FCA market oversight director named CEO of London Stock Exchange; Should You Use Investing Apps Like Robinhood?

Dec 7, 2020

First Read

$16,961/$300,000 (5.7%)


Hits & Takes
John Lothian & JLN Staff

Below is a write up and video from the LaSalle Street Trading Tech Awards event held last week. The video was fun, entertaining and moving in the stories of the Scouts. I encourage you to watch the video and make a donation if you are so moved.

The debate happened on Sunday night between Sen. Kelly Loeffler and her opponent, Rev. Raphael Warnock. It was not much of a “debate” as debates go. It is safe to say Sen. Loeffler was not on her high school’s debate team.

The election is meaningful and entertaining. Sen. Loeffler used Atilla the Hun in a commercial and a political action committee opposing her and fellow Sen. David Perdue gave them the “Grinch” treatment in a political video. Both of them are rapped for their trading of stocks during the pandemic.

You can forget about the Christmas cruise on Carnival Cruise Lines. They have cancelled all cruises until February of 2021.

The U.S. recorded more than 10K deaths from COVID-19 over a four day period.

We have had no new donations to our JLN MarketsWiki Education GoFundMe campaign in a few days. Help support our efforts to preserve industry history by donating to our GoFundMe campaign.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


Among other announcements, Intercontinental Exchange announced today that its board of directors has elected Shantella (Shan) Cooper and Mark Mulhern as new directors, effective December 4, 2020. The elections increased the ICE Board of Directors to 14 members, including five women and nine men.~SR

Grayscale Investments saw all-time highs in trading volume for its two SEC-regulated cryptocurrency funds, the Grayscale Bitcoin Investment Trust (GBTC) and the Grayscale Ethereum Investment Trust (ETHE) in November.~MR

The House of Representatives last week passed legislation to decriminalize cannabis on a federal level, removing it from the U.S. Controlled Substances Act by a 228-164 vote. The bill is not expected to pass the Republican-controlled Senate, but the House vote is nonetheless another step forward in the slow march toward federal legalization of marijuana. For a unique take on the process, see Friday’s PanXchange, Inc. blog post on the subject here.~SC


An Evening Supporting Scouting Comes in Many Different Names

The LaSalle Street Dinner. The LaSalle Street After Hours Affair. The LaSalle Street Trading Tech Awards. Those are all the derivations of 49 years of the Chicago financial district congregating together to raise funds for Scouting in Chicago. Last night the LaSalle Street Trading Tech Awards event became a virtual event and the participants gathered on Zoom to celebrate the industry’s support for Scouting.

Watch the video »


The Spread: Time for an Upgrade

This week on The Spread, Softbank ditches a controversial options investment, the CME becomes the new king of bitcoin derivatives, and more.

Watch the video »


Fact check: RFID microchips will not be injected with the COVID-19 vaccine, altered video features Bill and Melinda Gates and Jack Ma
A video shared over 27,100 times on Facebook implies that the COVID-19 vaccine will contain a tracking microchip that will be injected in the individuals that receive the COVID-19 vaccine once it is ready. This is false.

*****If an RFID microchip is good enough for my dog….~JJL


Friday’s Top Three
Our top story Friday was JLN’s FIA Asia-v: Are Data And Technology The New Drivers For The Business? by Jeff Bergstrom. Second was our MarketsWiki page on Tim Gits of Quantitative Brokers. Third was the Wall Street Journal’s Future of London Finance at Stake in Brexit Fight.


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Lead Stories

FCA market oversight director named CEO of London Stock Exchange; Julia Hoggett joins the London Stock Exchange as the new chief executive after nearly seven years at the Financial Conduct Authority.
Annabel Smith – The Trade
The director of market oversight for the UK’s financial watchdog has been named chief executive officer of the London Stock Exchange (LSE). Julia Hoggett joins the London Stock Exchange Group as CEO of the exchange business from the Financial Conduct Authority (FCA) where she worked for nearly seven years, most recently as market oversight director.

Should You Use Investing Apps Like Robinhood? Think about fees, security and customer service access.
Erin Lowry – Bloomberg
Last month my husband asked me about the trading app Robinhood and whether I’d seen reports of its users getting hacked and having their money stolen. Apparently, the victims had trouble getting in touch with company representatives. The situation led to a larger conversation about investing apps and whether one should use them in lieu of traditional brokerages. There are a few things investors should consider before deciding that an app is right for them.

Brexit and Covid harden the case for a proper EU financial market; Efforts to create banking and capital markets unions have languished for too long
Martin Sandbu – FT
The EU is rightly proud of its single market. But in finance, it is still more aspiration than reality, at least for smaller users. Households in need of banking services, small and medium-sized companies wanting to invest and expand, and new entrepreneurs seeking funding to develop their ideas, have few alternatives to their own domestic banks.

Bank-Driven Squeeze in Funding Markets Is Hitting Every Corner
Stephen Spratt – Bloomberg
Lenders are looking to counteract rise in regulatory scores; Consequences show up in currency, swap and collateral markets
All corners of the funding market are now seeing increased year-end pressure but there’s no need to search for a culprit — the fingerprints of global banks are all over the squeeze.

FTSE Russell drops eight Chinese companies from indices after Trump order; Ban on investment by US citizens triggers index reshuffle
David Carnevali and Eric Platt and Demetri Sevastopulo – FT
The index provider FTSE Russell said it would remove eight companies named by the US government as having ties to the Chinese military from some of its indices, after Donald Trump banned US investors from holding stakes in the businesses.

Chick-fil-A Sues Poultry Suppliers, Alleging Price-Fixing; Lawsuit adds one of the U.S. chicken industry’s biggest customers to expanding litigation that alleges long-running collusion among poultry processors
Jacob Bunge – WSJ
Chick-fil-A Inc., the leading U.S. chicken chain, sued major poultry producers, accusing them of price-fixing that the Atlanta-based company says led to inflated prices for billions of dollars worth of its chicken purchases.

