStone Now Offering Full Suite of Exchange-Traded Financial Products Throughout Canada; Company admitted as member of the Investment Industry Regulatory Organization of Canada
INTL FCStone Inc.
INTL FCStone Inc. (NASDAQ: INTL) today announced that its subsidiary, INTL FCStone Financial (Canada) Inc. (“INTL” or “the Company”), has become a member of the Investment Industry Regulatory Organization of Canada (IIROC). This membership, effective May 17, 2019, allows INTL to offer exchange-traded financial products throughout the Canadian Provinces.

Citigroup to merge its forex and rates-trading businesses
Paul Clarke – Financial News
Citigroup is to merge two of the largest divisions in its sales and trading unit, leading to the first major shakeup of its investment bank leadership since new boss Paco Ybarra took over in April. The bank is set to merge its foreign exchange trading team with its G10 rates trading desk, creating a new business called rates and currencies, according to an internal memo seen by Financial News.

****SD: Other sources: the Financial Times and Business Insider Prime.

Deutsche Bank seeks breathing space by slashing trading arm; Germany’s biggest lender wins cautious support for plan to shift EUR50bn of unwanted assets into a ‘bad bank’
Stephen Morris – FT
In the years after the financial crisis, many of the world’s biggest lenders set up vast “bad banks” to cleanse trillions of dollars in toxic assets from their balance sheets. Until now, very few of them have needed a second bite at the cherry.

Arrested in Russia, U.S. Investor Faces Setback in London Court
Jake Rudnitsky – Bloomberg
RBC says court ordered Baring Vostok to pay opponent’s fees; Baring Vostok says decision is just an interim ruling
The London Court of International Arbitration ruled in favor of a group of Russian investors in their legal battle with besieged private equity investor Michael Calvey in a decision that could force him to give up control of a key asset.

Philip Hammond launches London-Shanghai stock link

Kenya’s Derivatives Market to go live on 4th July
Kenyan Wall – African-Markets.com
After several years of preparation, the Nairobi Derivatives market will begin to operate on 4th July. NSE received the license to operate from the market regulators; CMA and the Central Bank of Kenya. It will be the number two derivatives market in Sub-Saharan Africa after the Johannesburg market.

Exchanges, OTC and Clearing

ICE approved as benchmark administrator by FCA; ICE Data Services has been given green light in the UK to act as a third country benchmark administrator.
Hayley McDowell – The Trade
Intercontinental Exchange (ICE) has been granted approval by the UK’s financial watchdog to operate as a third country benchmark administrator under the European Benchmark Regulation (BMR).

The additional trading session starts later for Derivatives market on 4, 11, 17, 18, 25 and 26 July 2019
Please note that the Derivatives Market evening trading session will begin five minutes later, i.e. at 7:05 pm MSK, on 4, 11, 17, 18, 25 and 26 July 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).

Mondo Visione Announces Martin Wolf, Chief Economics Commentator, Financial Times As A Keynote Speaker For Mondo Visione Exchange Forum
Mondo Visione the leading source of insight and knowledge about the world’s exchanges and trading venues, organisers of the Mondo Visione Exchange Forum, has announced Martin Wolf, chief economics commentator at the Financial Times, as a Keynote Speaker for the Mondo Visione Exchange Forum on 1 October 2019.

SGX welcomes TrickleStar Limited to Catalist
Singapore Exchange (SGX) today welcomed TrickleStar Limited to its Catalist under the stock code “CYW”. TrickleStar Limited designs and supplies affordable, simple and easy-to-use energy-saving products to help consumers reduce energy consumption in their homes and workplaces. Its portfolio of energy-saving products includes Advanced Powerstrips, load controllers, energy meters, energy monitors and surge protectors.

SGX Index Edge Licenses Three Indices to Yuanta SITC Taiwan
Singapore Exchange (SGX) today announced it is licensing three futures-based indices to Yuanta SITC, the leading ETF provider in Taiwan. The futures indices provide inverse, leverage and market exposure through the MSCI Emerging Markets (EM) Futures.

