For Citadel, it’s full speed ahead in China; Your Broker and You: New Rules, Old Tricks

Feb 17, 2020

First Read

Hits & Takes
By JLN Staff

Former SEC Chairman David Ruder, a former Northwestern Law dean, has died at the age of 90. Ruder was a leading scholar in corporate and securities law.~JJL

On Friday, ICE announced record trading volumes for sugar. How sweet of them for Valentine’s Day.~JJL

The women of WILD in London have an event scheduled on March 2 from 6 to 8 PM called “Wellbeing Event: Stress Reduction Strategies through Setting Boundaries” to be held at Intercontinental Exchange (ICE).~JJL

Renato Mariotti, a former federal prosecutor and current CNN Legal Analyst and a partner at Thompson Coburn LLP, was one of over 1,100 DOJ alumni who signed a letter condemning Attorney General William Barr’s politicization of the Justice Department and calling on him to resign.~JJL

The MarketsWiki Education World of Opportunity series in Chicago this summer is set for July 14 and 15. Stay tuned for details over the coming months. We are looking for firms to sponsor the series, which does include some free spots for your interns.~JJL


Bridgewater, Dalio Donate $10 Million For China Virus Fight
Katherine Burton and Bei Hu – Bloomberg
Money to go to hospitals and frontline medical teams; Hedge fund founder has long personal association with China
Billionaire Ray Dalio’s family charity and his hedge fund Bridgewater Associates LP are donating $10 million to help support China’s coronavirus relief efforts.

***** I would like to see more headlines like this one.~JJL


The Challenge of Sustainable Chocolate
Chocolate is one of the worst foods you can buy, in terms of the industry’s greenhouse gas emissions. But some people are trying to change that.
Melody Schreiber – The New Republic
The long black pruning poles looked cumbersome. But the farmers moved quickly, swarming over the small plot of land and hoisting the poles up to slice through cacao branches with ease. On the bottom end of the pole was a small gasoline engine; on the top, a chain saw. Buzzing sounds mixed with the humming of insects echoing through this corner of the Ecuadorian Amazon. Though it was early spring, the October heat already felt solid and oppressive as the workers, in jeans, long-sleeved orange tops, hard hats, and plastic face shields, strode through the jungle, chickens scrambling to get out of their way.

***** Valentine’s Day always brings out chocolate stories.~JJL


Brexiteer complains he has to wait in queue at EU airport: ‘This isn’t the Brexit I voted for’
Conrad Duncan – The Independent
A Brexiteer who was forced to wait in an immigration queue at an EU airport in Amsterdam has complained that “this isn’t the Brexit I voted for”. Colin Browning, who described himself as one of the 17.4 million people who voted for Brexit, said he was forced to wait for nearly an hour at Amsterdam Airport Schiphol before his passport was checked. “Absolutely disgusting service at Schiphol airport. 55 minutes we have been stood in the immigration queue. This isn’t the Brexit I voted for,” he wrote on Twitter.

******Get used to it.~JJL


Most Canadians Are Now Better Off Than Most Americans; Middle-class people in the U.S. are losing ground to their peers in other rich countries.
Justin Fox – Bloomberg
Everybody knows that the U.S. version of capitalism is rougher and tougher than is the norm in other affluent countries. The rich are richer here, the poor poorer and the welfare state less exhaustive. Not surprisingly, the U.S. scores poorly versus other rich nations in terms of health outcomes, education levels and other such metrics.

******And they have good beer, too.~JJL


Cryptoasset Trading Platforms; Manipulation and Contempt
Gary DeWaal – Bridging the Week
The International Organization of Securities Commissions articulated considerations for worldwide regulators evaluating cryptoasset trading platforms within their regulatory perimeter. However, IOSCO noted this assessment poses unique challenges because while CTPs share many common characteristics of trading platforms, they also often perform functions associated with intermediaries, custodians, transfer agents and/or clearinghouses. Separately, two food giants and the Commodity Futures Trading Commission appear poised once again to resolve the CFTC’s 2015 enforcement action charging the defendants with manipulation; a prior settlement was set aside by the presiding judge. However, contempt findings may still be imposed against the CFTC for its conduct in connection with the original settlement although the defendants may no longer be requesting such an outcome.


Friday’s Top Three
Our most read story on Friday was Bloomberg’s Coronavirus Could Infect Two-Thirds of Globe, Research Shows. Second was The Rising Value of Data in Financial Markets from Traders Magazine. (We have a headline below in Fintech that combines the two subjects: “Big Data Won’t Save You From Coronavirus.”) Third was the NFA notice NFA permanently bars former Chicago, Ill. commodity pool operator and commodity trading advisor Elkhorn Investments LLC from membership.