SONIA options go live at ICE; Cumulative contract volume for one month and three-month SONIA at ICE has reached more than £13 trillion notional as it launches SONIA options.
Annabel Smith – The Trade
Options and mid-curve options based on three-month SONIA index futures have gone live at exchange group ICE through its ICE Futures Europe business. ICE claims it is the first venue to launch the SONIA options after confirming plans to launch the contracts in late October.

Goldman spins off Folio’s 70K retail accounts to Interactive Brokers
Jessica Mathews – Financial Planning
Goldman Sachs has plans for Folio Financial’s RIA custodian, but not its retail brokerage business. The investment bank, which purchased Folio in September, is selling the self-directed retail brokerage segment to Interactive Brokers, according to a Dec. 4 announcement.

GFI Announces New Joint Venture in China
GFI Asia Partners Pte. ltd.
GFI Asia Partners Pte. Ltd (“GFI”), a subsidiary of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage and financial technology company, announced today that it took a majority stake in a newly established joint venture company in China, GFIGS Commercial Consulting (Shanghai) Co., Ltd (“GFIGS”), offering OTC derivatives brokerage service.

Inside the Retreat of Jamie Dinan’s York, a One-Time Star Hedge Fund; Energy bets gone wrong and a rocky succession played roles in the firm’s pullback from hedge funds
Juliet Chung – NY Times
York Capital Management’s hedge funds were flailing. Its credit hedge fund, which lost $700 million on energy bets gone wrong, was down about 50% since 2018. Other York hedge funds were also in the red.

Pandemic Pushes Fuel Makers in Richer Countries to the Brink; Covid-19 has accelerated a wave of refinery closures, igniting concerns about energy supply
David Winning and Rebecca Elliott – WSJ
A decade ago, Australia was home to seven refineries. Now, it has four. Soon, it could have just one. Covid-19 is accelerating a rash of global refinery shutdowns in the world’s richest economies. Companies from energy giant Royal Dutch Shell RDS.A 4.14% PLC to Australian fuel company Ampol Ltd. ALD 0.26% are closing facilities or considering doing so as they reckon with anemic fuel demand and growing competition from newer, more efficient fuel-making facilities in Asia and the Middle East.

Former LSE boss Rolet joins tech acquisition vehicle Golden Falcon
Pamela Barbaglia – MSN.com
Former London Stock Exchange boss Xavier Rolet has joined a newly-launched “blank check” company that is hunting for technology deals across Europe under the leadership of ex Barclays banker Makram Azar.

Investor Paul Tudor Jones rejects ‘false god’ of low pay, calls on companies to pay living wages
Julia La Roche – Yahoo Finance
The fight to close the growing wealth gap is “true social change” that has to begin in the private sector by raising worker wages, according to billionaire hedge fund manager Paul Tudor Jones.


The U.S. Has Passed the Hospital Breaking Point; A new statistic shows that health-care workers are running out of space to treat COVID-19 patients.
Robinson Meyer, Alexis C. Madrigal – The Atlantic
Since the beginning of the pandemic, public-health experts have warned of one particular nightmare. It is possible, they said, for the number of coronavirus patients to exceed the capacity of hospitals in a state or city to take care of them. Faced with a surge of severely ill people, doctors and nurses will have to put beds in hallways, spend less time with patients, and become more strict about whom they admit into the hospital at all. The quality of care will fall; Americans who need hospital beds for any other reason—a heart attack, a broken leg—will struggle to find space. Many people will unnecessarily suffer and die.

A Covid Vaccine Has Arrived. Get Ready for the Rollout
James Paton and Suzi Ring – Bloomberg
People across the U.K. could begin to get shots on Tuesday; ‘We’ve never done this before,’ vaccine executive says
Less than a year after the coronavirus crisis erupted, a massive mobilization to deliver a vaccine is underway, and Britain has emerged as a proving ground.

Long a Holdout From Covid-19 Restrictions, Sweden Ends Its Pandemic Experiment; Government imposes mandatory measures after failing to contain new surge in infections
Bojan Pancevski – WSJ
Sweden’s Covid-19 experiment is over. After a late autumn surge in infections led to rising hospitalizations and deaths, the government has abandoned its attempt—unique among Western nations—to combat the pandemic through voluntary measures.

It’s Time to Scare People About Covid; Our public messaging about the virus should explain the real costs — in graphic terms — of catching the virus.
Elisabeth Rosenthal – NY Times
I still remember exactly where I was sitting decades ago, during the short film shown in class: For a few painful minutes, we watched a woman talking mechanically, raspily through a hole in her throat, pausing occasionally to gasp for air. The public service message: This is what can happen if you smoke

Want Vaccines Fast? Suspend Intellectual Property Rights; Otherwise, there won’t be enough shots to go around, even in rich countries.
Achal Prabhala, Arjun Jayadev and Dean Baker – WSJ
As some reports would have it, this is the beginning of the end. Three coronavirus vaccines have posted excellent results, with more expected to come. But this is not the beginning of the end; it is only the beginning of an endless wait: There aren’t enough vaccines to go around in the richest countries on earth, let alone the poorest ones.

The West Gave Up On Wiping Out Covid — And That Was Its Big Mistake
The West Faces a Brutal, Bleak Covid Winter — While Normalcy is Returning in the East
Umair Haque – via Medium
The West faces a bleak, brutal Covid winter. In America, numbers are exploding all over again — for the third time in a row. Across Europe, cases are falling, but from a massively high peak.

Scandal Dogs China’s ‘King of Vaccines,’ Partner to AstraZeneca; The British-Swedish drugmaker has joined with a huge Asian company to produce a Covid-19 vaccine in China, where shady reputations are common in the pharmaceutical industry.
Sui-Lee Wee and Javier C. Hernández – NY Times
As a government regulator sidled into a car, the Chinese pharmaceutical executive handed over a paper bag stuffed with $44,000 in cash.