RGGI States Welcome New Jersey as Its CO2 Regulation Is Finalized
New Jersey will take part in the regional quarterly auctions, originating fully fungible CO2 allowances that may be used for compliance in any RGGI participating state. As an equal participant in the RGGI program , New Jersey will be a part of the RGGI program review process, a long-standing commitment to study potential improvements to RGGI’s design and propose changes to the program on a consensus basis.

HKEX Welcomes its First Listing of Active ETF
First active ETF listed in Hong Kong; Fund managers have discretion to select securities in the fund, with the aim of outperforming market indices; Enjoy the same benefits as traditional ETFs: convenience, lower cost and intra-day liquidity
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to welcome today (Tuesday) its first listing of an active Exchange Traded Fund (ETF) – ICBC CICC USD Money Market ETF (stock code: 3011/9011) – marking another milestone in the development of Hong Kong’s ETF market.

Euronext Reference Shareholders Agreement renewed for two years
Euronext, the leading pan-European exchange in the Eurozone, announced today that it was informed that the group of Reference Shareholders, holding 23.86% of its share capital, has decided to extend an amended version of their Reference Shareholders Agreement. This agreement dated 21 June 2017 was due to expire on 20 June 2019, and is now extended for a further period of two years commencing on 20 June 2019.


The Age of Artificial Intelligence and Wall Street
AIT News Desk
Broadridge’s 2019 Artificial Intelligence (AI) Outlook Survey Reveals Majority of Financial Services Firms See Value in AI for Data Mining, but Legacy Technology Is a Continuing Impediment

IHS Markit Completes Last Mile for Electronic Messaging in Syndicated Loan Trades
IHS Markit Online Newsroom
IHS Markit, a world leader in critical information, analytics and solutions, today announced that its ClearPar service is delivering syndicated loan trade settlement and trade funding information directly to custody systems using electronic messaging. The advance improves accuracy at custodians and reduces the risk of penalties that arise when buyers are late in making payments on loan trades.

VoxSmart capturing 1.5 million IM messages per month proves demand for their product with Tier 1 banks and IDB’s
VoxSmart, the Leader in providing global mobile voice and instant message (IM) capture technology, released today that they are currently capturing over 1.5 million instant messages per month. David Delaney, Chief Commercial Officer of VoxSmart, said “We have seen the demand for the capture of IM increase over the past 6 months. We were confident we would reach these numbers early 2020 however the demand was such that we hit this number in June 2019.” VoxSmart’s product suite captures voice calls and instant messages globally for the top 5 Inter Dealer Brokers and global tier-one banks, offering secure tamper proof technology that is available on both mobile and desktop.

Algomi ALFA Delivering Actionable Liquidity With Liquidnet And Trumid
Algomi, which provides data aggregation technology for the optimization of fixed income liquidity, today announced Algomi ALFA will enable orders to be executed on Liquidnet and Trumid.

FCG RegWatch – Stay on top of the latest regulatory changes
Today, we announce the release of a new technology offering, FCG RegWatch, that automatically keeps track and compiles news and updates of the regulations of the financial markets.

Pico Names Emma Wheeler New Chief Commercial Officer, EMEA
Pico, a leading infrastructure, connectivity, cloud technology, data and analytics services provider to the financial services industry, today announced the appointment of Emma Wheeler as Pico’s Chief Commercial Officer for Europe, the Middle East and Africa (EMEA) starting this July. She joins Pico as a member of the global senior executive team, reporting to Pico CEO Jarrod Yuster and working closely with Pico Global Head of Sales Michael Verkuijl and Chief Administrative Officer (CAO) Marc Hineman.

Pico Names Emma Wheeler New Chief Commercial Officer, EMEA
Pico, a leading infrastructure, connectivity, cloud technology, data and analytics services provider to the financial services industry, today announced the appointment of Emma Wheeler as Pico’s Chief Commercial Officer for Europe, the Middle East and Africa (EMEA) starting this July. She joins Pico as a member of the global senior executive team, reporting to Pico CEO Jarrod Yuster and working closely with Pico Global Head of Sales Michael Verkuijl and Chief Administrative Officer (CAO) Marc Hineman.