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Lead Stories

For Citadel, it’s full speed ahead in China; With a nearly $100 million settlement behind it, the trading firm has set its sights on prying open the trillion-dollar financial markets in China.
Lynne Marek – Crain’s Chicago Business
When Ken Griffin’s Citadel and Citadel Securities partners sent $7.5 million to China to fight the coronavirus this month, it was a reminder of their growing interest in the country.

Your Broker and You: New Rules, Old Tricks; New regulations will soon restrict some unsavory practices, but they don’t absolve investors of the need to remain vigilant
Jason Zweig – WSJ
Brokers will soon be getting the rule book thrown at them. Investors still need to read the writing on the wall. Before long, brokers will be restrained from placing their own or their firm’s interests ahead of their retail clients’ when making investment recommendations. Regulation Best Interest, adopted by the Securities and Exchange Commission last June, goes into force June 30.

Hong Kong Arrivals to Plunge 99% in February on Virus
Eric Lam – Bloomberg
Early indicators of damage to Hong Kong’s economy from the coronavirus outbreak aren’t pretty. Preliminary visitor arrivals data for February show average daily traffic to the city plummeted to fewer than 3,000 people, according to the Hong Kong Tourism Board. That’s an almost 99% decline from just shy of 200,000 a day during the same period last year, data compiled by Bloomberg show. Even the month-on-month change is staggering, as arrivals averaged about 100,000 a day in January despite China escalating shutdowns at the end of the month to contain the virus.

US market data shake-up aims to narrow high-frequency advantage; SEC sets out proposal to provide investors with faster, broader trading figures
Kadhim Shubber – FT
The Securities and Exchange Commission has proposed a shake-up of US stock market rules intended to help level the playing field between high-frequency traders and other investors. The US securities regulator on Friday called for changes to the way equity market data is collected and distributed to provide faster and more comprehensive information for investors who do not have access to expensive proprietary data streams.

Coronavirus Stress-Tests China’s Fragile Financial System; Whether or not the outbreak triggers a long-feared collapse, it makes guiding the economy much harder.
Tracy Alloway, Bei Hu – Bloomberg
There’s a sign pinned to the door of Peking Garden, a swanky restaurant in Hong Kong’s central business district and a popular venue for deal-closing dinners and gatherings of lawyers and financiers working nearby: “Temporary closure notice?…?We have received a report that one of our staff members is confirmed to be infected with the novel coronavirus.” The luxury stores surrounding the restaurant are empty; many office workers who once spent their lunch hours shopping here have been told to work from home for the foreseeable future.

Is That a Robot at My Desk? How to Survive on Wall St
Lananh Nguyen and Jennifer Surane – Bloomberg
Robots have arrived on Wall Street, and humans need to learn how to work with them. JPMorgan Chase & Co. is rolling out virtual assistants to maintain help desks, track errors and route inquiries. A Bank of America corporate client made a $1.6 billion payment by mobile phone. AllianceBernstein Holding LP’s robot, Abbie, can gather 4 million data points a day and execute bond trades directly with counterparty bots. U.S. banks could axe an estimated 200,000 jobs over the next decade with bank branch, call center and corporate employees bearing the brunt of those cuts as lenders automate back-office functions, according to Wells Fargo & Co. But all hope is not lost.

Biggest Family Offices Get Direct Access to Trading Desks
Benjamin Stupples – Bloomberg
Largest offices have institutional investing veterans on staff; ‘Some of them are so sophisticated,’ Citi’s Pigorini says
Family offices with assets of at least $1 billion are increasingly bypassing private bankers to deal directly with investment bank trading desks, a Citigroup Inc. executive said.

China’s Coffers Are Depleted Just as Virus Spurs Spending
Bloomberg News
Provinces expect weaker revenue growth; higher spending needs; Economists disagree if deficit target will exceed 3% of GDP
China’s provinces are facing the economic fallout from the coronavirus with depleted ammunition, given they were already bracing for a deterioration in public finances before the outbreak hit. More than half of mainland provinces expect slower expansion of revenue in 2020 than last year’s average local income growth, according to their budgets published before the disease outbreak became widespread in January. Hubei, the epicenter, was already expecting income to fall.

Coronavirus Fight Brings Its Own Kind of Pain to Small Businesses; Restrictions on employees’ movements could deal a fatal blow to many small businesses if the country doesn’t get back to work soon
Nathaniel Taplin – WSJ
Things were just starting to look up for China’s small businesses in late 2019. Now, two new threats have emerged: A dangerous new coronavirus is spreading through the nation and Chinese officials have shut down much of the country to try to curb infections.