The Covid Risks in the Workplace Break Room; Workers find extra stress at what was once a lunchtime sanctuary for friendly chatter with colleagues; here’s how to take a breather safely on the job during the pandemic
Krithika Varagur – WSJ
Lunch breaks have become a drag for Jason Alfonso. Due to the pandemic, the steel mill where he works in Pittsburg, Calif., has reduced the capacity of break rooms from six to two people, mandated wearing masks at all times and encouraged employees to spray down tables with a bleach mixture after they eat. Not the most relaxed place to take a break after spending hours in an indoor warehouse.

How to Give Shareholders a Say in Corporate Social Responsibility; If companies are going to pursue goals beyond profits, investors should be allowed to weigh in, argue these academics
Alex Edmans and Tom Gosling – WSJ
The idea that companies need to pursue a purpose beyond profit has gained traction in recent years, growing stronger in 2020 with the pandemic and social-justice protests.

Death of a Fur Industry Exposes Covid’s Enduring Threat; A scandal in Denmark over the government’s handling of a mink cull is a cautionary tale for the world.
Morten Buttler – Bloomberg
At Knud Vest’s farm an hour’s drive west from Copenhagen, a deathly silence pierces unusual wafts of fresh air. Rows and rows of cages are empty, with nothing left but mud and hay. The smell of fertilizer is gone, along with the animals.

In a First, the CDC Says to Use Masks Indoors When Not Home
Anna Edney – Bloomberg
Americans should be wearing a mask indoors whenever they’re outside their own home, the U.S. Centers for Disease Control and Prevention is recommending for the first time as Covid-19 surges across the country.

Exchanges, OTC and Clearing

LSEG announces new CEO of London Stock Exchange plc
London Stock Exchange Group
London Stock Exchange Group plc (“LSEG”, “the Group”) today announces that Julia Hoggett has been appointed as CEO of London Stock Exchange plc, a regulated subsidiary of LSEG. She will report to Murray Roos, Group Director, Capital Markets, LSEG and will start her position next year. Denzil Jenkins will continue as interim CEO of London Stock Exchange plc until Julia joins the Group to ensure a smooth transition.

Balbir Bakhshi to join LSEG as Chief Risk Officer
London Stock Exchange Group plc
London Stock Exchange Group plc (“LSEG” or “the Group”) announces today that Balbir Bakhshi will join the Group as Chief Risk Officer and a member of the LSEG Executive Committee, reporting to David Schwimmer, CEO. He will assume his role on 25 January 2021 succeeding Diane Côté who has informed the Group that she intends to retire around the close of the Refinitiv transaction. Diane will step down as Chief Risk Officer when Balbir starts, remaining with the Group until close to ensure a seamless transition.

Miami International Holdings Completes Acquisition of Minneapolis Grain Exchange
Miami International Holdings, Inc. Press Release
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX Exchange Group™, and the Minneapolis Grain Exchange (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), today announced the completion of MIH’s previously announced acquisition of MGEX for a combination of cash and MIH common stock. MGEX will continue as a wholly owned subsidiary of MIH.

We are live! Eurex extends the trading hours of further products into the Asian time zones.
As of 7 December 2020, we have extended the trading hours of an additional four futures products into the Asian time zones. The products, the 10-year Euro-OAT EURO STOXX® Banks, STOXX® Europe 600, and VSTOXX® Futures, answer demands for further trading and hedging opportunities for our global clients, but in particular those based in Asia Pacific who are in the first zone reacting to market news and geopolitical events.

Announcement of T7 Release 9.1
1. Introduction – Deutsche Börse plans to introduce T7 Release 9.1 on 28 June 2021. The simulation period for T7 Release 9.1 is planned to start on 3 May 2021.

Extension of enhanced volume rebate methodology: Amendments to the Price List; Eurex Circular 097/20 Extension of enhanced volume rebate methodology: Amendments to the Price List
This circular contains information with respect to the service offering of Eurex Clearing AG (Eurex Clearing) and introduces amendments to the Price List of Eurex Clearing AG (Price List) regarding the following topic:

Trading Charity 2020 at the Frankfurt Stock Exchange: “Act and Help”;Payments from December 7th will be donated to charitable organizations
Deutsche Börse
Deutsche Börse and the securities trading banks (specialists) active on the Frankfurt stock exchange will donate the transaction and trading fees, which will be collected via the Frankfurt Stock Exchange on Monday, December 7th , to non-profit organizations.

LCH CDSClear goes live with US credit index options clearing
CDSClear launches clearing of credit index options on CDX investment grade (IG) and CDX high yield (HY) indices; Builds upon LCH CDSClear’s existing credit index options clearing offering and liquidity; Expansion provides members and clients with additional risk management, operational efficiency and funding benefits; Demonstrates continued growth and innovation of the service
LCH, a leading global clearing house, today announced that it has successfully extended its credit index options clearing offering to include the CDX Investment Grade 5Y and CDX High Yield 5Y indices. This builds upon the broad product offering at LCH CDSClear, which was the first clearinghouse to offer clearing of credit index options in 2017.

ICE Marks a New Milestone in the Liberalization of Natural Gas Markets With the Launch of West India Marker LNG (Platts) Futures Contracts
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today marks a new milestone in the liberalization of natural gas markets with the launch of West India Marker LNG (Platts) futures contracts (“WIM LNG”).

Intercontinental Exchange Becomes First Venue to Launch SONIA Options
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announces the launch of Options and Mid-Curve Options based on Three Month SONIA Index Futures.

Performance Bond Requirements: Agriculture and Energy Margins – Effective December 07, 2020
CME GroupAs per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Notice of Summary Action
CME Group
PENALTY: Pursuant to the Rule 515.E. sanction schedule, Moore was issued a $5,000 fine on November 11, 2020, for his second violation of Rule 515.E. within 12 months.