Intertrust acquires Viteos; A competitive game-changer that accelerates our drive for global leadership in tech-enabled corporate and fund solutions
Today we announced the exciting news that we’ve acquired Viteos. Established in 2003, Viteos is a top 10 U.S. fund administration provider, delivering tech-enabled, value added services to the funds industry. With more than 700 highly skilled employees, Viteos has grown into an industry leader servicing $350 billion in assets.


Facebook Unveils Libra, Cryptocurrency Rival to Bitcoin; Move is the most ambitious effort yet to take blockchain payments mainstream
Jeff Horwitz and Parmy Olson – WSJ
Facebook Inc. formally announced plans to launch a cryptocurrency called Libra, promising a secure blockchain-based payment system backed by hard assets and designed for mainstream users.

Zuckerberg: The man who would be monetary king
Izabella Kaminska – FT
This is just one of a series of Alphaville posts on Libra coin, which we are calling Breaking the Zuck Buck, in which we will seek to show how nonsensical, pointless, stupid, risky, badly thought-out and blockchainless the whole thing is.

Facebook’s Libra: blockchain, but without the blocks or chain
Jemima Kelly – FT
This is just one of a series of Alphaville posts on Libra coin, which we are calling Breaking the Zuck Buck, in which we will seek to show how nonsensical, pointless, stupid, risky, badly thought-out and blockchainless the whole thing is.

Facebook’s Libra coin is a symptom of banks’ flaws; Social media group hopes to target obvious goal of costly transfers
The editorial board – FT
Between data breaches, hate speech and smear campaigns, Facebook has set a standard of sorts in Silicon Valley scandals. A new blockchain-based currency, Libra, is an odd choice to change that image. Such digital assets are known for volatility and criminality. Yet the meeting of Big Tech and fintech represents a challenge to traditional banks. Facebook hopes to exploit their flaws, most notably slow and expensive transactions. There are good reasons to remain wary of Facebook, but a digital shake-up of banking is long overdue.

Facebook unveils global digital coin called Libra; Initial backers for new currency include Visa, Uber, Vodafone and Spotify
Hannah Murphy – FT
Facebook has revealed plans for a new global digital currency with the backing of more than two dozen companies ranging from Visa and Mastercard to Lyft and Spotify, bringing the heft of the world’s largest social network to efforts to transform financial services.

MoneyGram Doubles After Blockchain Startup Ripple Buys Stake
Jeran Wittenstein – Bloomberg
MoneyGram International Inc. soared in extended trading on Monday after blockchain-technology company Ripple purchased a stake and entered a partnership for international money transfers.

Stonewalled by FINRA, Up to 40 Crypto Securities Wait in Limbo for Launch
Nikhilesh De – Coindesk
Blockchain startups waiting for approvals from U.S. securities regulators are getting restless, and wondering what’s the holdup.

Coin Metrics is unleashing crypto Twitter data onto its platform
Aislinn Keely – The Block Crypto
Crypto Twitter is often thought of as a stream of mindless consciousness, but that stream may soon become more valuable thanks to a new data partnership.
Coin Metrics is incorporating Social Market Analytics’ (SMA) cryptocurrency data feed into its market data platform, which will provide sentiment data on different cryptos based on Twitter information.

Ripple Takes $50 Million Stake in MoneyGram in Push to Deploy XRP
Jeff John Roberts – Fortune
Cryptocurrency company Ripple on Monday announced a major partnership with MoneyGram, which will see the money transfer service use the digital currency XRP as part of its day-to-day operations.

Top Crypto Exchange Pre-Announces $81 Million Bitcoin Transfer
Vildana Hajric and Olivia Rinaldi – Bloomberg
‘No need to FUD’ Binance tells users on Twitter on Monday; Bitcoin climbs past $9,000 to its highest level since May ’18
In the crypto world, long-held norms followed by Wall Street get broken every day.

London broker gatecrashes crypto derivatives market
The Block Crypto
A division at the world’s largest interbroker, TP ICAP, is now acting as an intermediary to customers who want to trade regulated Bitcoin futures to one another, Bloomberg writes. TP ICAP is also looking to add non-deliverable forwards tied to bitcoin.