Elon Musk Has Changed Investors’ Views on the Electric Car; Rival auto makers struggle to become more Tesla-like
Tim Higgins – WSJ
As longtime auto makers try to sell investors on their visions for the future, they keep hearing the same thing: What about Tesla? Investors increasingly see the future of the car as electric—even if most car buyers haven’t yet. And lately, those investors are placing bets on Tesla Inc. TSLA -0.49% to bring about that future versus auto makers with deeper pockets and generations of experience.

Former MEP warns of fresh raid on fund managers’ EU business models; Brussels data proposals could disrupt crucial delegation rules, says Kay Swinburne
Siobhan Riding – FT
A former Brussels lawmaker has warned that the EU’s push to establish its own data storage infrastructure to rival US giants Amazon and Google threatens the outsourcing arrangements that underpin asset managers’ global business models.

ION Group takes stake in Broadway Technology; Fixed income and foreign exchange trading technology provider Broadway has gained investment from ION Group.
Hayley McDowell – The Trade
ION Investment Group has confirmed it has taken a controlling stake in Broadway Technology, as the trading infrastructure provider continues its push into foreign exchange markets.

ICE Data Services veteran joins Vela amid expansion; Vela looks to expand its global products and account management teams with two new faces.
Kiays Khalil – The Trade
A veteran product manager at ICE Data Services has joined the London team of trading and market access technology firm, Vela, as the firm expands its workforce in London and New York. Cedric Rondeaux has been appointed product manager at Vela within the global product management team, taking control of the strategy for its market data business. He will report to Ollie Cadman, chief product officer.

Exchanges, OTC and Clearing

Contract of CEO Theodor Weimer extended by four years
Deutsche Börse Group
At today’s meeting, the Supervisory Board of Deutsche Börse AG signed the contract of the CEO, Dr. Theodor Weimer (60), extended by four years until December 31, 2024. He is committed to continuity in the management of Deutsche Börse. Weimer has been Chairman of the Executive Board of Deutsche Börse since January 1, 2018. His current contract ends on December 31, 2020.

ETF issuer Rize chooses Xetra for debut in Europe; The first products focus on the medical cannabis industry and cybersecurity
Deutsche Börse Group
With Rize ETF, a new provider for exchange traded funds has started on the European market, which specializes in topic-based products. Rize chose Deutsche Börse with its Xetra and Frankfurt Stock Exchange trading venues for the initial listing of two ETFs on the mega trends cannabis and cybersecurity on Monday.

Nasdaq Dubai Dealt a Blow as Its Biggest Company Opts to Delist
Filipe Pacheco – Bloomberg
Nasdaq Dubai is about to lose its most valuable stock after the emirate’s port operator announced plans to take the $11 billion company private.

Intercontinental Exchange Announces Record Daily Trading Volume for Sugar Futures
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced record trading volume for its sugar futures contracts.


Big Data Won’t Save You From Coronavirus; In an era where everything seems quantifiable, it’s unsettling that the information we’ve got on this deadly outbreak is approximate at best.
David Fickling – Bloomberg
How often do you see a piece of economic or financial information revised upward by 45%? And how reliable would you regard a data set that’s subject to such adjustments?

Why Peter Thiel’s $3.5 Billion Fintech Is Fleeing Britain; Germany’s N26 says it’s quitting the U.K. because of Brexit, but fierce competition will have played a big part too.
Elisa Martinuzzi – Bloomberg
Defying the gloom around the financial services industry in post-Brexit Britain, the U.K. has maintained its edge in fostering the industry’s digital revolution. Lured by friendly regulators, fintechs have proliferated and investors have poured billions into companies that have rattled centuries old, high-street lenders. The battleground is becoming so fierce, however, that it’s proving too much for some of the upstarts.

Google Cuts Jobs at Cloud-Computing Group; Reorganization is aimed at improving operations at the business
Aaron Tilley and Robert McMillan – WSJ
Google said it is cutting jobs at its cloud-computing unit as part of a reorganization aimed at improving operations at the business that has become more central to parent Alphabet Inc.

JPMorgan Chase Sends Letter to Fintech Firms Warning it will Not Allow Access to Customer Data Unless they Accept New Agreement
Omar Faridi – CrowdFund Insider
JPMorgan Chase, the world’s sixth-largest bank in terms of total assets, has reportedly sent a letter to several Fintech firms in which it cautioned that they will no longer be allowed to access customer data unless they accept the terms of a new data access agreement.
The letter from JPMorgan was sent last month. It instructs Fintech companies to commit to a “concrete plan” by July of this year. It also recommends moving away from methods including screenscraping and using client passwords to a new way of collecting customer data.

ION Investment Group Recapitalizes Broadway Technology
ION Investment Group
ION Investment Group (“ION”) announced a recapitalization of Broadway Technology (“Broadway”), a leading provider of high-performance capital markets solutions, in which ION is acquiring a controlling stake alongside Long Ridge Equity Partners and the Broadway founders.