Amendments to the Strike Price and Listing Schedule for Certain Options on Great British Pound/U.S. Dollar (GBP/USD) Futures Contracts
CME Group
Effective Sunday, January 31, 2021, for trade date Monday, February 1, 2021, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will amend the strike price and listing schedule for certain Options on Great British Pound/U.S. Dollar (GBP/USD) Futures contracts (collectively, the “Option Contracts”) as described below.

CBOT Financial Delivery Invoice CSV Reports
CME Group
Please be advised, csv versions of the CBOT financial delivery invoice reports are now available from the New Release environment for download and review in EREP. These reports are representative of the financial delivery assignment detail and summary activity, now made available to EREP in a csv format.

OTC IRS New Release Advisory – USD, CLP, COP Curve Input Changes
CME Group
As part of our continuing efforts to ensure a prudent risk management process for all products, CME Clearing will be incorporating the following changes to USD LIBOR 3M, CLP TNA 1D and COP IBR 1D forecasting curves:

Accountability Level of the Gold Kilo Futures Contract
CME Group
Effective at the close of trading December 30, 2020 for the January 2021 contract month and beyond, the Commodity Exchange, Inc. (“COMEX” or “Exchange”) will decrease the spot month position limit for the Gold Kilo Futures contract from 6,000 to 1,000 futures contract equivalents. As a result of the decrease, the Exchange will concurrently reduce the single month and all month accountability levels as noted below and in Exhibit A & B of COMEX Submission No. 20-483. Please note that the spot month limits in the December 2020 contract month are unchanged.

Virtual Meeting Between EGX And ISX To Activate Signed MoU Between Both Parties
The Egyptian Exchange (EGX) held a virtual meeting with the Iraq Stock Exchange (ISX), to activate the memorandum of understanding (MoU) signed between both parties during the Joint High Egyptian Iraq Committee meetings held in Baghdad- Iraq in October 2020.

Tehran Stock Exchange Changes Trading Pre-opening Regulations
An important announcement was made on how to register trading orders in the pre-opening session of all TSE’s markets.

SIX Joins Forces With Swisscom & Sygnum Joint-Venture Custodigit To Build Institutional Digital Asset Gateway
The Swiss Stock Exchange today announced an investment in Custodigit, the joint venture created by Swisscom and Sygnum in 2018. With this agreement, SIX Digital Exchange, Swisscom and Sygnum Bank enable Swiss banks to offer access to digital assets for their customers through a unique Institutional Digital Asset Gateway.


Gamification at work creates winners and losers; In our series on new research, an academic finds the tactic can have unintended results
Cassandra Chambers – FT
Even before Covid-19 forced employees to work from home, many businesses were moving to more remote working. While this offers flexibility, autonomy and cost savings, it makes managing staff more challenging. Without frequent face-to-face contact, organisations need to become more creative in their approaches.

Robo-surveillance shifts tone of CEO earnings calls; Trading algorithms leave a mark with deeper focus on the spoken word
Robin Wigglesworth – FT
When Man Group chief executive Luke Ellis discusses his investment company’s results with analysts he chooses his words carefully. He knows better than most that the machines are listening.

Pandemic brings surge in business for Middle East’s fintechs; Transactions and investments are up in a sector that started from a low base
Simeon Kerr – FT
Some of the world’s strictest lockdowns and restrictions were imposed across the Gulf states to combat coronavirus. They caused havoc across oil-reliant economies already hit by low crude prices.

Not every cloud has a silver lining
The Trade
The cloud has gone mainstream in 2020. Financial institutions were slow to adopt this technology because of concerns regarding critical and sensitive applications as well as outstanding requirements relating to redundancy and security. But we’re seeing significant shifts now, with even key exchanges (Nasdaq, CME) announcing plans to move to the cloud.

The Derivatives Service Bureau Announces UPI 2021 Industry Consultation – Consultation To Begin In Mid-January 2021 On The Unique Product Identifier http://
The Derivatives Service Bureau (DSB), founded by the Association of National Numbering Agencies (ANNA) to facilitate the allocation and maintenance of ISINs, CFIs and FISNs for OTC derivatives, is today announcing the forthcoming DSB consultation timelines for the principles underlying the fee model for the new Unique Product Identifier (UPI).

THETA Trading Technologies Hires Neena Dholani – Electronic Trading Veteran Joins As Head Of Business Development
THETA, the specialist provider of buy-side trading technology as a service, has appointed Neena Dholani as Head of Business Development and a Board Member.

Creating Trust in Financial Markets with VMware Multi-Cloud Solutions; Learn how Deutsche Börse—one of the world’s leading exchange organizations—is driving market innovation, creating trust for financial markets, and enhancing business resiliency with VMware multi-cloud solutions.
Headquartered in the financial center of Frankfurt Rhine-Main, Germany, Deutsche Börse Group is an international exchange organization and innovative market infrastructure provider. The company delivers trusted infrastructure and IT solutions for major capital market operators, including Germany’s largest stock exchange: the Frankfurt Stock Exchange.


FOMO by Big Investors May Support Bitcoin’s Polarizing Rally
Joanna Ossinger – Bloomberg
Digital asset is luring institutions like asset managers; More strategists are covering Bitcoin to feed client interest.
The financial industry was something of a curious onlooker during Bitcoin’s furious, retail-led rally past $19,000 in 2017. There are signs the sector is playing more of a role in the cryptocurrency’s latest surge.

JD.com Becomes China’s First Online Mall to Test Digital Yuan
Bloomberg News
JD.com Inc., China’s second-biggest online retailer, will become the country’s first virtual mall to use digital yuan, the cryptocurrency backed by the central bank.