Digital Asset announces DAML Partner Integrations with Hyperledger Fabric, R3’s Corda and Amazon Aurora; Digital Asset collaborates with R3, HACERA and Blockchain Technology Partners to enable multiple platform and cloud deployment options for DAML driven applications
Digital Asset
Digital Asset, creators of the DAML smart contract language, announced today that its partners, HACERA and Blockchain Technology Partners, have successfully integrated DAML with the Hyperledger Fabric and R3’s Corda blockchain platforms, and Aurora cloud storage engine on Amazon Web Services (AWS).


2020 Democratic Favorites for New York Donors? Biden, Buttigieg, Harris
Shane Goldmacher – NY Times
The behind-the-scenes competition for Wall Street money in the 2020 presidential race is reaching a fevered peak this week as no less than nine Democrats are holding New York fund-raisers in a span of nine days, racing ahead of a June 30 filing deadline when they must disclose their latest financial hauls. With millions of dollars on the line, top New York donors are already beginning to pick favorites, and three candidates are generating most of the buzz: former Vice President Joseph R. Biden Jr., Senator Kamala Harris of California and Mayor Pete Buttigieg of South Bend, Ind.

Trump’s $16 Billion Farm Bailout Criticized at WTO
Bryce Baschuk – Bloomberg
Countries say U.S. farm subsidies could violate WTO rules; U.S. program seeks to help farmers affected by trade wars
The European Union joined China and five other World Trade Organization members in criticizing the Trump administration’s $16 billion assistance program for U.S. farmers, indicating the bailout may violate international rules.


Swiss regulator says in contact with initiators of Facebook’s Libra
Switzerland’s financial regulator FINMA said on Tuesday that it is in contact with the “initiators” of Libra, Facebook’s planned cyrptocurrency.

IOSCO Urges Authorities To Use Existing Standards To Address Cyber Risk
The Board of the International Organization of Securities Commissions (IOSCO) today issued a final report that provides an overview of three internationally recognized cyber standards and frameworks used by IOSCO members. It also identifies potential gaps in the application of these standards and seeks to promote sound cyber practices across the IOSCO membership.

KPMG Paying $50 Million Penalty for Illicit Use of PCAOB Data and Cheating on Training Exams
The Securities and Exchange Commission today charged KPMG LLP with altering past audit work after receiving stolen information about inspections of the firm that would be conducted by the Public Company Accounting Oversight Board (PCAOB). The SEC’s order also finds that numerous KPMG audit professionals cheated on internal training exams by improperly sharing answers and manipulating test results.

June 2019 Disciplinary Actions
FINRA has taken disciplinary actions against the following firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB).

ESMA issues positive opinions on product intervention measures by Ireland, Italy, Luxembourg and Portugal
The European Securities and Markets Authority (ESMA) has today issued eight positive opinions on product intervention measures taken by the National Competent Authorities (NCAs) of Italy, Portugal, Ireland and Luxembourg. ESMA’s opinion finds that the proposed measures are justified and proportionate and that it is necessary for NCAs of other Member States to take product intervention measures that are at least as stringent as ESMA’s measures.

ESMA Publishes 2018 Annual Report
The European Securities and Markets Authority (ESMA) has published its Annual Report, which reviews its achievements against its 2018 priorities and objectives in meeting its mission of enhancing investor protection and promoting stable and orderly financial markets in the European Union.

ASIC approves AFCA Rules change for legacy complaints
ASIC has approved changes to the Australian Financial Complaints Authority (AFCA) Rules which give effect to the AFCA authorisation condition introduced by Government on 19 February 2019.

Police Raid Nordea’s Danish Office Amid Money Laundering Probe
Frances Schwartzkopff – Bloomberg
Danish police raided the Copenhagen offices of Nordea Bank Abp last week as part of an ongoing investigation into alleged money laundering at Scandinavia’s biggest bank.

Two More Brokers Applying For Retail FX Licenses in the US; Brightwin Securities and Nanshan Jinchuang both applied to become registered as NFEDs by the NFA last month
David Kimberley -Finance Magnates
Finance Magnates learned on Monday that two companies are applying for regulatory licensing in the US. According to documents released by the National Futures Association (NFA), Brightwin Securities and Finance applied to become a Retail Foreign Exchange Dealer (RFED) last month.