Mark Zuckerberg: Big Tech needs more regulation; New rules might hurt Facebook’s bottom line in the short term but will help long term
Mark Zuckerberg – FT
Every day, platforms like Facebook have to make trade-offs on important social values — between free expression and safety, privacy and law enforcement, and between creating open systems and locking down data.


Crypto custodian Copper raises $8M Series A to expand globally
Yogita Khatri – The Block
London-based crypto custodian has raised $8 million in Series A funding round to expand globally, including North America and Asia. The round saw participation from Target Global, MMC Ventures and LocalGlobe, according to an announcement published Monday. Notably, Copper is MMC Ventures’ “first investment” in the crypto and blockchain space. With the fresh capital in place, Copper looks to expand its commercial team and launch new products for institutional clients. The firm currently offers multi-signature custody and prime brokerage services to various funds, financial institutions, and high-net-worth private traders.

Vitalik Buterin talks Ethereum 2.0, DeFi, and community at ETHDenver
Steven Zheng – The Block
Speaking at ETHDenver on Saturday – an annual blockchain hackathon conference hosted in Colorado – Ethereum co-founder Vitalik Buterin shared his views on decentralized finance, the development of Ethereum 2.0, and the Ethereum community as a whole.

Coinbase Commerce Integrates Dai Cryptocurrency for Merchant Payments
Paddy Baker – Coindesk
Coinbase’s merchant payments arm has added support for the dai stablecoin, bringing together online retail and decentralized finance (DeFi). MakerDAO announced Thursday Coinbase Commerce had integrated dai as a payment method, opening the cryptocurrency up to affiliated online merchants and online commerce platforms like Shopify and WooCommerce. The integration will introduce “merchants to a growing segment of the cryptocurrency market, allowing them to bridge the gap between DeFi dapp entrepreneurs and their own “real world” businesses,” according to the blog post.

Can All Of Bitcoin Be Hacked?
William Baldwin – Forbes
Call it the singularity. One day, maybe a decade from now, a message flashes across the internet: “Elliptic curves cracked!” Elliptic curve cryptography, or ECC, is the foundation beneath bitcoin. Wouldn’t the discovery of a hole in this code destroy the currency—and take down any coin exchange? I posed the question to Brian Armstrong, who co-founded and runs Coinbase, the largest U.S. crypto exchange. He can’t prove that there won’t be some mathematical shortcut compromising bitcoin keys. But he considers the risk low.

Binance Applied for Singapore’s New Crypto License, CEO Says
Zheping Huang – Bloomberg
Binance Holdings Ltd., operator of one of the world’s largest crypto exchanges, has applied for an operating license in Singapore under the government’s new payments legislation. “We have already applied,” Binance co-founder and CEO “CZ” Zhao Changpeng said in a phone interview. “We submitted the application pretty fast. Binance’s Singapore entity has been in close touch with the local regulators, and they have always been open-minded.”

bZx exploit: Former Google engineer explains how an attacker made $350K in single transaction
Yogita Khatri – The Block
Korantin Auguste, a former Google software engineer, has explained in detail a recent attack on decentralized finance (DeFi) project bZx. In a blog post published Monday on his personal website Palkeo, Auguste said an attacker borrowed 10,000 ETH (currently worth about $2.49 million) from dYdX, a non-custodial exchange for margin trading. The attacker then sent 5,000 ETHs to DeFi lending protocol Compound and borrowed 112 wrapped bitcoins (WBTC), an ethereum-based token backed 1:1 by bitcoin, to pull off the attack.

Crypto-Friendly Presidential Candidate Andrew Yang Considering a Mayoral Run?
Turner Wright – Cointelegraph
“See you back in New York,” Andrew Yang said as he ended his campaign for US president. Cryptocurrency holders saw an ally in 2020 presidential hopeful Andrew Yang, so the news that he was suspending his campaign on Feb. 11 came as a major disappointment. As one of the outspoken candidates on blockchain and crypto, Yang outlined his plans for the cryptocurrency industry and discussed implementing blockchain-based mobile voting for the upcoming election. One of the political action committees (PAC) supporting Yang even allowed donations in Bitcoin.

OKEx Expands Into India’s Crypto Market via Partnership With Local Exchange
Helen Partz – Cointelegraph
Despite ongoing uncertainty regarding cryptocurrency regulation in India, major global crypto exchange OKEx has just made another push in the country’s market. On Feb. 14, OKEx partnered with India’s largest cryptocurrency trading platform, CoinDCX, to launch a new crypto futures product in India. As part of the partnership, OKEx will make a major step into the Indian cryptocurrency market, enabling more liquidity with its extensive expertise in developing world-class futures, CoinDCX said in an announcement shared with Cointelegraph.