Singapore grants digital bank licences to major Asian tech companies; Sea and Ant Group among recipients as city-state shakes up banking system
Stefania Palma and Mercedes Ruehl – FT
Singapore has awarded digital bank licences to a group of major Asian technology companies including Sea and Ant Group in the biggest shake-up of its banking sector in decades.

These Investors Are Riding the Bitcoin Wave to New Highs
Sebastian Pellejero – WSJ
Bitcoin is surging to records, a rally driven in part by the emergence of new investors from passionate individuals to return-starved hedge funds looking to profit from the digital currency’s momentum. The cryptocurrency rose as high as $19,834.93 on Monday, according to CoinDesk, topping the previous intraday record of $19,783.21 set on Dec. 18, 2017. After trading as low as $3,867 in March, bitcoin has nearly tripled in 2020 and is up 90% since early September. It settled Friday at $18,832.76.

CME Leveraged Funds Double Down on Shorts as Bitcoin Maintains $19,000
Zack Voell – Coindesk
Fresh off of bitcoin’s record high in late November, leverage funds trading bitcoin futures on the Chicago Mercantile Exchange continue adding to their short positions as the leading cryptocurrency trades above $19,000. Net short open interest (OI) for CME leveraged funds, or the total amount of outstanding contracts, hit record levels for the past two weeks, according to CME Commitment of Traders reports published every Friday. The market’s total OI hit record highs of $1.3 billion at the end of last month.

Cardano to Launch Hard Fork Before Next Major Development Phase
David Pan – Coindesk
IOHK, the development team behind public blockchain project Cardano, said it is set to launch a hard fork in December as part of the transition to the third development phase of the protocol. Dubbed “Goguen,” the third phase will be focused on the protocol’s integration of smart contracts after building Cardano’s foundation and decentralizing its system in the first two phases.

Boerse Stuttgart Group Says Its Crypto Trading App Has Hit EUR1B Volume in 2020
Tanzeel Akhtar – Coindesk
Germany’s second-largest stock exchange, Borse Stuttgart, announced on Monday that its Bison crypto trading app has achieved trading volume of EUR1 billion ($1.21 billion) so far this year. The stock exchange reported that in November there were several days where the app saw record daily trading volumes exceeding EUR35 million ($42.3 million). Over the year so far, active users also hit new highs, increasing by 180% to 206,000, the group said.

Bequant, Global Digital Finance Look to Create Best Practices for DeFi
Nikhilesh De – Coindesk
A working group created as a partnership between crypto prime broker Bequant and Global Digital Finance wants to create some best practices for decentralized finance (DeFi) in an effort to improve adoption while warding off burdensome regulations. The companies announced last month they would form an industry group with law firm Hogan Lovells, aiming to bring industry participants together “with the goal of bringing credibility and integrity to DeFi projects around the globe,” according to a press release.

Bittrex becomes second crypto exchange to launch 24/7 tokenized stock trading
Yogita Khatri – The Block
Crypto exchange Bittrex has followed the footsteps of rival FTX to offer 24/7 tokenized stock trading. Announcing the news on Monday, the Bermuda-based exchange said its users can now purchase fractions of stocks such as Tesla, Apple, and Google, with U.S. dollars, Tether (USDT), or bitcoin (BTC). Fractional stock trading allows buying less than one share, and this feature is convenient for purchasing high-cost stocks. Bittrex has partnered with Switzerland-based tokenization solutions provider Digital Assets AG (DAAG) for the new offering. FTX also teamed up with DAAG for its tokenized stock trading service, which was launched in October.

Apple Co-Founder Wozniak’s New Venture Lists Token to Help Fund Energy Efficiency Projects
David Pan – Coindesk
Apple co-founder Steve Wozniak has launched Efforce, a company that facilitates investments in energy efficiency projects via cryptocurrency and blockchain technology. The company aims to be a marketplace to streamline the process of financing and undertaking such projects by enabling them to receive crowd contributions from investors via its token, WOZX, which was listed on Thursday through HBTC.

Citi is working with ‘some governments’ to create digital currencies, says CEO
Yogita Khatri – The Block
Citigroup CEO Michael Corbat has revealed that the bank is working with “some governments” to create digital currencies. Corbat said sovereign digital currencies are “inevitable.” Michael Corbat, the outgoing CEO of Citigroup, has revealed that the bank is working with governments around the world to create digital currencies. In an interview with Bloomberg on Friday, Corbat said: “I think that we will see in the not-too-distant future a sovereign, I wouldn’t say crypto, digital currency coming out.”

Top Crypto Podcasts Of 2020
Tatiana Koffman – Forbes
I write about financial innovation. Creator of MythOfMoney.com.
As many of us know, the blockchain and cryptocurrency space develops at hyper-speed. Most books are outdated as soon as they hit the shelves and traditional education is years behind in this particular space. And so, the best way to keep up to date (or to get started) with bitcoin, blockchain and crypto, is to find a podcast that you enjoy. But with so much content out there, how do you know what to invest your time into? To help make the choice easier, I asked ‘Crypto Twitter’ to share their favorites.

Ethereum Becoming More Than Crypto Coder Darling, Grayscale Says
Joanna Ossinger – Bloomberg
Ether is up about 360% amid a boom in decentralized finance; Developers have been working to upgrade network’s speed
While Bitcoin’s record-high grabs attention, its crypto compatriot Ethereum is continuing to broaden its appeal beyond the software programming crowd.


In Georgia Debate, Kelly Loeffler Won’t Say Trump Lost; Republicans fear that President Trump’s grievances about the results might persuade his supporters to sit out Georgia’s two runoff elections, including Ms. Loeffler’s race, that will determine control of the Senate.
Richard Fausset and Rick Rojas – NY Times
In a televised debate on Sunday night, Senator Kelly Loeffler, a Georgia Republican, declined to say that President Trump had lost the election, arguing instead that the president had “every legal recourse available” to pursue his baseless assertion that the vote in Georgia was rigged against him.