CFTC tries to get to co-founder of fraudulent binary options scheme Berkley Capital Management
Finance Feeds
Service on Arie Bos, one of the co-founders of fraudulent binary options entity Berkley Capital Management, turns out to be problematic for the US regulator.

Investing and Trading

Gauge of Treasury market volatility hits highest since 2016
Joe Rennison – FT
A widely watched measure of volatility in Treasury markets hit its highest level since 2016, as investors gird themselves for potential price swings ahead of an important Federal Reserve meeting on Wednesday.

Outsourced Trading vs. Insourced Trading: A Comprehensive Examination
Jones Trading
Receiving trading services for variable commission dollars is not a new concept — outsourced trading firms have roots dating back as far as hedge funds. However, over the last five years, there has been a dramatic shift in both the levels of service offered by outsourced trading firms and the types of clients they now serve. Due to the pressure on fees and other trends such as MiFID II, outsourced trading is one of the most talked about and fastest growing components in the alternative and traditional asset management industries.

ADM to cut nearly 130 jobs in France at animal feed unit Neovia
Archer Daniels Midland Company plans to cut 127 staff at its recently acquired Neovia animal feed business in France to eradicate job duplication, a spokesman for the company said on Tuesday.

Buy-side Q&A: Dan Veiner, BlackRock; Dan Veiner, global head of fixed income trading at BlackRock, talks to The TRADE about how the world’s largest asset manager is approaching new technology advancements and where the fixed income markets need further innovation.
Chris Hall – The Trade
Dan Veiner, global head of fixed income trading at BlackRock
What are your biggest priorities/challenges in fixed income trading and how are you addressing them?

Buy-side Q&A: Lee Sanders, AXA Investment Managers; Les Sanders, head of execution FX and UK & Asia fixed income trading at AXA Investment Managers, talks to The TRADE about the asset manager’s approach to automation, fixed income liquidity provision and the evolving trading desk skill set.
Chris Hall – The Trade
Lee Sanders, head of execution FX and UK & Asia fixed income trading at AXA Investment Managers
What the biggest challenges for your fixed income trading desk and where are the opportunities?

Hidden leverage can make ‘dividend traps’ harder to spot; Investors should beware ruses such as reverse factoring, which flatters a balance sheet
Robert Smith- FT
Struggling UK government contractor Kier has developed a fine sideline in producing kitchen sinks.

Investors Haven’t Been This Bearish Since 2008 Financial Crisis
Ksenia Galouchko – Bloomberg
Equity allocation saw second-largest drop on record, BofA Says; Cash levels soar in the biggest jump since 2011, survey shows
Investors haven’t been this pessimistic since the global financial crisis of 2008.


Deutsche Bank’s Top Executives Embroiled in German Tax Scandal
Karin Matussek and Donal Griffin – Bloomberg
Bank provided services to clients exploiting tax loophole; Lender says it never directly participated in Cum-Ex deals
For over a decade, one of the biggest financial scandals in German history has been snaking its way through Deutsche Bank AG.

Deutsche Bank plans to pare U.S. equities business to skeleton operation: sources
Matt Scuffham – Reuters
Deutsche Bank plans to dramatically reduce the size of its U.S. equities business, leaving only a skeleton operation in place to service corporate and high-net-worth clients, three sources familiar with the matter told Reuters.
Chief Executive Officer Christian Sewing is battling to convince investors he can turn around Germany’s biggest lender, whose shares hit a record low this month.

Morgan Stanley Expands Investing with Impact Platform
Abby Schultz – Barron’s
Morgan Stanley Wealth Management has created six new “impact portfolios” of publicly traded investment options to reach a wider swath of investors who want to create environmental and social impact alongside financial returns.

Invesco launches Model Portfolio Service; Using Intelliflo
Beth Brearley – InvestmentWeek
Invesco has announced plans to launch a model portfolio service, which will be the first to use Intelliflo’s integrated Model Portfolio technology (iMPS). The model portfolios – which will be built and actively managed by a 40-strong team at Invesco – will initially launch with a range of multi-manager model portfolios.