Why Bison Trails Is Staying the Course on Libra
John Biggs – Coindesk
Viktor Bunin is a protocol specialist at Bison Trails, a company that offers one-click access to various blockchain nodes. While the number of Bison Trails users is, according to Bunin, headed “up and to the right,” he addressed concerns with Libra and the recent drop-out of major banking and business players.

Craig Wright Threatens BTC and BCH With Potential Lawsuits
Ting Peng – Cointelegraph
Craig Wright, who claims to be the Bitcoin creator known as Satoshi Nakamoto, has warned the Bitcoin (BTC) and BCH to stop using the Bitcoin database in order to avoid potential lawsuits. He claims that both networks may also violate the laws under the terms of Bitcoin’s original EULA and MIT License. The man behind Bitcoin SV in the recent personal blog post added that he is going to take back control of the system he created, and is ready to fight for his rights this year.

2019 Crypto Tax Guidance May Not Be Binding Per GAO
Shehan Chandrasekera – Forbes
The Government Accountability Office (GAO) is an independent, nonpartisan agency that works for Congress. On February 12, 2020, GAO published “Virtual Currencies: Additional Information Reporting and Clarified Guidance Could Improve Tax Compliance (GAO-20-188)” report after analyzing IRS’s efforts in the crypto tax compliance space. GAO reviewed IRS forms and interviewed various stakeholders such as IRS officials, FinCen, other federal agencies, tax practitioners and crypto exchanges to produce this report. This post discusses some of the highlights of this report and how they may affect crypto tax holders in the US.

London-Based Crypto Custodian Copper Raises $8M for Expansion Overseas
Paddy Baker – Coindesk
Crypto custody provider Copper has raised $8 million in a Series A round – an investment it plans to use launching in new markets. Participants in the Series A included two U.K.-based venture capitals, LocalGlobe and MMC Ventures, as well as the Berlin-based Target Global, which specializes in investing in European companies so they can fund global expansion, according to a Monday announcement. The London-based startup said it aims to develop a presence in key regional areas, like Asia and North America, as well as enhance its offering to feature more sophisticated trading facilities found in traditional prime brokerage offerings.


Trump administration considers proposing new tax incentives for stock buying: report
Victor Reklaitis – MarketWatch
The New York Stock Exchange building is seen along Wall Street in New York City.
The Trump administration is considering making it possible for Americans to invest more in the stock market on a tax-free basis, according to a CNBC report on Friday citing four unnamed administration officials.

Not one S&P 500 CEO is donating to Bernie Sanders or Elizabeth Warren
Victor Reklaitis, Katie Marriner – MarketWatch
While the moderate Democrats finished behind Bernie Sanders in New Hampshire, fellow 2020 presidential hopefuls Amy Klobuchar, Pete Buttigieg and Joe Biden are winning over the CEOs of S&P 500 companies, as top executives cast votes with their wallets.

Trump Tweet Makes Ralph Waldo Emerson Great Again
Ros Krasny – Bloomberg
Quotes poet’s ‘when you strike at a king, you must kill him’; President continues victory lap after impeachment acquittal
Donald Trump created a Twitter sensation by quoting a line from American poet and essayist Ralph Waldo Emerson used in a recent New York Times article, which warned that “When you strike at a king, you must kill him.”

U.S. Says It Has Thwarted $6 Billion Russia-Germany Gas Pipeline
Patrick Donahue and Matthew Miller – Bloomberg
Gazprom won’t complete Nord Stream 2 link, Brouillette says; Trump administration will continue efforts to halt project
President Donald Trump’s top energy official said he’s confident that Russia won’t be able to complete the Nord Stream 2 gas pipeline in the Baltic Sea — and signaled that the U.S. will press forward with its opposition to the project.

Democratic Candidates Sharpen Criticisms of Bloomberg; Rivals for their party’s presidential nomination say former New York mayor’s past views on law enforcement and economic issues would hinder chances of defeating the president
Ken Thomas and Ted Mann – WSJ
Democratic presidential candidates are sharpening their criticism of high-spending rival Michael Bloomberg, saying that the billionaire former New York City mayor would fail to mobilize the party in a potential matchup against President Trump in November.

Democratic rivals tell billionaire Bloomberg: Let’s debate
Doina Chiacu, Jason Lange – Reuters
U.S. Democratic presidential candidates said on Sunday billionaire Michael Bloomberg should face the same rigorous scrutiny as his rivals and they would welcome the chance to square off with him in a 2020 presidential debate.

Former DOJ officials call on Attorney General Barr to resign
More than 1,000 former U.S. Justice Department officials on Sunday called for Attorney General William Barr to resign over his handling of the trial of a longtime adviser of President Donald Trump.