4 takeaways from the Georgia Senate debate
CNN Digital Expansion 2018 Clare Foran
Clare Foran, CNN
Republican Sen. Kelly Loeffler and her Democratic opponent Rev. Raphael Warnock traded sharp attacks during a debate Sunday evening ahead of a pivotal runoff election next month. The outcome of their race, along with the result of a second Georgia runoff in January between incumbent Republican Sen. David Perdue and his Democratic challenger Jon Ossoff, will determine control of the Senate in the new Congress.

Covid-19 Liability Shield Is a Bad Idea; Mitch McConnell says he wants to protect businesses from pandemic lawsuits. Hasn’t he heard of moral hazard?
Stephen L. Carter – Bloomberg
When pondering the liability shield proposed by congressional Republicans to protect businesses against Covid-related claims by their employees, I find my attention drawn to the revolt of the restaurants. Across the country, eateries are in all-but-open rebellion against new shutdown orders. Here and there, enraged restauranteurs are at the barricades, refusing to shut their doors even if ordered to do so. This may not quite be the stuff of Paris 1848 (droit au travail indeed!), but just now it’s hard to view the sector as one paralyzed by fears of litigation.


Singapore Man Gets More Charges in $1.5 Billion Wirecard Fraud
Chanyaporn Chanjaroen – Bloomberg
R. Shanmugaratnam accused of falsifying account balances; Collapse of Wirecard has reverberated across the world
A Singapore businessman faces fresh accusations that he falsely claimed to look after money for Wirecard AG, taking the amount covered by a series of charges to 1.2 billion euros ($1.5 billion), equivalent to more than half of the cash missing from the disgraced German payments company.

Wirecard fugitive Jan Marsalek took bank lending decision; Former chief operating officer took crucial credit decision without having formal role at Bafin-regulated lender
Olaf Storbeck – FT
Wirecard fugitive Jan Marsalek is alleged to have violated internal governance rules and banking laws in an incident that was flagged to Germany’s financial watchdog Bafin in 2019.

Watchdog for U.S. Agency That Brokered Controversial Kodak Loan Deal Finds No Wrongdoing; Sen. Elizabeth Warren had called for an investigation into the now-halted $765 million loan for the one-time photo giant to produce drug ingredients in the Covid-19 fight
Rachael Levy – WSJ
A government watchdog agency found no wrongdoing in the process that created a now-halted U.S. loan to Eastman Kodak Co. KODK 4.15% to produce drug ingredients for the Covid-19 response, according to a copy of the assessment reviewed by The Wall Street Journal.

ASIC succeeds in application to wind up Chris Marco’s unregistered managed investment scheme
The Federal Court has ordered the winding up of an unregistered managed investment scheme (the scheme) operated by Mr Chris Marco and AMS Holdings (WA) Pty Ltd (AMS).

ESAA Highlight the Change in the Status of Simple, Transparent and Standardized (STS) Securitization Transactions at the End of the UK Transition Period.
The Joint Committee of the European Supervisory Authorities (ESAs) – ESMA, EBA and EIOPA – wish to highlight the impact in the change of status of ‘Simple, Transparent and Standardised’ (STS) securitisation transactions after the end of the Transition Period on 31 December 2020.

Proposed Rule Change to Extend the Effective Date of the Temporary Amendments set forth in SR-FINRA-2020-026
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the effective date of the temporary amendments set forth in SR-FINRA-2020-026 from December 31, 2020, to April 30, 2021. Due to the impacts of COVID-19 on the administration of FINRA qualification examinations at test centers, SR-FINRA-2020-026 extended the 120-day period that certain individuals can function as a principal or Operations Professional without having successfully passed an appropriate qualification examination through December 31, 2020.

SEC Charges The Cheesecake Factory For Misleading COVID-19 Disclosures
The Securities and Exchange Commission today announced settled charges against The Cheesecake Factory Incorporated for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations and financial condition. The action is the SEC’s first charging a public company for misleading investors about the financial effects of the pandemic.

Statement on the Departure of Bill Hinman, by Chairman Jay Clayton, Commissioner Hester M. Peirce, Commissioner Elad L. Roisman, Commissioner Allison Herren Lee, Commissioner Caroline A. Crenshaw

CFTC Staff Provides Further Brexit-Related Relief to Provide Market Certainty
The Commodity Futures Trading Commission’s Market Participants Division (MPD) and Division of Clearing and Risk (DCR) today announced they are jointly issuing no-action relief, effective today, to provide greater certainty to the global marketplace in connection with the withdrawal of the United Kingdom from the European Union, known as Brexit.

CPO Members—Changes to the NFA Form PQR
NFA Compliance Rule 2-46 requires, with limited exceptions, commodity pool operator (CPO) Members to file NFA Form PQR on a quarterly basis with NFA for each pool that it operates. CFTC Regulation 4.27 imposes similar CPO reporting requirements by requiring CPOs to file CFTC Form CPO-PQR.

Update of position limits for certain commodity derivative contracts
The Financial Conduct Authority (FCA) has today published updated position limits for certain commodity derivative contracts traded on ICE Futures Europe. The limits have been established under the Markets in Financial Instruments Regulations 2017 (MIFI Regs).

Hong Kong Securities And Futures Commission Issues Quarterly Report
The Securities and Futures Commission (SFC) today published its latest Quarterly Report which summarises key developments from July to September 2020.

Digital Infrastructure To Enable More Effective Financial Planning By Singaporeans
The Monetary Authority of Singapore (MAS) and the Smart Nation and Digital Government Group (SNDGG) today launched the Singapore Financial Data Exchange (SGFinDex) , which will enable Singaporeans to consolidate their financial information for more effective financial planning.