Crédit Agricole’s head of forex options departs; Andrew Soper leaves French bank to pursue other opportunities
Ben St. Clair – Risk.net
Crédit Agricole Corporate and Investment Bank’s global head of foreign exchange options trading, Andrew Soper, has left the bank to focus on private investment and business opportunities.

Marlborough hires former Russell Investments MD as head of business development; Newly created role for Nick French
Lauren Mason – InvestmentWeek
Marlborough Group has appointed Nick French as head of business development for multi-asset and wealth management, a newly created role.

Deutsche Bank Senior European Equities Banker Edward Sankey to Leave; Pending cuts to equities, broader investment bank take increasing toll
Jenny Strasburg – WSJ
Senior Deutsche Bank AG DB 0.44% European equities banker Edward Sankey is leaving the bank after almost 15 years, as planned cuts to its beleaguered equities business and the broader investment bank increasingly take a toll, according to people close to the lender.

There Is No Easy Fix for Legg Mason and Other Money Managers; Pushback from affiliates shows how hard it can be for firms to streamline their businesses
Justin Baer – WSJ
The plan to fix money manager Legg Mason Inc. LM -1.85% appears as obvious as ever—and no easier to pull off.

The Hot New Thing in Funds Is Higher Fees and More Restrictions; Asset managers are bullish on interval funds. Should you be?
John Gittelsohn – Bloomberg
The hottest thing in investing for the past decade has been low-cost exchange-traded funds, which investors can hop in and out of any time the market is open. So here’s a strange proposition: How about buying a fund with higher fees and restrictions on when you can take out your money?

Ex-Julius Baer Banker Starting Wealth Firm for Billionaires
Tom Metcalf – Bloomberg
Ali Jamal, a former Julius Baer Group Ltd. banker, is starting a new wealth-management firm focused on billionaire entrepreneurs.


World’s Top Bicycle Maker Says the Era of ‘Made in China’ Is Over
Cindy Wang – Bloomberg
Giant Manufacturing is moving U.S. orders to Taiwan factory; Chairwoman says company acted swiftly on Trump’s tariff threat
Giant Manufacturing Co. saw the writing on the wall early on. The world’s biggest bicycle maker started moving production of U.S.-bound orders out of its China facilities to its home base in Taiwan as soon as it heard Donald Trump threaten tariff action in September.

India’s Exotic Funds Are a $40 Billion Time-Bomb for Investors; Explosive growth in alternative investment vehicles is storing up future trouble for middle-class investors.
Andy Mukherjee – Bloomberg
Even as the fate of India’s shadow banks swings precariously between unexpected defaults and sudden downgrades, there’s trouble brewing in another unlit corner of finance.

‘No One Died’: Australia Central Bank Officials Relaxed About New Banknote Typo
Michael Heath – Bloomberg
Australian central bank chief Philip Lowe was “relatively relaxed” about an error on the nation’s new A$50 note that was repeated four hundred million times, according to internal correspondence released under a Freedom of Information request.

Russia defies pipeline threats over gas for Europe; Gazprom insists resources will flow even if Nord Stream 2 is not ready this year
Nastassia Astrasheuskaya – FT
In the extreme conditions of Russia’s far northern Yamal peninsula, 500km from the nearest town, thousands of workers are drilling 1.7km through permafrost for a contentious resource.


Britain’s Next Prime Minister Has Probably Already Lost Scotland; While the Tories squabble over Brexit in London, the Scots are reminded of how alien all that English politicking is.
Alan Crawford, Rodney Jefferson – Bloomberg
When it opened in 1998, the National Museum of Scotland captured the mood at large in the U.K. Those were the heady early days of the Blair government, Cool Britannia was in vogue, and transferring powers from London to the kingdom’s constituent nations was a policy imperative. It was the year of the Good Friday Agreement, which brought peace to Northern Ireland; in Scotland, voters had just chosen—in what was then a rare referendum—to reinstate a Scottish Parliament after almost 300 years.

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