William Barr must go
Every member of Congress should be calling for the resignation of the attorney general.
The Editorial Board – The Boston Globe
No one is as good at hiring an unscrupulous lawyer as Donald Trump. And now it seems that the worst of the bunch, the late Roy Cohn — the lying, cheating, and eventually disbarred attorney who represented both the red-baiting Joseph McCarthy and the president, when Trump was a young real estate developer — has been reincarnated in the form of Bill Barr. The trouble is that this time, the lawyer in question isn’t just a personal lackey or counsel to the president, but rather the attorney general of the United States.

Robert Peston on ‘Boris Johnson’s hedge-fund government’
Robert Preston – ITV
As you know, I misspent much of the past 20 years trying to understand and report on the excesses of the City of London that led to the banking crisis and everything that followed. There were two hedge fund managers who made a bundle out of the rise and fall – Chris Hohn and Patrick Degorce. I mention them because the new Chancellor, Rishi Sunak, worked with and for both of them.

Trump Is Already Making Stuff Up About Voter Fraud; Undermining faith in U.S. elections is just another way to weaken American democracy.
Francis Wilkinson – Bloomberg
While candidates jostle for advantage in the Democratic presidential primary, and the news media play the odds, President Donald Trump already knows the identity of his opponent. Indeed, his campaign, with the full support of the Republican Party, is already waging a vigorous crusade to destroy his opposition. No, it’s not Joe Biden, who inspired Trump’s shakedown of Ukraine. Trump’s gunning for bigger game: democracy itself.


SEC Proposes to Modernize Key Market Infrastructure Responsible for Collecting, Consolidating, and Disseminating Securities Market Data; Seeks to Introduce Competitive Forces to Core Components of the System for the First Time
The Securities and Exchange Commission today proposed to modernize the infrastructure for the collection, consolidation, and dissemination of market data for exchange-listed national market system (NMS) stocks. The proposal would update and expand the content of NMS market data to better meet the diverse needs of investors in today’s equity markets. The Commission has not significantly updated the rules that govern the content and dissemination of NMS market data since their initial implementation in the late 1970s. The proposal would also seek to introduce competitive forces into this core component of the national market system for the first time. The introduction of and competition among these new data consolidators could, in turn, allow all market participants, including investors, to access and benefit from the expanded content of NMS market data.

CFTC Charges Unregistered Commodity Pool Operator and Its Principal with Fraud and Misappropriation
The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Eastern District of Missouri against Joshua Christian McDonald and his company, Perfection PR Firm LLC (PPR), which operated out of California and Tennessee. The complaint charges McDonald and PPR with fraud and misappropriation related to an off-exchange foreign currency (forex) trading scheme in which they solicited funds totaling at least $440,000 from at least 12 investors, including multiple residents of Missouri.

CFTC Charges Colorado Resident with Fraud in Digital Asset-Linked Ponzi Scheme
The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the U.S. District Court for the District of Colorado against Breonna Clark, of Denver, Colorado, and Venture Capital Investments Ltd., a Colorado limited liability company, charging them with fraud and failing to register with the CFTC.

Remarks of CFTC Commissioner Rostin Behnam at the 56th Crop Insurance and Reinsurance Bureau Annual Meeting, Bonita Springs, Florida
Changing Weather Patterns: Risk Management for Certain Uncertain Change

The FCA fines Moneybarn £2.77m for unfair treatment of customers in arrears
The Financial Conduct Authority (FCA) has today imposed a fine of £2.77 million on car finance provider, Moneybarn Ltd (Moneybarn), for not treating customers fairly when they fell behind with loan repayments while in financial difficulties, between 1 April 2014 and 4 October 2017.

2020 Involvement and Election Process Overview
FINRA has multiple committees that facilitate effective engagement with its member firms and representatives of the public regarding regulatory and policy initiatives related to FINRA’s mission of promoting market integrity and investor protection in a manner that facilitates vibrant capital markets. The purpose of this Notice is to:

Investing and Trading

All the Ways Stock Market Bulls Have Gone Off the Rails. Again
Sarah Ponczek and Elena Popina – Bloomberg
Traders blame liquidity, tech giants, and ETFs for stock rally; But there are counterarguments to each and every theory
It’s that time of the bull market again, when everyone decides things beyond the realm of rationality have taken over in equities. Demand is brisk for an account of all the ways investors have lost their minds.

Virus Overshadows All as Traders Brace for 2020 Fed Rate Cuts
Vivien Lou Chen – Bloomberg
Eurodollars show bets policy makers will feel pressure to ease; ‘When the global economy goes south, the Fed steps in’
Traders are so fixated on the coronavirus that, in the absence of compelling reasons to do otherwise, they’re piling into hedges in case the contagion is a disaster for the global economy.