Investing and Trading

Swelling US stock valuations leave some investors uneasy; Low rates have helped offset concerns about equity prices untethering from profits
David Carnevali and Eric Platt – FT
US stocks are expensive. So expensive by one measure, in fact, that only the dotcom boom saw higher valuations. Since the election of Joe Biden as US president and the emergence of Covid-19 vaccine breakthroughs, the roughly $41tn market has soared, pulling benchmark stocks indices up to record levels.

Demand grows for student-led impact investment funds; Universities offer ethical fund-management experiences as part of studies, but finding a related job is tough
Andrew Jack – FT
Katie Wheeler applied to the University of Michigan to study how private-sector approaches could be deployed in the public sector, but ended up with far more than classroom-based learning. She was soon shaking up a $500,000 student-run fund to scrutinise the effectiveness of the social enterprises in which it invests.

Post-pandemic recovery will reshape asset management industry, says study; PwC forecasts that infrastructure and sustainable strategies will be important sources of new business
Chris Flood – FT
The speed and strength of the economic recovery after the pandemic will reshape the investment industry over the next five years and force asset managers to change their business models to prosper, a study has predicted.

Farmers, Buyers Tussle Over Cocoa Prices; Cocoa futures recently hit a nine-month high in November, despite the pandemic’s blow to demand
Kirk Maltais – WSJ
A recent climb in the price of cocoa is fueling tensions between West African growers and candy makers including Hershey Co. HSY 0.69% and Mars Inc. about measures intended to guarantee farmers a living wage.

Should Investors Buy a Stock After It Splits? Buying a stock that has just split generally pays off. But in some years it’s a losing move.
Derek Horstmeyer – WSJ
In the past few months, numerous well-known companies have undergone stock splits, including Apple AAPL -0.56% and Tesla. TSLA 0.95% In theory, a stock split shouldn’t matter one bit for a company’s future returns. Cutting the price per share of a company in half while doubling the number of shares outstanding changes nothing fundamental about the company, since its market capitalization is exactly the same as it was before.

Soaring Metals Prices Signal Bets on Global Economic Recovery; Hopes for vaccines and stimulus are boosting investor sentiment as part of a vast market rally
Amrith Ramkumar and Joe Wallace -WSJ
Investors are piling into wagers on industrial metals like copper and nickel, betting that coronavirus vaccines and stimulus programs will drive a boom in manufacturing activity as part of a global economic resurgence.

Environmental, Social and Corporate Governance

Students push for university climate change divestments; Oxford offers blueprint for selling fossil fuel assets while retaining influence over divested businesses
Billy Nauman – FT
When environmentalist Bill McKibben hit the road in 2012 to preach the gospel of sustainable investing, few would have guessed that his bio-fuel-powered bus tour of US universities would spark a worldwide divestment movement.

Next generation behind family offices’ ESG push; Transfer of wealth will place trillions of dollars under the control of millennials in the coming decades
Antonia Cundy – FT
In 2017 when Josh Tanenbaum joined the Polonsky Foundation, his stepfather’s namesake family office, he wanted to diversify its portfolio to include more investments that made a positive social impact.

Scientists warn of ‘disconnect’ between EU climate goals and finance rules; Experts say commission is at risk of jeopardising pledge to reduce emissions to net zero by 2050
Mehreen Khan – FT
Brussels has been urged to stick to climate science when drawing up rules on sustainable finance after experts warned that the European Commission was at risk of jeopardising the EU’s pledge to reduce emissions to net zero by 2050.

US oil producers begin to follow Europe with emissions pledges; Investor pressure over climate change leads American companies to change tack
Myles McCormick – FT
US oil and gas producers have begun to follow their European rivals in setting ambitious targets on cutting their emissions amid mounting investor pressure over climate change.

Absolute return funds on course for worst ever annual outflows; Investors have pulled money from the all-weather funds after they disappointed during the coronavirus sell-off
Siobhan Riding – FT
Absolute return funds, products that promised investors positive returns in all markets, are on track to record their worst-selling year to date after suffering poor performance during the coronavirus market shock.

Exxon Under Pressure From New Activist Fund; Engine No. 1 plans proxy fight for four Exxon board seats
Cara Lombardo and David Benoit – WSJ
Exxon Mobil Corp. XOM 3.66% is facing the threat of a proxy fight from a newcomer activist investor with a sustainability bent that wants the beleaguered energy giant to act faster to remake itself.


UBS’s Weber Sees No Deal With Credit Suisse in the Near Term
Marion Halftermeyer and Francine Lacqua – Bloomberg
His counterpart at Credit Suisse said merger not unreasonable; Weber says recent change of leadership makes deal unlikely
UBS Group AG Chairman Axel Weber said he doesn’t expect to combine any time soon with Credit Suisse Group AG, after his counterpart at the Swiss rival said over the weekend that a merger wouldn’t be “unreasonable” and could bring several benefits.

Goldman Plots Florida Base for Asset Management in a Blow to New York
Sridhar Natarajan – Bloomberg
Remote-work experience speeds plan to shift New York-area jobs; Elliott, Blackstone and Citadel have been expanding in Florida
Goldman Sachs Group Inc. is weighing plans for a new Florida hub to house one of its key divisions, in another potential blow to New York’s stature as the de facto home of the U.S. financial industry.

SocGen Seeks More Than $500 Million Savings in Retail Shift
Alexandre Rajbhandari – Bloomberg
Bank combining retail operations with Credit du Nord unit; SocGen expects to reduce branches by about 600 by 2025
Societe Generale SA expects to cut annual costs by about 450 million euros ($545 million) by combining its French retail operations with its Credit du Nord subsidiary, as Chief Executive Officer Frederic Oudea seeks to bolster profitability.

JPMorgan Warns of Crowded Trades Amid Markets’ ‘Clear Consensus’
Joanna Ossinger – Bloomberg
History shows consensus rarely plays out entirely: strategists; Crowded trades include short dollar, long copper, long Bitcoin
There’s strong consensus in markets right now and investors need to position to hedge against crowded trades, according to JPMorgan Chase & Co.

SocGen to shut 600 French branches and cut EUR450m in costs; Lender to combine main retail network with subsidiary Crédit du Nord in response to pandemic-led changes in customer behaviour
David Keohane – FT
Société Générale is merging its two domestic retail bank networks, closing 600 branches and cutting EUR450m in costs, as the French lender looks to capitalise on changes in consumer behaviour wrought by the pandemic.

Some Small Hedge Funds Reap Big Gains in Tough Times; As volatility hurts many investing strategies, a few of the smallest funds are putting up some of the biggest returns
Julie Steinberg and Ben Dummett – WSJ
Hedge funds are trailing the U.S. stock market this year. Some of the smallest funds are emerging as some of the best performers, driving greater demand for these types of managers. Funds with less than $1 billion in assets are benefiting from their more manageable portfolios. They can dart in and out of holdings to protect gains or minimize losses amid the market volatility that has characterized this year. They also get more bang for their buck—making investments that require less firepower to affect their overall performance.

BNP Paribas Asset Management Appoints Daniel Klein As Global Head Of Client Services Mondovisione
BNP Paribas Asset Management (‘BNPP AM’) announces that it has further strengthened its Global Client Group (‘GCG’) with the senior appointment of Daniel Klein as Global Head of Client Services, with effect from 1 January 2021. Daniel will be based in Paris and report to Sandro Pierri, Head of the Global Client Group and member of BNPP AM’s Executive Committee.


Shares of Chinese Companies on U.S. Blacklist Fall as Index Eviction Looms; FTSE Russell’s decision hits shares of companies including Hangzhou Hikvision Digital
Frances Yoon – WSJ
Shares of some companies the U.S. government says support China’s military fell Monday, after index compiler FTSE Russell said it would drop the stocks from major indexes. Late Friday, FTSE Russell said it would remove securities of eight Chinese companies from the FTSE Global Equity Index Series, the FTSE China A Inclusion Indexes and other associated benchmarks on Dec. 21. These stocks can only be reconsidered for inclusion a year after removal, it said.

Foreign Investors Can Learn to Love Japan Again; Japan’s stocks have been outperforming, and the combination of many cheap cyclical stocks and strong balance sheets offers reason to believe they will continue to
Mike Bird – WSJ
The Nikkei 225 index is now outperforming the S&P 500 for the year to date in dollar terms by around 4 percentage points. International investors don’t seem to have particularly noticed.

‘Crude Oil Treasure’ Debacle Leads to Fine for Chinese Bank; Investment product generated big losses for individual investors when U.S. oil prices briefly went negative
Chong Koh Ping and Xie Yu – WSJ
One of China’s biggest banks has been fined nearly $8 million over an investment product that generated big losses for individual investors when U.S. oil prices briefly went negative. Bank of China Ltd. BACHY 0.23% was fined 50.5 million yuan, the equivalent of $7.7 million, and four of its global markets staff were fined a further 1.8 million yuan, the equivalent of $280,000, after an investigation into the “Crude Oil Treasure” product, the China Banking and Insurance Regulatory Commission said Saturday.

Ivory Coast lifts suspension of Hershey cocoa sustainability schemes
Ange Aboa – Reuters
Ivory Coast will lift a suspension imposed this week on cocoa sustainability schemes run by Hershey after the U.S.-based chocolate maker committed to paying a premium aimed at combating poverty among farmers.

Russia Starts Preparing for Life After Peak Fossil Fuels
Anna Andrianova and Evgenia Pismennaya – Bloomberg
Finance Ministry has begun weighing scenarios for low demand; A third of Russia’s budget revenues come from energy sales
The Finance Ministry of the world’s biggest energy exporter has started preparing for the possibility of lower budget revenues in case global oil demand declines sooner than expected.


U.K. Says Talks Could Collapse in Next Few Hours: Brexit Update
Ian Wishart, Nikos Chrysoloras, and Tim Ross – Bloomberg
A British official warned that talks over a future trade deal with the European Union could collapse on Monday unless negotiators make progress in the next few hours.

Barnier tells EU officials he ‘cannot guarantee’ Brexit trade deal; Sterling drops as EU chief negotiator warns that key sticking points remain
Jim Brunsden and Mehreen Khan – FT
Michel Barnier has warned he “cannot guarantee” there will be a Brexit trade accord as Brussels eyed Wednesday as its deadline to seal an agreement and sterling fell on fears that no deal would be struck.

Plans for Irish Sea trade border after Brexit in ‘a mess’; Industry bodies call for one-year implementation period to bed down new processes
Peter Foster – FT
The UK government’s plans for a new trade border in the Irish Sea are in a “mess” and will not be operationally ready by January 1 despite the creation of a £200m support service, Northern Irish trade bodies have warned.

No-Deal Brexit Will Inflict Serious Pain on Europe, Too
Lionel Laurent – Bloomberg
Europeans seem more sanguine about Brexit than the British. More French column inches were filled with the death of former President Valery Giscard d’Estaing last week than with the risks of a messy end to decades of unfettered trade between the U.K. and the European Union.

No visible progress yet on key day for final Brexit deal
Raf Casert and Jill Lawless – Associated Press
One of the most intense days in the long-running Brexit trade negotiations started off with little good news about any progress Monday, with the United Kingdom and the European Union seemingly still stuck on the same issues that have dogged the standoff for months. EU chief negotiator Michel Barnier held a pre-dawn briefing with ambassadors of the 27 member states to see if a deal is still possible with London ahead of the Jan. 1 deadline, but had no news of a breakthrough. Irish Foreign Minister Simon Coveney said Barnier’s message was “very downbeat.”

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Past JLN Newsletters

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