There’s a Wall of Cash Eager to Buy Treasuries on Any Price Dip
Liz McCormick and Ruth Carson – Bloomberg
It’s ‘a resilience play that makes sense’: BlackRock’s Thiel; Pensions, mutual funds and hedge funds have all piled in
Investors overseeing trillions of dollars are plowing money into U.S. government debt like never before, in a wave that’s only gaining strength as the spreading coronavirus casts doubt on the global growth outlook.

The Bond Market Might Finally Be Nearing Its Limit; In the next recession, bonds might stop providing investors with the protection they crave against falling stock prices
James Mackintosh – WSJ
For two decades bonds have offered a form of free insurance for investors, tending to move in the opposite direction to stocks over short periods while making good money over the longer run.

If these millennials can save $100,000 — how easy is it for you to do it too?
Quentin Fottrell – MarketWatch
The most fortunate young Americans are ahead of where their older peers were when they were the same age. A sizable number have seen a savings bump in recent years. One quarter of millennials have $100,000 or more in savings, up from 16% two years ago, according to Bank of America’s BAC, -0.17% “Better Money Habits” report, which surveyed nearly 2,000 millennials aged 24 to 41. The bank asked about the total amount of savings, including bank savings/checking accounts, IRA, 401(k) and other retirement or investment accounts.


Credit Suisse Still Discussing Former CEO Thiam’s Bonus, SZ Says
Leonard Kehnscherper – Bloomberg
Credit Suisse Group AG hasn’t decided whether to approve the final bonus of former Chief Executive Officer Tidjane Thiam, Swiss newspaper SonntagsZeitung reported, without saying how it got the information.

Deutsche Bank’s Risky-Debt Decision Loses Bite Amid Overhaul
Alice Gledhill – Bloomberg
Investors unfazed by possible AT1 extension after bond sale; Lender’s clarity on call criteria has aided investor sentiment
Deutsche Bank AG may have defused a potential land mine in its still-fragile turnaround. A once-treacherous decision about whether to retire one of the bank’s riskiest bonds in April has almost become a nonevent amid signs of progress in the overhaul and overwhelming evidence of the lender’s ability to sell Additional Tier 1 notes in a red-hot market. The bank has also avoided much of the opacity that riled Banco Santander SA bondholders ahead of a similar AT1 call decision last year.

Goldman Sachs offers ‘basket’ for bets against Chinese stocks; Bank launches product based on US shares that mirrors CSI 300 benchmark
Robin Wigglesworth – FT
Goldman Sachs and a research boutique have constructed a “synthetic” way for investors to bet more cheaply against Chinese stocks.

Citi’s Corbat latest Wall Street boss without a pay bump; Chief executive received $24m in compensation for 2019
Robert Armstrong – FT
Mike Corbat, chief executive of Citigroup, received $24m in compensation for 2019, the same level as 2018, continuing a trend of flat or lower pay for the leaders of Wall Street’s big banks.

Credit Suisse sets sights on rejoining Europe’s top ETF providers; Group plans to convert funds with up to $16bn of assets to meet demand from wealthy clients
Chris Flood – FT
Credit Suisse Asset Management plans to re-establish itself as a top 10 provider of exchange traded funds in Europe, seven years after selling its specialist business to BlackRock.

Jupiter to acquire Merian Global Investors for £370 million; Formerly Old Mutual, Merian Global Investors deal with Jupiter will form £65 billion UK active asset management powerhouse.
Hayley McDowell – The Trade
UK investment firms Jupiter Fund Management and Merian Global Investors have confirmed plans to merge to form a £65 billion active asset management institution, in the latest round of buy-side consolidation.


Coronavirus to Hit Korea and Japan Hardest, Natixis Says
Bloomberg News
Natixis estimates damage to Asia from closed factories; China’s trade dominance means shutdown resonates across Asia
China’s increasing dominance of global trade means that the ongoing shutdown of many factories will resonate across Asia, doing the largest amount of damage to the economies of South Korea and Japan.

Ships Are Skipping China and It’s Causing Turmoil for Trade
Alex Longley – Bloomberg
Hundreds of thousands of shipping containers out of action; Energy and commodity giants, retailers have been impacted
February 2020 will come to be remembered as a period of historic disruption to physical supply chains the world over, as the coronavirus wrecks trade.

China Quarantines Cash to Sanitize Old Bank Notes From Virus
Bloomberg News
The new coronavirus has restricted millions of Chinese people to their homes and towns, and now old bank notes are being quarantined.

What are the unsolved problems in the Indian financial services sector?
The finance industry has seen its fair share of ups and downs in every generation, with the repercussions reaching far and wide across the globe. Despite the inevitability of highs and lows, the financial services sector presents massive opportunities for willing entrepreneurs to build thriving businesses.
Sanjay Swamy, Managing Partner at Prime Venture Partners, said,

OPEC Underestimates China Virus; The oil cartel should get realistic about the potential impact the Covid-19 virus will have on China’s economy, and the rest of the world.
Julian Lee – Bloomberg
The Covid-19 virus is a human tragedy for many who have been affected by it and it’s having a profound impact on the lives of a large part of the Chinese population. The impact on the rest of the world of the disease’s dislocation of the Chinese economy is yet to be fully felt. Forecasts of only a modest impact on oil demand worldwide are far too optimistic.

U.K. to Spend $1.6 Billion on World’s Best Climate Supercomputer
Alex Morales – Bloomberg
New machine will help Met Office forecast weather, climate; U.K. aims to demonstrate it leads world in climate research
The U.K. said it will spend 1.2 billion pounds ($1.6 billion) on developing the most powerful weather and climate supercomputer in the world.

Armed gang steals toilet rolls in panic-buying hit Hong Kong
Channel News Asia
Armed robbers who stole hundreds of toilet rolls were being hunted by Hong Kong police on Monday (Feb 17), in a city wracked by shortages caused by coronavirus panic-buying. Toilet rolls have become hot property in the densely packed business hub, despite government assurances that supplies remain unaffected by the virus outbreak.

How a widening scope of CTT will impact the commodities market; Finance Bill 2020 proposes tax on sale of index futures and on sale of option in goods
Akhil Nallamuthu – The HIndu Businessline
In Budget 2020-21, the demand for abolition of financial transaction taxes — the Commodities Transaction Tax (CTT) in commodities market and the Securities Transaction Tax (STT) in securities market — went unaddressed.


Bangers & Mash in Danger for EU Under Johnson’s Brexit Plan
Joe Mayes – Bloomberg
Fresh sausages can’t be sold to EU from outside the bloc; EU doesn’t have paperwork to accept imports of prepared meats
The U.K. is due to lose the ability to sell fresh sausages to the European Union after Brexit, a sign of the economic upheaval that comes from quitting the bloc’s single market.

Brexit: France warns UK of bitter trade negotiations
BBC News
France has warned Britain to expect a bruising battle with the EU in post-Brexit trade negotiations. French Foreign Minister Jean-Yves Le Drian predicted the two sides would “rip each other apart” as they strove for advantage in the negotiations. He also said it would be tough for the UK to achieve its aim of agreeing a free trade deal by the end of the year. The UK government said it wanted a deal based on “friendly co-operation between sovereign equals”.

UK post-Brexit rules to ‘turn off tap’ of low-skilled foreign labor
Costas Pitas – Reuters
Britain will “turn off the tap” of foreign, low-skilled labor and require all skilled workers wishing to come to the country to have a job offer and meet salary and language requirements as it sets post-Brexit rules from next year. Britain formally left the European Union at the end of January but a transition period is in effect until Dec. 31, during which time little changes. At the moment, European Union citizens are able to move freely between the member states, prompting some Britons to vote for Brexit in the 2016 referendum in a bid to bring down the number of people arriving in the country.

Coronavirus fears force China into mass chicken cull; Beijing to import US birds as traffic shutdown leads to poultry feed shortages
Sun Yu – FT
China is to begin importing live chickens from the US as feed shortages due to the coronavirus force poultry farms in the world’s second-biggest economy to start culling millions of young birds.

Plastics tax, carbon-trading cash to cover EU’s Brexit gap, officials say
Jan Strupczewski – Reuters
The chairman of the European Union’s leaders proposed on Friday filling the hole left by Britain in the bloc’s next long-term budget with revenue from a new tax on plastics and funds from trading carbon emissions. Presenting a so-called ‘negotiating box’ which will form the basis of intense horse-trading between 27 EU national leaders at a summit on Feb. 20, Charles Michel proposed a budget for 2021-27 of 1.074% of the EU’s gross national income, or 1.095 trillion euros (£910.48 billion), of which a quarter is to go towards making the EU neutral in terms of CO2 emissions by 2050.


When Corporations Violate Privacy, They Do Concrete Harm
Benjamin Powers – Coindesk
Lindsey Barrett, a staff attorney at Georgetown Law, does not hold back when she sees bad actors in the tech space. She recently vehemently opposed the Sprint-T-Mobile merger in Slate, warning that “further consolidating an already anti-competitive sector” would make “it easier for those companies to gouge their customers.” Social media companies are making our lives a privacy hell, she says. And Democrats aren’t much better than Republicans when it comes to standing up to Big Tech.

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